v3.25.1
Convertible Notes
 9 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Convertible Notes
Note 6. Lines of Credit and Term Loans

Short-term and long-term loan obligations with respect to revolving lines of credit and term loans as of March 31, 2025 and June 30, 2024 consisted of the following (in thousands):
 
 March 31,June 30,
 20252024
Line of credit:
CTBC Credit Lines$24,166 $184,573 
Chang Hwa Bank Credit Lines— 9,215 
HSBC Bank Credit Lines— 30,000 
E.SUN Bank Credit Lines— 60,000 
Mega Bank Credit Lines— 50,000 
First Bank Credit Lines— 28,084 
Total line of credit24,166 361,872 
Term loan facilities:
Chang Hwa Bank Credit Facility due October 15, 202611,957 17,918 
CTBC Term Loan Facility, due June 4, 203026,756 31,155 
CTBC Term Loan Facility, due August 15, 20261,980 3,079 
E.SUN Bank Term Loan Facility, due September 15, 202614,500 22,116 
E.SUN Bank Term Loan Facility, due August 15, 20279,490 12,645 
Mega Bank Term Loan Facility, due October 3, 2026
18,125 27,644 
Total term loans82,808 114,557 
Total lines of credit and term loans
106,974 476,429 
Lines of credit and current portion of term loans
63,971 402,346 
Term loans, non-current
$43,003 $74,083 
Activities under Revolving Lines of Credit and Term Loans

Available borrowings and interest rates as of March 31, 2025 and June 30, 2024 consisted of the following (in thousands except for percentages):

 March 31, 2025June 30, 2024
Available borrowingsInterest rateAvailable borrowingsInterest rate
Line of credit:
2018 Bank of America Credit Facility$— n/a$350,000 6.82%
2022 Bank of America Credit Facility$— n/a$20,000 6.49%
Cathay Bank Line of Credit$— n/a$132,000 7.33%
CTBC Credit Lines
$160,834 
2.63% - 5.79%
$427 
2.09% - 6.13%
Chang Hwa Bank Credit Lines
$29,062 
1.88% - 5.18%
$20,000 
1.88% - 6.33%
HSBC Bank Credit Lines
$— n/a$20,000 
2.03% - 6.28%
E.SUN Bank Credit Lines
$— n/a$— 
2.02% - 6.17%
Mega Bank Credit Lines
$50,000 
2.02% - 5.26%
$— 
1.90% - 5.80%
First Bank Credit Lines
$— n/a$1,916 
2.03% - 6.19%
Yuanta Bank Credit Lines
$46,822 
2.32% - 5.95%
$47,610 
2.32% - 6.33%
Term loan facilities:
Bank of America Term Loan$— n/a$— n/a
Chang Hwa Bank Credit Facility due October 15, 2026$— 2.08%$— 1.68%
CTBC Term Loan Facility, due June 4, 2030$— 1.33%$— 1.33%
CTBC Term Loan Facility, due August 15, 2026
$— 
1.53% - 2.03%
$— 1.53%
E.SUN Bank Term Loan Facility, due September 15, 2026
$— 
1.87% - 2.17%
$— 1.87%
E.SUN Bank Term Loan Facility, due August 15, 2027
$— 1.87%$— 1.87%
 Mega Bank Term Loan Facility, due October 3, 2026
$— 
 2.02%
$— 
1.52% - 1.72%
See Note 7 “Lines of Credit and Term Loans” of the Company’s 2024 Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (“2024 10-K”) to the condensed consolidated financial statements in this Quarterly Report for a more complete description of the Company's credit facilities.

The Company entered into new agreements during the nine months ended March 31, 2025 with the following terms:

Bank of America

Bridge Term Loan Facility

On July 19, 2024, the Company entered into a Term Loan Credit Agreement, by and among the Company, the lenders party thereto, and Bank of America, N.A., as the administrative agent (the “Term Loan Agent”), which provided for a $500 million term loan facility (the “Bridge Term Loan Facility”). On September 27, 2024, the Company entered into Amendment No. 1 to Term Loan Credit Agreement (the “Term Loan Amendment”), by and among the Company, the lenders party thereto, and the Term Loan Agent, which amended the Bridge Term Loan Facility to, among other things, extend the date by which the Company was required to deliver its audited financial statements for its fiscal year 2024 under the Bridge Term Loan Facility from September 28, 2024 to November 27, 2024 and required the Company to prepay $250 million of the term loans outstanding thereunder.
On November 1, 2024, the Company prepaid in full and terminated its obligations under the Term Loan Agreement.

2018 Bank of America Credit Facility

On July 19, 2024, the Company entered into an Eighth Amendment to Loan and Security Agreement, by and among the Company, the lenders party thereto, and Bank of America, N.A., as administrative agent for the lenders (the “ABL Agent”), which amends the Loan and Security Agreement, dated as of April 19, 2018 (the “ABL Agreement”) to, among other things, allow for the Company’s entry into and borrowing under the Term Loan Facility.

On September 27, 2024, the Company entered into the Ninth Amendment to the ABL Agreement, by and among the Company, the lenders party thereto, and the ABL Agent, which amended the ABL Agreement to, among other things, extend the date by which the Company was required to deliver its audited financial statements for its fiscal year ended June 30, 2024 under the ABL Agreement and added a $70 million availability block to the U.S borrowing base thereunder.

On November 20, 2024, the Company prepaid in full and terminated its obligations under the ABL Agreement.

2022 Bank of America Credit Facility

On November 20, 2024, the Company through Super Micro Computer, Inc. Taiwan (the “Taiwan Subsidiary”), a wholly owned subsidiary of the Company, terminated its obligations under the Uncommitted Facility Agreement for credit lines with Bank of America – Taipei Branch.

Cathay Bank

Cathay Bank Line of Credit

On October 28, 2024, the Company entered into a Third Amendment to Loan Agreement, by and among the Company and Cathay Bank, which amended the Loan Agreement, dated as of May 19, 2022 (the “Cathay Bank Loan Agreement”), to, among other things, (a) extend the date by which the Company was required to deliver its (i) audited financial statements for its fiscal year 2024 under the Cathay Bank Loan Agreement from October 28, 2024 to December 31, 2024 and (ii) balance sheet and income statement for its fiscal quarter ended September 30, 2024 under the Loan Agreement from November 29, 2024 to December 31, 2024 and (b) added a covenant requiring that the Company maintain at least $150 million of unrestricted cash at all times. On November 15, 2024, the Company also entered into a Fourth Amendment to Loan Agreement, by and between the Company and Cathay Bank, which amended the Cathay Bank Loan Agreement to, among other things, reduce the revolving line and letter of credit sub-limit under the Cathay Bank Loan Agreement to $458,000. On November 20, 2024, the Company prepaid in full and terminated its obligations under the Cathay Bank Loan Agreement.

CTBC Bank

2025 CTBC Facility Letter

On February 27, 2025, the Taiwan Subsidiary received a new facility letter from CTBC Bank (“2025 Facility”), issued under the general agreement for omnibus credit lines with CTBC Bank, dated February 16, 2024 (the “2024 CTBC Agreement”). As a result, the credit arrangements under the 2024 CTBC Agreement now include the previously issued long and medium-term loan facility of New Taiwan Dollar (“NTD”) 1,550 million entered into in 2020 and 2021 (the “Long and Medium Loan Facility”), and each of (i) a short-term loan and guarantee line providing credit of up to NTD 1,800 million and NTD 100 million, respectively (the “NTD Short Term Loan/Guarantee Line”), (ii) a short-term loan providing a line of credit of up to $40 million (the “USD Short Term Loan Line”), (iii) an export/import o/a loan line providing a line of credit of up to $105 million for exports and imports (the “Export/Import Line”) and (iv) an import o/a loan line of credit of up to $80 million (the “Import O/A Line,” and, together with the NTD Short Term Loan/Guarantee Line, the USD Short Term Loan Line, and the Export/Import Line, the “2025 CTBC Credit Lines”). Aggregate borrowings under all the 2025 CTBC Credit Lines are subject to a cap of $185 million as set forth under the 2024 CTBC Agreement.

The 2025 Facility expires on February 28, 2026. As of March 31, 2025, the outstanding borrowings under the 2025 CTBC Bank Credit Lines were $24.2 million.
E.SUN Bank

E.SUN Bank Term Loan Facilities and Credit Lines

On November 14, 2024, the Taiwan Subsidiary entered into amendments (the “E.SUN Amendments”) of various Notifications and Confirmations of Credit Agreements (the “Notifications and Confirmations”) previously entered into with E.SUN Bank, which among other things, extended the time period for the financial statements issued by the Taiwan Subsidiary for its fiscal year 2024 to be reviewed by E.SUN Bank from October 31, 2024 to December 31, 2024. In addition, the Notifications and Confirmations included various financial commitments applicable to the Subsidiary related to current ratio, net debt ratio, and interest coverage multiple. If such financial commitments are not achieved, the amortization period for the current balances thereunder will be shortened to one year starting from the 31st of the review month. The Company submitted the financial statements prior to December 31, 2024.

HSBC Bank

HSBC Bank Credit Lines

On December 20, 2024, the General Loan, Export/Import Financing, Overdraft Facilities, and Securities Agreement which the Taiwan Subsidiary had entered into with the Taiwan affiliate of HSBC Bank (the “HSBC Loan Agreement”) was terminated and not renewed. The balance of $50 million under the HSBC Loan Agreement was fully repaid on September 9, 2024, and the loan had remained undrawn since such date.

Principal payments on lines of credit and term loans are due as follows (in thousands):

 Fiscal Year:
 Principal Payments
Remainder of 2025$34,118 
202639,805 
202717,293 
20285,833 
20295,178 
2030 and thereafter4,747 
Total lines of credit and term loans
$106,974 

As of March 31, 2025, the Company was in compliance with all the covenants for the revolving lines of credit and term loans identified in this Note 6 “Lines of Credit and Term Loans”.
Note 7. Convertible Notes

2029 Convertible Notes

In February 2024, the Company issued $1,725.0 million aggregate principal amount of 0.00% Convertible Senior Notes due 2029 (the “Original 2029 Convertible Notes”). On February 11, 2025, the Company entered into privately negotiated subscription agreements with certain holders of the Original 2029 Convertible Notes (the “Convertible Note SPAs”) to, among other things, amend certain terms of, and obtain waivers with respect to, the Original 2029 Convertible Notes and to issue $700.0 million aggregate principal amount of the 2028 Convertible Notes (as further described below). On February 12, 2025, pricing of the amended 2029 Convertible Notes and 2028 Convertible Notes was set pursuant to the Convertible Note SPAs, establishing a binding commitment by the parties to the Convertible Note SPAs. On February 20, 2025, the Company amended and supplemented that certain indenture governing the Original 2029 Convertible Notes (the “Original 2029 Notes Indenture”), dated as of February 27, 2024, by and between the Company U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) by entering into a first supplemental indenture and a second supplemental indenture (the Original 2029 Notes Indenture, as so amended, the “2029 Convertible Notes Indenture”), in each case with the Trustee. Pursuant to the 2029 Convertible Notes Indenture, the 2029 Convertible Notes were amended to (i) bear interest from February 20, 2025 at an annual rate of 3.50%, payable semi-annually in arrears on each March 1 and September 1, beginning on September 1, 2025 and (ii) include an updated conversion rate of 11.9842 shares of the Company's common stock per $1,000 principal amount of 2029 Convertible Notes which is equivalent to a conversion price of approximately $83.44 per share of the Company’s common stock, in each case subject to adjustment as set forth in 2029 Convertible Notes Indenture (such amendments, the “Amendments”). The 2029 Convertible Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, at the Company’s election. The other terms of the 2029 Convertible Notes remained substantially unchanged. The amendment was treated as an extinguishment of the original debt and an issuance of the new debt, in which a debt extinguishment loss of $30.3 million was recognized during the quarter ended March 31, 2025.

The conversion rate is subject to customary adjustments for certain events as described in the 2029 Convertible Notes Indenture. Special interest will accrue on the 2029 Convertible Notes in the circumstances and at the rates described in the 2029 Convertible Notes Indenture. The debt issuance costs and premium are amortized to interest expense. The 2029 Convertible Notes do not contain financial maintenance covenants.

Holders may convert their 2029 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “2029 Convertible Note measurement period”) in which the trading price per $1,000 principal amount of 2029 Convertible Notes for each trading day of the 2029 Convertible Note measurement period was less than 98% of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the 2029 Convertible Notes Indenture; (4) if the Company calls such notes for redemption; and (5) at any time from, and including, September 1, 2028 until the close of business on the second scheduled trading day immediately before the maturity date irrespective of the circumstances in (1) - (4) above.

If the Company undergoes a fundamental change (as defined in the 2029 Convertible Notes Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2029 Convertible Notes, at a fundamental change repurchase price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus any accrued and unpaid interest, if any, up to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their 2029 Convertible Notes in connection with such corporate event or during the relevant redemption period.
The 2029 Convertible Notes are redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or after March 1, 2027 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The 2029 Convertible Notes have customary provisions relating to the occurrence of “events of default” (as defined in the 2029 Convertible Notes Indenture). The occurrence of such events of default may result in the acceleration of all amounts due under the 2029 Convertible Notes. No sinking fund is provided for the 2029 Convertible Notes.

The 2029 Convertible Notes are general unsecured obligations of the Company and rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2029 Convertible Notes; equal in right of payment with all of the Company’s existing and future senior, unsecured indebtedness (including the 2028 Convertible Notes); effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity if any, of the Company’s current or future subsidiaries. As of March 31, 2025, none of the conditions permitting the holders of the 2029 Convertible Notes to convert their notes early had been met. Therefore, the 2029 Convertible Notes are classified as long-term debt.

The carrying value of the 2029 Convertible Notes, net of unamortized issuance costs and premium of $23.9 million, was $1,701.1 million as of March 31, 2025. Interest expense related to the amortization of debt issuance costs and premium was $0.8 million and interest was $8.2 million for the quarter ended March 31, 2025. The effective interest rate is 3.88%.

In connection with the Amendment, the Company entered into agreements to amend certain terms of the Capped Call Transactions. Refer to discussion below under “Capped Calls”.

2028 Convertible Notes

On February 20, 2025, the Company issued $700.0 million aggregate principal amount of its 2.25% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”) pursuant to an indenture by and between the Company and U.S. Bank Trust Company, National Association, as trustee (the “2028 Convertible Notes Indenture”). The Company received proceeds from the offering of approximately $700.0 million before deducting any issuance costs and fees payable to the placement agents. The 2028 Convertible Notes will mature on July 15, 2028, unless earlier repurchased, redeemed or converted.

The 2028 Convertible Notes bear interest from February 20, 2025 at an annual rate of 2.25%, payable semi-annually in arrears on each January 15 and July 15, beginning on July 15, 2025. The 2028 Convertible Notes are convertible into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, at an initial conversion rate of 16.3784 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $61.06 per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the 2028 Convertible Notes Indenture. The Company may pay special interest, if any, at its election as the sole remedy relating to a failure to comply with its reporting obligations and will be obligated to pay additional interest, if any, under the circumstances set forth in the 2028 Convertible Notes Indenture. The 2028 Convertible Notes do not contain financial maintenance covenants.
Holders may convert their 2028 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “2028 Convertible Note measurement period”) in which the trading price per $1,000 principal amount of 2028 Convertible Notes for each trading day of the 2028 Convertible Note measurement period was less than 98% of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the 2028 Convertible Notes Indenture; (4) if the Company calls such 2028 Convertible Notes for redemption; and (5) at any time from, and including, January 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date irrespective of the circumstances in (1) - (4) above.

If the Company undergoes a fundamental change (as defined in the 2028 Convertible Notes Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2028 Convertible Notes, at a fundamental change repurchase price equal to 100% of the principal amount of the 2028 Convertible Notes to be repurchased, plus any accrued and unpaid interest, up to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their 2028 Convertible Notes in connection with such corporate event or during the relevant redemption period.

The 2028 Convertible Notes are redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or after March 1, 2026 and on or before the 20th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 150% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The 2028 Convertible Notes have customary provisions relating to the occurrence of “events of default” (as defined in the 2028 Convertible Notes Indenture). The occurrence of such events of default may result in the acceleration of all amounts due under the 2028 Convertible Notes. No sinking fund is provided for the 2028 Convertible Notes.

The 2028 Convertible Notes are general unsecured obligations of the Company and rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2028 Convertible Notes; equal in right of payment with all of the Company’s existing and future senior, unsecured indebtedness (including the 2029 Convertible Notes); effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity if any, of the Company’s current or future subsidiaries. As of March 31, 2025, none of the conditions permitting the holders of the 2028 Convertible Notes to convert their notes early had been met. Therefore, the 2028 Convertible Notes are classified as long-term debt.

The Company accounted for the issuance of the 2028 Convertible Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.

The carrying value of the 2028 Convertible Notes, net of unamortized issuance costs of $15.8 million, was $684.2 million as of March 31, 2025. Interest expense related to the amortization of debt issuance costs was $0.5 million and for interest was $1.8 million for the quarter ended March 31, 2025. The effective interest rate is 2.97%.
Capped Calls

On February 12, 2025, in connection with the Amendments, the Company also entered into agreements to amend certain terms of the privately negotiated capped call transactions (collectively and as amended, the “Capped Call Transactions”) originally entered into with certain financial institutions (the “Capped Call Counterparties”) on February 22, 2024. The amendments, among other things, make certain adjustments to the economic terms of the capped call transactions, including the strike price and cap price. The strike price, after giving effect to the amendments, is initially $83.44 per share of the Company's common stock. The cap price, after giving effect to the amendments, is initially $94.17 per share of the Company's common stock, and is subject to certain adjustments under the terms of the amended capped calls. The number of shares underlying the Capped Calls increased from 7.455 to 11.984 per $1,000 principal amount of 2029 Convertible Notes.

The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the 2029 Convertible Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of the 2029 Convertible Notes, as the case may be, with such reduction and/or offset, in each case subject to a cap.
For accounting purposes, each Capped Call Transaction is a separate transaction, and not part of the terms of the 2029 Convertible Notes. The amendment to the Capped Call Transactions did not change the recognition of the Capped Call Transactions as shareholders’ equity and did not result in any incremental value requiring recognition. The amended 2029 Convertible Notes and the amended Capped Call Transactions have been integrated for tax purposes. The impact of this tax treatment results in the Capped Call Transactions being deductible with the cost of the Capped Call Transactions qualifying as original issue discount for tax purposes over the term of the 2029 Convertible Notes.