Core Viewpoint - Super Micro Computer Inc. is significantly benefiting from Nvidia's growth in the AI sector, acting as a crucial player in the infrastructure that supports AI technologies [2][10]. Group 1: Company Overview - Super Micro is closely tied to Nvidia, often being the first to implement Nvidia's new technologies into functional systems for demanding AI workloads [2][3]. - The company specializes in fast deployments of Nvidia's latest chips, creating ready-to-run servers designed to address challenges in AI data centers, such as power delivery and cooling [6][8]. Group 2: Stock Performance - Super Micro's stock has been on an upward trend for four consecutive days, driven by its strong connection to Nvidia's success [2][7]. - Investors are currently attracted to Super Micro due to its momentum and proven track record of quickly transitioning Nvidia's technology from labs to live environments [8][9]. Group 3: Challenges and Considerations - While Super Micro's rapid scaling is a strength, it also presents challenges, as the company is increasing operating expenses to remain competitive, raising concerns about sustainability [9]. - The company faces the dilemma of maintaining growth without overextending its resources, a common issue in the tech industry [9]. Group 4: Industry Context - The AI revolution is not solely about chip manufacturing; infrastructure plays a critical role, making Super Micro's position in the market essential to watch [10][14]. - As AI workloads become more complex, companies like Super Micro that focus on infrastructure will be as important as those creating the chips [13][14].

Market Overview - U.S. stock futures declined following a rally, with major indices showing lower futures [1] - The Dow closed above 46,000 for the first time, despite negative economic indicators such as inflation rising to 2.9% year-over-year and jobless claims reaching 263,000, the highest since October 2021 [2] - The 10-year Treasury bond yielded 4.04%, while the two-year bond was at 3.56%, with markets pricing a 100% likelihood of an interest rate cut by the Federal Reserve [2] Index Performance - Dow Jones futures fell by 0.17%, S&P 500 by 0.14%, Nasdaq 100 by 0.06%, and Russell 2000 by 0.45% [3] - The SPDR S&P 500 ETF Trust (SPY) was down 0.10% at $656.95, while Invesco QQQ Trust ETF (QQQ) rose 0.0068% to $584.12 [3] Sector Performance - Most sectors in the S&P 500 closed positively, with consumer discretionary, healthcare, and materials stocks showing the largest gains, while energy stocks declined slightly [4] - The overall market strength led to significant gains, with the Dow Jones increasing by over 600 points as investors reacted to consumer inflation data [4] Company Earnings - Kroger Co. reported better-than-expected second-quarter earnings, while The Lovesac Co. saw a 15% drop in stock price after cutting its fiscal year 2026 GAAP EPS guidance [5] - Adobe Inc. rose 3.83% after exceeding third-quarter expectations and raising its fiscal 2025 outlook, while RH dropped 7.93% due to weaker-than-expected second-quarter results [16] Analyst Insights - Analysts indicate a slowdown in the U.S. labor market, with negative revisions to previous job gains suggesting a noticeable deceleration [9] - Despite the hiring slowdown, companies are retaining employees, with initial jobless claims remaining stable in the historically low range of 220,000 to 240,000 [11] - Investment strategies are shifting, with recommendations to trim risk and rebalance portfolios, particularly moving funds from Communication Services and Energy sectors to Financials [15] Commodities and Global Markets - Crude oil futures traded lower at $62.31 per barrel, while gold rose to approximately $3,644.80 per ounce [17] - Asian markets closed higher, with notable gains in indices such as Australia's ASX 200 and Japan's Nikkei 225, while European markets showed mixed results [18]

NEW YORK, Sept. 09, 2025 (GLOBE NEWSWIRE) -- Moore Law, PLLC, a shareholder litigation law firm located on Wall Street, is investigating potential claims against: Super Micro Computer, Inc. (NASDAQ: SMCI) What is the Lawsuit About? On August 6, 2024, SMCI revealed a significant decline in its gross margin attributed to increased production costs that could no longer be passed on to customers. On this news, the price of SMCI stock declined over 20%, from $616.94 per share on August 6, 2024, to $492.70 per sh ...

Core Insights - Super Micro Computer (SMCI) is experiencing significant growth in its next-generation air-cooled and liquid-cooled GPU and AI platforms, contributing over 70% to its revenue in Q4 fiscal 2025 [1][9] - The company has set a revenue guidance of $33 billion for fiscal 2026, reflecting a 48% year-over-year growth [5][9] Group 1: Product and Technology Developments - SMCI's cooling technologies are integral to its Data Center Building Block Solutions (DCBBS), which have seen increased demand, reducing installation time from 12-18 months to 3-6 months [2][9] - The newly introduced DLC-2 system is popular among customers, achieving up to 40% reductions in power and water consumption, thus lowering total ownership costs while enhancing performance for modern data centers [3] - The company has achieved a production milestone of 2000 DLC racks per month, indicating strong adoption of liquid cooling technology [4] Group 2: Competitive Landscape - Vertiv (VRT) is expanding its thermal management portfolio and collaborating with NVIDIA to enhance cooling systems for AI factories [6] - Dell Technologies (DELL) offers modular and customizable liquid cooling architectures, facilitating easier deployment and adoption of their server solutions [7] Group 3: Financial Performance and Valuation - SMCI's shares have increased by 31.6% year-to-date, outperforming the Zacks Computer-Storage Devices industry's growth of 21.4% [8] - The company trades at a forward price-to-sales ratio of 0.75X, which is lower than the industry average of 1.52X [11] - The Zacks Consensus Estimate indicates a 23% year-over-year growth in fiscal 2025 earnings and a 29% growth in fiscal 2026 earnings, although these estimates have been revised downward recently [12]

Core Insights - Super Micro is actively participating in industry conferences, indicating its commitment to engaging with stakeholders and showcasing its offerings [1] Group 1 - Asiya Merchant, a VP & Analyst, is leading the discussion and has prepared questions for Super Micro [1] - Mike Staiger and Krishna from Super Micro are present at the conference, highlighting the company's involvement in industry events [1] - The audience is encouraged to participate by asking questions, which reflects an interactive approach to the conference [1]

Summary of Super Micro Computer (SMCI) Conference Call Company Overview - **Company**: Super Micro Computer (SMCI) - **Event**: 2025 Conference on September 04, 2025 - **Growth**: Reported a strong growth of approximately 47% year-over-year [2][4][70] Key Industry Insights - **Demand Dynamics**: The demand for Super Micro's products has been robust, driven by a new technology cycle and the growth of neo clouds and enterprises [3][5][6] - **Customer Base Expansion**: The number of scale customers increased from one in 2024 to four in 2025, with expectations of two to four more in 2026 [4][35][38] - **AI Integration**: Hyperscalers are optimizing their applications for AI, which is influencing demand for Super Micro's products [5][6] Competitive Positioning - **No Legacy Architecture**: Super Micro has no legacy systems, allowing for a focus on lowering costs and improving performance for customers [8][11] - **Product Differentiation**: The company offers a wide range of architectures and solutions, differentiating itself from competitors who may focus on a single architecture [11][12][30] - **High Repeat Business**: The company enjoys a high rate of repeat business due to continuous innovation and customer satisfaction [13] Financial Performance and Projections - **Revenue Growth**: Projected growth of over 50% for fiscal 2026, supported by strong customer engagement and initial order potentials [66][68] - **Operational Efficiency**: The company has maintained a strong operational efficiency with a focus on managing operating expenses relative to growth [31][34] - **Cash Position**: As of the last report, Super Micro had $5.2 billion in cash, indicating a strong balance sheet to support growth initiatives [34][58] Market Trends and Challenges - **AI Adoption**: The adoption of AI is still in early stages, with many proof of concepts (POCs) being trialed by customers [15][19] - **Supply Chain Constraints**: The company faces challenges related to supply chain constraints and the readiness of data centers, which can impact growth [20][23][24] - **Liquid Cooling Market**: Super Micro is a leader in liquid cooling technology, which is becoming increasingly important as power constraints in data centers grow [63][65] Strategic Focus Areas - **Data Center Building Block Solutions (DCBBS)**: The DCBBS approach is unique to Super Micro, allowing for comprehensive solutions that include engineering support and service elements [25][30] - **Innovation and Engineering Control**: The company emphasizes its control over design, engineering, and manufacturing as key competitive advantages [52][79] - **Customer-Centric Approach**: Super Micro is focused on providing the best performance and reliability to its customers, which is expected to drive future growth [26][79] Conclusion - Super Micro Computer is well-positioned for continued growth in the technology sector, particularly with the increasing demand for AI-optimized solutions and data center infrastructure. The company's focus on innovation, customer satisfaction, and operational efficiency will be critical in navigating market challenges and capitalizing on emerging opportunities.

Core Insights - Super Micro Computer (SMCI) stock has declined nearly 29% in the past month as investors reassess its position in the AI sector [2] - The company's Q4 2025 earnings fell short of expectations, revealing ongoing margin pressures and significant weaknesses in financial reporting controls [2][5] Financial Performance - In Q4 2025, SMCI's sales grew by only 8% year-over-year to $5.8 billion, while earnings per share dropped from $0.46 in Q4 2024 to $0.31 [3] - Gross margins decreased sharply from 17% in Q4 FY'23 to 9.5% in Q4 FY'25, attributed to price reductions for new design contracts and costs related to Nvidia's platform transition [3] - The company has cut its full-year revenue forecast twice, reducing the initial expectation of 87% growth to only 49%, indicating challenges in demand forecasting [4] Competitive Landscape - SMCI faces intensified competition from larger companies like Dell, HPE, and Lenovo, which offer broader product lines and stronger supply chains [3] - The server market is becoming increasingly commoditized, putting SMCI at risk of operating within a low-margin business model [3] Corporate Governance Issues - SMCI has a history of failing to meet ambitious promises, consistently falling short of consensus earnings predictions, which raises concerns about its growth trajectory [4] - Recent allegations of accounting discrepancies and delays in SEC filings have further damaged the company's reputation [5]

Group 1 - MongoDB's stock experienced a record rally of 44%, leading a surge in enterprise technology companies benefiting from the artificial intelligence boom [1] - Other companies also saw significant gains, with Pure Storage rising 33%, Snowflake increasing by 21%, and Autodesk up by 8.4% [1] - The generative AI trend, which began in late 2022, has primarily benefited companies like Nvidia, Microsoft, Google, and Oracle, as well as hardware vendors like Dell and Super Micro Computer [2] Group 2 - Recent quarterly results and executive commentary have alleviated concerns regarding AI's impact on enterprise tech companies, indicating that financial benefits are beginning to materialize [3] - MongoDB's CEO noted that while enterprise rollouts of AI services are occurring, they are happening gradually, with companies cautious about further investments until they see successful outcomes [4] - MongoDB reported a 24% year-over-year revenue increase to $591 million, surpassing the average analyst estimate of $556 million, along with earnings and full-year profit and revenue forecasts exceeding expectations [4]

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Super Micro Computer delivers AI and HPC optimized rack-scale IT solutions, focusing on rapid innovation and global manufacturing - Company provides total IT solutions for AI, HPC, enterprise, cloud, and edge computing, emphasizing rack-scale, liquid-cooled solutions[15](index=15&type=chunk)[16](index=16&type=chunk)[23](index=23&type=chunk) - Strategy focuses on continuous R&D, rapid product innovation (leveraging Building Block Solutions®), and capitalizing on new technologies like AI, cloud, and 5G/edge computing[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Key product developments in FY2025 include AI-focused solutions for NVIDIA's Hopper (H100/H200) and Blackwell (GB200/B200/RTX Pro 6000) platforms, Data Center Building Block Solutions (DCBBS) for liquid-cooled AI factories, and DLC-2 for energy efficiency[23](index=23&type=chunk) - Global operations include headquarters in Silicon Valley, facilities in Taiwan and the Netherlands, and a new facility in Malaysia to expand capacity[18](index=18&type=chunk)[27](index=27&type=chunk) International Sales as % of Net Sales | Fiscal Year | Percentage | | :---------- | :--------- | | 2025 | 40.6% | | 2024 | 32.0% | | 2023 | 32.1% | - Competes with global technology vendors (Cisco, Dell, Hewlett-Packard Enterprise, and Lenovo) and ODMs (Foxconn, Quanta Computer, and Wiwynn Corporation) based on time-to-market, product breadth, performance, and cost-effectiveness[48](index=48&type=chunk)[49](index=49&type=chunk) - As of June 30, 2025, the company employed **6,238 employees**, with over **3,200 in R&D**, and emphasizes talent development, equal opportunity, and a comprehensive total rewards program[60](index=60&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from SEC reporting, global operations, regulatory compliance, and financial indebtedness - Past SEC reporting delinquencies (FY2024 10-K, Q1/Q2 2025 10-Q) led to significant expenses, negative publicity, and potential impact on financial reporting accuracy and stock price[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Identified material weaknesses in internal control over financial reporting as of June 30, 2025, which could affect timely and accurate financial reporting if not remediated[91](index=91&type=chunk)[92](index=92&type=chunk) - Sales are concentrated in a few large customers; **four customers accounted for 10% or more of net sales in FY2025**, and one in FY2024, increasing dependency and risk of revenue decrease[99](index=99&type=chunk)[100](index=100&type=chunk) - Vulnerable to volatility in core component markets (e.g., GPUs, CPUs, memory), supply chain disruptions, and increased costs, which can impact product delivery, warranty claims, and financial results[107](index=107&type=chunk)[108](index=108&type=chunk) - Geopolitical conditions, particularly U.S.-China trade tensions and export control restrictions on AI-related technologies (e.g., GPUs), significantly impact business, supply chains, and ability to serve international markets[113](index=113&type=chunk)[115](index=115&type=chunk)[161](index=161&type=chunk) - Subject to complex and evolving domestic and international data privacy and protection laws (e.g., GDPR, CCPA, CPRA), increasing compliance costs and potential for penalties or reputational harm[174](index=174&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk) - Indebtedness of approximately **$4.8 billion as of June 30, 2025**, including convertible notes, could limit cash flow, restrict financing options, and dilute existing stockholders[190](index=190&type=chunk)[193](index=193&type=chunk) - Conflicts of interest may arise with related parties Ablecom and Compuware, who are major contract manufacturers and distributors, due to shared family ownership and management ties[125](index=125&type=chunk)[128](index=128&type=chunk)[132](index=132&type=chunk) [Item 1B. Unresolved Staff Comments](index=37&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC [Item 1C. Cybersecurity](index=37&type=section&id=Item%201C.%20Cybersecurity) The company maintains an information security program aligned with industry standards, with Board oversight of cybersecurity - Cybersecurity risk management includes infrastructure, systems, policies, and procedures for proactive and reactive threat addressing, following industry standards[204](index=204&type=chunk) - The Board and Audit Committee provide oversight of cybersecurity matters, receiving regular updates from management[209](index=209&type=chunk) - No cyber incidents in the past had a material adverse effect on business strategy, operations, or financial conditions[208](index=208&type=chunk) [Item 2. Properties](index=38&type=section&id=Item%202.%20Properties) As of June 30, 2025, the company owned 3.16 million sq ft and leased 1.54 million sq ft globally Owned and Leased Space (as of June 30, 2025) | Category | Square Footage (approx.) | | :------- | :----------------------- | | Owned | 3,157,000 | | Leased | 1,539,000 | - Long-lived assets outside the U.S. represented **37.8% of total value in fiscal year 2025**[212](index=212&type=chunk) - Key facilities are in San Jose, California (headquarters, R&D, production), Taiwan (manufacturing, R&D, service, warehouse), Netherlands (European headquarters, manufacturing, service), and a new facility in Malaysia (manufacturing)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Item 3. Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company faces multiple class action and derivative lawsuits, plus DOJ and SEC subpoenas, with uncertain outcomes - Facing multiple putative class action and derivative lawsuits alleging misrepresentations in financial statements and internal controls, with outcomes currently not estimable[673](index=673&type=chunk)[676](index=676&type=chunk) - Received subpoenas from the Department of Justice and SEC following a short seller report, and is cooperating with document requests[678](index=678&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) SMCI common stock trades on Nasdaq, underwent a 10-for-1 split, expects no dividends, and repurchased shares - Common stock (SMCI) trades on Nasdaq Global Select Market; **10-for-1 forward stock split effective September 30, 2024**[221](index=221&type=chunk)[224](index=224&type=chunk) - As of July 31, 2025, there were **594,273,308 shares of common stock outstanding**[6](index=6&type=chunk) - No cash dividends are expected to be paid in the foreseeable future[226](index=226&type=chunk) Issuer Purchases of Equity Securities (Q4 FY2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----- | :------------------------------- | :--------------------------- | | June 2025 | 4,891,171 | $40.89 | - The repurchase in June 2025 was for approximately **$200.0 million**, conducted concurrently with the 2030 Convertible Notes offering, and the shares were retired[236](index=236&type=chunk) [Item 6. [Reserved]](index=45&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Super Micro Computer, profitable since 1993, focuses on AI and data center IT solutions, with financial results detailed - Company has been **profitable every year since inception in 1993**[242](index=242&type=chunk) - Strategic focus on Application-Optimized Total IT Solutions, integrating server, storage, networking, and software at rack and cluster levels, with a key component being DCBBS for liquid-cooled AI factories[241](index=241&type=chunk)[243](index=243&type=chunk) - AI and data center demand is a substantial driver for product demand, and the company plans to enhance product capabilities and service offerings in these areas[245](index=245&type=chunk) Financial Highlights (in millions) | Metric | FY2025 | FY2024 | Change (YoY) | % Change (YoY) | | :----- | :----- | :----- | :----------- | :------------- | | Net sales | $21,972.0 | $14,989.2 | $6,982.8 | 46.6% | | Gross profit | $2,429.9 | $2,061.4 | $368.5 | 17.9% | | Total operating expenses | $1,176.9 | $850.6 | $326.3 | 38.4% | | Income from operations | $1,253.0 | $1,210.8 | $42.2 | 3.5% | | Net income | $1,048.9 | $1,152.7 | $(103.8) | (9.0)% | | Net income per diluted share | $1.68 | $1.92 | $(0.24) | (12.5)% | - Gross margin decreased to **11.1% in fiscal year 2025** from **13.8% in fiscal year 2024** due to competitive pricing, product/customer mix changes, and higher manufacturing expenses[251](index=251&type=chunk)[285](index=285&type=chunk) - Operating expenses increased by **38.4% in fiscal year 2025**, primarily due to higher headcount, salaries, and stock-based compensation[251](index=251&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) Net Sales by Product Type (in millions) | Product Type | FY2025 | FY2024 | FY2023 | 2025 vs 2024 % Change | 2024 vs 2023 % Change | | :----------- | :----- | :----- | :----- | :-------------------- | :-------------------- | | Server and storage systems | $21,311.6 | $14,185.2 | $6,569.8 | 50.2% | 115.9% | | Subsystems and accessories | $660.4 | $804.0 | $553.7 | (17.9)% | 45.2% | | Total net sales | $21,972.0 | $14,989.2 | $7,123.5 | 46.6% | 110.4% | - Server and storage systems sales increased by **50.2% in fiscal year 2025**, driven by strong demand for GPU servers, HPC, and rack-scale solutions, with a **34% increase in average selling price**[276](index=276&type=chunk) Net Sales by Geographic Region (in millions) | Region | FY2025 | FY2024 | FY2023 | 2025 vs 2024 % Change | 2024 vs 2023 % Change | | :----- | :----- | :----- | :----- | :-------------------- | :-------------------- | | United States | $13,052.6 | $10,187.2 | $4,834.1 | 28.1% | 110.7% | | Asia | $5,494.1 | $2,912.6 | $1,050.8 | 88.6% | 177.2% | | Europe | $2,727.0 | $1,294.0 | $1,003.1 | 110.7% | 29.0% | | Others | $698.3 | $595.4 | $235.5 | 17.3% | 152.8% | | Total net sales | $21,972.0 | $14,989.2 | $7,123.5 | 46.6% | 110.4% | - Net cash provided by operating activities was **$1,659.5 million in fiscal year 2025**, a significant increase from **$(2,486.0) million in fiscal year 2024**, driven by increased cash collection from customers and reduced inventory purchases[311](index=311&type=chunk)[312](index=312&type=chunk) - Cash and cash equivalents increased to **$5,169.9 million as of June 30, 2025**, from **$1,669.8 million in fiscal year 2024**[308](index=308&type=chunk) - Issued **$700.0 million in 2028 Convertible Notes** and **$2.3 billion in 2030 Convertible Notes** in fiscal year 2025[104](index=104&type=chunk)[314](index=314&type=chunk) - Anticipates capital expenditures of **$180.0 million to $200.0 million for fiscal year 2026**, primarily for global manufacturing, tooling, IT investments, and facility upgrades[316](index=316&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate and foreign exchange risks, with minimal expected impact from 10% rate changes - Exposed to interest rate risk on fixed-rate investments and variable-rate debt (term loans, revolving lines of credit), but a **10% change is not expected to have a significant impact**[321](index=321&type=chunk)[323](index=323&type=chunk) - Direct exposure to foreign exchange rate fluctuations is minimal as most sales and purchases are in U.S. dollars; a **10% change is not expected to have a significant impact**[324](index=324&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for FY2025-2023, including balance sheets and cash flows - Consolidated financial statements for FY2025, FY2024, and FY2023 are presented, audited by BDO USA, P.C. (2025, 2024) and Deloitte & Touche LLP (2023)[329](index=329&type=chunk)[345](index=345&type=chunk) - BDO USA, P.C. expressed an **adverse opinion on the effectiveness of internal control over financial reporting as of June 30, 2025**[331](index=331&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :----- | :------------ | :------------ | | Total current assets | $12,301,654 | $8,931,960 | | Total assets | $14,018,429 | $9,826,092 | | Total current liabilities | $2,344,792 | $2,345,721 | | Total liabilities | $7,716,558 | $4,408,722 | | Total stockholders' equity | $6,301,871 | $5,417,370 | Consolidated Statements of Operations Highlights (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----- | :----- | :----- | :----- | | Net sales | $21,972,042 | $14,989,251 | $7,123,482 | | Gross profit | $2,429,922 | $2,061,410 | $1,283,012 | | Income from operations | $1,252,994 | $1,210,774 | $761,142 | | Net income | $1,048,854 | $1,152,666 | $639,998 | | Diluted EPS | $1.68 | $1.92 | $1.14 | Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----- | :----- | :----- | :----- | | Net cash provided by (used in) operating activities | $1,659,524 | $(2,485,972) | $663,580 | | Net cash used in investing activities | $(183,214) | $(194,248) | $(39,486) | | Net cash provided by (used in) financing activities | $2,024,045 | $3,911,724 | $(448,293) | - Inventories increased to **$4.68 billion in fiscal year 2025** from **$4.33 billion in fiscal year 2024**. Write-down adjustments for excess and obsolete inventory totaled **$232.0 million in fiscal year 2025**, up from **$83.0 million in fiscal year 2024**[468](index=468&type=chunk) - Total revenue from service and software increased to **$330.5 million in fiscal year 2025** from **$228.3 million in fiscal year 2024**[449](index=449&type=chunk) - **Four customers accounted for 10% or more of net sales in fiscal year 2025** (Customer A: **20.9%**, Customer B: **11.5%**, Customer C: **11.3%**, Customer D: **11.1%**)[419](index=419&type=chunk) - **Two suppliers accounted for a significant portion of total purchases in fiscal year 2025** (Supplier A: **64.4%**, Supplier B: **5.1%**)[414](index=414&type=chunk) - Convertible notes outstanding include **$1.7 billion of 2029 Convertible Notes**, **$700.0 million of 2028 Convertible Notes**, and **$2.3 billion of 2030 Convertible Notes**[536](index=536&type=chunk)[550](index=550&type=chunk)[560](index=560&type=chunk) - Related party transactions with Ablecom and Compuware (contract manufacturing, distribution) represented **3.3% of cost of sales in fiscal year 2025**[416](index=416&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=125&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) EY resigned as auditor in October 2024, citing governance concerns, but a Special Committee found their conclusions unsupported - EY resigned as independent auditor in **October 2024**, citing concerns about governance, transparency, internal controls, and inability to rely on management/Audit Committee representations[705](index=705&type=chunk) - EY's resignation led to delinquent filings of the FY2024 10-K and Q1/Q2 FY2025 10-Qs, which were subsequently filed by **February 25, 2025**[708](index=708&type=chunk) - A Special Committee review concluded that EY's resignation and conclusions were **not supported by the facts examined**, finding no substantial concerns about senior management integrity or Audit Committee oversight[712](index=712&type=chunk) [Item 9A. Controls and Procedures](index=126&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of June 30, 2025, due to material internal control weaknesses, with remediation underway - Disclosure controls and procedures were **not effective as of June 30, 2025**, due to material weaknesses in internal control over financial reporting[710](index=710&type=chunk) - Identified material weaknesses include: (i) IT general controls for certain financial reporting systems, (ii) segregation of duties conflicts, (iii) completeness and accuracy of information, and (iv) documentation of control procedures for timely recording and disclosure, including related party transactions[715](index=715&type=chunk) - Remediation plan includes enhancing accounting competencies, implementing standard policies for manual journal entries, completing a risk-based review of IT architecture, and redesigning ERP system security[721](index=721&type=chunk)[724](index=724&type=chunk) - BDO USA, P.C. issued an **adverse opinion on the effectiveness of internal control over financial reporting as of June 30, 2025**[729](index=729&type=chunk)[734](index=734&type=chunk) [Item 9B. Other Information](index=132&type=section&id=Item%209B.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by executive officers and directors in Q4 FY2025 - David Weigand (SVP, CFO, CCO) adopted a Rule 10b5-1 trading arrangement on **May 30, 2025**, for **50,000 shares**[739](index=739&type=chunk) - Sara Liu (Co-Founder, SVP, Director) adopted a Rule 10b5-1 trading arrangement on **May 29, 2025**, for **600,000 shares**[739](index=739&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=132&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company has no disclosures regarding foreign jurisdictions that prevent inspections PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=133&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section lists executive officers and directors, detailing Board composition, governance, and independent committees - Charles Liang serves as President, CEO, and Chairman; Sara Liu as Co-Founder, SVP, and Director; Yih-Shyan (Wally) Liaw as Co-Founder, SVP Business Development, and Director[744](index=744&type=chunk)[749](index=749&type=chunk)[750](index=750&type=chunk) - **Six of nine current Board members** (Judy Lin, Robert Blair, Scott Angel, Sherman Tuan, Susan Mogensen, Tally Liu) are independent[767](index=767&type=chunk) - The Board has three standing committees (Audit, Compensation, Governance), all composed solely of non-employee, independent directors[777](index=777&type=chunk) - Tally Liu was re-appointed as lead independent director for a one-year term expiring **January 2026**[774](index=774&type=chunk) - Scott Angel, appointed **March 2025**, is an "audit committee financial expert" with extensive audit and technology industry experience[753](index=753&type=chunk)[778](index=778&type=chunk) [Item 11. Executive Compensation](index=143&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation links NEO pay to corporate performance, with CEO Charles Liang's compensation almost entirely performance-based - Executive compensation philosophy links a significant portion of NEO compensation to corporate performance, reducing reliance on fixed compensation[800](index=800&type=chunk) - CEO Charles Liang's compensation is almost entirely performance-based, with a **$1 annual salary** and no cash bonuses, tied to the 2021 and 2023 CEO Performance Awards[801](index=801&type=chunk)[802](index=802&type=chunk)[803](index=803&type=chunk) - As of June 30, 2025, all five tranches of the **2021 CEO Performance Award (10,000,000 shares) had vested**[801](index=801&type=chunk)[819](index=819&type=chunk) - For the 2023 CEO Performance Award (**5,000,000 shares**), **four of five stock price goals** ($45, $60, $75, $90) and **all five revenue goals** ($13.0B, $15.0B, $17.0B, $19.0B, $21.0B) were achieved by August 2025, resulting in **4,000,000 shares vested**[804](index=804&type=chunk)[831](index=831&type=chunk)[835](index=835&type=chunk) - Other NEOs (Weigand, Clegg, Kao) participate in the FY2025 Performance Program, which includes Base Salary, Fixed Bonus, and a Performance Incentive Award (mix of cash and service-based RSUs) tied to individualized KPIs (e.g., stock price, revenue growth, customer growth, inventory)[800](index=800&type=chunk)[809](index=809&type=chunk)[849](index=849&type=chunk) FY2025 Summary Compensation for NEOs (in thousands) | Name | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Total ($) | | :--- | :--------- | :-------- | :--------------- | :---------------- | :----------------------------------------- | :-------- | | Charles Liang | 1 | — | — | — | — | 442 | | David Weigand | 557,958 | 180,979 | 1,166,317 | — | 55,638 | 1,961,333 | | Don Clegg | 426,474 | 109,384 | 661,883 | — | 139,534 | 1,337,716 | | George Kao | 417,823 | 69,822 | 813,363 | 510,915 | 58,851 | 1,871,315 | - The CEO pay ratio for fiscal year 2025 was **0.16 to 1**, with CEO compensation of **$13,518** and median employee compensation of **$86,832**[928](index=928&type=chunk) - The company adopted a new compensation clawback policy (effective **Oct 25, 2023**) compliant with Nasdaq and SEC rules, allowing recovery of excess incentive-based compensation in case of accounting restatements[890](index=890&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=172&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common stock for NEOs, directors, and major stockholders as of July 31, 2025 Beneficial Ownership as of July 31, 2025 | Owner Category | Amount of Beneficial Ownership | Percent of Common Stock Outstanding | | :------------- | :----------------------------- | :-------------------------------- | | Charles Liang & Sara Liu | 82,071,594 | 13.5% | | All directors and executive officers as a group | 98,904,662 | 16.2% | | BlackRock, Inc. | 41,338,350 | 7.0% | | The Vanguard Group | 61,946,070 | 10.4% | - As of June 30, 2025, **55,276,780 shares were subject to outstanding options and RSU awards**, with **17,217,058 shares remaining available for future issuance** under equity compensation plans[958](index=958&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=173&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) The Audit Committee reviews related party transactions, with significant business relationships with Ablecom and Compuware - Audit Committee is responsible for reviewing and approving related person transactions, with specific procedures to ensure independence and alignment with company interests[960](index=960&type=chunk) - Significant related party transactions with Ablecom and Compuware, where Charles Liang and Sara Liu (CEO and Director) have ownership in Ablecom, and other family members hold positions/ownership in both[969](index=969&type=chunk)[970](index=970&type=chunk) - Purchases from Ablecom totaled **$321.9 million in fiscal year 2025** (vs. **$269.3 million in FY2024**), and from Compuware totaled **$328.3 million in fiscal year 2025** (vs. **$280.8 million in FY2024**)[976](index=976&type=chunk)[977](index=977&type=chunk) - Outstanding non-cancelable purchase orders to Ablecom were **$30.6 million** and to Compuware were **$118.3 million as of June 30, 2025**[978](index=978&type=chunk)[979](index=979&type=chunk) - CEO Charles Liang has an unsecured loan of approximately **$16.8 million** (including interest) from Steve Liang's spouse, dating back to **October 2018**[985](index=985&type=chunk) [Item 14. Principal Accountant Fees and Services](index=177&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) BDO USA, P.C. was appointed as the independent auditor for FY2024 onwards, with all services pre-approved - BDO USA, P.C. was appointed as the independent registered public accounting firm starting **fiscal year 2024**[987](index=987&type=chunk) Independent Registered Public Accounting Firm Fees (in thousands) | Fee Type | FY2025 | FY2024 | | :------- | :----- | :----- | | Audit Fees | $8,263 | $8,578 | - The Audit Committee pre-approves all audit and permissible non-audit services to ensure auditor independence[990](index=990&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=177&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists all documents filed as part of the 10-K report, including financial statements and exhibit index [Item 16. Form 10-K Summary](index=182&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is marked "None," indicating no summary is provided

Group 1 - Super Micro Computer, Inc. (NASDAQ: SMCI) was initially rated as a Strong Buy in December 2022 when it was relatively unknown [1] - The analysis of SMCI stock is conducted by a chief investment analyst at a family office, indicating a professional level of scrutiny and expertise [1] - The investing group Beyond the Wall Investing provides access to high-quality analysis and insights similar to those used by institutional market participants [1]