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Convertible Notes | 3 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
Convertible Notes | Lines of Credit and Term Loans Short-term and long-term loan obligations as of September 30, 2024 and June 30, 2024 consisted of the following (in thousands):
| September 30, |  | June 30,
| 2024 |  | 2024
Line of credit: |  |  |
CTBC Credit Lines | $ | 68,253 |  |  | $ | 184,573 |
Chang Hwa Bank Credit Lines | 9,470 |  |  | 9,215 |
HSBC Bank Credit Lines | — |  |  | 30,000 |
E.SUN Bank Credit Lines | — |  |  | 60,000 |
Mega Bank Credit Lines | 50,000 |  |  | 50,000 |
First Bank Credit Lines | 28,084 |  |  | 28,084 |
Yuanta Bank Credit Lines | 47,000 |  |  | — |
Total line of credit | 202,807 |  |  | 361,872 |
Term loan facilities: |  |  |
Bank of America Term Loan | 249,407 |  |  | — |
Chang Hwa Bank Credit Facility due October 15, 2026 | 16,440 |  |  | 17,918 |
CTBC Term Loan Facility, due June 4, 2030 | 30,664 |  |  | 31,155 |
CTBC Term Loan Facility, due August 15, 2026 | 2,799 |  |  | 3,079 |
E.SUN Bank Term Loan Facility, due September 15, 2026 | 20,202 |  |  | 22,116 |
E.SUN Bank Term Loan Facility, due August 15, 2027 | 11,969 |  |  | 12,645 |
Mega Bank Term Loan Facility, due October 3, 2026 | 25,253 |  |  | 27,644 |
Total term loans | 356,734 |  |  | 114,557 |
Total lines of credit and term loans | 559,541 |  |  | 476,429 |
Lines of credit and current portion of term loans | 493,808 |  |  | 402,346 |
Term loans, non-current | $ | 65,733 |  |  | $ | 74,083 |
Activities under Revolving Lines of Credit and Term Loans Available borrowings and interest rates as of September 30, 2024 and June 30, 2024 consisted of the following (in thousands except for percentages):
| September 30, 2024 |  | June 30, 2024
| Available borrowings |  | Interest rate |  | Available borrowings |  | Interest rate
Line of credit: |  |  |  |  |  |  |
2018 Bank of America Credit Facility | $ | 280,000 |  |  | 6.82% |  | $ | 350,000 |  |  | 6.82%
2022 Bank of America Credit Facility | $ | 20,000 |  |  | 6.49% |  | $ | 20,000 |  |  | 6.49%
Cathay Bank Line of Credit | $ | 132,000 |  |  | 7.16% |  | $ | 132,000 |  |  | 7.33%
CTBC Credit Lines | $ | 116,747 |  |  | 2.15% - 6.03% |  | $ | 427 |  |  | 2.09% - 6.13%
Chang Hwa Bank Credit Lines | $ | 20,000 |  |  | 1.88% - 5.70% |  | $ | 20,000 |  |  | 1.88% - 6.33%
HSBC Bank Credit Lines | $ | 50,000 |  |  | 2.03% - 6.25% |  | $ | 20,000 |  |  | 2.03% - 6.28%
E.SUN Bank Credit Lines | $ | 60,000 |  |  | 2.02% - 6.17% |  | $ | — |  |  | 2.02% - 6.17%
Mega Bank Credit Lines | $ | — |  |  | 1.90% - 5.56% |  | $ | — |  |  | 1.90% - 5.80%
First Bank Credit Lines | $ | 1,916 |  |  | 2.03% - 6.19% |  | $ | 1,916 |  |  | 2.03% - 6.19%
Yuanta Bank Credit Lines | $ | 1,927 |  |  | 2.32% - 5.95% |  | $ | 47,610 |  |  | 2.32% - 6.33%
Term loan facilities: |  |  |  |  |  |  |
Bank of America Term Loan | $ | 250,000 |  |  | 6.63% |  | $ | — |  |  | n/a
Chang Hwa Bank Credit Facility due October 15, 2026 | $ | — |  |  | 1.68% |  | $ | — |  |  | 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 | $ | — |  |  | 1.52% - 1.72% |  | $ | — |  |  | 1.52% - 1.72%
See Note 7 "Short-term and Long-term Debt” and Note 16 "Subsequent Events" of the Company’s 2024 10-K for a more complete description of the Company's credit facilities. The Company entered into new agreements during the three months ended September 30, 2024 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. 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. HSBC Bank HSBC Bank Credit Lines On September 9, 2024, the Company repaid the balance of $50 million under the Loan Agreement entered into by Super Micro Computer, Inc. Taiwan (“Taiwan Subsidiary”), a wholly-owned subsidiary of the Company, and the Taiwan affiliate of HSBC Bank, and the loan had remained undrawn since such date. Principal payments on short-term and long-term debt obligations are due as follows as of September 30, 2024 (in thousands): Fiscal Year Principal Payments
Remainder of 2025 |  | $ | 483,409 |
2026 |  | 41,594 |
2027 |  | 18,071 |
2028 |  | 6,095 |
2029 |  | 5,411 |
2030 and thereafter |  | 4,961 |
Total lines of credit and term loans |  | $ | 559,541 |
As of September 30, 2024, the Company was in compliance with all the covenants for the revolving lines of credit and term loans identified in this Note 6. Convertible Notes 2029 Convertible Notes In February 2024, the Company issued $1,725.0 million aggregate principal amount of the 2029 Convertible Notes. The Company received net proceeds from the offering of approximately $1,695.8 million. The Company used approximately $142.1 million of the net proceeds to fund the cost of entering into the Capped Call Transactions described below. The 2029 Convertible Notes will mature on March 1, 2029, unless earlier converted, redeemed or repurchased. On February 20, 2025, the Company executed a first supplemental indenture and second supplemental indenture related to the 2029 Convertible Notes that implemented amendments to the 2029 Convertible Notes. Refer to Note 14, “Subsequent Events,” in the notes to the condensed consolidated financial statements below. The 2029 Convertible Notes, when issued, did not bear regular interest, and the principal amount of the 2029 Convertible Notes did not accrete. Because the Company did not file its Annual Report on Form 10-K for the fiscal year ended June 30, 2024 in a timely manner, it elected to accrue special interest on the 2029 Convertible Notes and accrued additional interest on the 2029 Convertible Notes in accordance with the indenture governing the 2029 Convertible Notes (the “2029 Convertible Notes Indenture”). Interest expense recognized was $2.2 million for the three months ended September 30, 2024. 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, at an initial conversion rate of 7.455 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which is equivalent to an initial conversion price of approximately $134.14 per share of common stock. The conversion rate is subject to customary adjustments for certain events as described in the 2029 Convertible Notes Indenture. Special interest and additional interest will accrue on the 2029 Convertible Notes in the circumstances and at the rates described in the 2029 Convertible Notes Indenture and have accrued on the 2029 Convertible Notes subsequent to June 30, 2024 as described above. The debt issuance costs 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 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 “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the 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. 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 special interest and additional 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 special and additional 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. The 2029 Convertible Notes were not eligible for conversion as of September 30, 2024. 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; 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 September 30, 2024, 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 Company accounted for the issuance of the 2029 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 2029 Convertible Notes, net of unamortized issuance costs of $25.8 million, was $1,699.2 million as of September 30, 2024. Interest expense related to the amortization of debt issuance costs was $1.5 million for the quarter ended September 30, 2024. The effective interest rate is 0.34%. Capped Calls In connection with the issuance of the 2029 Convertible Notes, the Company entered into privately negotiated capped call transactions (collectively, the “Capped Call Transactions”) with certain financial institutions (the “Capped Call Counterparties”). 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. In connection with the amendment of the 2029 Convertible Notes, the Company entered into agreements to amend certain terms of the Capped Call Transactions. Refer to Note 14, “Subsequent Events,” below. The Capped Call Transactions initially have a strike price of $134.14 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2029 Convertible Notes. The cap price of the Capped Call Transactions was initially $195.10 per share of common stock subject to certain adjustments under the terms of the Capped Call Transactions. For accounting purposes, each Capped Call Transaction is a separate transaction, and not part of the terms of the 2029 Convertible Notes. As these transactions meet certain accounting criteria, the Capped Call Transactions of $142.1 million are recorded in stockholders’ equity and are not accounted for as derivatives. The Capped Call Transactions will not be remeasured as long as they continue to meet the conditions for equity classification. The 2029 Convertible Notes and the Capped Call Transactions have been integrated for tax purposes. The accounting 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.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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