Analysis of Debt
Total Debt (Carrying Amount)
Super Micro Computer Inc., balance sheet: debt
US$ in thousands
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
The data reveals significant fluctuations and growth in the company's debt obligations over the observed periods. A detailed analysis of each category provides the following insights:
- Lines of Credit and Current Portion of Term Loans
- From June 2019 to June 2021, these liabilities increased moderately from 23,647 to 63,490 thousand US dollars, showing gradual expansion. However, there is a notable spike in June 2022, reaching 449,146 thousand US dollars, which is more than a sevenfold increase compared to the previous year. This peak is followed by a sharp decrease in June 2023 to 170,123 thousand, then an increase again in June 2024 to 402,346 thousand. This pattern suggests periodic refinancing or restructuring activities affecting short-term debt obligations.
- Term Loans, Non-Current
- Non-current term loans start at zero in June 2019, then appear at 5,697 thousand dollars in June 2020, increasing significantly to 34,700 thousand in June 2021. A further sharp increase occurs in June 2022 to 147,618 thousand, followed by a decrease to 120,179 thousand in June 2023 and a more substantial decline to 74,083 thousand by June 2024. This trend suggests the company initially drew down long-term debt aggressively, then paid down or restructured some of these obligations in later periods.
- Convertible Notes
- Convertible notes are not present until June 2024, where a substantial amount of 1,697,716 thousand dollars appears. This sudden issuance of convertible notes marks a major change in the company’s debt structure, indicating a new financing approach or refinancing of existing liabilities using convertible instruments.
- Total Lines of Credit, Term Loans, and Convertible Notes (Carrying Amount)
- The total debt amount reflects the combined effect of all components. It grows from a relatively modest 23,647 thousand in June 2019 to nearly 98,190 thousand in June 2021, then surges dramatically to 596,764 thousand in June 2022. The total then declines sharply to 290,302 thousand in June 2023, followed by a striking jump to 2,174,145 thousand in June 2024, driven mainly by the introduction of convertible notes. This pattern indicates periods of aggressive debt accumulation followed by partial deleveraging and a major refinancing event in the final period under review.
Overall, the company's debt profile exhibits increased volatility and complexity. The substantial increase in short-term borrowings and long-term loans in 2022 suggests aggressive leverage, likely to support growth or capital-intensive projects. The introduction of a large volume of convertible notes in 2024 significantly alters the capital structure, potentially reflecting strategic financing decisions to optimize debt costs or prepare for equity conversion. These observations highlight active debt management and evolving financial strategies over the five-year span.
Total Debt (Fair Value)
| Jun 30, 2024 | |
|---|---|
| Selected Financial Data (US$ in thousands) | |
| Lines of credit and term loans | 476,429) |
| 2029 Convertible Notes | 1,734,600) |
| Total lines of credit, term loans, and convertible notes (fair value) | 2,211,029) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 1.02 |
Based on: 10-K (reporting date: 2024-06-30).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on lines of credit, term loans, and convertible notes: 1.37%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 6.13% | 184,573) | 11,314) | |
| 6.33% | 9,215) | 583) | |
| 6.28% | 30,000) | 1,884) | |
| 6.17% | 60,000) | 3,702) | |
| 5.80% | 50,000) | 2,900) | |
| 6.19% | 28,084) | 1,738) | |
| 1.68% | 17,918) | 301) | |
| 1.33% | 31,155) | 414) | |
| 1.53% | 3,079) | 47) | |
| 1.87% | 22,116) | 414) | |
| 1.87% | 12,645) | 236) | |
| 1.72% | 27,644) | 475) | |
| 0.34% | 1,697,716) | 5,772) | |
| Total | 2,174,145) | 29,782) | |
| 1.37% | |||
Based on: 10-K (reporting date: 2024-06-30).
1 US$ in thousands
2 Weighted-average interest rate = 100 × 29,782 ÷ 2,174,145 = 1.37%