Super Micro Computer Inc

Previous wording

We commenced operations in 1993 and have been profitable every year since inception. For the three months ended December 31, 2024 and 2023, our net income was $320.6 million and $296.0 million, respectively. For the six months ended December 31, 2024 and 2023, our net income was $744.9 million and $453.0 million, respectively. In order to increase our sales and profits, we believe that we must continue to develop flexible and application optimized server and storage solutions and be among the first to market with new features and products and deliver Total IT Solutions that combine server, storage, networking and software that is integrated, validated and delivered at the rack and cluster (multi-rack) level. We must also continue to expand our software and customer service and support offerings, particularly as we increasingly focus on larger enterprise and large data center customers. Additionally, we must focus on development of our sales partners and distribution channels to further expand our market share. We measure our financial success based on various indicators, including growth in net sales, gross profit margin, operating margin, and growth in net income per common share. Among the key non-financial indicators of our success is our ability to rapidly introduce new products and deliver the latest application-optimized server and storage solutions. In this regard, we work closely with microprocessor and other key component vendors to take advantage of new technologies as they are introduced. Historically, our ability to introduce new products rapidly has allowed us to benefit from technology transitions such as the introduction of new GPUs, microprocessors and storage technologies. As a result, we monitor the product introduction cycles of NVIDIA Corporation, Intel Corporation, Advanced Micro Devices, Inc., Broadcom Inc., Samsung Electronics Company Limited, Micron Technology, Inc. and others closely and carefully. This also impacts our research and development expenditures as we continue to invest more in our current and future product development efforts.

Current wording

We measure our financial success based on various indicators, including growth in net sales, gross profit margin, operating margin, and growth in net income per common share. Among the key non-financial indicators of our success is our ability to rapidly introduce new products and deliver the latest application-optimized server and storage solutions. To achieve this, we work closely with the developers and manufacturers of key components, ensuring we leverage emerging technologies as they become available. Historically, our ability to quickly introduce new products has allowed us to capitalize on technology transitions such as the launch of new GPUs, microprocessors and storage technologies. As a result, we closely monitor the product introduction cycles of industry leaders, including NVIDIA Corporation, Intel Corporation, Advanced Micro Devices, Inc., Broadcom Inc., Samsung Electronics Company Limited, Micron Technology, Inc. and others. This focus also influences our research and development expenditures as we continue to invest in both our current and future product development efforts.

Previous wording

The increased use of artificial intelligence ("AI"), which has required increased datacenter capabilities, has substantially increased demand for our products in the recent past. We expect that the AI market, and thus the need for additional datacenter capabilities, will continue to strengthen, and we will therefore continue to enhance our product capabilities and breadth of our service offerings to meet the demand of the AI market and datacenters. We believe that the configuration of certain of our products to meet the unique needs of the AI market and datacenters differentiates us from many of our competitors and will lead us to secure an even greater market share going forward.

Current wording

The growing use of artificial intelligence (“AI”), which requires enhanced datacenter capabilities, has substantially increased demand for our products. We expect this trend to continue, with further demand for datacenter expansion driven by the AI market. As a result, we will continue to enhance our product capabilities and expand our service offerings to address the growing demand in the AI market and datacenter markets. We believe that our ability to tailor certain products to the unique needs of these sectors sets us apart from many competitors and positions us to capture an even greater market share going forward.

Previous wording

•Net sales increased by 54.9% in the three months ended December 31, 2024 as compared to the three months ended December 31, 2023.

Current wording

•Net sales increased by 19.5% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Previous wording

•Gross margin decreased to 11.8% in the three months ended December 31, 2024 from 15.4% in the three months ended December 31, 2023.

Current wording

•Gross margin decreased to 9.6% in the three months ended March 31, 2025 from 15.5% in the three months ended March 31, 2024.

Previous wording

•Operating expenses increased by 56.2% as compared to the three months ended December 31, 2023 and were equal to 5.3% and 5.3% of net sales in the three months ended December 31, 2024 and 2023, respectively.

Current wording

•Operating expenses increased by 33.9% as compared to the three months ended March 31, 2024 and were equal to 6.4% and 5.6% of net sales in the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Net sales primarily consist of sales of our server and storage solutions, including systems and related services, subsystems and accessories. The main factors that impact net sales of our server and storage systems are the number of servers and racks sold and the average selling prices per server or rack. The main factors that impact net sales of our subsystems and accessories are units shipped and the average selling price per unit. The prices for our server and storage systems range widely depending upon the configuration, including the speed, functionality and performance of key components such as central processing units (“CPUs”), graphic processing units (“GPUs”), solid state drives (“SSDs”), and memory. The prices for our subsystems and accessories can also vary widely based on whether a customer is purchasing power supplies, server boards, chassis or other accessories.

Current wording

Net sales primarily consist of sales of our server and storage solutions, including systems and related services, subsystems, and accessories. The key factors that impact net sales of our server and storage systems are the number of servers and racks sold and the average selling prices per server or rack. For subsystems and accessories, the main drivers of net sales are the number of units shipped and the average selling price per unit. The prices for our server and storage systems can vary widely depending on the configuration, including factors such as speed, functionality and performance of key components, including central processing units (“CPUs”), GPUs, solid state drives (“SSDs”), cooling systems and memory. Similarly, the prices for our subsystems and accessories fluctuate depending on the relative value of the specific item being purchased. such as power supplies, server boards, chassis or other accessories.

Previous wording

Cost of sales primarily consists of the costs to manufacture our products, which includes: the costs of components and materials, contract manufacturing, shipping, personnel expenses (salaries, benefits, stock-based compensation and incentive bonuses), equipment and facility expenses, warranty costs and inventory reserve charges. The primary factors that impact our cost of sales are the volume and mix of products sold, changes in the cost of components, changes in logistic costs, changes in salary and benefits and overhead costs related to production as well as economies of scale gained from higher production volume in our facilities. Cost of sales as a percentage of net sales may increase or decrease over time if the changes in our costs are not matched by corresponding changes in our ASPs. Our cost of sales as a percentage of net sales is also impacted by the timing and extent to which we add to, and are able to efficiently utilize, our manufacturing capacity. Because we generally do not have long-term fixed supply agreements, our cost of sales is subject to frequent change based on the availability of materials and other market conditions. We expect inventory levels to continue to increase to support the future growth of our business. Certain materials used in the manufacturing of our products are available from a limited number of suppliers and we expect that this trend will continue in the future.

Current wording

Cost of sales primarily consists of the costs to manufacture our products, which includes: the costs of components and materials, contract manufacturing, shipping, personnel expenses (salaries, benefits, stock-based compensation and incentive bonuses), equipment and facility expenses, warranty costs and inventory reserve charges.

Previous wording

Research and development expenses consist of personnel expenses including salaries, benefits, stock-based compensation and incentive bonuses, and related expenses for our research and development personnel, as well as product development costs such as materials and supplies, consulting services, third-party testing services and equipment and facility expenses related to our research and development activities. All research and development costs are expensed as incurred. We occasionally receive non-recurring engineering funding from certain suppliers and customers for joint development. Under these arrangements, we are reimbursed for certain research and development costs that we incur as part of the joint development efforts with our suppliers and customers. These reimbursed costs offset a portion of the related research and development expenses and have the effect of reducing our reported research and development expenses.

Current wording

Research and development expenses consist of personnel expenses including salaries, benefits, stock-based compensation and incentive bonuses, and related expenses for our research and development personnel, as well as product development costs such as materials and supplies, consulting services, third-party testing services and equipment and facility expenses related to our research and development activities.

Previous wording

Sales and marketing expenses consist primarily of personnel expenses including salaries, benefits, stock-based compensation and incentive bonuses, and related expenses for our sales and marketing personnel, cost for tradeshows, sales representative fees and marketing programs. From time to time, we receive marketing development funding from certain suppliers. Under these arrangements, we are reimbursed for certain marketing costs that we incur as part of the joint promotion of our products and those of our suppliers. These amounts offset a portion of the related expenses and have the effect of reducing our reported sales and marketing expenses. The timing, magnitude and estimated usage of these programs can result in significant variations in reported sales and marketing expenses from period to period. Spending on cooperative marketing, reimbursed by our suppliers, typically increases in connection with new product releases by our suppliers.

Current wording

Sales and marketing expenses consist primarily of personnel expenses including salaries, benefits, stock-based compensation and incentive bonuses, and related expenses for our sales and marketing personnel, cost for trade shows, sales representative fees and marketing programs. From time to time, we receive marketing development funding from certain suppliers. Under these arrangements, we are reimbursed for certain marketing costs that we incur as part of the joint promotion of our products and those of our suppliers. These amounts offset a portion of the related expenses and have the effect of reducing our reported sales and marketing expenses.

Previous wording

Interest expense represents interest expense on our term loans and lines of credit and amortization of the 2029 Convertible Notes issuance costs.

Current wording

Other (expense) income, net consists primarily of interest earned on our investments, cash balances and foreign exchange gains and losses. Interest expense represents interest expense on our term loans and lines of credit and amortization of the 2029 Convertible Notes and 2028 Convertible Notes issuance costs.

Previous wording

The following table presents certain items of our condensed consolidated statements of operations expressed as a percentage of revenue.

Current wording

The following table presents certain items of our condensed consolidated statements of operations expressed as a percentage of revenue for the three and nine months ended March 31, 2025 and 2024:

Previous wording

The following table presents net sales by product type for the three and six months ended December 31, 2024 and 2023 (dollars in millions):

Current wording

The following table presents net sales by product type for the three and nine months ended March 31, 2025 and 2024 (dollars in millions):

Previous wording

The period-over-period increase in net sales of our server and storage systems was primarily driven by an increase in the demand from customers for GPU servers, high performance computing (“HPC"), and rack-scale solutions which are generally more complex and of higher value, resulting in an increase of average selling price ("ASP").

Current wording

The$760.4 million increase in net sales of our server and storage systems was primarily driven by an increase in the demand from customers for GPU servers, high performance computing (“HPC”), and rack-scale solutions which are generally more complex and of higher value, resulting in an increase of average selling price (“ASP”).

Previous wording

The period-over-period decrease in net sales for our subsystems and accessories of 16.8% was primarily due to the focus on allocating certain supply chain constrained components to build and ship server and storage systems rather than selling them as parts of subsystems and accessories.

Current wording

The $10.6 million decrease in net sales for our subsystems and accessories of 7.0% was primarily due to the focus on allocating certain supply chain constrained components to build and ship server and storage systems rather than selling them as parts of subsystems and accessories.

Previous wording

The period-over-period increase in net sales of our server and storage systems was primarily driven by an increase in the demand from customers for GPU servers, HPC, and rack-scale solutions which are generally more complex and of higher value, resulting in an increase of ASP.

Current wording

The$6,593.1 million increase in net sales of our server and storage systems was primarily driven by an increase in the demand from customers for GPU servers, HPC, and rack-scale solutions which are generally more complex and of higher value, resulting in an increase of ASP.

Previous wording

The period-over-period decrease in net sales for our subsystems and accessories of 0.5% was primarily due to the focus on allocating certain supply chain constrained components to build and ship server and storage systems rather than selling them as parts of subsystems and accessories.

Current wording

The $12.7 million decrease in net sales for our subsystems and accessories of 2.4% was primarily due to the focus on allocating certain supply chain constrained components to build and ship server and storage systems rather than selling them as parts of subsystems and accessories.

Previous wording

The following table presents net sales by geographic region for the three and six months ended December 31, 2024 and 2023 (dollars in millions):

Current wording

The following table presents net sales by geographic region for the three and nine months ended March 31, 2025 and 2024 (dollars in millions):

Previous wording

The period-over-period increase in overall net sales is driven by an increase in demand from customers for GPU servers, HPC, and rack-scale solutions which have higher ASPs, especially for large enterprise and data center customers from the United States and Europe, where they have experienced significant growth. The period-over-period increase of net sales in Europe is mainly due to an increase in net sales in the United Kingdom, Spain and Sweden.

Current wording

The $749.8 million increase in overall net sales is driven by an increase in demand from customers for GPU servers, HPC, and rack-scale solutions which have higher ASPs, especially for large enterprise and data center customers from Asia where these customers have experienced significant growth. The $589.7 million increase of net sales in Asia is mainly due to an increase in net sales in Japan, and Thailand.

Previous wording

The period-over-period increase in overall net sales is driven by an increase in demand from customers for GPU servers, HPC, and rack-scale solutions which have higher ASPs, especially for large enterprise and data center customers from the United States, Asia and Europe sales where they have experienced significant growth. The period-over-period increase of net sales in Europe and Asia is mainly due to an increase in net sales in the United Kingdom, Spain, Sweden and Singapore.

Current wording

The $6,580.4 million increase in overall net sales is driven by an increase in demand from customers for GPU servers, HPC, and rack-scale solutions which have higher ASPs, especially for large enterprise and data center customers from the United States, Asia and Europe where these customers have experienced significant growth. The increase of net sales in Europe and Asia is mainly due to an increase in net sales in the United Kingdom, Sweden, Spain, Japan, Singapore and Thailand.

Previous wording

Cost of sales and gross margin for the three and six months ended December 31, 2024 and 2023 are as follows (dollars in millions):

Current wording

Cost of sales and gross margin for the three and nine months ended March 31, 2025 and 2024 are as follows (dollars in millions):

Previous wording

The period-over-period increase in cost of sales was primarily attributed to an increase of $1,858.7 million in costs of materials and contract manufacturing expenses, a $21.8 million increase in overhead costs, a $17.1 million increase in inventory write-down adjustment and a $9.7 million increase in freight costs primarily related to the increase in net sales volume.

Current wording

The $907.0 million increase in cost of sales can primarily be attributed to an increase of $772.5 million in costs of materials, contract manufacturing expenses, and the expedited recognition of costs in order to accelerate time-to-market for new products that primarily resulted in the increase in net sales volume. Additionally, there was a $109.6 million increase in inventory write-down adjustment, mainly from prior generations of GPUs and related components, along with additional reserves established during the period. Further, overhead costs increased by $18.0 million and freight costs increased by a $6.9 million, primarily due to the increase in net sales volume.

Previous wording

The period-over-period decrease in the gross margin percentage was primarily due to our strategy to offer competitive pricing to gain market share, increased competition and a change in product and customer mix.

Current wording

The 5.9% decrease in the gross margin percentage was primarily due to our strategy to offer competitive pricing to gain market share, increased competition, a shift in product focus towards modular system designs that offer scalability and flexibility to meet the diverse needs of data centers, and a change in customer mix, including an increased presence in international markets.

Previous wording

The period-over-period increase in cost of sales was primarily attributed to an increase of $5,206.2 million in costs of materials and contract manufacturing expenses primarily related to the increase in net sales volume, a $41.0 million increase in overhead costs, a $34.0 million increase in freight costs primarily related to the increase in net sales volume, and a $21.8 million increase in inventory write-down adjustment.

Current wording

The $6,210.0 million increase in cost of sales can primarily be attributed to an increase of $5,978.6 million in costs of materials, contract manufacturing expenses, and expedited costs to accelerate time-to-market for new products primarily related to the increase in net sales volume. Additionally, there was a $131.4 million increase in inventory write-down adjustment, mainly from prior generations of GPU and related components, along with additional reserves established during the period. Further, overhead costs increased by $59.1 million and freight costs increased by $40.9 million, primarily due to the increase in net sales volume.

Previous wording

The period-over-period decrease in the gross margin percentage was primarily due to our strategy to offer competitive pricing to gain market share, increased competition and a change in product and customer mix.

Current wording

The 4.1% decrease in the gross margin percentage was primarily due to our strategy to offer competitive pricing to gain market share, increased competition, a shift in product focus towards modular system designs that offer scalability and flexibility to meet the diverse needs of data centers, and a change in customer mix, including an increased presence in international markets.

Previous wording

Operating expenses for the three and six months ended December 31, 2024 and 2023 are as follows (dollars in millions):

Current wording

Operating expenses for the three and nine months ended March 31, 2025 and 2024 are as follows (dollars in millions):

Previous wording

Research and development expenses. The period-over-period increase in research and development expenses was driven by a $39.8 million increase in employee related costs including stock-based compensation expense, salary increases and higher headcount as we expanded our workforce and invested in key talent, a $12.6 million increase in product development costs to support next generation products and technologies, offset by a $3.0 million increase in research and development credits received from certain suppliers and customers. We believe that research and development expenses will continue to increase as we continue to expand our workforce and invest in key talent to stay at the forefront of development of next generation products and technologies.

Current wording

Research and development expenses. The $46.7 million increase in research and development expenses was driven by a $41.9 million increase in employee-related costs driven by our planned workforce expansion as we continue to invest in key talent, primarily comprised of additional stock compensation expense and salary increases. In addition, there was a $5.1 million increase in product development costs to support next generation products and technologies. We believe that research and development expenses will continue to increase as we continue to expand our workforce and invest in key talent to stay at the forefront of development of next generation products and technologies.

Previous wording

Sales and marketing expenses. The period-over-period increase in sales and marketing expenses was driven by a $38.7 million increase in employee related costs including stock-based compensation expense, salary increases and higher headcount as we expanded our workforce and invested in key talent, and a $31.0 million increase in advertising and other expenses, which was offset by a $5.4 million increase in marketing development funds received. We believe that sales and marketing expenses will continue to increase as we continue to expand our workforce and invest in key talent.

Current wording

Sales and marketing expenses. The $10.3 million increase in sales and marketing expenses was primarily driven by a $8.6 million increase in employee-related costs, driven by increased strategic hiring across sales and marketing functions to support our growth and sales strategy, primarily comprised of additional stock-based compensation expense and salary increases. In addition, there was $13.8 million increase in advertising and other expenses, which was partially offset by a $12.1 million increase in marketing development funds received.

Previous wording

General and administrative expenses. The period-over-period increase in general and administrative expenses was driven by a $16.0 million increase in professional and service fees primarily driven by expenses associated with the circumstances discussed in the Explanatory Note, an $8.5 million increase in employee related costs including stock-based compensation expense, salary increases and higher headcount as we expanded our workforce and invested in key talent and an increase of $1.9 million in other expenses which consisted primarily of increased facilities expenses. We believe that general and administrative expenses will continue to increase as we continue to expand our workforce and invest in key talent.

Current wording

General and administrative expenses. The $17.4 million increase in general and administrative expenses was driven by a $19.0 million increase in professional and service fees primarily from additional external accounting, tax, legal, and advisory services necessary to support our external reporting related activities. This was partially offset by a $3.1 million decrease in employee-related costs, primarily due to lower stock-based compensation expense. We believe that general and administrative expenses will continue to increase as we continue to expand our workforce and invest in key talent.

Previous wording

Research and development expenses. The period-over-period increase in research and development expenses was driven by a $58.7 million increase in employee related costs including stock-based compensation expense, salary increases and higher headcount as we expanded our workforce and invested in key talent, a $17.0 million increase in product development costs to support next generation products and technologies, which was offset by a $5.0 million increase in research and development credits received from certain suppliers and customers. We believe that research and development expenses will continue to increase as we continue to expand our workforce and invest in key talent to stay at the forefront of development of next generation products and technologies.

Current wording

Research and development expenses. The $117.2 million increase in research and development expenses was driven by a $100.4 million increase in employee-related costs driven by our planned workforce expansion as we continue to invest in key talent, primarily comprised of stock-based compensation expense and salary increases. In addition, there was a $22.1 million increase in product development costs to support next generation products and technologies, which was partially offset by a $5.3 million increase in research and development credits received from certain suppliers and customers. We believe that research and development expenses will continue to increase as we continue to expand our workforce and invest in key talent to stay at the forefront of developing next generation products and technologies.

Previous wording

Sales and marketing expenses. The period-over-period increase in sales and marketing expenses was driven by a $14.9 million increase in employee related costs including stock-based compensation expense, salary increases and higher headcount as we expanded our workforce and invested in key talent, and a $19.6 million increase in advertising and other expenses, which was offset by a $1.8 million increase in marketing development funds received. We believe that sales and marketing expenses will continue to increase as we continue to expand our workforce and invest in key talent.

Current wording

Sales and marketing expenses. The $74.6 million increase in sales and marketing expenses was primarily driven by a $47.2 million increase in employee-related costs, driven by increased strategic hiring across sales and marketing functions to support our growth and sales strategy, primarily comprised of additional stock-based compensation expense and salary increases. In addition, there was a $45.0 million increase in advertising and other expenses, which was partially offset by a $17.6 million increase in marketing development funds received.

Previous wording

General and administrative expenses. The period-over-period increase in general and administrative expenses was driven by a $36.2 million increase in professional and service fees primarily driven by expenses associated with the circumstances discussed in the Explanatory Note, a $16.3 million increase in employee related costs including stock-based compensation expense, salary increases and higher headcount as we expanded our workforce and invested in key talent and an increase of $6.2 million in other expenses which consisted primarily of increased facilities expenses. We believe that general and administrative expenses will continue to increase as we continue to expand our workforce and invest in key talent.

Current wording

General and administrative expenses. The $76.3 million increase in general and administrative expenses was driven by a $55.1 million increase in professional and service fees primarily from additional external accounting, tax, legal, and advisory services necessary to support our external reporting related activities. In addition, there was a $13.2 million increase in employee-related costs driven by increased strategic hiring across various finance and other functions, comprised primarily of stock-based compensation expense and salary increases, and an $8.0 million increase in facilities related expenses. We believe that general and administrative expenses will continue to increase as we continue to expand our workforce and invest in key talent.

Previous wording

Other income (expense), net and Interest expense for the three and six months ended December 31, 2024 and 2023 are as follows (dollars in millions):

Current wording

Other (expense) income, net and Interest expense for the three and nine months ended March 31, 2025 and 2024 are as follows (dollars in millions):

Previous wording

Income tax provision for income taxes and effective tax rates for the three and six months ended December 31, 2024 and 2023 are as follows (dollars in millions):

Current wording

Income tax (provision) benefit and effective tax rates for the three and nine months ended March 31, 2025 and 2024 are as follows (dollars in millions):

Previous wording

Our quarterly effective income tax rate is based on the estimated annual income tax rate forecast and discrete tax items recognized in the period. The effective tax rate for the three months ended December 31, 2024, was lower than that for the three months ended December 31, 2023, primarily due to the increase in the stock compensation tax deduction and research tax credit in the three months ended December 31, 2024.

Current wording

Our quarterly effective income tax rate is based on the estimated annual income tax rate forecast and discrete tax items recognized in the period. The effective tax rate for the three months ended March 31, 2025, was higher than that for the three months ended March 31, 2024, primarily due to a decrease in the stock compensation tax deduction for the three months ended March 31, 2025 driven by the decrease in our stock price.

Previous wording

We have financed our growth primarily with funds generated from operations, utilizing borrowing facilities and selling our common stock, and issuing convertible notes. Our recent drivers of liquidity changes have included an increase in the need for working capital due to higher levels of inventory required to support our growing revenues and to a lesser extent, longer supply chain lead times on certain key components. Our cash and cash equivalents were $1.4 billion and $1.7 billion as of December 31, 2024 and June 30, 2024, respectively. Our cash and cash equivalents in foreign locations were$325.8 million and $337.3 million as of December 31, 2024 and June 30, 2024, respectively.

Current wording

We have financed our growth primarily through funds generated from operations, borrowing facilities, the sale of our common stock, and the issuance of convertible notes. Recent factors contributing to changes in liquidity include an increased need for working capital to support higher inventory levels required for our growing revenues and, to a lesser extent, longer supply chain lead times for certain key components. Our cash and cash equivalents were $2.5 billion and $1.7 billion as of March 31, 2025 and June 30, 2024, respectively. Of these amounts, cash and cash equivalents held in foreign locations were$728.1 million and $337.3 million as of March 31, 2025 and June 30, 2024, respectively.

Previous wording

Amounts held outside of the U.S. are generally utilized to support non-U.S. liquidity needs. Repatriations generally will not be taxable from a U.S. federal tax perspective but may be subject to state income or foreign withholding tax. Where local restrictions prevent intercompany transfer of funds, our intent is to keep cash balances outside of the U.S. and to meet liquidity needs through operating cash flows, external borrowings, or both. We do not expect restrictions or potential taxes incurred on repatriation of amounts held outside of the U.S. to have a material effect on our overall liquidity, financial condition or results of operations.

Current wording

Amounts held outside of the U.S. are typically used to meet non-U.S. liquidity needs. Repatriations of these funds is generally not subject to U.S. federal income tax, though state income or foreign withholding taxes may apply. In cases where local restrictions prevent the intercompany transfer of funds, our strategy is to retain cash balances outside the U.S. and meet liquidity needs through operating cash flows, external borrowings, or both. We do not expect restrictions or potential taxes on the repatriation of amounts held outside the U.S. to materially affect our overall liquidity, financial condition, or results of operations.

Previous wording

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 filing of this Quarterly Report. We continue to evaluate financing options that may be required to support the growth of our business.

Current wording

We believe that our current cash, cash equivalents, borrowing capacity from available credit facilities and internally generated cash flows will be sufficient to support our operating activities, as well as maturing debt and interest payments, for the 12 months following the filing of this Quarterly Report. We continue to assess financing options that may be necessary to support the growth of our business.

Previous wording

Net cash provided by operating activities increased by $493.7 million for the six months ended December 31, 2024, as compared to the six months ended December 31, 2023. This increase was primarily driven by a $292.0 million increase in net income, a $179.6 million increase in working capital, and a $22.1 million increase in non-cash items. The cash provided by working capital was primarily driven by a $1,755.1 million increase in inventory due to higher shipment of inventory to fulfill customer demand, a $35.3 million increase in accounts receivable due to cash collections, this was offset by a $1,386.5 million decrease in accounts payable due to timing of vendor payments, and a $224.3 million decrease in other operating assets and liabilities.

Current wording

Net cash provided by operating activities increased by $2,634.1 million for the nine months ended March 31, 2025, compared to the nine months ended March 31, 2024. This increase was primarily driven by a $2,505.0 million increase in working capital and a $130.8 million increase in non-cash items, comprised of stock-based compensation expense and the loss on extinguishment of our 2029 convertible notes. The increase in working capital was due to a $3,136.9 million increase in inventory in anticipation of planned future shipments. Accounts receivable increased by $596.7 million due to stronger cash collections in the current period, partially offset by a $1,121.3 million decrease in accounts payable, resulting from the timing of vendor payments during the current period. Other operating assets and liabilities decreased by $107.3 million, driven by movements in prepaid expenses, income tax payable, accrued liabilities, and deferred revenue.

Previous wording

Net cash used in investing activities increased by $49.3 million for the six months ended December 31, 2024 as compared to the six months ended December 31, 2023 primarily due to an increase in property, plant and equipment of $54.5 million made in the six months ended December 31, 2024, partially offset by a decrease in investments of $5.2 million.

Current wording

Net cash used in investing activities decreased by $33.5 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024 primarily due to a reduction in investments in marketable securities by $27.7 million, and a decrease in capital expenditures on property, plant, and equipment of $5.8 million.

Previous wording

Refer to Note 6, “Lines of Credit and Term Loans,” in our notes to condensed consolidated financial statements in this Quarterly Report for further information on our outstanding bank debt.

Current wording

Refer to Note 6 “Lines of Credit and Term Loans”, in our notes to the condensed consolidated financial statements in this Quarterly Report for further information on our outstanding bank debt.