Super Micro Computer Inc (SMCI)

Interest coverage

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,328,923	1,588,805	1,570,800	1,233,491	1,157,805	868,538	720,142	761,142	699,600	690,295	518,029	327,034	200,902	128,180	122,629	123,947	111,794	110,285	100,735	104,743
Interest expense (ttm)	US$ in thousands	40,403	33,247	34,843	19,352	19,749	14,791	8,416	10,491	9,910	10,153	9,547	6,413	4,120	3,196	2,615	2,485	2,456	2,367	2,358	2,236
Interest coverage		32.89	47.79	45.08	63.74	58.63	58.72	85.57	72.55	70.60	67.99	54.26	51.00	48.76	40.11	46.89	49.88	45.52	46.59	42.72	46.84

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,328,923K ÷ $40,403K
= 32.89

The interest coverage ratio for Super Micro Computer Inc. demonstrates a consistently high level of ability to meet interest obligations throughout the analyzed period. Starting from June 30, 2020, the ratio stood at approximately 46.84, reflecting that the company's earnings before interest and taxes were nearly 47 times its interest expenses at that time. The ratio experienced minor fluctuations, maintaining a strong position with values generally above the 40 mark until the end of 2022. Notably, there was a progressive upward trend from September 30, 2021, onwards, reaching a peak of approximately 70.60 in March 2023, and maintaining elevated levels through mid-2024.

In the most recent data available, the interest coverage ratio remains robust, with a value of around 58.63 as of March 2024, indicating a substantial cushion to cover interest expenses. However, a decline is observable in the latest quarter ending September 30, 2024, where the ratio drops to approximately 45.08, and further decreases to around 32.89 by March 2025. Despite this decline, the ratio continues to remain well above 1, signifying that earnings before interest and taxes are still comfortably exceeding interest obligations.

Overall, Super Micro Computer Inc. has exhibited a history of strong interest coverage ratios, reflecting a solid capacity to service interest payments with earnings. The upward trend observed over the recent periods suggests improving financial health, although the recent decline warrants monitoring in the context of earnings fluctuations. The sustained high ratios imply the company has maintained a conservative approach toward debt and interest management over the analyzed period.