Stock Analysis on Net

Super Micro Computer Inc. (NASDAQ:SMCI)

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

Super Micro Computer Inc., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Net operating profit after taxes (NOPAT)1 1,116,783 627,683 314,116 103,035 70,352 123,581
Cost of capital2 17.88% 18.85% 16.47% 18.11% 18.62% 18.60%
Invested capital3 7,676,769 2,437,425 2,222,919 1,282,041 1,239,197 1,150,419
 
Economic profit4 (255,938) 168,339 (52,037) (129,157) (160,428) (90,410)

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).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,116,78317.88% × 7,676,769 = -255,938

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Super Micro Computer Inc. economic profit increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Net Operating Profit after Taxes (NOPAT)

Super Micro Computer Inc., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Net income 1,152,666 639,998 285,163 111,865 84,308 71,918
Deferred income tax expense (benefit)1 (168,499) (92,710) (6,657) (8,390) (13,772) (16,872)
Increase (decrease) in allowance for credit losses2 (9) (1,671) (838) (1,995) (4,320) 6,961
Increase (decrease) in deferred revenue3 111,928 70,587 31,544 (1,452) 350 55,139
Increase (decrease) in accrued warranty costs4 2,956 2,722 (726) 484 1,345 1,150
Increase (decrease) in equity equivalents5 (53,624) (21,072) 23,323 (11,353) (16,397) 46,378
Interest expense 19,352 10,491 6,413 2,485 2,236 6,690
Interest expense, operating lease liability6 1,804 594 714 709 854
Adjusted interest expense 21,156 11,085 7,127 3,194 3,090 6,690
Tax benefit of interest expense7 (4,443) (2,328) (1,497) (671) (649) (1,405)
Adjusted interest expense, after taxes8 16,714 8,757 5,630 2,523 2,441 5,285
(Gain) loss on marketable securities 1,300
Investment income, before taxes 1,300
Tax expense (benefit) of investment income9 (273)
Investment income, after taxes10 1,027
Net operating profit after taxes (NOPAT) 1,116,783 627,683 314,116 103,035 70,352 123,581

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).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for credit losses.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in accrued warranty costs.

5 Addition of increase (decrease) in equity equivalents to net income.

6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 35,382 × 5.10% = 1,804

7 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 21,156 × 21.00% = 4,443

8 Addition of after taxes interest expense to net income.

9 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -1,300 × 21.00% = -273

10 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Super Micro Computer Inc. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

Cash Operating Taxes

Super Micro Computer Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Income tax provision 63,294 110,666 52,876 6,936 2,922 14,884
Less: Deferred income tax expense (benefit) (168,499) (92,710) (6,657) (8,390) (13,772) (16,872)
Add: Tax savings from interest expense 4,443 2,328 1,497 671 649 1,405
Less: Tax imposed on investment income (273)
Cash operating taxes 236,509 205,704 61,030 15,997 17,343 33,161

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).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Super Micro Computer Inc. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

Invested Capital

Super Micro Computer Inc., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Lines of credit and current portion of term loans 402,346 170,123 449,146 63,490 23,704 23,647
Term loans, non-current 74,083 120,179 147,618 34,700 5,697
Convertible notes 1,697,716
Operating lease liability1 35,382 19,160 23,800 20,861 24,412 17,472
Total reported debt & leases 2,209,527 309,462 620,564 119,051 53,813 41,119
Total Super Micro Computer, Inc. stockholders’ equity 5,417,206 1,972,005 1,425,575 1,096,225 1,065,540 941,015
Net deferred tax (assets) liabilities2 (365,172) (162,654) (69,929) (63,288) (54,898) (41,126)
Allowance for credit losses3 73 82 1,753 2,591 4,586 8,906
Deferred revenue4 416,376 304,448 233,861 202,317 203,769 203,419
Accrued warranty costs5 17,815 14,859 12,137 12,863 12,379 11,034
Equity equivalents6 69,092 156,735 177,822 154,483 165,836 182,233
Accumulated other comprehensive (income) loss, net of tax7 (706) (639) (911) (453) 152 80
Noncontrolling interest 164 165 172 173 167 161
Adjusted total Super Micro Computer, Inc. stockholders’ equity 5,485,756 2,128,266 1,602,658 1,250,428 1,231,695 1,123,489
Buildings construction in progress8 (14,828) (303) (303) (87,438) (46,311) (14,189)
Investment in marketable equity security9 (3,686)
Invested capital 7,676,769 2,437,425 2,222,919 1,282,041 1,239,197 1,150,419

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).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of deferred revenue.

5 Addition of accrued warranty costs.

6 Addition of equity equivalents to total Super Micro Computer, Inc. stockholders’ equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of buildings construction in progress.

9 Subtraction of investment in marketable equity security.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Super Micro Computer Inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Cost of Capital

Super Micro Computer Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 27,027,141 27,027,141 ÷ 29,273,552 = 0.92 0.92 × 19.27% = 17.79%
Lines of credit, term loans, and convertible notes3 2,211,029 2,211,029 ÷ 29,273,552 = 0.08 0.08 × 1.37% × (1 – 21.00%) = 0.08%
Operating lease liability4 35,382 35,382 ÷ 29,273,552 = 0.00 0.00 × 5.10% × (1 – 21.00%) = 0.00%
Total: 29,273,552 1.00 17.88%

Based on: 10-K (reporting date: 2024-06-30).

1 US$ in thousands

2 Equity. See details »

3 Lines of credit, term loans, and convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 13,501,598 13,501,598 ÷ 13,811,060 = 0.98 0.98 × 19.27% = 18.84%
Lines of credit, term loans, and convertible notes3 290,302 290,302 ÷ 13,811,060 = 0.02 0.02 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 19,160 19,160 ÷ 13,811,060 = 0.00 0.00 × 3.10% × (1 – 21.00%) = 0.00%
Total: 13,811,060 1.00 18.85%

Based on: 10-K (reporting date: 2023-06-30).

1 US$ in thousands

2 Equity. See details »

3 Lines of credit, term loans, and convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 3,627,650 3,627,650 ÷ 4,248,214 = 0.85 0.85 × 19.27% = 16.46%
Lines of credit, term loans, and convertible notes3 596,764 596,764 ÷ 4,248,214 = 0.14 0.14 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 23,800 23,800 ÷ 4,248,214 = 0.01 0.01 × 3.00% × (1 – 21.00%) = 0.01%
Total: 4,248,214 1.00 16.47%

Based on: 10-K (reporting date: 2022-06-30).

1 US$ in thousands

2 Equity. See details »

3 Lines of credit, term loans, and convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 1,806,080 1,806,080 ÷ 1,925,131 = 0.94 0.94 × 19.27% = 18.08%
Lines of credit, term loans, and convertible notes3 98,190 98,190 ÷ 1,925,131 = 0.05 0.05 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 20,861 20,861 ÷ 1,925,131 = 0.01 0.01 × 3.40% × (1 – 21.00%) = 0.03%
Total: 1,925,131 1.00 18.11%

Based on: 10-K (reporting date: 2021-06-30).

1 US$ in thousands

2 Equity. See details »

3 Lines of credit, term loans, and convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 1,436,761 1,436,761 ÷ 1,490,574 = 0.96 0.96 × 19.27% = 18.58%
Lines of credit, term loans, and convertible notes3 29,401 29,401 ÷ 1,490,574 = 0.02 0.02 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 24,412 24,412 ÷ 1,490,574 = 0.02 0.02 × 3.50% × (1 – 21.00%) = 0.05%
Total: 1,490,574 1.00 18.62%

Based on: 10-K (reporting date: 2020-06-30).

1 US$ in thousands

2 Equity. See details »

3 Lines of credit, term loans, and convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 1,136,936 1,136,936 ÷ 1,178,055 = 0.97 0.97 × 19.27% = 18.60%
Lines of credit, term loans, and convertible notes3 23,647 23,647 ÷ 1,178,055 = 0.02 0.02 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 17,472 17,472 ÷ 1,178,055 = 0.01 0.01 × 0.00% × (1 – 21.00%) = 0.00%
Total: 1,178,055 1.00 18.60%

Based on: 10-K (reporting date: 2019-06-30).

1 US$ in thousands

2 Equity. See details »

3 Lines of credit, term loans, and convertible notes. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Super Micro Computer Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Selected Financial Data (US$ in thousands)
Economic profit1 (255,938) 168,339 (52,037) (129,157) (160,428) (90,410)
Invested capital2 7,676,769 2,437,425 2,222,919 1,282,041 1,239,197 1,150,419
Performance Ratio
Economic spread ratio3 -3.33% 6.91% -2.34% -10.07% -12.95% -7.86%
Benchmarks
Economic Spread Ratio, Competitors4
Apple Inc. 166.33% 139.50% 201.00% 197.35% 145.30% 89.40%
Arista Networks Inc. 42.07% 27.45% 22.98% 38.02% 20.43%
Cisco Systems Inc. 0.95% 8.13% 8.03% 7.27% 11.51% 5.73%
Dell Technologies Inc. -5.96% 0.87% 5.00% 0.40% -0.80%

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).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -255,938 ÷ 7,676,769 = -3.33%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Super Micro Computer Inc. economic spread ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Economic Profit Margin

Super Micro Computer Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019
Selected Financial Data (US$ in thousands)
Economic profit1 (255,938) 168,339 (52,037) (129,157) (160,428) (90,410)
 
Net sales 14,989,251 7,123,482 5,196,099 3,557,422 3,339,281 3,500,360
Add: Increase (decrease) in deferred revenue 111,928 70,587 31,544 (1,452) 350 55,139
Adjusted net sales 15,101,179 7,194,069 5,227,643 3,555,970 3,339,631 3,555,499
Performance Ratio
Economic profit margin2 -1.69% 2.34% -1.00% -3.63% -4.80% -2.54%
Benchmarks
Economic Profit Margin, Competitors3
Apple Inc. 21.26% 21.94% 23.75% 22.93% 19.04% 17.45%
Arista Networks Inc. 29.79% 20.72% 15.83% 22.27% 15.94%
Cisco Systems Inc. 1.53% 8.09% 9.00% 8.11% 12.01% 6.04%
Dell Technologies Inc. -3.65% 0.48% 2.61% 0.35% -0.68%

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).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -255,938 ÷ 15,101,179 = -1.69%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Super Micro Computer Inc. economic profit margin improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.