Super Micro Computer (SMCI) 10-K risk factor changes: FY2023 vs FY2022

- Conflicts of interest may arise [removed: between us and] [added: with] Ablecom and Compuware, and [removed: those conflicts] [added: they] may adversely affect our operations.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 10][added: 9]

- Future sales of shares by existing [removed: stockholders] [added: stockholders, including any shares that have vested or may in the future vest under the 2021 CEO Performance Award,] could cause our stock price to decline.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 11][added: 10]

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 12][added: 11]

The crisis in eastern Europe continues to [removed: be a challenge] [added: pose challenges] to global companies, including us, which have customers in the impacted regions.

For example, with respect to Russia, Belarus and the restricted areas in Ukraine, we [removed: do not] [added: did not, prior to the imposition of restrictions,] make a material portion of our sales or acquire a material portion of our parts or components directly from impacted regions; however, our suppliers and their suppliers may acquire raw materials for parts or components from the impacted regions.

Supply disruptions may make it harder for them to find favorable pricing and reliable sources for materials they need, which may put [added: further] upward pressure on their costs and increasing the risks that our costs may increase and that it may be more difficult, or we may be unable, to acquire materials needed.

Furthermore, [removed: the] continued weakness and uncertainty in worldwide credit markets may harm our customers’ available budgetary spending, which could lead to cancellations or delays in planned purchases of our Total IT Solutions.

If our customers or potential customers experience economic hardship, this could reduce the demand for our Total IT Solutions, delay and lengthen sales cycles, [added: increase requests for customer credit which may increase our risks in the event customers do not pay or make timely payment,] lower prices for our Total IT Solutions, and lead to slower growth or even a decline in our revenues, operating results and cash flows.

- [removed: The] [added: Continuing lingering effects from the COVID-19 pandemic, the] occurrence of [added: other] global pandemics, [removed: including COVID-19,] and other events that impact the global economy or one or more sectors [removed: of the global economy,] [added: thereof,] such as the global economic downturn and recent events in eastern Europe;

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 13][added: 12]

- Fluctuations in availability and costs associated with key components, particularly semiconductors, memory, storage solutions, and other materials needed to satisfy customer [removed: requirements, especially during a period of global market disruption, and, in particular, the impact of the extended duration of both the COVID-19 pandemic, the global economic downturn and recent events in eastern Europe on our supply chain and the supply chain of our suppliers;][added: requirements;]

- The introduction and market acceptance of new technologies and products, and our success in [removed: new] [added: emergent] and [added: rapidly] evolving [removed: markets,] [added: markets (such as AI),] and incorporating emerging technologies in our products, as well as the adoption of new standards;

- Changes in our product pricing policies, including those made in response to new product [removed: announcements;][added: announcements and fluctuations in availability and costs of key components;]

As a result of a variety of factors discussed in this Annual Report, our revenue and margins for a particular quarter are difficult to predict, especially in light of a challenging and inconsistent global macroeconomic environment, [removed: the significant] [added: lingering] impacts of the COVID-19 pandemic, the global economic [removed: downturn and] [added: downturn,] recent events in eastern Europe, [added: volatility in emergent and rapidly evolving markets (such as AI),] steps we are taking in response thereto, increased competition, the effects of the ongoing trade disputes between the United States and China and related market uncertainty.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 14][added: 13]

As we increasingly target larger customers and larger sales opportunities, our customer base may become more concentrated, our cost of sales may increase, our margins may be lower, our borrowings to fund purchases of key components may be higher, we are exposed to inventory risks and [added: increased credit risks, and] our sales may be less predictable.

[removed: No] [added: While no] single customer accounted for 10% or more of net sales in any of fiscal years [removed: 2022, 2021] [added: 2023, 2022] or [removed: 2020.][added: 2021, we may have customers account for 10% or more of net sales in the future.]

If our largest customers do not purchase our products, or we are unable to supply such customers with products, at the levels, in the timeframes or within the geographies that we expect, including as a result of the [removed: impact of COVID-19, the] global economic [removed: downturn] [added: downturn, lingering impacts of the COVID-19 pandemic,] or recent events in eastern Europe on their or our businesses, our ability to maintain or grow our net sales will be adversely affected.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 15][added: 14]

Increases in average selling prices for our solutions have [removed: historically] significantly contributed to increases in net sales in some of the periods covered by this Annual Report.

[removed: Recently, the] [added: The] market for key components [removed: has become] [added: became, and continues to be,] more volatile during the [removed: COVID-19 pandemic, the] global economic [removed: downturn] [added: downturn, the COVID-19 pandemic] and [added: lingering effects thereof, and] recent events in eastern Europe.

We cannot predict the timing or amount of any decline in the average selling prices of our server solutions that we may experience in the future, which may be exacerbated by [removed: continued] [added: the global economic downturn, lingering] effects from the COVID-19 pandemic, [removed: the global economic downturn] and recent events in eastern Europe.

Prices of certain materials and core components utilized in the manufacture of our server and storage solutions, such as [added: GPUs,] serverboards, chassis, CPUs, memory, hard drives and SSDs, represent a significant portion of our cost of sales.

While we have increased our purchases of certain critical materials and core components in response to the supply and demand [removed: uncertainties associated with the COVID-19 pandemic, the global economic downturn and recent events in eastern Europe,] [added: uncertainties,] we do not have long-term supply contracts for all critical materials and core components, but instead often purchase these materials and components on a purchase order basis.

Prices [added: and availability] of these core components and materials are volatile, and, as a result, it is difficult to predict expense levels and operating results.

Because we often acquire materials and key components on an as needed basis, we may be limited in our ability to effectively and efficiently respond to customer orders because of the then-current availability or the terms and pricing of these materials and key [removed: components.][added: components, particularly for GPUs during periods of growth of new emerging markets (such as for AI).]

Our industry has experienced materials shortages and delivery delays in the past, including as a result of [added: increased demand during periods of growth of new emerging markets (such as for AI),] the negative impact of COVID-19, the global economic downturn and recent events in eastern Europe on global supply chains, and we may experience shortages or delays of critical materials or increased logistics costs to obtain necessary materials in a timely manner in the future.

The COVID-19 [removed: pandemic and] [added: pandemic,] other macroeconomic factors exacerbated by the COVID-19 [removed: pandemic has] [added: pandemic, lingering effects from the COVID-19 pandemic, and other factors, have in the past] resulted [added: in, and may] in [removed: widely reported] [added: future result in additional] shortages of [added: key] semiconductors.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 16][added: 15]

[removed: There are uncertainties and risks related to COVID-19,] [added: In] the [removed: global economic downturn and recent events in eastern Europe, for which] [added: past,] we have taken certain actions including our increased purchase of certain critical materials and components as a part of our response [removed: planning.][added: planning for various uncertainties and risks, such as those related to the COVID-19 pandemic and lingering effects therefrom.]

Nevertheless, no assurances can be given that [added: any] such efforts will be successful to manage inventory, and we could be exposed to risks of insufficient, excess, or obsolete inventory.

We expect that we will experience such write downs from time-to-time in the future related to existing and future commitments, and potentially related to [removed: our] [added: any] proactive purchase of certain critical materials and components as part of our planning [removed: in light of COVID-19, the global economic downturn] [added: for uncertainties] and [removed: recent events in eastern Europe.][added: risks.]

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 17][added: 16]

Conflicts of interest may arise [removed: between us and] [added: with] Ablecom and Compuware, and [removed: those conflicts] [added: they] may adversely affect our operations.

Our purchases of products from Ablecom and Compuware represented [removed: 8.2%, 7.8%] [added: 6.6%, 8.3%] and [removed: 10.1%] [added: 7.8%] of our cost of sales for fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

Steve Liang owned no shares of our common stock as of June 30, [removed: 2022, 2021] [added: 2023, 2022] or [removed: 2020.][added: 2021.]

Charles Liang and his spouse, Sara Liu, our Co-Founder, Senior Vice President and Director, jointly owned approximately 10.5% of Ablecom’s capital stock, while Mr. Steve Liang and other family members owned approximately 28.8% of Ablecom’s outstanding common stock as of June 30, [removed: 2022.][added: 2023.]

As of June 30, [removed: 2022,] [added: 2023,] the amount due on the unsecured loan (including principal and accrued interest) was approximately [removed: $15.7] [added: $16.0] million.

- We may be unable to secure additional financing on favorable terms, or at all, which in turn could impair the rate of our growth.

- The use of AI by our workforce may present risks to our business.

- Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business.

When we issue credit in connection with large orders, in the event customers to do not pay or make timely payment our ability to collect amounts owed to us creates risk.

We have in the past, and may continue in the future, on a case by case basis, take steps to mitigate collection risks, such as seeking third party insurance with respect to credit issued and taking a security interest in goods we have sold to customers pending collection of any credit given.

However, we cannot assure that such measures will be effective to collect on all or part of any such credit issued.

Larger customers may also request larger amounts of credit or longer payment terms, which, if granted, increases our risks in the event customers to do not pay or make timely payment, which risk is exacerbated in the event our payment terms with major suppliers of necessary components for such orders do not match the payment terms of our customers.

We may be unable to secure additional financing on favorable terms, or at all, which in turn could impair the rate of our growth.

We had net income of $640.0 million, $285.2 million and $111.9 million in fiscal years 2023, 2022 and 2021, respectively.

We believe that our current cash, cash equivalents, borrowing capacity available from our credit facilities and internally generated cash flows will be sufficient to support our operating businesses and maturing debt and interest payments for the 12 months following the issuance of the financial statements included in this Annual Report.

Nevertheless, we intend to continue to grow our business, which could require additional capital.

Since our initial public offering, we have funded our growth primarily through the cash raised from our operations and credit facilities with banking institutions.

We may need to expand our existing credit facilities, enter into new credit facilities or engage in equity, debt or other type of financings to secure additional capital to continue or increase our rate of growth.

If we raise additional capital through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we may issue could have rights, preferences and privileges superior to those holders of our common stock.

Any credit facility or debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which could make it more difficult for us to raise additional capital and to pursue our growth strategies.

If we are unable to secure additional funding on favorable terms, or at all, when we seek it, we may not be able to continue the rate of our growth.

In addition, no assurances can be given that in the event that we secure such financing that the proceeds thereof will be used effectively or result in growth.

We may continue to take similar actions in the future based upon our assessment of uncertainties and risks.

Each of Ablecom and Compuware are also developing campuses in close proximity to the campus we are developing in Malaysia to expand our manufacturing.

We are also pursuing an expansion of our manufacturing operations into Malaysia.

During the second quarter of fiscal year 2023, we entered into a letter of understanding to acquire land in Malaysia.

A definitive agreement to acquire such land, subject to various conditions, was subsequently executed in January 2023.

We are obtaining early access to such land prior to acquisition, and we anticipate significant capital expenditures will be required for such initiative.

To the extent we are unable to recoup expenditures made during our period of early access to such land and we are subsequently unable to complete the acquisition of the land, we could be materially and adversely affected.

There are also no assurances that investments we make to pursue new business markets and opportunities (such as ecommerce in B2B and B2C markets and data center offerings) will be successful or profitable, given the investment costs necessary to pursue these markets and opportunities, which includes investments in technology, people, time, and other overhead costs.

Similar future events may cause additional interruptions on the global supply chain.

Other U.S. states have also enacted data privacy laws that began to take effect in 2023 and impose similar privacy obligations to the CCPA and CPRA.

We do not sell products or provide services to the Russian Federal Security Service (the “FSB”).

We had last recorded revenue from Russia on February 23, 2022.

We receive significant tax benefits from sales to our non-U.S. customers.

These benefits are contingent upon existing tax laws and regulations in the U.S. and in the countries in which our international operations are located.

Future changes in domestic or international tax laws and regulations or a change in how we manage our international operations could adversely affect our ability to continue realizing these tax benefits.

Many countries around the world are beginning to implement legislation and other guidance to align their international tax rules with the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting recommendations and related action plans that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer-pricing documentation rules and nexus-based tax incentive practices.

As a result, many of these changes, if enacted, could increase our worldwide effective tax rate and harm our operating results, financial condition, and cash flows.

Our effective tax rate could also be adversely affected by changes in tax laws and regulations and interpretations of such laws and regulations, which in turn would negatively impact our earnings and cash and cash equivalent balances we currently maintain.

Additionally, our effective tax rate could also be adversely affected if there is a change in international operations, our tax structure and how our operations are managed and structured, and as a result, we could experience harm to our operating results and financial condition.

- Lawsuits filed against us;

See “Item 11.

Furthermore, additional tranches of the 2021 CEO Performance Award may vest, subject to the achievement of specified annualized revenue milestones (the “Annualized Revenue Milestones”) and a matching stock price milestone, and if such additional tranches do vest, they would be subject to the risks discussed above.

In connection therewith, the Company has determined that the Annualized Revenue Milestones that have not yet been achieved are “probable of achievement,” for purposes of determining whether to recognize expense associated with the applicable tranche.

- The effects of the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic adversely affected our business operations, financial condition and results of operations, and there are no assurances adverse effects will not continue.

- We incurred significant expenses related to the matters that led to the delay in the filing of our 2017 10-K and may incur additional expenses related to resulting litigation.

The effects of the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic adversely affected our business operations, financial condition and results of operations, and there are no assurances adverse effects will not continue.

The novel strain of the coronavirus identified in Wuhan, China in late 2019 (COVID-19) spread throughout the world and resulted in authorities imposing, and businesses and individuals implementing, numerous unprecedented measures to try to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, and shutdowns.

These measures impacted and may continue to impact our business operations, the operations of our customers, and those of our respective vendors, suppliers, and partners.

During the COVID-19 pandemic, we continued our manufacturing operations and customers’ orders processing and services, although our productivity at times slowed, especially in the United States and in the Netherlands.

Logistics has continued to be a challenge during the COVID-19 pandemic as the global transportation industry, and particularly ocean transportation, has been constrained by shortages of containers, labor, truckers and crowded ports.

The COVID-19 pandemic also adversely impacted shipments to our customers and, to a lesser extent, our ability to provide services and support to our customers.

As a result, shipping by air has been used more frequently despite that it is more expensive and there are fewer flights during the COVID-19 pandemic than there were previously.

We have experienced increased costs in freight.

In addition, we also experienced increased direct labor costs as we incentivized our employees to continue to work and assist us in serving our customers, many of whom are in critical industries.

We expect both of these trends to continue until the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic end.

We have invested capital to procure key components (such as CPUs, memory, SSDs and GPUs) so we can maintain reasonable lead times to fulfill orders for our customers.

There are positive signs with the expiration of various COVID-19 mandates, vaccine availability and the rollout of boosters; however, with the possibility of the emergence of other new virus strains and vaccine supply constraints, we are unable to predict the ultimate extent to which the global COVID-19 pandemic (or other potential infectious diseases, such as the currently spreading monkeypox virus) may further impact our business operations, financial performance and results of operations.

The extent to which the effects of the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic will continue to impact our business, operations, financial condition and results of operations will depend on numerous evolving factors that we may not be able to control or predict, including:

- The duration and scope of the COVID-19 pandemic;

- The extent and effectiveness of responsive actions by authorities and the impact of these and other factors on our employees, customers and vendors;

- The rate of spending on server and storage solutions, including delays in prospective customers’ purchasing decisions and delays in the provisioning of our products;

- The rate at which our suppliers develop and release new components such as microprocessors and memory;

- The rate at which our customers can perform acceptance testing or qualify our products, particularly if they contain new technologies;

- Factors affecting the availability of human capital, including either shortage of labor and/or heightened unemployment;

- The global economic recession and/or inflation pressures;

- The health impact of the pandemic on our employees, including key personnel;

- The impact on the liquidity of our sales partners and end customers, including lengthening of customers payment terms and potential bankruptcies;

- Our continued ability to execute on business continuity plans for the maintenance of our critical business processes and managing our liquidity and access to credit facilities on terms acceptable to us;

- Availability of and fluctuations in the cost of materials, logistics and labor; and

- Erosion of economic activity by small and medium size business or sectors to which we are exposed through OEMs and indirect sales channels.

We have also entered into a tripartite agreement with Ablecom and Compuware related to a three-way purchase of land in proximity to our campus in Bade, Taiwan.

Certain other state laws, including Virginia, Colorado, Connecticut and Utah data privacy laws, impose similar privacy obligations and will take effect beginning in 2023.

We incurred significant expenses related to the matters that led to the delay in the filing of our 2017 10-K and may incur additional expenses related to resulting litigation.

We devoted substantial internal and external resources towards investigating, discovering, understanding and remediating the matters that led to the delay in the filing of our 2017 10-K (all as described in the 2017 10-K).

As a result of these efforts, we incurred substantial incremental fees and expenses for additional accounting, financial and other consulting and professional services, as well as the implementation and maintenance of systems and processes that will need to be updated, supplemented or replaced.

Specifically, in connection with these efforts, we incurred professional fees of approximately $4.4 million, $0.5 million and $14.0 million in fiscal years 2022, 2021 and 2020, respectively.

In addition, as of and for the year ended June 30, 2022, we recorded a net litigation settlement cost of $2.0 million associated with the settlement of one of the stockholder actions associated with the delay in the filing of our 2017 10-K and, as of and for the year ended June 30, 2020, we recorded a liability of $17.5 million for our SEC settlement of the investigation into our Company's financial accounting for fiscal years 2014 to 2017.

We have taken a number of steps in order to strengthen our corporate culture, sales processes, and accounting function so as to allow us to be able to provide timely and accurate financial reporting.

To the extent these steps are not successful, we could be required to devote significant additional time and incur significant additional expenses.

Even if these steps are successful, we may incur significant legal fees in future periods as we continue to address litigation arising from the matters that led to the delay in the filing our 2017 10-K.

The expenses we are and may incur in this regard, as well as the substantial time devoted by our management to identify and address internal control deficiencies, could have a material adverse effect on our business, results of operations and financial condition.

Following the U.S. federal government’s enactment of the Tax Cuts and Jobs Act (“2017 Tax Reform Act”), we realigned our international business operations and group structure to take advantage of certain international tax planning opportunities and incentives.

Our future effective income tax rates could be adversely affected if tax authorities challenge our international tax structure or if the relative mix of our United States and international income changes for any reason, or due to changes in U.S. or international tax laws.

We are a Silicon Valley-based provider of accelerated compute platforms that are application-optimized high performance and high-efficiency server and storage systems for a variety of markets, including enterprise data centers, cloud computing, [removed: artificial intelligence,] [added: AI,] 5G and edge computing.

Our Total IT Solutions include complete servers, storage systems, modular blade servers, blades, workstations, full [removed: rack scale] [added: rack-scale] solutions, networking devices, server sub-systems, server management and security software.

For fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] our net income was [removed: $285.2] [added: $640.0] million, [removed: $111.9] [added: $285.2] million and [removed: $84.3] [added: $111.9] million, respectively.

Historically, our ability to introduce new products rapidly has allowed us to benefit from technology transitions such as the introduction of new microprocessors and storage technologies, and as a result, we monitor the [added: product] introduction cycles of [removed: NVIDIA Corporation,] Intel Corporation, [added: NVIDIA Corporation,] Advanced Micro Devices, Inc., Samsung Electronics Company Limited, Micron Technology, Inc. and others closely and carefully.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 37

Refer to Part II, Item 8, Note [removed: 9,] [added: 7,] “Short-term and Long-term Debt” in our notes to consolidated financial statements in this Annual Report on Form 10-K for further information on our outstanding [removed: debt][added: debt.]

[removed: *Financial Highlights*][added: Financial Highlights]

The following is a summary of financial highlights of fiscal years [removed: 2022] [added: 2023] and [removed: 2021:][added: 2022:]

- Net sales increased by [removed: 46.1%] [added: 37.1%] in fiscal year [removed: 2022] [added: 2023] as compared to fiscal year [removed: 2021.][added: 2022.]

- Gross margin increased to [removed: 15.4%] [added: 18.0%] in fiscal year [removed: 2022] [added: 2023] from [removed: 15.0%] [added: 15.4%] in fiscal year [removed: 2021,] [added: 2022,] primarily due to product and customer mix and [removed: was offset by increased] [added: decreased] logistic costs.

- Operating expenses increased by [removed: 13.2%] [added: 12.3%] in fiscal year [removed: 2022] [added: 2023] as compared to fiscal year [removed: 2021,] [added: 2022,] primarily due to the increase in personnel expenses as a result of salary [removed: increases] [added: increases, equity grants] and a higher headcount.

- Net income increased to [removed: $285.2] [added: $640.0] million in fiscal year [removed: 2022] [added: 2023] as compared to [removed: $111.9] [added: $285.2] million in fiscal year [removed: 2021,] [added: 2022,] which was primarily due to the higher net sales and lower operating expenses as a percentage of revenues in fiscal year [removed: 2022] [added: 2023] as compared to fiscal year [removed: 2021.][added: 2022.]

- Our cash and cash equivalents were [removed: $267.4] [added: $440.5] million and [removed: $232.3] [added: $267.4] million at the end of fiscal years [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 38

We evaluate our estimates on an on-going basis [removed: and base our estimates] [added: based] on [added: a)] historical [removed: experience and on various other] [added: experience, b)] assumptions [removed: that] we believe to be reasonable under the [removed: circumstances,] [added: circumstances and are not readily apparent from other sources,] the results of which form the basis for making [removed: the] judgments [removed: we make] about the carrying values of assets and [removed: liabilities that are not readily apparent from other sources.][added: liabilities.]

We also estimate the costs of customer and distributor programs and incentive offerings such as price protection, [added: customer] rebates, as well as the estimated costs of cooperative marketing arrangements where the fair value of the benefit derived from the costs cannot be reasonably estimated.

These estimates and judgements have not fluctuated significantly for the fiscal year ended June 30, [removed: 2022] [added: 2023] compared to prior fiscal years.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 39

SMCI | [removed: 2022] [added: 2023] Form 10-K | 40

SMCI | [removed: 2022] [added: 2023] Form 10-K | 41

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Cost of sales | | | [removed: 84.6] [added: 82.0] | | % | | | | [removed: 85.0] [added: 84.6] | | % | | | | [removed: 84.2] [added: 85.0] | | % |

| Gross profit | | | [removed: 15.4] [added: 18.0] | | % | | | | [removed: 15.0] [added: 15.4] | | % | | | | [removed: 15.8] [added: 15.0] | | % |

| Research and development | | | [removed: 5.2] [added: 4.3] | | % | | | | [removed: 6.3] [added: 5.2] | | % | | | | [removed: 6.6] [added: 6.3] | | % |

| Sales and marketing | | | [removed: 1.7] [added: 1.6] | | % | | | | [removed: 2.4] [added: 1.7] | | % | | | | [removed: 2.5] [added: 2.4] | | % |

| General and administrative | | | [removed: 2.0] [added: 1.4] | | % | | | | [removed: 2.8] [added: 2.0] | | % | | | | [removed: 4.1] [added: 2.8] | | % |

| Total operating expenses | | | [removed: 8.9] [added: 7.3] | | % | | | | [removed: 11.5] [added: 8.9] | | % | | | | [removed: 13.2] [added: 11.5] | | % |

| Income from operations | | | [removed: 6.5] [added: 10.7] | | % | | | | [removed: 3.5] [added: 6.5] | | % | | | | [removed: 2.6] [added: 3.5] | | % |

| Other [removed: (expense) income,] [added: income (expense),] net | | | [removed: 0.2] [added: 0.1] | | % | | | | [removed: (0.1)] [added: 0.2] | | % | | | | [removed: —] [added: (0.1)] | | % |

| Income before income tax provision | | | [removed: 6.6] [added: 10.7] | | % | | | | [removed: 3.3] [added: 6.6] | | % | | | | [removed: 2.5] [added: 3.3] | | % |

| Income tax provision | | | [removed: (1.0)] [added: (1.6)] | | % | | | | [removed: (0.2)] [added: (1.0)] | | % | | | | [removed: (0.1)] [added: (0.2)] | | % |

| Share of [added: (loss)] income from equity investee, net of taxes | | | [removed: —] [added: (0.1)] | | % | | | | — | | % | | | | [removed: 0.1] [added: —] | | % |

| Net income | | | [removed: 5.6] [added: 9.0] | | % | | | | [removed: 3.1] [added: 5.6] | | % | | | | [removed: 2.5] [added: 3.1] | | % |

The following table presents net sales by product type for fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] (dollars in millions):

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] over [removed: 2021] [added: 2022] Change | | | | | | | | | | | | [removed: 2021] [added: 2022] over [removed: 2020] [added: 2021] Change | | | | | | | | |

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

| Server and storage systems | | | $ | [removed: 4,463.8] [added: 6,569.8] | | | | | $ | [removed: 2,790.3] [added: 4,463.8] | | | | | $ | [removed: 2,620.8] [added: 2,790.3] | | | | | $ | [removed: 1,673.5] [added: 2,106.0] | | | | | [removed: 60.0] [added: 47.2] | | % | | | | $ | [removed: 169.5] [added: 1,673.5] | | | | | [removed: 6.5] [added: 60.0] | | % |

| *Percentage of total net sales* | | | [removed: 85.9] [added: 92.2] | | % | | | | [removed: 78.4] [added: 85.9] | | % | | | | [removed: 78.5] [added: 78.4] | | % | | | | | | | | | | | | | | | | | | | | | | | | |

| Subsystems and accessories | | | [removed: 732.3] [added: 553.7] | | | | | | [removed: 767.1] [added: 732.3] | | | | | | [removed: 718.5] [added: 767.1] | | | | | | [removed: (34.8)] [added: (178.6)] | | | | | | [removed: (4.5)] [added: (24.4)] | | % | | | | [removed: 48.6] [added: (34.8)] | | | | | | [removed: 6.8] [added: (4.5)] | | % |

| *Percentage of total net sales* | | | [removed: 14.1] [added: 7.8] | | % | | | | [removed: 21.6] [added: 14.1] | | % | | | | [removed: 21.5] [added: 21.6] | | % | | | | | | | | | | | | | | | | | | | | | | | | |

Our business and financial outlook have experienced, and may continue to face, challenges due to adverse macroeconomic conditions and uncertainties.

These factors encompass labor shortages, disruptions in the supply chain, inflation, higher interest rates, and fluctuations in capital markets.

The global business landscape encountered widespread disruption as a consequence of the COVID-19 pandemic, which commenced in early 2020.

The extent of its direct or indirect impact on general market conditions, as well as our business, results of operations, cash flows, and financial condition, is contingent upon uncertain future developments, including the emergence of new variants.

We remain committed to continuously assessing the nature and extent of the impact of general macroeconomic conditions and the ongoing COVID-19 pandemic on our business.

For a more comprehensive discussion, please refer to the "Risk Factors" included in Part I, Item 1A of this Annual Report on Form 10-K.

In fiscal year 2023, we generated net cash of $172.4 million, comprised of $663.6 million provided by operating activities primarily due to increased net income, $448.3 million used in financing activities primarily due to repayment of debt and stock repurchase, and $39.5 million cash used in investing activities primarily due to $36.8 million in purchases of property and equipment.

The year-over-year increase in net sales of server and storage systems was primarily due to the strong demands from such customers for GPU, high performance computing (“HPC”), and rack-scale solutions which are generally more complex and of higher value, resulting in an increase of average selling prices.

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2023 over 2022 Change | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | |

| Total net sales | | | $ | 7,123.5 | | | | | $ | 5,196.1 | | | | | $ | 3,557.4 | | | | | $ | 1,927.4 | | | | | 37.1 | | % | | | | $ | 1,638.7 | | | | | 46.1 | | % |

*Fiscal Year 2023 Compared with Fiscal Year 2022*

The year-over-year increase in overall net sales is the result of increased selling prices and units shipped of product sold especially to large enterprise and datacenter customers.

The United States experienced the highest percentage growth among all regions.

This is due to increased demand from datacenter customers in the United States for GPU, high performance computing (“HPC”), and rack-scale solutions.

The year-over-year decrease in Asia is mainly due to economic slowdown in China and Japan during fiscal year 2023 which heavily reduced the sales activities in that region.

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2023 over 2022 Change | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

*Fiscal Year 2023 Compared with Fiscal Year 2022*

The year-over-year increase in cost of sales was primarily attributed to an increase of $1,379.6 million in costs of materials and contract manufacturing expenses primarily related to the increased shipments of our products and solutions, a $59.2 million increase in overhead costs which includes labor costs attributed to increase of operation activities, a $36.6 million increase in inventory reserves, and a $13.6 million increase in other cost of sales partially offset by a $44.6 million decrease in freight charges due to a reduced need to expedite shipments due to disruptions in the supply chain caused by the COVID-19 pandemic.

The year-over-year increase in the gross margin percentage was primarily due to favorable product and customer mix and lower other cost of goods sold as a percentage of sales, based on higher volumes.

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2023 over 2022 Change | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

*Fiscal Year 2023 Compared with Fiscal Year 2022*

The year-over-year increase in research and development expenses was primarily driven by a $43.5 million increase in compensation expenses due to salary increases, higher headcount and the cost of equity awards as we expanded our workforce and invested in key talent, and a $2.6 million increase in product development costs to support the development of next generation products and technologies, offset by a $11.1 million increase in research and development credits received from certain suppliers and customers.

The year-over-year increase in sales and marketing expenses was primarily driven by a $23.8 million increase in compensation expenses due to salary increases, higher headcount and the cost of equity awards and a $4.6 million increase in travel and trade show expenses to drive new sales opportunities for our products and customer support, offset by a $3.5 million increase in marketing development funds received.

The year-over-year decrease in general and administrative expenses was primarily due to a $5.2 million decrease in professional fees and other, a $2.0 million decrease in litigation settlement expenses relating to a derivative lawsuit, partially offset by an increase of $4.4 million in compensation expenses associated with the cost of equity awards.

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2023 over 2022 Change | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

*Fiscal Year 2023 Compared with Fiscal Year 2022*

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2023 over 2022 Change | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

*Fiscal Year 2023 Compared with Fiscal Year 2022*

The year-over-year decrease in the effective tax rate is attributable to higher tax deductions from disqualified disposition of stock-based compensation, an increase in the R&D tax credit, and an increase in foreign-derived income.

As a result of these favorable elements which were partially offset by certain unfavorable items including an increase in state taxes, the total effective tax rate decreased by 1%, declining from 15.7% in the fiscal year ended June 30, 2022, to 14.7% in the fiscal year ended June 30, 2023.

| | | | Years Ended June 30, | | | | | | | | | | | | | | | | | | 2023 over 2022 Change | | | | | | | | | | | | 2022 over 2021 Change | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

*Fiscal Year 2023 Compared with Fiscal Year 2022*

On June 17, 2023, the Company through the Taiwan subsidiary, entered into a Notification and Confirmation pursuant to which the Taiwan subsidiary and E.SUN Bank agreed to drawdowns of up to US$30 million for an import o/a financing loan with a tenor of 120 days (the “2023 Import O/A Loan”).

We continue to evaluate financing options that may be required to support the growth of our business, if it occurs more rapidly than anticipated.

We repurchased 1,553,350 shares of common stock for $150 million during the fiscal year ended June 30, 2023 under this program and had $50.0 million of remaining availability as of June 30, 2023.

COVID-19 and its variants have continued to create volatility, uncertainty and economic disruption for many businesses worldwide.

In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, including orders that govern the operations of businesses.

We are an essential critical infrastructure (information technology) business under the relevant federal, state and county regulations.

Our first priority is the safety of our workforce and we have therefore implemented numerous health precautions and work practices to be in compliance with the law and to operate in a safe manner.

We have continued to see ongoing demand for our IT solutions and do not have significant direct exposure to industries which have been impacted the greatest.

The COVID-19 pandemic has created additional demand for many server applications that support the global movement towards a digital economy.

These applications include greater use of online transactions for everyday purchases by consumers of food, clothing, entertainment from gaming and video streaming, as well as tele-health, social networking, messaging, email, autonomous driving solutions and video conferencing companies.

We have actively managed our supply chain for potential shortage risk by building inventories of critical components required such as CPUs, memory, SSDs and GPUs to support our ability to fulfill customer orders.

Our architecture, which is based on a “Building Block Solutions” design approach, has also assisted us during the COVID-19 pandemic, to qualify different components for compatibility with our systems to help us overcome some shortages.

Logistics has continued to be a challenge during the COVID-19 pandemic as the global transportation industry, and particularly ocean transportation, has been constrained by shortages of containers, labor, truckers and crowded ports.

As a result, shipping by air, has been used more frequently despite that it is more expensive and there are fewer flights during the COVID-19 pandemic than there were previously.

We have experienced increased costs in freight.

In addition, we also experienced increased direct labor costs as we incentivized our employees to continue to work and assist us in serving our customers, many of whom are in critical industries.

We expect both of these trends to continue until the COVID-19 pandemic and other macroeconomic factors exacerbated by the COVID-19 pandemic end.

We monitor the credit profile and payment history of our customers to evaluate risk in specific industries or geographic areas where cash flow may be disrupted.

While we believe that we are adequately capitalized, we actively manage our liquidity needs.

In June 2021, we negotiated an extension of our credit facility with Bank of America to extend the maturity date to June 2026 and, in March 2022, further negotiated an increase in the size of our credit facility with Bank of America from $200 million to $350 million.

In July 2021, we replaced our prior credit facility and term loan facility with CTBC Bank, with a new facility for omnibus credit lines.

In September 2021, we replaced our prior credit facility with E.SUN Bank, with new credit facility and term facility.

In September 2021 and April 2022, we entered into a term loan facility and credit line, respectively, with Mega Bank which will be used to support our manufacturing activities (including the purchase of materials and components) and provide medium-term working capital.

In October 2021, we entered into a credit facility with Chang Hwa Bank and in January 2022 we entered into a loan agreement with HSBC Bank, each of which will be used to support the growth of our Taiwan business.

In May 2022, we also entered into a line of credit with Cathay Bank to be used for general corporate purposes to support our growth.

In August 2022, we entered into a new general credit agreement with E.Sun Bank which replaced the prior E.Sun Bank credit facility which will also support the growth of our Taiwan business.

Our management team is focused on guiding our company through the ongoing challenges presented by the COVID-19 pandemic, including the emergence of any new variants.

There are positive signs with the expiration of various COVID-19 mandates, vaccine availability and the rollout of boosters; however, with the possibility of the emergence of other new virus strains and ongoing adverse impacts of the COVID-19 pandemic on economic recovery, we are unable to predict the ultimate extent to which the global COVID-19 pandemic may further impact our business operations, financial performance and results of operations.

In fiscal year 2022, we generated net cash of $35.1 million and $522.9 million in cash provided by financing activities primarily due to the proceeds from borrowings and invested $45.2 million in purchases of property and equipment.

We used $440.8 million in operating activities primarily related to the increase in inventories and accounts receivables.

Variable Interest Entities

We determine at the inception of each arrangement whether an entity in which we hold an investment or in which we have other variable interests is considered a variable interest entity ("VIE").

We consolidate VIEs when we are the primary beneficiary.

The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE.

Periodically, we assess whether any changes in the interest or relationship with the entity affect the determination of whether the entity is still a VIE and, if so, whether we are the primary beneficiary.

If we are not the primary beneficiary in a VIE, we account for the investment or other variable interest in accordance with applicable GAAP.

We have concluded that Ablecom and its affiliate, Compuware, are VIEs; however, we are not the primary beneficiary as we do not have the power to direct the activities that are most significant to the entities and therefore, we do not consolidate these entities.

In performing this analysis, we considered our explicit arrangements with Ablecom and Compuware, including all contractual arrangements with these entities.

Also, as a result of the substantial related party relationships between us and these two companies, we considered whether any implicit arrangements exist that would cause us to protect these related parties’ interests from suffering losses.

We determined that no material implicit arrangements exist with Ablecom, Compuware, or their shareholders.

Our ability to assess correctly our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements.

Subsequent evaluations of the primary beneficiary of a VIE may require the use of different assumptions that could lead to identification of a different primary beneficiary, resulting in a different consolidation conclusion than what was determined at inception of the arrangement.

The year-over-year increase in net sales of server and storage systems was primarily due to an increase of average selling prices per compute node by approximately 17%, offset by a decrease of approximately 9% in the number of units of compute nodes sold.

As of June 30, [removed: 2022,] [added: 2023,] our investments were in money market funds, certificates of deposits and auction rate securities.

The interest rates for the term loans and the revolving lines of credit ranged from [removed: 0.83%] [added: 1.20%] to [removed: 4.0%] [added: 7.08%] at June 30, [removed: 2022.][added: 2023.]

Based on the outstanding principal indebtedness of [removed: $596.8] [added: $290.3] million under our credit facilities as of June 30, [removed: 2022,] [added: 2023,] we believe that a 10% change in interest rates would not have a significant impact on our results of operations.

[removed: Foreign] [added: Realized and unrealized foreign] exchange gain (loss) for fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] was [removed: $7.7] [added: $0.2] million, [removed: $(3.2)] [added: $7.7] million and [removed: $(1.4)] [added: $(3.2)] million, respectively.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 50][added: 49]

We are a Silicon Valley-based provider of accelerated compute platforms that are application-optimized [removed: high-performance] [added: high performance] and high-efficiency server and storage systems for [removed: various] [added: a variety of] markets, including enterprise data centers, cloud computing, artificial [removed: intelligence,] [added: intelligence (“AI”),] 5G and edge computing.

Our [removed: solutions, which we refer to as] Total IT [removed: Solutions,] [added: Solutions] include complete servers, storage systems, modular blade servers, blades, workstations, [removed: complete rack scale plug and play solutions delivering pre-defined and pre-tested] full rack scale solutions, networking devices, server sub-systems, [removed: system] [added: server] management and security software.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 1

As of June 30, [removed: 2022,] [added: 2023,] we had over [removed: 2,000] [added: 2,400] employees in our research and development organization.

In addition to serving traditional needs for server and storage systems, we have devoted, and will continue to devote, substantial resources to developing systems that support emerging and growing applications including [added: AI,] cloud computing, [removed: artificial intelligence,] 5G/edge computing, storage and others.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 2

These Total IT Solutions and products are designed to serve a variety of markets, such as enterprise data centers, cloud computing, [removed: artificial intelligence (“AI”)] [added: AI] and 5G/edge computing.

The percentage of our net sales represented by sales of server and storage systems increased to [removed: 85.9%] [added: 92.2%] in fiscal year [removed: 2022] [added: 2023] compared to [removed: 78.4%] [added: 85.9%] in fiscal year [removed: 2021] [added: 2022] and [removed: 78.5%] [added: 78.4%] in fiscal year [removed: 2020,] [added: 2021,] and the percentage of our net sales represented by sales of subsystems and accessories was [removed: 14.1%] [added: 7.8%] in fiscal year [removed: 2022, 21.6%] [added: 2023, 14.1%] in fiscal year [removed: 2021] [added: 2022] and [removed: 21.5%] [added: 21.6%] in fiscal year [removed: 2020.][added: 2021.]

During fiscal year [removed: 2022,] [added: 2023,] we experienced increased revenue from server and storage systems, particularly from our large enterprise and datacenter customers.

The year-over-year [added: increase in net sales of server and storage systems and corresponding] decrease in net sales of subsystems and accessories was primarily due to [removed: the] [added: our] emphasis [removed: of] [added: on] selling full systems and servers which require utilization of the subcomponents.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 3

During each of fiscal [removed: year] [added: years 2023,] 2022 and [removed: fiscal year] 2021, we sold to over 1,000 direct customers in over 100 countries.

In addition, over the three years ended June 30, [removed: 2022,] [added: 2023,] we have sold to thousands of end users through our indirect sales channel.

These customers represent a diverse set of market verticals including enterprise data centers, cloud computing, [removed: artificial intelligence,] [added: AI,] 5G and edge computing markets.

In each of fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] no customer represented greater than 10% of our total net sales.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 4

Sales to customers located outside of the United States represented [removed: 41.6%, 40.7%] [added: 32.1%, 41.6%] and [removed: 41.4%] [added: 40.7%] of net sales in fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

See Part II, Item 8, Note [removed: 12,] [added: 9,] “Related Party Transactions,” to the consolidated financial statements and Part III, Item 13, “Certain Relationships and Related Transactions and Director Independence.”

SMCI | [removed: 2022] [added: 2023] Form 10-K | 5

As of June 30, [removed: 2022,] [added: 2023,] we employed [removed: 4,607] [added: 5,126] full time employees, consisting of [removed: 2,089] [added: 2,448] employees in research and development, [removed: 525] [added: 585] employees in sales and marketing, [removed: 456] [added: 465] employees in general and administrative and [removed: 1,537] [added: 1,628] employees in manufacturing.

Of these employees, [removed: 2,222] [added: 2,291] employees are based in our San Jose facilities.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 6

SMCI | [removed: 2022] [added: 2023] Form 10-K | 7

In addition, we abide by global standards, irrespective of legal requirements, regarding the treatment of workers such as those detailed by the Responsible Business [removed: Alliance (“RBA”).][added: Alliance.]

Please see Part II, Item 8, Note [removed: 17,] [added: 14,] “Segment Reporting” to the consolidated financial statements in this Annual Report for information regarding segment reporting and Part II, Item 8, Note 3, “Revenue - Disaggregation of Revenue” to the consolidated financial statements in this Annual Report for information regarding our net sales by geographic region.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 8

Additionally, during the fiscal year [removed: 2022,] [added: 2023,] the computer server industry experienced global supply chain shortage, which requires us to carry more inventories to fulfill our customers and partners’ demands and backlogs.

In fiscal year 2023, we announced more than 50 products supporting Intel’s new Sapphire Rapids data center CPU.

During the second half of fiscal year 2023, our product portfolio was enhanced to support AMD’s Genoa data center CPU.

In March 2023, we released a high-density petascale class all-flash NVMe server family supporting next-generation EDSFF form factor, including the E3.S and E1.S devices.

Also in March 2023, we unveiled comprehensive portfolio of GPU systems including servers in 8U, 6U, 5U, 4U, 2U, and 1U form factors, as well as workstations that support the full range of new NVIDIA H100 GPUs.

In November 2021, we announced the Universal GPU server; which enables customers to choose the most suitable CPUs and GPUs, and switch configurations for their specific applications and workloads.

In February 2022, we introduced the SuperEdge multi-node Server for 5G, IoT, and edge applications.

This 2U, 3-node, short-depth design increases node density by 50% for high-density computing at the intelligent edge.

During fiscal year 2020, we sold to over 820 direct customers.

From the start of the COVID-19 pandemic, we proactively implemented preventative protocols, which we continuously assess and update for changes in conditions and applicable regulations.

These preventative protocols are intended to safeguard our employees, contractors, suppliers, customers, and communities, and to ensure business continuity.

We are following government policies and recommendations designed to slow the spread of COVID-19 and are committed to the health and safety of anyone in our facilities.

To respond to the COVID-19 pandemic, we implemented the following precautions:

- We require that on-site employees and visitors complete a daily health questionnaire, provide thermometers in all buildings, and adhere to social distance requirements, mask protocols and our internal vaccination mandate;

- We exclude employees who test positive for COVID-19 from the workplace, conduct contact tracing, provide self-tests for employee surveillance, disinfect common areas daily and carry out weekly fogging of each building, minimize non-priority business travel, and provide personal HEPA air purifiers for each employee; and

- To respond to changing COVID-19 updates, we work closely with our Environmental Health and Safety team to monitor and periodically update our policies.

We believe these actions are appropriate and essential to safeguard our employees, contractors, suppliers, customers, and communities while allowing us to safely continue operations.

SMCI | 2022 Form 10-K | 9

The information required by this item is incorporated herein by reference to the information set forth under the caption “Litigation and Claims” in Part II, Item 8, Note [removed: 15] [added: 12] “Commitments and Contingencies” of our notes to the consolidated financial statements included in this Annual Report.

For the fiscal year ended June 30, [removed: 2022][added: 2023]

[removed: ][added: ]

| [removed: Emerging growth company] | | | [removed: ☐] | | | | | | [added: Emerging growth company] | | | [added: ☐] | | |

The aggregate market value of the registrant’s common stock held by non-affiliates, based upon the closing price of the common stock on December 31, [removed: 2021,] [added: 2022,] as reported by the NASDAQ Global Select Market, was [removed: $1,962,046,138.][added: $3,828,767,079.]

As of July 31, [removed: 2022,] [added: 2023,] there were [removed: 52,347,039] [added: 52,905,947] shares of the registrant’s common stock, $0.001 par value, outstanding, which is the only class of common stock of the registrant issued.

FOR THE FISCAL YEAR ENDED JUNE 30, [removed: 2022][added: 2023]

| Item 1. | | | [removed: [Business](#i3228858d90d940fabb3f087f4a45e56d_16)] [added: [Business](#icac7281ee66a4bc980041b3207ca2865_19)] | | | [removed: [1](#i3228858d90d940fabb3f087f4a45e56d_16)] [added: [1](#icac7281ee66a4bc980041b3207ca2865_19)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i3228858d90d940fabb3f087f4a45e56d_19)] [added: Factors](#icac7281ee66a4bc980041b3207ca2865_22)] | | | [removed: [10](#i3228858d90d940fabb3f087f4a45e56d_19)] [added: [9](#icac7281ee66a4bc980041b3207ca2865_22)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i3228858d90d940fabb3f087f4a45e56d_22)] [added: Comments](#icac7281ee66a4bc980041b3207ca2865_25)] | | | [removed: [33](#i3228858d90d940fabb3f087f4a45e56d_22)] [added: [32](#icac7281ee66a4bc980041b3207ca2865_25)] | | |

| Item 2. | | | [removed: [Properties](#i3228858d90d940fabb3f087f4a45e56d_25)] [added: [Properties](#icac7281ee66a4bc980041b3207ca2865_28)] | | | [removed: [33](#i3228858d90d940fabb3f087f4a45e56d_25)] [added: [32](#icac7281ee66a4bc980041b3207ca2865_28)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i3228858d90d940fabb3f087f4a45e56d_28)] [added: Proceedings](#icac7281ee66a4bc980041b3207ca2865_31)] | | | [removed: [33](#i3228858d90d940fabb3f087f4a45e56d_28)] [added: [33](#icac7281ee66a4bc980041b3207ca2865_31)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i3228858d90d940fabb3f087f4a45e56d_31)] [added: Disclosures](#icac7281ee66a4bc980041b3207ca2865_34)] | | | [removed: [33](#i3228858d90d940fabb3f087f4a45e56d_31)] [added: [33](#icac7281ee66a4bc980041b3207ca2865_34)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i3228858d90d940fabb3f087f4a45e56d_37)] [added: Securities](#icac7281ee66a4bc980041b3207ca2865_40)] | | | [removed: [34](#i3228858d90d940fabb3f087f4a45e56d_37)] [added: [34](#icac7281ee66a4bc980041b3207ca2865_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i3228858d90d940fabb3f087f4a45e56d_43)] [added: Operations](#icac7281ee66a4bc980041b3207ca2865_46)] | | | [removed: [37](#i3228858d90d940fabb3f087f4a45e56d_43)] [added: [37](#icac7281ee66a4bc980041b3207ca2865_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i3228858d90d940fabb3f087f4a45e56d_58)] [added: Risk](#icac7281ee66a4bc980041b3207ca2865_61)] | | | [removed: [50](#i3228858d90d940fabb3f087f4a45e56d_58)] [added: [49](#icac7281ee66a4bc980041b3207ca2865_61)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i3228858d90d940fabb3f087f4a45e56d_61)] [added: Data](#icac7281ee66a4bc980041b3207ca2865_64)] | | | [removed: [51](#i3228858d90d940fabb3f087f4a45e56d_61)] [added: [50](#icac7281ee66a4bc980041b3207ca2865_64)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i3228858d90d940fabb3f087f4a45e56d_145)] [added: Disclosure](#icac7281ee66a4bc980041b3207ca2865_148)] | | | [removed: [100](#i3228858d90d940fabb3f087f4a45e56d_145)] [added: [99](#icac7281ee66a4bc980041b3207ca2865_148)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i3228858d90d940fabb3f087f4a45e56d_148)] [added: Procedures](#icac7281ee66a4bc980041b3207ca2865_151)] | | | [removed: [100](#i3228858d90d940fabb3f087f4a45e56d_148)] [added: [99](#icac7281ee66a4bc980041b3207ca2865_151)] | | |

| Item 9B. | | | [Other [removed: Information](#i3228858d90d940fabb3f087f4a45e56d_154)] [added: Information](#icac7281ee66a4bc980041b3207ca2865_157)] | | | [removed: [101](#i3228858d90d940fabb3f087f4a45e56d_154)] [added: [101](#icac7281ee66a4bc980041b3207ca2865_157)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i3228858d90d940fabb3f087f4a45e56d_1751)] [added: Inspections](#icac7281ee66a4bc980041b3207ca2865_160)] | | | [removed: [102](#i3228858d90d940fabb3f087f4a45e56d_1751)] [added: [101](#icac7281ee66a4bc980041b3207ca2865_160)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i3228858d90d940fabb3f087f4a45e56d_160)] [added: Governance](#icac7281ee66a4bc980041b3207ca2865_166)] | | | [removed: [102](#i3228858d90d940fabb3f087f4a45e56d_160)] [added: [102](#icac7281ee66a4bc980041b3207ca2865_166)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i3228858d90d940fabb3f087f4a45e56d_163)] [added: Compensation](#icac7281ee66a4bc980041b3207ca2865_169)] | | | [removed: [111](#i3228858d90d940fabb3f087f4a45e56d_163)] [added: [111](#icac7281ee66a4bc980041b3207ca2865_169)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i3228858d90d940fabb3f087f4a45e56d_166)] [added: Matters](#icac7281ee66a4bc980041b3207ca2865_172)] | | | [removed: [134](#i3228858d90d940fabb3f087f4a45e56d_166)] [added: [136](#icac7281ee66a4bc980041b3207ca2865_172)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#i3228858d90d940fabb3f087f4a45e56d_169)] [added: Independence](#icac7281ee66a4bc980041b3207ca2865_175)] | | | [removed: [135](#i3228858d90d940fabb3f087f4a45e56d_169)] [added: [137](#icac7281ee66a4bc980041b3207ca2865_175)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i3228858d90d940fabb3f087f4a45e56d_172)] [added: Services](#icac7281ee66a4bc980041b3207ca2865_178)] | | | [removed: [139](#i3228858d90d940fabb3f087f4a45e56d_172)] [added: [141](#icac7281ee66a4bc980041b3207ca2865_178)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i3228858d90d940fabb3f087f4a45e56d_178)] [added: Schedules](#icac7281ee66a4bc980041b3207ca2865_184)] | | | [removed: [139](#i3228858d90d940fabb3f087f4a45e56d_178)] [added: [141](#icac7281ee66a4bc980041b3207ca2865_184)] | | |

In some cases, you can identify forward-looking statements by terminology including “would,” “could,” “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” [added: “probable of achievement,”] or “continue,” the negative of these terms or other comparable terminology.

In evaluating these statements, you should specifically consider various factors, including the risks described below, under Part I, Item 1A, “Risk Factors”, and in other parts of this Form 10-K as well as in our other filings with the [removed: SEC.][added: Securities and Exchange Commission (the "SEC").]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| Item 6. | | | [\[Reserved\]](#icac7281ee66a4bc980041b3207ca2865_43) | | | [36](#icac7281ee66a4bc980041b3207ca2865_43) | | |

| | | | [Signatures](#icac7281ee66a4bc980041b3207ca2865_193) | | | [147](#icac7281ee66a4bc980041b3207ca2865_193) | | |

| Item 6. | | | [Selected Financial Data](#i3228858d90d940fabb3f087f4a45e56d_40) | | | [36](#i3228858d90d940fabb3f087f4a45e56d_40) | | |

| | | | [Signatures](#i3228858d90d940fabb3f087f4a45e56d_187) | | | [145](#i3228858d90d940fabb3f087f4a45e56d_187) | | |

As of June 30, [removed: 2022,] [added: 2023,] we owned approximately 2,273,000 square feet and leased approximately [removed: 690,000] [added: 720,000] square feet of office and manufacturing space.

Our long-lived assets located outside of the United States represented 36.8%, [removed: 34.4%] [added: 36.8%] and [removed: 23.5%] [added: 34.4%] of total value of long-lived assets in fiscal years [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

See Part II, Item 8, Note [removed: 17,] [added: 14,] “Segment Reporting” to the consolidated financial statements in this Annual Report for a summary of long-lived assets by geographic region.

We lease approximately 5,000 square feet of office space in Jersey City, New Jersey under a lease that expires in [removed: May 2027,] [added: July 2025,] lease approximately 46,000 square feet of office space in San Jose, California under a lease that expires in January 2028, lease approximately 246,000 square feet of warehouse space in Fremont, California under a lease that expires in July 2025, [removed: and] lease approximately 28,000 square feet of warehouse space in Milpitas, California under a lease that expires in March 2027.

Our European headquarters for manufacturing and service operations is located in Den Bosch, the Netherlands where we own approximately 12,000 square feet of office and we lease approximately 203,000 square feet of office and manufacturing space under five leases, which expire in [removed: July 2025 and] June 2026.

These manufacturing facilities are pledged as security under the existing term loans with [removed: $45.8] [added: $38.2] million remaining outstanding as of June 30, [removed: 2022.][added: 2023.]

Our research and development center, service operations, and warehouse space in Asia are located in an approximately [removed: 110,000] [added: 118,000] square feet facility in [removed: Taipei,] [added: Taipei and Hsinchu,] Taiwan under [removed: thirteen] [added: fourteen] leases that expire at various dates ranging from [removed: November 2022] [added: January 2024] through [removed: July 2025] [added: February 2026] and an approximately [removed: 38,000] [added: 42,000] square feet facility in Taoyuan, Taiwan under [removed: two] [added: three] leases that expire in December [removed: 2022.][added: 2023.]

In fiscal year [removed: 2022,] [added: 2023,] we continued to engage several contractors for the development and construction of improvements on the property.

See Part II, Item 8, Note [removed: 9,] [added: 7,] “Short-term and Long-term Debt” to the consolidated financial statements in this Annual Report for a discussion of our company's debt.

SMCI | 2023 Form 10-K | 32

Subsequent to June 30, 2023, we entered into a five year lease for an additional approximate 124,000 square feet of warehouse space in San Jose, California.

During the second quarter of fiscal year 2023, we entered into a letter of understanding to acquire land in Malaysia to be used to expand our manufacturing operations.

A definitive agreement to acquire such land, subject to various conditions, was subsequently executed in January 2023.

We are obtaining early access to such land prior to acquisition.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 33

As of July 31, [removed: 2022,] [added: 2023,] there were 20 registered stockholders of record of our common stock.

The graph reflects an investment of $100 (with reinvestment of all dividends, if any) in our common stock, the Nasdaq Computer Index and the Nasdaq Composite Index on June 30, [removed: 2017,] [added: 2018,] and our relative performance tracked through June 30, [removed: 2022.][added: 2023.]

SMCI | [removed: 2022] [added: 2023] Form 10-K | 34

[removed: ][added: ]

| | | | | | | [removed: 6/30/2017] [added: 6/30/2018] | | | | | | [removed: 6/30/2018] [added: 6/30/2019] | | | | | | [removed: 6/30/2019] [added: 6/30/2020] | | | | | | [removed: 6/30/2020] [added: 6/30/2021] | | | | | | [removed: 6/30/2021] [added: 6/30/2022] | | | | | | [removed: 6/30/2022] [added: 6/30/2023] | | |

During the three months ended June 30, [removed: 2022,] [added: 2023,] we did not repurchase [added: any] shares of our common [removed: stock.][added: stock:]

[removed: On January 29, 2021,] [added: (1)On August 3, 2022, after the expiration of] a [added: prior share repurchase program on July 31, 2022, a] duly authorized subcommittee of [removed: the] [added: our] Board approved a [added: new] share repurchase program [removed: (the "Prior Repurchase Program")] to repurchase [removed: up to $200 million] [added: shares] of our common stock [added: for up to $200 million] at prevailing prices in the open market.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 35

| Super Micro Computer, Inc. | | | | | | 100.00 | | | | | | 81.82 | | | | | | 120.04 | | | | | | 148.75 | | | | | | 170.61 | | | | | | 1,053.91 | | |

| Nasdaq Composite Index | | | | | | 100.00 | | | | | | 106.60 | | | | | | 133.93 | | | | | | 193.12 | | | | | | 146.85 | | | | | | 183.59 | | |

| Nasdaq Computer Index | | | | | | 100.00 | | | | | | 108.22 | | | | | | 155.03 | | | | | | 233.08 | | | | | | 190.10 | | | | | | 260.87 | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | | Total Number of Shares Purchased | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (1) | | |

| Month 1 (April 1, 2023 to April 30, 2023) | | | — | | | | | | $ | — | | | | | — | | | | | | $50.0 Million | | |

| Month 2 (May 1, 2023 to May 31, 2023) | | | — | | | | | | $ | — | | | | | — | | | | | | $50.0 Million | | |

| Month 3 (June 1, 2023 to June 30, 2023) | | | — | | | | | | $ | — | | | | | — | | | | | | $50.0 Million | | |

| Total | | | — | | | | | | $ | — | | | | | — | | | | | | | | |

As of June 30, 2023, $50 million remained available under the program.

| Super Micro Computer, Inc. | | | | | | 100.00 | | | | | | 95.94 | | | | | | 78.50 | | | | | | 115.17 | | | | | | 142.72 | | | | | | 163.69 | | |

| Nasdaq Composite Index | | | | | | 100.00 | | | | | | 122.31 | | | | | | 130.39 | | | | | | 163.81 | | | | | | 236.20 | | | | | | 179.61 | | |

| Nasdaq Computer Index | | | | | | 100.00 | | | | | | 129.47 | | | | | | 140.11 | | | | | | 200.72 | | | | | | 301.78 | | | | | | 246.13 | | |

Prior to the expiration of such repurchase program on July 31, 2022, an aggregate of $50 million had been purchased thereunder.

Subsequently, on August 3, 2022, after the expiration of the Prior Repurchase Program, a duly authorized subcommittee of the Board approved a new share repurchase program to repurchase shares of common stock for up to $200 million at prevailing prices in the open market.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 36

| [Report of Independent Registered Public Accounting Firm (PCAOB [removed: ID:](#i3228858d90d940fabb3f087f4a45e56d_64)] [added: ID:](#icac7281ee66a4bc980041b3207ca2865_67)] 34) | | | | | | [removed: [52](#i3228858d90d940fabb3f087f4a45e56d_64)] [added: [51](#icac7281ee66a4bc980041b3207ca2865_67)] | | |

| [Consolidated Balance [removed: Sheets](#i3228858d90d940fabb3f087f4a45e56d_67)] [added: Sheets](#icac7281ee66a4bc980041b3207ca2865_70)] | | | | | | [removed: [54](#i3228858d90d940fabb3f087f4a45e56d_67)] [added: [53](#icac7281ee66a4bc980041b3207ca2865_70)] | | |

| [Consolidated Statements of [removed: Operations](#i3228858d90d940fabb3f087f4a45e56d_70)] [added: Operations](#icac7281ee66a4bc980041b3207ca2865_73)] | | | | | | [removed: [55](#i3228858d90d940fabb3f087f4a45e56d_70)] [added: [54](#icac7281ee66a4bc980041b3207ca2865_73)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i3228858d90d940fabb3f087f4a45e56d_73)] [added: Income](#icac7281ee66a4bc980041b3207ca2865_76)] | | | | | | [removed: [56](#i3228858d90d940fabb3f087f4a45e56d_73)] [added: [55](#icac7281ee66a4bc980041b3207ca2865_76)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#i3228858d90d940fabb3f087f4a45e56d_76)] [added: Equity](#icac7281ee66a4bc980041b3207ca2865_79)] | | | | | | [removed: [57](#i3228858d90d940fabb3f087f4a45e56d_76)] [added: [56](#icac7281ee66a4bc980041b3207ca2865_79)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i3228858d90d940fabb3f087f4a45e56d_79)] [added: Flows](#icac7281ee66a4bc980041b3207ca2865_82)] | | | | | | [removed: [58](#i3228858d90d940fabb3f087f4a45e56d_79)] [added: [57](#icac7281ee66a4bc980041b3207ca2865_82)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i3228858d90d940fabb3f087f4a45e56d_82)] [added: Statements](#icac7281ee66a4bc980041b3207ca2865_85)] | | | | | | [removed: [60](#i3228858d90d940fabb3f087f4a45e56d_82)] [added: [59](#icac7281ee66a4bc980041b3207ca2865_85)] | | |

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 51][added: 50]

We have audited the accompanying consolidated balance sheets of Super Micro Computer, Inc. and subsidiaries (the "Company") as of June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended June 30, [removed: 2022,] [added: 2023,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended June 30, [removed: 2022,] [added: 2023,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission [removed: (COSO)] and our report dated August [removed: 29, 2022,] [added: 25, 2023,] expressed an unqualified opinion on the Company’s internal control over financial reporting.

Critical Audit [removed: Matters][added: Matter]

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 52][added: 51]

- We [removed: involved data specialists to assess] [added: assessed] management’s estimate on reserve rates by recalculating historical reserve rates across multiple fiscal periods.

SMCI | [removed: 2022] [added: 2023] Form 10-K | [removed: 53][added: 52]

(in thousands, except [added: par value] per share amounts)

| | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | |

| Cash and cash equivalents | | | $ | [removed: 267,397] [added: 440,459] | | | | | $ | [removed: 232,266] [added: 267,397] | |

| Accounts receivable, net of [removed: allowances] [added: allowance for credit losses] of [removed: $1,753] [added: $82] and [removed: $2,591] [added: $1,753] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively (including amounts receivable from related parties of [removed: $8,398] [added: $5,473] and [removed: $8,678] [added: $8,398] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively) | | | [removed: 834,513] [added: 1,148,259] | | | | | | [removed: 463,834] [added: 834,513] | | |

| Inventories | | | [removed: 1,545,606] [added: 1,445,564] | | | | | | [removed: 1,040,964] [added: 1,545,606] | | |

| Prepaid expenses and other current assets (including receivables from related parties of [removed: $24,412] [added: $27,732] and [removed: $23,837] [added: $24,412] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively) | | | [removed: 158,799] [added: 145,144] | | | | | | [removed: 130,195] [added: 158,799] | | |

| Total current assets | | | [removed: 2,806,315] [added: 3,179,426] | | | | | | [removed: 1,867,259] [added: 2,806,315] | | |

| Property, plant and equipment, net | | | [removed: 285,972] [added: 290,240] | | | | | | [removed: 274,713] [added: 285,972] | | |

| Deferred income taxes, net | | | [removed: 69,929] [added: 162,654] | | | | | | [removed: 63,288] [added: 69,929] | | |

| Total assets | | | $ | [removed: 3,205,077] [added: 3,674,729] | | | | | $ | [removed: 2,241,964] [added: 3,205,077] | |

| Accounts payable (including amounts due to related parties of [removed: $87,355] [added: $89,134] and [removed: $70,096] [added: $87,355] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively) | | | $ | [removed: 655,403] [added: 776,831] | | | | | $ | [removed: 612,336] [added: 655,403] | |

| Accrued liabilities (including amounts due to related parties of [removed: $18,676] [added: $14,017] and [removed: $18,528] [added: $18,676] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively) | | | [removed: 212,419] [added: 163,865] | | | | | | [removed: 178,850] [added: 212,419] | | |

| Income taxes payable | | | [removed: 41,743] [added: 129,166] | | | | | | [removed: 12,741] [added: 41,743] | | |

| Short-term debt | | | [removed: 449,146] [added: 170,123] | | | | | | [removed: 63,490] [added: 449,146] | | |

| Deferred revenue | | | [removed: 111,313] [added: 134,667] | | | | | | [removed: 101,479] [added: 111,313] | | |

| Total current liabilities | | | [removed: 1,470,024] [added: 1,374,652] | | | | | | [removed: 968,896] [added: 1,470,024] | | |

| Deferred revenue, non-current | | | [removed: 122,548] [added: 169,781] | | | | | | [removed: 100,838] [added: 122,548] | | |

| Long-term debt | | | [removed: 147,618] [added: 120,179] | | | | | | [removed: 34,700] [added: 147,618] | | |

| Other long-term liabilities | | | [removed: 39,140] [added: 37,947] | | | | | | [removed: 41,132] [added: 39,140] | | |

| Total liabilities | | | [removed: 1,779,330] [added: 1,702,559] | | | | | | [removed: 1,145,566] [added: 1,779,330] | | |

| Commitments and contingencies (Note [removed: 15)] [added: 12)] | | | | | | | | | | | |

| Authorized shares: 100,000; Outstanding shares: [removed: 52,311] [added: 52,901] and [removed: 50,582] [added: 52,311] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively | | | | | | | | | | | |

| Issued shares: [removed: 52,311] [added: 52,901] and [removed: 50,582] [added: 52,311] at June 30, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively | | | [removed: 481,741] [added: 538,352] | | | | | | [removed: 438,012] [added: 481,741] | | |

| Accumulated other comprehensive income | | | [removed: 911] [added: 639] | | | | | | [removed: 453] [added: 911] | | |

| Retained earnings | | | [removed: 942,923] [added: 1,433,014] | | | | | | [removed: 657,760] [added: 942,923] | | |

August 25, 2023

| | | | 2023 | | | | | | 2022 | | |

| Other assets | | | 42,409 | | | | | | 42,861 | | |

| Net income | | | $ | 639,998 | | | | | $ | 285,163 | | | | | $ | 111,865 | |

| Share repurchases and retirement | | | (1,553,350) | | | | | | (91) | | | | | | — | | | | | | — | | | | | | — | | | | | | (149,907) | | | | | | — | | | | | | (149,998) | | |

| Net income (loss) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 639,998 | | | | | | (7) | | | | | | 639,991 | | |

| Balance at June 30, 2023 | | | 52,901,358 | | | | | | $ | 538,352 | | | | | — | | | | | | $ | — | | | | | $ | 639 | | | | | $ | 1,433,014 | | | | | $ | 165 | | | | | $ | 1,972,170 | |

| Net income | | | $ | 639,998 | | | | | $ | 285,163 | | | | | $ | 111,865 | |

| Inventories | | | 100,042 | | | | | | (504,642) | | | | | | (189,466) | | |

| Acquisition, net of cash acquired | | | (2,193) | | | | | | — | | | | | | — | | |

During the year ended June 30, 2023, the Company completed the acquisition of 100% of the common shares of Gemini Open Cloud Computing Inc. (“Gemini”) for a total purchase consideration of $2.5 million, subject to a holdback of $0.3 million due one year from the closing date of the acquisition.

The revenue and results of operations of Gemini since the acquisition date on April 17, 2023 were not material and have been included in the Company’s consolidated financial statements for fiscal 2023.

The purchase price was allocated to tangible and identified intangible assets acquired and liabilities assumed based on estimated fair values.

The goodwill is primarily attributable to the planned growth in the combined business of Super Micro Computer and Gemini.

Goodwill of $1.8 million is recorded within other assets in the consolidated balance sheets and is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any interim indicators of impairment.

Goodwill recognized in the acquisition is not expected to be deductible for foreign tax purposes.

Acquisition-related costs attributable to Gemini were not material and included in selling, general and administrative expense for the year ended June 30, 2023.

Pro forma earnings and revenues as if this acquisition had occurred at the beginning of fiscal 2022 were not presented as they were not material.

Certain prior year balances have been reclassified to conform with the current year financial statement presentation.

In order to conform with current period presentation Investment in Equity Investee has been grouped with Other Assets on the consolidated balance sheet as of June 30, 2022.

Additionally, certain prior year amounts within cash from operating activities in the consolidated statements of cash flows have been reclassified to conform to current year presentation.

These changes in presentation do not affect previously reported results.

Allowance for Credit Losses

| Net income | | | $ | 639,998 | | | | | $ | 285,163 | | | | | $ | 111,865 | |

In March 2020, the FASB issued authoritative guidance, Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This ASU provides optional expedients and exceptions for applying U.S. GAAP to contracts affected by *reference* *rate* *reform* if certain criteria are met.

In December 2022, FASB issued ASU 2022-06 (ASC Topic 848) and deferred the sunset date from December 31, 2022 to December 31, 2024.

The Company adopted the guidance in the quarter ended June 30, 2023 on a prospective basis and has transitioned from an interest rate based on LIBOR to Secured Overnight Financing Rate ("SOFR").

The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.

| Total assets measured at fair value | | | $ | 20,823 | | | | | $ | 462 | | | | | $ | 1,843 | | | | | $ | 23,128 | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| Total | | | $ | 7,123,482 | | | | | $ | 5,196,099 | | | | | $ | 3,557,422 | |

Deferred revenue increased $70.6 million as of June 30, 2023, as compared to the fiscal year ended June 30, 2022.

This was accompanied by a $5.4 million increase in non-cancellable non-refundable advance consideration or cash consideration received from customers which preceded the Company's satisfaction of the associated performance obligations relating to product sales expected to be fulfilled in the next 12 months.

| Allowance for credit losses | | | | | | | | | | | | | | | | | | | | | | | |

| Year ended June 30, 2023 | | | $1,753 | | | | | | $(13) | | | | | | $(1,659) | | | | | | $82 | | |

| | | | 2023 | | | | | | 2022 | | |

| | | | 2023 | | | | | | 2022 | | |

| | | | 479,627 | | | | | | 453,730 | | |

August 29, 2022

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Investment in equity investee | | | 5,329 | | | | | | 4,578 | | |

| Other assets | | | 37,532 | | | | | | 32,126 | | |

| Balance at June 30, 2019 | | | 51,289,413 | | | | | | $ | 349,683 | | | | | (1,333,125) | | | | | | $ | (20,491) | | | | | $ | (80) | | | | | $ | 611,903 | | | | | $ | 161 | | | | | $ | 941,176 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 84,308 | | | | | | 6 | | | | | | 84,314 | | |

| Recovery of allowance for doubtful accounts | | | (840) | | | | | | (820) | | | | | | (3,081) | | |

| Provision for excess and obsolete inventories | | | 15,090 | | | | | | 6,805 | | | | | | 18,373 | | |

| Inventories | | | (519,732) | | | | | | (196,271) | | | | | | (199,683) | | |

| Proceeds from sale of investment in a privately-held company | | | — | | | | | | — | | | | | | 750 | | |

| Net repayment on asset-backed revolving line of credit, net of costs | | | — | | | | | | — | | | | | | (1,116) | | |

Allowances for Doubtful Accounts

During the fiscal year ended June 30, 2020, the Company also recorded a $9.5 million net settlement fee as a reduction in the research and development expenses related to the reimbursement of previously incurred expenses for one canceled joint product development agreement.

Accounting Pronouncements Not Yet Adopted

The guidance also establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients.

The amendments in this update do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022 that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship.

The amendment is effective for all entities through December 31, 2022.

In January 2021, the FASB issued further guidance on this topic, which clarified the scope and application of the original guidance.

In April 2022, FASB issued a proposed accounting standard update for the deferral of the sunset date of Topic 848 and amendments to the definition of secured overnight financing rate (“SOFR").

The proposed amendment defers the sunset date of Topic 848 to December 31, 2024.

The Company has loans and lines of credit with various financial institutions.

Benchmark interest rates are used to calculate the interest on borrowings under the Chang Hwa Bank, CTBC, HSBC, Mega Bank Credit Facilities.

The 2018 Bank of America Credit Facility was amended on June 28, 2021 to provide for a new maturity date of June 28, 2026 and fallback terms related to LIBOR replacement mechanics.

On March 3, 2022, the 2018 Bank of America Credit Facility was amended to, among other items, increase the size of the facility from $200.0 million to $350.0 million and update provisions relating to payments and LIBOR replacement mechanics to SOFR.

As these amendments had other contemporaneous changes to the facility, including the amount of borrowings permitted under the facility and not just directly related to LIBOR replacement, optional expedients under this guidance cannot be elected.

The Company is currently evaluating the overall impact of adoption of the guidance on its consolidated financial statements and disclosures.

| Total assets measured at fair value | | | $ | 151 | | | | | $ | 863 | | | | | $ | 1,556 | | | | | $ | 2,570 | |

| | | | June 30, 2021 | | | | | | | | | | | | | | | | | | | | |

Starting July 1, 2020, the Company does not separately disclose revenue by products sold to indirect sales channel partners or direct customers and original equipment manufacturers because management does not make business operational decisions based on this set of disaggregation, so the disclosure is no longer material to investors.

| Allowance for doubtful accounts: | | | | | | | | | | | | | | | | | | | | | | | |

| Year ended June 30, 2020 | | | $8,906 | | | | | | $(3,081) | | | | | | $(1,239) | | | | | | $4,586 | | |

During fiscal years 2022, 2021 and 2020, the Company recorded a net provision for excess and obsolete inventory to cost of sales totaling $15.1 million, $6.8 million and $18.4 million, respectively.

The Company classifies subsystems and accessories that may be sold separately or incorporated into systems as finished goods.

| | | | 453,730 | | | | | | 420,535 | | |

(1)Construction in progress balance as of June 30, 2021, primarily relates to the development and construction costs associated with the Company’s Green Computing Park located in San Jose, California and the new building in Taiwan.

Prepaid expenses and other current assets as of June 30, 2022 and 2021 consisted of the following (in thousands):

| Other receivables(1) | | | $ | 138,054 | | | | | $ | 99,921 | |

| Prepaid expenses | | | 5,632 | | | | | | 6,719 | | |

| Deferred service costs | | | 5,562 | | | | | | 4,900 | | |

Under the supervision, and with the participation, of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, [removed: 2022.][added: 2023.]

Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, [removed: 2022.][added: 2023.]

Management, including our CEO and CFO, assessed our internal control over financial reporting as of June 30, [removed: 2022.][added: 2023.]

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of June 30, [removed: 2022,] [added: 2023,] to provide reasonable assurance regarding the reliability of financial reporting and preparation of consolidated financial statements in accordance with U.S. GAAP.

The effectiveness of our internal control over financial reporting as of June 30, [removed: 2022,] [added: 2023,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and their opinion is stated in their report which is included in this Annual Report on Form 10-K.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended June 30, [removed: 2022,] [added: 2023,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 100

We have audited the internal control over financial reporting of Super Micro Computer, Inc. and subsidiaries (the “Company”) as of June 30, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, [removed: 2022,] [added: 2023,] of the Company and our report dated August [removed: 29, 2022,] [added: 25, 2023,] expressed an unqualified opinion on those financial statements.

SMCI | 2023 Form 10-K | 99

August 25, 2023

August 29, 2022

*Disclosure Pursuant to Section 13(r) of the Exchange Act*

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which amended the Exchange Act to add Section 13(r) thereof, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether, during the relevant reporting period, it or any entity acting on its behalf knowingly engaged in certain activities, transactions or dealings relating to parties sanctioned pursuant to Executive Order 13382 or other specified authorities.

Such sanctions are administered by the Office of Foreign Assets Control (“OFAC”) within the U.S. Department of the Treasury, even if those transactions are authorized by law.

On March 2, 2021, pursuant to Executive Order 13382, the Russian Federal Security Service (the “FSB”) was designated by the U.S. government as a blocked party.

Notwithstanding such designation, OFAC has issued General License No. 1B, authorizing certain transactions involving the FSB, including all transactions ordinarily incident and necessary to requesting, receiving, utilizing, paying for, or dealing in licenses, permits, certifications, or notifications issued or registered by the FSB for the importation, distribution, or use of information technology products in the Russian Federation, subject to certain limitations.

Section 13(r) of the Exchange Act requires disclosure of dealings with FSB, even where the activities were conducted in compliance with applicable laws and regulations, and where such activities, transactions, or dealings did not have a material financial or other impact on the issuer.

As previously disclosed in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, we had previously, before the designation of the FSB in Executive Order 13382, authorized certain third parties to periodically file notifications with, or apply for import licenses and permits from, the FSB on our behalf in connection with the importation of our products into Russia, as permitted under OFAC authorizations.

During various periods during fiscal year 2023, third parties filed notifications with, applied for import licenses and permits from, and/or received the associated approvals from the FSB on our behalf.

However, no sales of any products actually occurred in the Russian Federation during fiscal year 2023, and accordingly, these filing activities did not result in any revenue or otherwise contribute to our net income during fiscal year 2023.

We believe we have terminated all these authorizations.

The Company and its subsidiaries do not sell products or provide services to the FSB.

The Company and its subsidiaries had last recorded revenue from Russia on February 23, 2022.

*Submission of Matters to a Vote of Security Holders*

At our Annual Meeting of Stockholders held on May 19, 2023, a non-binding, advisory vote was taken on the frequency of future advisory votes regarding the compensation of our named executive officers.

As previously reported in the Current Report on Form 8-K we filed with the SEC on May 23, 2023, among the options presented to stockholders (every one year, every two years, or every three years), the greatest number of votes were cast in favor of holding such an advisory vote every one year, which was also the frequency recommended to the stockholders by our Board of Directors.

In light of these results and consistent with the previous recommendation and determination of our Board of Directors, we intend to continue to hold a non-binding advisory vote on executive compensation every one year until the next required vote on the frequency of stockholder votes on executive compensation.

None.

SMCI | 2022 Form 10-K | 101

SMCI | 2023 Form 10-K | 101

The following table sets forth information regarding our current directors and executive officers and their ages as of July 31, [removed: 2022:][added: 2023:]

| Charles Liang | | | | | | [removed: 64] [added: 65] | | | | | | President, Chief Executive Officer and Chairman of the Board | | |

| David Weigand | | | | | | [removed: 64] [added: 65] | | | | | | Senior Vice President, Chief Financial Officer and Chief Compliance Officer | | |

| Don Clegg | | | | | | [removed: 63] [added: 64] | | | | | | Senior Vice President of Worldwide Sales | | |

| George Kao | | | | | | [removed: 61] [added: 62] | | | | | | Senior Vice President of Operations | | |

| Sara Liu | | | | | | [removed: 60] [added: 61] | | | | | | Co-Founder, Senior Vice President and Director | | |

| Daniel Fairfax [removed: (1)(4)] [added: (1)(3)(4)] | | | | | | [removed: 66] [added: 67] | | | | | | Director | | |

| Judy Lin (2)(4) | | | | | | [removed: 69] [added: 70] | | | | | | Director | | |

| Sherman Tuan (2)(3)(4) | | | | | | [removed: 68] [added: 69] | | | | | | Director | | |

| Shiu Leung (Fred) Chan (1)(2)(4) | | | | | | [removed: 74] [added: 75] | | | | | | Director | | |

| Tally Liu (1)(3)(4) | | | | | | [removed: 72] [added: 73] | | | | | | Director | | |

SMCI | [removed: 2022] [added: 2023] Form 10-K | 102

| Board Diversity Matrix (As of July 31, [removed: 2022)] [added: 2023)] | | | | | | | | | | | | | | |

| Total Number of Directors | | | [removed: 7] [added: 8] | | | | | | | | | | | |

| Directors | | | 2 | | | [removed: 5] [added: 6] | | | 0 | | | 0 | | |

| White | | | 0 | | | [removed: 1] [added: 2] | | | 0 | | | 0 | | |

Mr. Liang has been granted [removed: many] [added: 23 U.S.] server technology patents.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 103

*Sara Liu* co-founded Super Micro in September 1993, has been a member of our Board since [removed: March 2007] [added: our inception in September 1993] and currently serves as our Co-Founder, Senior Vice President, and a director.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 104

Our authorized number of directors is currently [removed: seven.][added: eight.]

There are currently [removed: seven] [added: eight] directors.

| Class II Directors (2) | | | [added: Robert Blair] Sara Liu Judy Lin | | |

(1)The term of Class I directors expires at the annual meeting of stockholders following fiscal year [removed: 2022.][added: 2025.]

SMCI | [removed: 2022] [added: 2023] Form 10-K | 105

We have adopted “Corporate Governance Guidelines” to help ensure that the Board is independent from management, [added: that it] appropriately performs its function as the overseer of management, and that the interests of the Board of Directors and management align with the interests of our stockholders.

The “Corporate Governance Guidelines” are available at [removed: https://ir.supermicro.com/governance/governance-documents/default.aspx][added: https://ir.supermicro.com/governance/governance-documents/default.aspx.]

In addition, the listing rules generally require that, subject to specified exceptions, each member of a listed company’s audit committee, compensation committee, and nominating and corporate governance [removed: committees] [added: committee] be independent.

Based on these standards, our Board has determined that [removed: five] [added: six] of its current [removed: seven] [added: eight] members, Daniel Fairfax, Judy Lin, [added: Robert Blair,] Sherman [removed: Tuan] [added: Tuan,] Shiu Leung (Fred) Chan and Tally Liu, are “independent directors” under the applicable rules and regulations of the SEC and the listing requirements and rules of The Nasdaq Stock Market.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 106

We held an annual meeting of stockholders on May [removed: 18, 2022,] [added: 19, 2023,] for our fiscal year [removed: 2021.][added: 2022.]

The Board held [removed: eleven] [added: nine] meetings during fiscal year [removed: 2022,] [added: 2023,] four of which were regularly scheduled meetings and [removed: seven] [added: five] of which were special meetings.

All directors attended at least 75% of the meetings of the Board and the committees on which they served during the time they were members of the Board or such committees during fiscal year [removed: 2022.][added: 2023.]

In October [removed: 2021, the] [added: 2022,] each of the three standing committees conducted their periodic review of their charters, [removed: and] [added: and, in April 2023, the Governance Committee conducted] a [removed: description] [added: further review] of [added: its charter and amended it in connection with] such [removed: charters is set forth below.][added: review.]

| Daniel [removed: W.] Fairfax | | | | | | [removed: Tally Liu] [added: Daniel Fairfax] | | | | | | Sherman Tuan | | |

| Shiu Leung (Fred) Chan | | | | | | [added: Tally Liu] | | | | | | Judy Lin | | |

The Audit Committee met [removed: sixteen] [added: ten] times in fiscal year [removed: 2022,] [added: 2023,] four of which were regularly scheduled meetings and [removed: twelve] [added: six] of which were special meetings.

The Board has determined that each member of our Audit Committee meets the requirements for independence under the applicable listing requirements of The Nasdaq Stock Market [added: (including Rule 5605(c)(2)(A))] and the rules of the [removed: SEC.][added: SEC (including Rule 10A-3 promulgated under the Exchange Act).]

The Board has also determined that our Audit Committee has the required number of “audit committee financial experts” as defined [removed: under applicable SEC rules.][added: in Item 407 of Regulation S-K promulgated by the SEC.]

SMCI | [removed: 2022] [added: 2023] Form 10-K | 107

| Robert Blair | | | | | | 75 | | | | | | Director | | |

*Robert Blair* has been a member of our Board since December 2022.

Mr. Blair was President and Chief Executive Officer of ESS Technology, Inc., a fabless semiconductor company for 19 years from September 1999 through July 2018 where he also served as a director from September 1999 through August 2019.

During this time, ESS Technology, Inc. was a publicly listed company on NASDAQ for 9 years.

Mr. Blair has been a director of Pictos, Inc., a technology licensing company that owns a portfolio of fundamental CMOS imaging patents, since July 2008 where he also previously served as President and Chief Executive Officer between 2008 and 2013.

His professional background also includes more than 35 years of experience in marketing, sales, engineering, operations, and general management, principally in the computer hardware, software, and semiconductor industries.

His experience includes roles at Global Semiconductor Alliance, Logistix Corporation, and XEGMAG (a division of Xidex Corporation).

Mr. Blair holds twelve issued U.S. patents plus additional patents worldwide, and studied electrical engineering at Arizona State University and applied economics at the University of San Francisco.

Our Governance Committee concluded that Mr. Blair should serve on the Board based on his familiarity with technology businesses, skills and experience with business operations at technology companies, and public company experience.

A description of the charters is set forth below.

The Governance Committee charter provides that the Governance Committee shall be comprised of no fewer than two members.

- Periodically assesses, reports, and provides guidance to management and the full Board on our practices with respect to environmental, social and corporate governance issues, including monitoring climate-related issues, as well as review of any environmental sustainability performance report;

- Provides guidance and recommendations to the Board regarding legal compliance matters as appropriate relating to current environmental public policy trends; and

- Periodically reviews and discusses with management our practices with respect to environmental, social and corporate governance issues; and

In this section we provide an explanation and analysis of the material elements of the compensation provided to our Chief Executive Officer, Chief Financial Officer, and both of our other two executive officers who were serving on June 30, [removed: 2022,] [added: 2023,] which was the end of our fiscal year [removed: 2022] [added: 2023] (collectively referred to as our “named executive [removed: officers”).][added: officers” or “NEOs”).]

Our named executive officers and their positions at the end of fiscal year [removed: 2022] [added: 2023] were:

[removed: ][added: ]

[removed: (1)The] [added: (1)The] chart presents the percentage compensation by compensation component received by the three non-CEO named executive officers together (aggregate compensation) as a group, as well as the split between cash and equity compensation for all such persons received in the aggregate as a group.

No equivalent chart is presented for CEO compensation because, through all of fiscal year [removed: 2022,] [added: 2023,] and continuing for about the next [removed: four] [added: three] years, almost all of Mr. Liang’s compensation has been, and is expected to be, based only upon his ability to earn the 2021 CEO Performance Award, as further described below.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 111

Compensation Philosophy and [removed: Objectives—Our Continued Move Toward] [added: Objectives—Continuing Improvement of] Performance-Based Compensation Arrangements

[removed: However, during] [added: Efforts in] fiscal year [added: 2021 were primarily focused on our CEO (Mr. Charles Liang), but, in fiscal year] 2022, the Compensation Committee [removed: further] expanded the linkage of compensation to corporate performance to certain other named executive officers.

[removed: During the early part of fiscal year 2022,] [added: While] the Compensation Committee [removed: reviewed the results of a new compensation study it had requested from its independent compensation consultant, and] continued to [removed: explore (with Mr. Liang) the appropriate] [added: use a similar] balance [removed: for other named executive officers] between fixed and regular compensation components (like base salary and regularly refreshed equity grants with time-based vesting) and performance-based equity awards (like performance-based restricted stock units [removed: (“PRSUs”)).][added: (“PRSUs”) and stock options) from fiscal year 2022 to fiscal year 2023, the Compensation Committee for fiscal year 2023 carefully re-evaluated the specified objective metrics (“key performance indicators” or “KPIs”) used under the performance-based portion of such programs, as well as the fixed bonus component of such programs.]

These efforts culminated in the adoption of a new fiscal year [removed: 2022] [added: 2023] compensation program for [added: each of] Messrs.

Weigand and Clegg in [removed: March 2022] [added: January 2023] (the [removed: “FY2022] [added: “FY2023] Performance Program for Other Named Executive Officers”).

See [removed: “FY2022] [added: “FY2023] Performance Program for Other Named Executive Officers” below for more specific information about the design and operation of [removed: this new] [added: the] compensation [removed: program.][added: program for Messrs.]

With respect to our CEO, Mr. Liang, fiscal year [removed: 2022] [added: 2023] was [removed: a] [added: the second] year of evaluating and monitoring the [removed: initial] results of performance-based compensation arrangements made with Mr. Liang in fiscal year 2021.

In March 2021, we [removed: had] changed Mr. Liang’s compensation to be almost completely performance-based.

As discussed in more detail below, in March 2021, we converted nearly 100% of Mr. Liang’s compensation to performance-based compensation through the issuance of performance-based options (the “2021 CEO Performance Award”) to purchase 1,000,000 shares of our common stock at an exercise price of $45.00 per share, which price was 32% higher than the market price of our common stock on the date [added: of] the award [removed: was provided] ($34.08).

[added: Similar to fiscal year 2022,] Mr. Liang’s compensation for fiscal year [removed: 2022] [added: 2023] was based entirely upon the 2021 CEO Performance Award and related agreements.

As [added: a result, as] of the date of this report, [removed: one] [added: only 200,000] of the [removed: five tranches] [added: original 1,000,000 options granted] under the 2021 CEO Performance Award [removed: (representing 200,000 options granted] [added: remain unearned, and the only remaining goal] under [removed: such award) has been earned because] the [removed: first] [added: 2021 CEO Performance Award is the fifth] revenue goal of [removed: $4.0] [added: $8.0] billion in annualized [removed: revenue was achieved and the first stock price goal of $45.00 was achieved.][added: revenue.]

Mr. Liang received a base salary of $1 during fiscal year [removed: 2022.][added: 2023.]

In summary, [removed: since] [added: through all of fiscal year 2023 (and similar to] the latter part of fiscal year [removed: 2021, through] [added: 2021 and] all of fiscal year [removed: 2022, and continuing for about the next four years,] [added: 2022),] almost all of Mr. Liang’s compensation has [removed: been, and is expected to be,] [added: been] based only upon us achieving the revenue goals described below and the common stock price targets described below.

To fully achieve those [removed: goals and targets,] [added: goals,] our revenue must [added: continue to] increase to $8 billion over a rolling four-quarter period (from $3.6 billion for the last full fiscal year before the [removed: award) and the market price of our common stock must reach $120.00 per share (from $34.08 on the day the award was provided).][added: award).]

[removed: During] [added: At the end of] fiscal year [removed: 2022,] [added: 2023,] the Compensation Committee was [removed: principally] comprised of [removed: two] [added: three] non-employee directors, although [removed: for a brief] [added: during the] period from [removed: April 27,] [added: July 1,] 2022 through [removed: May 18,] [added: October 25,] 2022, the Compensation Committee was [added: principally] comprised of [removed: three] [added: two] non-employee directors.

All of the non-employee directors who served on the Compensation Committee during fiscal year [removed: 2022] [added: 2023] were independent pursuant to the applicable listing rules of NASDAQ and Rule 16b-3 under the Exchange Act.

SMCI | [removed: 2022] [added: 2023] Form 10-K | 112

As part of making an overall assessment of each named executive officer’s role and performance, and structuring our compensation programs for fiscal year [removed: 2022,] [added: 2023,] the Compensation Committee [added: (among other things) (1)] reviewed recommendations of our Chief Executive Officer, [removed: as well as] [added: (2) considered] publicly available peer group compensation [removed: data] [added: data,] and [added: (3) considered compensation] data [removed: compiled] [added: previously assembled for the Compensation Committee] by [removed: our independent compensation consultant.][added: Radford (an Aon Hewitt company ("Radford")) from a sample of public companies previously selected by us, with input on the selection of this sample from Radford.]

The sample [added: previously] selected by us consisted of the following [removed: companies(1):][added: companies:]

Key Fiscal Year [removed: 2022] [added: 2023] Executive Compensation Decisions and Actions

Key fiscal year [removed: 2022] [added: 2023] executive compensation decisions and actions included the following:

- As a part of [removed: continuing] [added: continued] efforts to evolve the approach to [added: named] executive officer compensation and to further [removed: expand] [added: improve] the linkage of compensation to corporate performance to other named executive officers, the Compensation Committee [removed: adopted] [added: carefully re-evaluated] the [removed: FY2022] [added: KPIs utilized under the performance-based portion of the FY2023] Performance Program for Other Named Executive Officers [removed: in March 2022.][added: and the fixed bonus component of the FY2023 Performance Program for Other Named Executive Officers:]

[removed: In] [added: Similar to the program for these persons utilized during the prior fiscal year, in] addition to base salary and fixed bonus components, the [removed: new] program [removed: includes] [added: continued to include] a performance-based annual incentive award, most of which is payable in the form of service-based restricted stock units (“RSUs”) that generally vest over [removed: an extended] [added: a] period of four years.

The performance-based annual incentive [removed: award:][added: award continues to have each of the following features:]

SMCI | [removed: 2022] [added: 2023] Form 10-K | 113

[removed: *Is formula based;][added: *Formula-based;]

*Utilizes company performance metrics tied closely to stockholder value, including percentage appreciation in stock price from the prior fiscal [removed: year, percentage increase in worldwide revenue from the prior fiscal year,] [added: year] and percentage increase in worldwide [removed: net profit] [added: revenue] from the prior fiscal year.

See “- [removed: FY2022] [added: FY2023] Performance Program for Other Named Executive Officers” below for more information.

- Based on effective base salaries and the Compensation Committee’s review and certification of actual performance (as described further below) under the [removed: FY2022] [added: FY2023] Performance Program for Other Named Executive Officers for fiscal year [removed: 2022:][added: 2023:]

*Mr. Clegg received a fixed bonus amount of [removed: $70,620] [added: $88,888] paid in semi-monthly installments [removed: starting October 1, 2021,] [added: during fiscal year 2023,] earned a cash payment of [removed: $166,250,] [added: $157,923,] and earned [removed: a] [added: an aggregate] grant of [removed: $166,250] [added: $157,923] in RSUs that [removed: are expected to be] [added: were] granted on August [removed: 29, 2022] [added: 24, 2023] and [removed: will generally vest in annual installments over four years.][added: August 25, 2023.]

- Base salaries for the named executive officers other than the CEO were [added: also] adjusted [removed: several times] during fiscal year [removed: 2022] [added: 2023] as a part of a perceived critical need to enhance retention value for key personnel, and were based in part upon:

*Analyses provided in the [removed: newly] [added: previously] prepared compensation study for fiscal year 2022 that indicated that base salaries for such named executive officers (prior to the increases) were generally below the 25th percentile in the [removed: market; and][added: market.]

*Consideration of [added: the continued] inflationary market conditions in [removed: the second half of] fiscal year [removed: 2022.][added: 2023.]

- Fiscal year [removed: 2022] [added: 2023] was the [removed: first] [added: second] full fiscal year in which the CEO operated under the 2021 CEO Performance Award, and related agreements, which was granted in March 2021.

During fiscal year 2023, the Compensation Committee continued to refine the link between compensation and corporate performance for these other two named executive officers.

Under such programs, the Compensation Committee determined to use the same KPIs and fixed bonus component as fiscal year 2022 for Mr. Weigand’s program, but determined to use an updated and different mix of KPIs and an adjusted fixed bonus component for Mr. Clegg for fiscal year 2023 compared to his program for fiscal year 2022.

During fiscal year 2022, one of the five tranches under the 2021 CEO Performance Award (representing 200,000 options granted under such award) was earned, and during fiscal year 2023 an additional three tranches under the 2021 CEO Performance Award (representing an additional 600,000 options granted under such award) were earned.

This is because, during fiscal year 2023, each of the second, third, and fourth revenue goals of $4.8 billion, $5.8 billion, and $6.8 billion, respectively, in annualized revenue were achieved and the second, third, and fourth stock price goals of $60.00, $75.00, and $95.00, respectively, were achieved.

In addition, during fiscal year 2023 and through the date of this report, the Compensation Committee also certified the achievement of the fifth and final stock price goal of $120.00.

Unless all the goals under the 2021 CEO Performance Award are achieved and all such options awarded thereunder are fully earned prior to such time, Mr. Liang’s compensation is expected to be similarly based upon awards he earns under the 2021 CEO Performance Award for about the next three years.

The 60-trading-day average stock price of our common stock has already reached the final goal of $120.00 per share (from $34.08 on the day the award was provided).

As a result, as of the date of this report, the 2021 CEO Performance Award has been earned and is exercisable at a per share price of $45 with respect to 800,000 shares.

Fiscal Year 2023 Business Performance Highlights

The following are highlights of our performance for fiscal year 2023.

When given, comparisons are between fiscal year 2023 and fiscal year 2022 results.

- Revenue was $7,123.5 million, up 37.1%;

- Gross margin was 18.0%, an improvement from 15.4%;

- Net income was $640.0 million, an improvement of 124.4%;

- Diluted net income per common share was $11.43 million, up 114.8%;

- The sixty-trading-day average stock price of our shares exceeded $120.00, reaching $120.87 during the period from March 6, 2023 through May 30, 2023;

- During fiscal year 2023 and the period from July 1, 2022 to June 30, 2023, our stock price reached a high of $261.66 on June 9, 2023; and

- We recorded a $36.6 million increase in inventory reserve charges between fiscal year 2022 and fiscal year 2023.

The Compensation Committee utilized for fiscal year 2023 the independent consultant report developed for fiscal year 2022 as it believed the report continued to be relevant.

- As a part of its philosophy to link compensation to corporate performance, the Compensation Committee adopted the FY2023 Performance Program for Other Named Executive Officers in January 2023.

*Under such program, the Compensation Committee determined to utilize the same KPIs for fiscal year 2023 as were utilized in fiscal year 2022 for Mr. Weigand.

These included a Stock Price Increase KPI and a Long-Term Investor Increase KPI, as well as a subjective Individual Performance Evaluation KPI determined by the CEO.

The Compensation Committee believed such KPIs continued to accurately reflect the most relevant factors to measure the CFO’s performance in a manner that aligns with stockholder value and stockholder interests.

The weightings given to such KPIs were also unchanged between the programs for fiscal year 2022 and fiscal year 2023.

See “- FY2023 Performance Program for Other Named Executive Officers – Performance Incentive Award” below for more information.

In addition, the Compensation Committee decided to leave unchanged the fixed bonus component for Mr. Weigand at 30% of his base salary for fiscal year 2023.

See “- FY2023 Performance Program for Other Named Executive Officers – Fixed bonus component” below for more information.

*Under such program, the Compensation Committee determined to utilize an updated and different mix of KPIs for fiscal year 2023 for Mr. Clegg’s program.

For fiscal year 2023, Mr. Clegg’s KPIs continued to include a Worldwide Revenue KPI, as well as a subjective Individual Performance Evaluation KPI determined by the CEO (features similar to those used for fiscal year 2022).

However, for fiscal year 2023, Mr. Clegg’s other KPIs included both a Growth in Top 3000 Customer KPI and a Slow Moving & Excess and Obsolete Inventory KPI (the “Inventory KPI”), which are new.

Previously, in fiscal year 2022, Mr. Clegg’s other KPIs included both a Stock Price Increase KPI and a Worldwide Net Profit KPI, which the Compensation Committee determined not to utilize for fiscal year 2023, as the Compensation Committee believed the new KPIs more accurately reflected the appropriate objectives of a Senior Vice President of Worldwide Sales in a manner that aligns with stockholder value and stockholder interests.

In addition, the Compensation Committee also determined for fiscal year 2023 to adjust the weightings of the various KPIs selected for Mr. Clegg to more finely tune the program.

For example, while the Worldwide Revenue KPI had been double weighted in Mr. Clegg’s program for fiscal year 2022, for fiscal year 2023 this KPI was triple weighted.

See “- FY2023 Performance Program for Other Named Executive Officers – Performance Incentive Award” below for more information.

In addition, the Compensation Committee decided to adjust the fixed bonus component for Mr. Clegg to 20% of his base salary for fiscal year 2023, compared to 25% of his base salary for the prior fiscal year 2022.

See “- FY2023 Performance Program for Other Named Executive Officers – Fixed bonus component” below for more information.

*Mr. Weigand received a fixed bonus amount of $148,568 paid in semi-monthly installments during fiscal year 2023, earned a cash payment of $167,127 and earned an aggregate grant of $668,509 in RSUs that were granted on August 24, 2023 and August 25, 2023.

These RSUs generally vest in annual installments over four years; and

These RSUs generally vest in annual installments over four years.