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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Super Micro Computer Inc., economic profit calculation

US$ in thousands

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	17.91%	18.88%	16.50%	18.14%	18.65%	18.63%
Invested capital³	7,676,769)	2,437,425)	2,222,919)	1,282,041)	1,239,197)	1,150,419)

Economic profit⁴	(258,151)	167,595)	(52,630)	(129,532)	(160,801)	(90,757)

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
= 1,116,783 – 17.91% × 7,676,769 = -258,151

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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.

Super Micro Computer Inc., NOPAT calculation

US$ in thousands

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.

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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.

Super Micro Computer Inc., cash operating taxes calculation

US$ in thousands

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).

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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.

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

US$ in thousands

	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.

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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.

Super Micro Computer Inc., cost of capital calculations

Jun 30, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	27,027,141)	27,027,141)	÷	29,273,552)	=	0.92	0.92	×	19.31%	=	17.82%
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					17.91%

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 »

Jun 30, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	13,501,598)	13,501,598)	÷	13,811,060)	=	0.98	0.98	×	19.31%	=	18.87%
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					18.88%

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 »

Jun 30, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	3,627,650)	3,627,650)	÷	4,248,214)	=	0.85	0.85	×	19.31%	=	16.49%
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					16.50%

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 »

Jun 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,806,080)	1,806,080)	÷	1,925,131)	=	0.94	0.94	×	19.31%	=	18.11%
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					18.14%

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 »

Jun 30, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,436,761)	1,436,761)	÷	1,490,574)	=	0.96	0.96	×	19.31%	=	18.61%
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					18.65%

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 »

Jun 30, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,136,936)	1,136,936)	÷	1,178,055)	=	0.97	0.97	×	19.31%	=	18.63%
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					18.63%

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 »

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

	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	(258,151)	167,595)	(52,630)	(129,532)	(160,801)	(90,757)
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	-3.36%	6.88%	-2.37%	-10.10%	-12.98%	-7.89%
Benchmarks
Economic Spread Ratio, Competitors⁴
Apple Inc.	166.32%	139.49%	200.99%	197.34%	145.28%	89.38%
Arista Networks Inc.	42.07%	27.46%	22.98%	38.03%	20.44%	—
Cisco Systems Inc.	0.97%	8.16%	8.05%	7.30%	11.53%	5.75%
Dell Technologies Inc.	-5.94%	0.88%	5.01%	0.42%	-0.79%	—

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 × -258,151 ÷ 7,676,769 = -3.36%

⁴ Click competitor name to see calculations.

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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.

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

	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	(258,151)	167,595)	(52,630)	(129,532)	(160,801)	(90,757)

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	-1.71%	2.33%	-1.01%	-3.64%	-4.81%	-2.55%
Benchmarks
Economic Profit Margin, Competitors³
Apple Inc.	21.26%	21.94%	23.75%	22.93%	19.04%	17.45%
Arista Networks Inc.	29.79%	20.73%	15.83%	22.27%	15.94%	—
Cisco Systems Inc.	1.56%	8.11%	9.03%	8.13%	12.03%	6.07%
Dell Technologies Inc.	-3.64%	0.49%	2.62%	0.36%	-0.67%	—

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 × -258,151 ÷ 15,101,179 = -1.71%

³ Click competitor name to see calculations.

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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.

Super Micro Computer Inc. (NASDAQ:SMCI)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin