Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | Nov. 30, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Super Micro Computer, Inc. | |
Entity Central Index Key | 0001375365 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 50,085,282 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 169,735 | $ 115,377 |
Accounts receivable, net of allowances of $5,055 and $1,945 at March 31, 2019 and June 30, 2018, respectively (including amounts receivable from related parties of $11,895 and $3,082 at March 31, 2019 and June 30, 2018, respectively) | 327,366 | 451,393 |
Inventories | 761,113 | 853,252 |
Prepaid expenses and other current assets (including receivables from related parties of $14,275 and $24,016 at March 31, 2019 and June 30, 2018, respectively) | 97,857 | 110,856 |
Total current assets | 1,356,071 | 1,530,878 |
Investment in equity investee | 1,370 | 2,376 |
Property, plant and equipment, net | 203,442 | 196,631 |
Deferred income taxes, net | 33,776 | 25,583 |
Other assets | 12,593 | 14,037 |
Total assets | 1,607,252 | 1,769,505 |
Current liabilities: | ||
Accounts payable (including amounts due to related parties of $52,928 and $77,810 at March 31, 2019 and June 30, 2018, respectively) | 331,983 | 527,158 |
Accrued liabilities (including amounts due to related parties of $9,106 and $18,394 at March 31, 2019 and June 30, 2018, respectively) | 112,951 | 102,478 |
Income taxes payable | 8,729 | 7,191 |
Short-term debt | 22,660 | 116,181 |
Deferred revenue | 87,746 | |
Deferred revenue | 58,549 | |
Total current liabilities | 564,069 | 811,557 |
Deferred revenue, non-current | 105,584 | |
Deferred revenue, non-current | 89,731 | |
Other long-term liabilities (including related party balance of $3,500 at March 31, 2019 and June 30, 2018, respectively) | 24,441 | 24,565 |
Total liabilities | 694,094 | 925,853 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock and additional paid-in capital, $0.001 par value, Authorized shares: 100,000,000, Issued Shares: 51,215,039 and 50,914,571 at March 31, 2019 and June 30, 2018, respectively | 345,308 | 331,550 |
Treasury stock (at cost), 1,333,125 shares at March 31, 2019 and June 30, 2018 | (20,491) | (20,491) |
Accumulated other comprehensive (loss) income | (12) | 165 |
Retained earnings | 588,193 | 532,271 |
Total Super Micro Computer, Inc. stockholders’ equity | 912,998 | 843,495 |
Noncontrolling interest | 160 | 157 |
Total stockholders’ equity | 913,158 | 843,652 |
Total liabilities and stockholders’ equity | $ 1,607,252 | $ 1,769,505 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Current assets: | ||
Accounts receivable, allowances | $ 5,055 | $ 1,945 |
Accounts receivable, related party | 11,895 | 3,082 |
Prepaid expenses and other current assets, related party | 14,275 | 24,016 |
Current liabilities: | ||
Accounts payable, related party | 52,928 | 77,810 |
Accrued liabilities, related party | 9,106 | 18,394 |
Other long-term liabilities, related party | $ 3,500 | $ 3,500 |
Stockholders' Equity | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 51,215,039 | 50,914,571 |
Treasury stock, shares (in shares) | 1,333,125 | 1,333,125 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||||
Net sales (including related party sales of $17,590 and $17,614 in the three months ended March 31, 2019 and 2018, respectively, and $48,849 and $46,199 in the nine months ended March 31, 2019 and 2018, respectively) | $ 743,499 | $ 835,110 | $ 2,646,126 | $ 2,378,830 |
Cost of sales (including related party purchases of $62,624 and $62,861 in the three months ended March 31, 2019 and 2018, respectively, and $215,331 and $191,805 in the nine months ended March 31, 2019 and 2018, respectively) | 631,172 | 729,193 | 2,282,638 | 2,081,165 |
Gross profit | 112,327 | 105,917 | 363,488 | 297,665 |
Operating expenses: | ||||
Research and development | 44,800 | 42,284 | 133,718 | 122,496 |
Sales and marketing | 18,494 | 18,893 | 56,463 | 53,684 |
General and administrative | 36,174 | 23,555 | 106,214 | 68,286 |
Total operating expenses | 99,468 | 84,732 | 296,395 | 244,466 |
Income from operations | 12,859 | 21,185 | 67,093 | 53,199 |
Other (expense) income, net | (86) | (388) | 707 | (1,578) |
Interest expense | (1,271) | (1,326) | (5,480) | (3,497) |
Income before income tax provision | 11,502 | 19,471 | 62,320 | 48,124 |
Income tax provision | (497) | (4,159) | (10,540) | (25,725) |
Income (Loss) from Equity Method Investments | (359) | (717) | (3,572) | (2,508) |
Net income | $ 10,646 | $ 14,595 | $ 48,208 | $ 19,891 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.30 | $ 0.97 | $ 0.40 |
Diluted (in dollars per share) | $ 0.21 | $ 0.28 | $ 0.94 | $ 0.38 |
Weighted-average shares used in calculation of net income per common share: | ||||
Basic (in shares) | 49,988 | 49,425 | 49,845 | 49,285 |
Diluted (in shares) | 51,558 | 51,679 | 51,557 | 52,090 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||||
Net sales, related party sales | $ 17,590 | $ 17,614 | $ 48,849 | $ 46,199 |
Cost of sales, related party purchases | $ 62,624 | $ 62,861 | $ 215,331 | $ 191,805 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 10,646 | $ 14,595 | $ 48,208 | $ 19,891 |
Other comprehensive income (loss), net of tax: | ||||
Net changes in unrealized loss on investments | 0 | 0 | 0 | (38) |
Foreign currency translation gain (loss) | 60 | 318 | (177) | 637 |
Total other comprehensive income (loss) | 60 | 318 | (177) | 599 |
Total comprehensive income | $ 10,706 | $ 14,913 | $ 48,031 | $ 20,490 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Non-controlling Interest |
Shares outstanding, beginning balance (in shares) at Jun. 30, 2017 | 50,273,527 | (1,333,125) | ||||
Stockholders' equity, beginning balance at Jun. 30, 2017 | $ 773,846 | $ 308,271 | $ (20,491) | $ (77) | $ 485,973 | $ 170 |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options, net of taxes (in shares) | 267,970 | |||||
Exercise of stock options, net of taxes | 3,043 | $ 3,043 | ||||
Release of common stock shares upon vesting of restricted stock units (in shares) | 410,878 | |||||
Release of common stock shares upon vesting of restricted stock units | 0 | |||||
Shares withheld for the withholding on vesting of restricted stock units (in shares) | (144,214) | |||||
Shares withheld for the withholding tax on vesting of restricted stock units | (3,152) | $ (3,152) | ||||
Stock-based compensation | 18,649 | $ 18,649 | ||||
Unrealized loss on investments | (38) | (38) | ||||
Foreign currency translation gain (loss) | 637 | 637 | ||||
Net income (loss) | 19,882 | 19,891 | (9) | |||
Shares outstanding, ending balance (in shares) at Mar. 31, 2018 | 50,808,161 | (1,333,125) | ||||
Stockholders' equity, ending balance at Mar. 31, 2018 | 813,052 | $ 326,863 | $ (20,491) | 522 | 505,997 | 161 |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2017 | 50,712,177 | (1,333,125) | ||||
Stockholders' equity, beginning balance at Dec. 31, 2017 | 793,014 | $ 321,738 | $ (20,491) | 204 | 491,402 | 161 |
Increase (Decrease) in Stockholders' Equity | ||||||
Release of common stock shares upon vesting of restricted stock units (in shares) | 147,433 | |||||
Release of common stock shares upon vesting of restricted stock units | 0 | |||||
Shares withheld for the withholding on vesting of restricted stock units (in shares) | (51,449) | |||||
Shares withheld for the withholding tax on vesting of restricted stock units | (963) | $ (963) | ||||
Stock-based compensation | 6,088 | $ 6,088 | ||||
Unrealized loss on investments | 0 | |||||
Foreign currency translation gain (loss) | 318 | 318 | ||||
Net income (loss) | 14,595 | 14,595 | ||||
Shares outstanding, ending balance (in shares) at Mar. 31, 2018 | 50,808,161 | (1,333,125) | ||||
Stockholders' equity, ending balance at Mar. 31, 2018 | 813,052 | $ 326,863 | $ (20,491) | 522 | 505,997 | 161 |
Shares outstanding, beginning balance (in shares) at Jun. 30, 2018 | 50,914,571 | (1,333,125) | ||||
Stockholders' equity, beginning balance at Jun. 30, 2018 | $ 843,652 | $ 331,550 | $ (20,491) | 165 | 532,271 | 157 |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options, net of taxes (in shares) | 0 | |||||
Release of common stock shares upon vesting of restricted stock units (in shares) | 439,379 | |||||
Release of common stock shares upon vesting of restricted stock units | $ 0 | |||||
Shares withheld for the withholding on vesting of restricted stock units (in shares) | (138,911) | |||||
Shares withheld for the withholding tax on vesting of restricted stock units | (2,323) | $ (2,323) | ||||
Stock-based compensation | 16,081 | $ 16,081 | ||||
Unrealized loss on investments | 0 | |||||
Foreign currency translation gain (loss) | (177) | (177) | ||||
Net income (loss) | 48,211 | 48,208 | 3 | |||
Shares outstanding, ending balance (in shares) at Mar. 31, 2019 | 51,215,039 | (1,333,125) | ||||
Stockholders' equity, ending balance at Mar. 31, 2019 | 913,158 | $ 345,308 | $ (20,491) | (12) | 588,193 | 160 |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2018 | 51,136,062 | (1,333,125) | ||||
Stockholders' equity, beginning balance at Dec. 31, 2018 | 898,211 | $ 341,070 | $ (20,491) | (72) | 577,547 | 157 |
Increase (Decrease) in Stockholders' Equity | ||||||
Release of common stock shares upon vesting of restricted stock units (in shares) | 118,617 | |||||
Release of common stock shares upon vesting of restricted stock units | 0 | |||||
Shares withheld for the withholding on vesting of restricted stock units (in shares) | (39,640) | |||||
Shares withheld for the withholding tax on vesting of restricted stock units | (722) | $ (722) | ||||
Stock-based compensation | 4,960 | $ 4,960 | ||||
Unrealized loss on investments | 0 | |||||
Foreign currency translation gain (loss) | 60 | 60 | ||||
Net income (loss) | 10,649 | 10,646 | 3 | |||
Shares outstanding, ending balance (in shares) at Mar. 31, 2019 | 51,215,039 | (1,333,125) | ||||
Stockholders' equity, ending balance at Mar. 31, 2019 | $ 913,158 | $ 345,308 | $ (20,491) | $ (12) | $ 588,193 | $ 160 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
OPERATING ACTIVITIES: | ||
Net income | $ 48,208 | $ 19,891 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation and amortization | 18,185 | 16,186 |
Stock-based compensation expense | 16,081 | 18,649 |
Allowances for doubtful accounts | 3,110 | 151 |
Provision for excess and obsolete inventories | 24,585 | 6,203 |
Share of loss from equity investee | 3,572 | 2,508 |
Foreign currency exchange (gain) loss | (292) | 838 |
Deferred income taxes, net | (9,751) | 10,693 |
Other | 923 | 675 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net (including changes in related party balances of ($8,813) and $5,154 during the nine months ended March 31, 2019 and 2018, respectively) | 155,232 | (23,413) |
Inventories | 36,750 | (91,604) |
Prepaid expenses and other assets (including changes in related party balances of $9,741 and ($6,964) during the nine months ended March 31, 2019 and 2018, respectively) | 26,392 | (25,315) |
Accounts payable (including changes in related party balances of ($24,882) and $24,832 during the nine months ended March 31, 2019 and 2018, respectively) | (201,624) | 12,206 |
Income taxes payable | 1,538 | 3,378 |
Deferred revenue | 49,710 | 43,127 |
Accrued liabilities (including changes in related party balances of ($9,288) and $8,616 during the nine months ended March 31, 2019 and 2018, respectively) | 9,706 | 24,441 |
Other long-term liabilities (including changes in related party balances of $0 and ($1,050) during the nine months ended March 31, 2019 and 2018, respectively) | (1,625) | 771 |
Net cash provided by operating activities | 180,700 | 19,385 |
INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment (including payments to related parties of $4,203 and $4,537 during the nine months ended March 31, 2019 and 2018, respectively) | (15,781) | (16,635) |
Proceeds from redemption of auction rate security | 0 | 1,000 |
Net cash used in investing activities | 0 | (2,100) |
Net cash used in investing activities | (15,781) | (17,735) |
FINANCING ACTIVITIES: | ||
Proceeds from debt, net of debt issuance costs | 41,760 | 107,337 |
Repayment of debt | (67,700) | (83,600) |
Net repayment on asset-backed revolving line of credit, net of costs | (67,099) | 0 |
Payment of other fees for debt financing | (375) | 0 |
Proceeds from exercise of stock options | 0 | 3,043 |
Payment of withholding tax on vesting of restricted stock units | (2,323) | (3,152) |
Payments of obligations under capital leases | (206) | (203) |
Net cash (used in) provided by financing activities | (95,943) | 23,425 |
Effect of exchange rate fluctuations on cash | (88) | 265 |
Net increase in cash, cash equivalents and restricted cash | 68,888 | 25,340 |
Cash, cash equivalents and restricted cash at beginning of period | 120,382 | 112,797 |
Cash, cash equivalents and restricted cash at end of period | 189,270 | 138,137 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,402 | 3,217 |
Cash paid for taxes, net of refunds | 21,657 | 14,735 |
Non-cash investing and financing activities: | ||
Unpaid property, plant and equipment purchases (including due to related parties of $1,067 and $1,423 as of March 31, 2019 and 2018, respectively) | 9,039 | 6,389 |
Contribution of certain technology rights to equity investee | $ 3,000 | $ 0 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net cash provided by (used in) operating activities | ||
Accounts receivable, changes in related party balances | $ (8,813) | $ 5,154 |
Prepaid expenses and other current assets, changes in related party balances | 9,741 | (6,964) |
Accounts payable, changes in related party balances | (24,882) | 24,832 |
Accrued liabilities, changes in related party balances | (9,288) | 8,616 |
Other long term liabilities, changes in related party balances | 0 | (1,050) |
Purchase of property, plant and equipment, related party | 4,203 | 4,537 |
Unpaid property, plant and equipment, related party | $ 1,067 | $ 1,423 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization Super Micro Computer, Inc. (“Super Micro Computer”) was incorporated in 1993. Super Micro Computer is a global leader in server technology and green computing innovation. Super Micro Computer develops and provides high performance server and storage solutions based upon an innovative, modular and open-standard architecture. Super Micro Computer has operations primarily in the United States, the Netherlands, Taiwan, China and Japan. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The condensed consolidated financial statements of Super Micro Computer include the accounts of Super Micro Computer and entities consolidated under the variable interest model or the voting interest model. Noncontrolling interests are not presented separately in the condensed consolidated statements of operations and condensed consolidated statements of comprehensive income as the amounts are immaterial. All intercompany accounts and transactions of Super Micro Computer and its consolidated entities (collectively, the "Company") have been eliminated in consolidation. For equity investments over which the Company is able to exercise significant influence over the investee but does not control the investee, and is not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments in equity securities which do not have readily determinable fair values and for which the Company is not able to exercise significant influence over the investee are accounted for under the measurement alternative which is the cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar securities of the same investee. Prior to July 1, 2018, investments for which the Company was not able to exercise significant influence over the investee were accounted for under the cost method. The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and include the accounts of Super Micro Computer and its consolidated subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The consolidated results of operations for the three and nine months ended March 31, 2019 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2019. Use of Estimates U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to: allowances for doubtful accounts and sales returns, inventory valuation, useful lives of property, plant and equipment, product warranty accruals, stock-based compensation, impairment of investments and long-lived assets, and income taxes. The Company’s estimates are evaluated on an ongoing basis and changes in the estimates are recognized prospectively. Actual results could differ from those estimates. Revenue Recognition The Company’s revenue recognition policy and related disclosures are discussed in Note 2, “Revenue.” Product Warranties The Company offers product warranties ranging from 15 to 39 months against any defective products. These standard warranties are assurance type warranties and the Company does not offer any services beyond the assurance that the product will continue working as specified. Therefore, under recently adopted guidance, Revenue from Contracts with Customers , (“ASC 606”), these warranties are not considered separate performance obligations in the arrangement. Based on historical experience, the Company accrues for estimated returns of defective products at the time revenue is recognized. The Company monitors warranty obligations and may make revisions to its warranty reserve if actual costs of product repair and replacement are significantly higher or lower than estimated. Accruals for anticipated future warranty costs are charged to cost of sales and included in accrued liabilities and other long-term liabilities. Warranty accruals are based on estimates that are updated on an ongoing basis taking into consideration inputs such as new product introductions, changes in the volume of claims compared with the Company's historical experience, and the changes in the cost of servicing warranty claims. The Company accounts for the effect of such changes in estimates prospectively. Inventories Inventories are stated at weighted average cost, subject to lower of cost or net realizable value. Net realizable value is the estimated selling price of our products in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventories consist of purchased parts and raw materials (principally electronic components), work in process (principally products being assembled) and finished goods. The Company evaluates inventory on a quarterly basis for lower of cost or net realizable value and excess and obsolescence and, as necessary, writes down the valuation of units based upon the Company's forecasted usage and sales, anticipated selling price, product obsolescence and other factors. Once inventory is written down, its new value is maintained until it is sold or scrapped. The Company receives various rebate incentives from certain suppliers based on its contractual arrangements, including volume-based rebates. The rebates earned are recognized as a reduction of cost of inventories and reduce the cost of sales in the period when the related inventory is sold. Income Taxes The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax reporting purposes, net operating loss carry-forwards and other tax credits measured by applying enacted tax laws related to the financial statement periods. Valuation allowances are provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company recognizes tax liabilities for uncertain income tax positions on the income tax return based on the two-step process. The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires the Company to determine the probability of various possible outcomes. The Company evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors, including changes in facts or circumstances, changes in applicable tax law, settlement of issues under audit and new exposures. If the Company later determines that its exposure is lower or that the liability is not sufficient to cover its revised expectations, the Company adjusts the liability and effects a related charge in its tax provision during the period in which the Company makes such a determination. Stock-Based Compensation The Company measures and recognizes compensation expense for all share-based awards made to employees and non-employees, including stock options and restricted stock units ("RSUs"). The share-based awards granted to non-employees have not been material to date. The Company is required to estimate the fair value of share-based awards on the date of grant. The Company recognizes the grant date fair value of all share-based awards over the requisite service period and accounts for forfeitures as they occur. The fair value of RSUs with service conditions or performance conditions is based on the closing market price of the Company's common stock on the date of grant. The fair value for RSUs with service conditions, or time-based RSUs, is amortized on a straight-line basis over the requisite service period. The fair value for RSUs with performance conditions ("PRSUs") is recognized on a ratable basis over the requisite service period when it is probable the performance conditions of the awards will be met. The Company reassesses the probability of vesting at each reporting period and adjusts the total compensation expense of the award based on this probability assessment. The Company estimates the fair value of stock options granted using a Black-Scholes option pricing model. This model requires the Company to make estimates and assumptions with respect to the expected term of the option and the expected volatility of the price of the Company's common stock. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on the Company's historical experience. The expected volatility is based on the implied and historical volatility of the Company’s common stock. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Variable Interest Entities The Company determines at the inception of each arrangement whether an entity in which the Company holds an investment or in which the Company has other variable interests is considered a variable interest entity ("VIE"). The Company consolidates VIEs when it is 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, the Company assesses 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 the Company is the primary beneficiary. If the Company is not the primary beneficiary in a VIE, the Company accounts for the investment or other variable interest in accordance with applicable GAAP. The Company has concluded that Ablecom Technology, Inc. (“Ablecom”) and its affiliate, Compuware Technology, Inc. ("Compuware") are VIEs in accordance with applicable accounting standards and guidance; however, the Company is not the primary beneficiary as it does not have the power to direct the activities that are most significant to the entities and therefore, the Company does not consolidate these entities. In performing its analysis, the Company considered its explicit arrangements with Ablecom and Compuware, including the supplier arrangements. Also, as a result of the substantial related party relationships between the Company and these entities, the Company considered whether any implicit arrangements exist that would cause the Company to protect those related parties’ interests from suffering losses. The Company determined it has no material implicit arrangements with Ablecom, Compuware or their shareholders. The Company and Ablecom jointly established Super Micro Asia Science and Technology Park, Inc. (the "Management Company") in Taiwan to manage the common areas shared by the Company and Ablecom for its separately constructed manufacturing facilities. In fiscal year 2012, each company contributed $0.2 million and owns 50% of the Management Company. The Company has concluded that the Management Company is a VIE, and the Company is the primary beneficiary as it has the power to direct the activities that are most significant to the Management Company. For the three and nine months ended March 31, 2019 and 2018, the accounts of the Management Company have been consolidated with the accounts of Super Micro Computer, and a noncontrolling interest has been recorded for Ablecom's interest in the net assets and operations of the Management Company. Net income (loss) attributable to Ablecom's interest was not material for the periods presented and was included in general and administrative expenses in the Company's condensed consolidated statements of operations. Investment in a Corporate Venture In October 2016, the Company entered into agreements pursuant to which the Company contributed certain technology rights in connection with an investment in a privately-held company (the "Corporate Venture") located in China to expand the Company's presence in China. The Corporate Venture is 30% owned by the Company and 70% owned by another company in China. The transaction was closed in the third fiscal quarter of 2017 and the investment has been accounted for using the equity method. As such, the Corporate Venture is also a related party. As of March 31, 2019 and June 30, 2018 , the Company's equity investment in the Corporate Venture was $1.4 million and $2.4 million , respectively, and was recorded under investment in equity investee on the Company's condensed consolidated balance sheet. The Company's share of losses of the Corporate Venture were $0.4 million and $0.7 million for the three months ended March 31, 2019 and 2018, respectively, and $3.6 million and $2.5 million for the nine months ended March 31, 2019 and 2018, respectively. The Company recorded a deferred gain related to the contribution of certain technology rights of $7.0 million in the third fiscal quarter of 2017. The amortization of the deferred gain is being recognized as a credit to research and development expenses in the Company's condensed consolidated statement of operations over a period of five years which represents the estimated period over which the remaining obligations will be fulfilled. As a result of the adoption of new accounting guidance as of the beginning of fiscal year 2019, the Company recorded an increase of $3.0 million to the investment in equity investee for the contribution of those technology rights, and corresponding increases in deferred gain and retained earnings of $2.1 million and $0.9 million , respectively. As of March 31, 2019 and June 30, 2018 , the Company had unamortized deferred gain balance of $2.0 million and $1.4 million , respectively, in accrued liabilities and $3.5 million and $3.5 million , respectively, in other long-term liabilities in the Company’s condensed consolidated balance sheets. The Company monitors the investment for events or circumstances indicative of potential other-than-temporary impairment and makes appropriate reductions in carrying values if it determines that an impairment charge is required. No impairment charge was recorded for the three and nine months ended March 31, 2019 and March 31, 2018 , respectively. Additionally, the Company sold products worth $13.7 million and $3.1 million to the Corporate Venture in the three months ended March 31, 2019 and March 31, 2018 , respectively, and $35.2 million and $14.5 million in the nine months ended March 31, 2019 and March 31, 2018 , respectively, and the Company's share of intra-entity profits on the products that remained unsold by the Corporate Venture as of March 31, 2019 and June 30, 2018 have been eliminated and have reduced the Company's investment in the Corporate Venture. The Company had $11.6 million and $2.9 million due from the Corporate Venture in accounts receivable, net as of March 31, 2019 and June 30, 2018 , respectively, in its condensed consolidated balance sheets. Concentration of Supplier Risk Certain materials used by the Company in the manufacture of its products are available from a limited number of suppliers. Shortages could occur in these materials due to an interruption of supply or increased demand in the industry. One supplier accounted for 20.1% and 26.9% of total purchases for the three months ended March 31, 2019 and 2018 , respectively, and 21.2% and 26.2% for the nine months ended March 31, 2019 and 2018 , respectively. Ablecom and Compuware, related parties of the Company, as noted in Note 8, "Related Party Transactions," accounted for 9.9% and 8.6% of total cost of sales for the three months ended March 31, 2019 and 2018 , respectively, and 9.4% and 9.2% for the nine months ended March 31, 2019 and 2018 , respectively. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, investment in an auction rate security and accounts receivable. No single customer accounted for 10% or more of the net sales for the three and nine months ended March 31, 2019 and 2018 . No country other than the United States accounted for 10% or more of the net sales in the three and nine months ended March 31, 2019 . No country other than the United States accounted for 10% or more of the net sales in the three months ended March 31, 2018 , whereas the United States and China accounted for 55.4% and 11.4% , respectively, of the net sales in the nine months ended March 31, 2018 . One customer accounted for 14.9% of the Company's accounts receivable, net as of March 31, 2019 , and one customer accounted for 11.6% of the Company's accounts receivable, net as of June 30, 2018 . Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance,ASC 606, that supersedes nearly all U.S. GAAP on revenue recognition and eliminates industry-specific guidance. ASC 606 provides a unified model in determining when and how revenue is recognized with the core principle that revenue should be recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its issuance, the FASB has issued several amendments to ASC 606. The Company adopted ASC 606 on July 1, 2018 using the modified retrospective method. In connection with the adoption of ASC 606, the Company recorded a transition adjustment to increase retained earnings by $6.8 million as of July 1, 2018. The comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. The primary impact of the adoption of ASC 606 was the acceleration of revenue recognition for (i) sales to distributors where the Company previously accounted for such sales on a sell-through basis and (ii) software arrangements. The following tables summarize the impacts of the adoption of ASC 606 on the Company’s condensed consolidated financial statements. The adoption of ASC 606 did not have any impact on the net cash provided by operating activities. Selected Captions from the Condensed Consolidated Balance Sheet as of March 31, 2019 (in thousands) As Reported Adjustments Balances without adoption of ASC 606 ASSETS Accounts receivable, net of allowances $ 327,366 $ (17,367 ) $ 309,999 Inventories 761,113 11,808 772,921 Prepaid expenses and other current assets 97,857 (1,916 ) 95,941 Deferred income taxes, net 33,776 1,558 35,334 LIABILITIES AND STOCKHOLDERS' EQUITY Accrued liabilities $ 112,951 $ (4,655 ) $ 108,296 Deferred revenue 87,746 653 88,399 Income taxes payable 8,729 71 8,800 Deferred revenue, non-current 105,584 2,783 108,367 Retained earnings 588,193 (4,769 ) 583,424 Selected Captions from the Condensed Consolidated Statement of Operations for the Three and Nine Months ended March 31, 2019 (in thousands) Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 As Reported Adjustments Balances without adoption of ASC 606 As Reported Adjustments Balances without adoption of ASC 606 Net sales $ 743,499 $ (1,621 ) $ 741,878 $ 2,646,126 $ 18,449 $ 2,664,575 Cost of sales 631,172 (403 ) 630,769 2,282,638 18,995 2,301,633 Gross profit 112,327 (1,218 ) 111,109 363,488 (546 ) 362,942 General and administrative 36,174 (1,626 ) 34,548 106,214 (2,662 ) 103,552 Income before income tax provision 11,502 408 11,910 62,320 2,116 64,436 Income tax provision 497 (244 ) 253 10,540 71 10,611 Net income 10,646 652 11,298 48,208 2,045 50,253 In January 2016, the FASB issued new guidance, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changes the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The most significant impact of this accounting standard update is that it requires the remeasurement of equity investments not accounted for under the equity method to be recorded at fair value through the consolidated statement of operations at the end of each reporting period. The Company adopted this accounting standard update as of July 1, 2018. The result of the adoption did not have a material impact on the consolidated financial statements. As a result of the adoption of the new standard, the Company’s equity investments are accounted for as follows: • Marketable equity securities that have a readily determinable fair value are measured and recorded at fair value. • Non-marketable equity securities that do not have a readily determinable fair value and for which the Company does not control the investee nor is it able to exert significant influence over the investee are measured using a measurement alternative recorded at cost less any impairment, plus or minus changes resulting from qualifying observable price changes. • Equity method investments are equity securities for which the Company does not control the investee but is able to exert significant influence over the investee. These investments are measured at cost less any impairment, plus or minus the Company's share of equity method investee income or loss. In August 2016, the FASB issued an amendment to the accounting guidance, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This amendment consists of eight provisions that provide guidance on the classification of certain cash receipts and cash payments. If practicable, this amendment should be applied using a retrospective transition method to each period presented. For the provisions that are impracticable to apply retrospectively, those provisions may be applied prospectively as of the earliest date practicable. The Company adopted the accounting guidance on July 1, 2018. The result of the adoption did not have a material impact on the consolidated statements of cash flows. In October 2016, the FASB issued an amendment to the accounting guidance, Intra-Entity Transfers of Assets Other Than Inventory . This amendment simplifies the accounting for income tax consequences of intra-entity transfers of assets other than inventory by requiring recognition of current and deferred income tax consequences when such transfers occur. The Company adopted the accounting guidance on July 1, 2018. The result of the adoption did not have a material impact on the consolidated financial statements and related disclosures. In November 2016, the FASB issued an amendment to the accounting guidance, Statement of Cash Flows: Restricted Cash. This amendment addresses presentations of total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted the accounting guidance on July 1, 2018 using a retrospective transition method to each period presented. The adoption did not have a material impact on the consolidated statements of cash flows. Presentation of prior period information has been retrospectively adjusted. In February 2017, the FASB issued new accounting guidance, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This guidance clarifies the scope and application on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The Company adopted this guidance on July 1, 2018. Prior to adoption, the Company had previously contributed certain technology rights in exchange for 30% ownership in a privately-held company (the “Corporate Venture”) and accounted for the transaction in accordance with the guidance related to exchanges of a nonfinancial asset for a noncontrolling ownership interest in ASC 845 - Nonmonetary Transactions, which has been eliminated by the new guidance. As a result of the adoption of the new guidance, the Company recognized $3.0 million increase in the carrying value of the equity-method investment, a $2.1 million increase in deferred gain, and a $0.9 million increase in retained earnings. In August 2018, the Securities and Exchange Commission (“SEC”) adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification . The amendments became effective on November 5, 2018. The SEC staff subsequently indicated that it would not object if a filer’s first presentation of changes in stockholders’ equity is included in its Form 10-Q for the quarter that begins after the final rule’s effective date. Among the amendments is the requirement to present the changes in stockholders’ equity in the interim financial statements (either in a separate statement or footnote) in Quarterly Reports on Form 10-Q. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a consolidated statement of operations is required to be filed. The Company adopted this guidance in the first quarter of fiscal year 2019. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued an amendment to the accounting guidance, Leases. The amendment will supersede the existing lease guidance, including on-balance sheet recognition of operating leases for lessees. Since its issuance, the FASB has issued several amendments to the new lease standard. The standard is effective for the Company from July 1, 2019 and the Company will apply this standard using the modified retrospective approach and will not restate prior comparative periods. The Company will elect the “package of practical expedients” under the transition guidance of the new standard, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs, for leases that are in effect as of the date of adoption of the new lease guidance. While the Company is currently finalizing its implementation of new policies, processes and internal controls to comply with the new rules, it is anticipated that the adoption of the new standard will result in the recognition of right-of-use assets and lease liabilities on the Company’s consolidated balance sheet of $14.8 million and $15.2 million , respectively, as of July 1, 2019, primarily related to real estate leases. The adoption of the new standard will not have a material impact on the Company’s consolidated statement of operations or consolidated statement of cash flows. In June 2016, the FASB issued authoritative guidance, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments , that amends the impairment model for certain financial assets by requiring the use of an expected loss methodology, which will result in more timely recognition of credit losses. The amendment is effective for the Company from July 1, 2020. Early adoption is permitted. The Company is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures, results of operations and financial position. In February 2018, the FASB issued Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act ("2017 Tax Reform Act"), from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election and is effective for the Company from July 1, 2019. The adoption of the guidance will not have a material impact on its consolidated financial statements. In June 2018, the FASB issued amended guidance to expand the scope of ASC 718 - Compensation-Stock Compensation , to include share-based payment transactions for acquiring goods and services from non-employees. The amendments specify that the guidance applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The new amendment is effective for the Company from July 1, 2019. The adoption of the new standard will not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued amended guidance, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, to modify the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The new standard is effective for the Company from July 1, 2020. The Company is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures. In August 2018, the FASB issued amended guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. According to the amendments, the entity shall determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. It requires the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The new standard is effective for the Company from July 1, 2020. The Company is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures, results of operations and financial position. |
Revenue
Revenue | 9 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue recognition for periods after the Company’s adoption of ASC 606 as of July 1, 2018 The Company adopted ASC 606 as of July 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company considered the effect of all modifications when identifying performance obligations and allocating transaction price, which did not have a material effect on the adjustment to retained earnings. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. ASC 606 provides a unified model in determining when and how revenue is recognized with the core principle that revenue should be recognized when a customer obtains control of the promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generates revenues from the sale of server and storage systems, subsystems, accessories, services, server software management solutions, and support services. Product sales . The Company recognizes revenue from sales of products as control is transferred to customers, which generally happens at the point of shipment or upon delivery, unless customer acceptance is uncertain. Products sold by the Company are delivered via shipment from the Company’s facilities or drop shipment directly to its customer from a Company vendor. The Company may use distributors to sell products to end customers. Revenue from distributors is recognized when the distributor obtains control of the product, which generally happens at the point of shipment or upon delivery, unless customer acceptance is uncertain, and in the amount of consideration to which the Company expects to be entitled. As part of determining the transaction price in contracts with customers, the Company estimates reserves for future sales returns based on a review of its history of actual returns for each major product line. Based upon historical experience a refund liability is recorded at the time of sale for estimated product returns and an asset is recognized for the amount expected to be recorded in inventory upon product return, less the expected recovery costs. The Company also reduces revenue for the estimated costs of customer and distributor programs and incentive offerings such as price protection and 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. Any provision for customer and distributor programs and other discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience. Services sales. The Company’s sale of services mainly consists of extended warranty and on-site services. Revenue related to extended warranty commences upon the expiration of the standard warranty period and is recognized ratably over the contractual period as the Company stands ready to perform any required warranty service. Revenue related to on-site services commences upon recognition of the product sale and is recognized ratably over the contractual period as the on-site services are made available to the customer. These service contracts are typically one to five years in length. Service revenue has been less than 10% of net sales for all periods presented and is not separately disclosed. Contracts with multiple promised goods and services. Certain of the Company’s contracts contain multiple promised goods and services. Performance obligations in a contract are identified based on the promised goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. Revenue allocated to each performance obligation is recognized at the time the related performance obligation is satisfied by transferring control of the promised good or service to a customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information, such as internally approved pricing guidelines with respect to geographies, customer type, internal costs, and gross margin objectives, for the related performance obligations. When the Company receives consideration from a customer prior to transferring goods or services to the customer, the Company records a contract liability (deferred revenue). The Company also recognizes deferred revenue when it has an unconditional right to consideration (i.e., a receivable) before transfer of control of goods or services to a customer. The Company considers shipping & handling activities as costs to fulfill the sales of products. Shipping revenue is included in net sales when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of products sold. Taxes imposed by governmental authorities on the Company's revenue producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales. Revenue recognition for periods prior to the Company’s adoption of ASC 606 as of July 1, 2018 Product sales. The Company recognizes revenue from sales of products upon meeting all of the following revenue recognition criteria, which is typically met upon shipment or delivery of its products to customers, unless customer acceptance is uncertain or significant obligations to the customer remain: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders and (iv) collectibility is reasonably assured. The Company estimates reserves for future sales returns based on a review of its history of actual returns for each major product line. The Company also reduces revenue for customer and distributor programs and incentive offerings such as price protection and rebates as well as cooperative marketing arrangements where the fair value of the benefit identified from the costs cannot be reasonably estimated. The Company may use distributors to sell products to end customers. Revenue from distributors may be recognized on sell-in or sell-through basis depending on the terms of the arrangement between the Company and the distributor. The Company records costs related to shipping and handling in sales and marketing expenses. Shipping and handling fees billed to customers are included in net sales. Services sales . The Company’s sale of services mainly consists of extended warranty and on-site services. These services are sold at the time of the sale of the underlying products. Revenue related to extended warranty commences upon the expiration of the standard warranty period and is recognized ratably over the contractual period. Revenue related to on-site services commences upon recognition of the product sale and is recognized ratably over the contractual period. These service contracts are typically one to five years in length. Service revenue has been less than 10% of net sales for all periods presented and is not separately disclosed. Multiple-element arrangements. Certain of the Company’s arrangements contain multiple elements, consisting of both the Company’s products and services. Revenue allocated to each element is recognized when all the revenue recognition criteria are met for that element. The Company allocates arrangement consideration at the inception of an arrangement to all deliverables, if they represent a separate unit of accounting, based on their relative estimated stand-alone selling prices. A deliverable qualifies as a separate unit of accounting when the delivered element has stand-alone value to the customer. The guidance establishes the following hierarchy to determine the relative estimated stand-alone selling price to be used for allocating arrangement consideration to deliverables: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence of selling price (“TPE”) if VSOE is not available, or (iii) the vendor's best estimated selling price (“BESP”) if neither VSOE nor TPE are available. The Company does not have VSOE for deliverables in its arrangements, and TPE is generally not available because its products are highly differentiated, and the Company is unable to obtain reliable information on the products and pricing practices of the Company’s competitors. BESP reflects the Company’s estimate of what the selling price of a deliverable would be if it were sold regularly on a stand-alone basis. As such, BESP is generally used to allocate the total arrangement consideration at the arrangement inception. The Company determines BESP for a product by considering multiple factors including, but not limited to, geographies, customer types, internal costs, gross margin objectives and pricing practices. Disaggregation of Revenue The Company disaggregates revenue by type of product, by geographical market, and by products sold to indirect sales channel partners or direct customers and original equipment manufacturers ("OEMs") that depict the nature, amount, and timing of revenue and cash flows. Service revenues are not a significant component of total revenue and are aggregated within the respective categories. The following is a summary of net sales by product type (in thousands): Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 2018 Amount Percent of Amount Percent of Amount Percent of Amount Percent of Server and storage systems $ 592,783 79.7 % $ 669,114 80.1 % $ 2,161,321 81.7 % $ 1,841,218 77.4 % Subsystems and accessories 150,716 20.3 % 165,996 19.9 % 484,805 18.3 % 537,612 22.6 % Total $ 743,499 100.0 % $ 835,110 100.0 % $ 2,646,126 100.0 % $ 2,378,830 100.0 % Server and storage systems constitute an assembly and integration of subsystems and accessories, and related services. Subsystems and accessories are comprised of serverboards, chassis and accessories. International net sales are based on the country and region to which the products were shipped. The following is a summary for the three and nine months ended March 31, 2019 and 2018, of net sales by geographic region (in thousands): Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 2018 Net sales: United States $ 436,734 $ 455,021 $ 1,516,262 $ 1,317,175 Europe 128,789 150,319 472,325 392,797 Asia 146,120 188,101 549,296 561,807 Others 31,856 41,669 108,243 107,051 $ 743,499 $ 835,110 $ 2,646,126 $ 2,378,830 The following table presents the percentages of net sales from products sold through the Company's indirect sales channel and to its direct customers and OEMs for the three and nine months ended March 31, 2019 and 2018: Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Indirect sales channel 38.2 % 42.8 % (4.6 )% 37.7 % 43.7 % (6.0 )% Direct customers and OEMs 61.8 % 57.2 % 4.6 % 62.3 % 56.3 % 6.0 % Total net sales 100.0 % 100.0 % 100.0 % 100.0 % Contract Balances Generally, the payment terms of the Company’s offerings range from 30 to 60 days. In certain instances, customers may prepay for products and services in advance of delivery. Receivables relate to the Company’s right to consideration for performance obligations completed (or partially completed) for which the Company has an unconditional right to consideration. Contract assets are rights to consideration in exchange for goods or services that the Company has transferred to a customer when such right is conditional on something other than the passage of time. Such contract assets are insignificant to the Company’s condensed consolidated financial statements. Contract liabilities consist of deferred revenue and relate to amounts invoiced to or advance consideration received from customers, which precede the Company’s satisfaction of the associated performance obligation(s). The Company’s deferred revenue primarily results from customer payments received upfront for extended warranties and on-site services because these performance obligations are satisfied over time. On July 1, 2018, deferred revenue totaled $143.5 million after recognizing the cumulative effect of initially applying ASC 606. Of that amount, $14.1 million and $39.8 million was recognized as revenue during the three and nine months ended March 31, 2019, respectively. Deferred revenue increased during the nine months ended March 31, 2019 because the amounts for service contracts invoiced during the period exceeded the recognition of revenue from contracts entered into in prior periods. Transaction Price Allocated to the Remaining Performance Obligations Remaining performance obligations represent in aggregate the amount of transaction price that has been allocated to performance obligations not delivered, or only partially undelivered, as of the end of the reporting period. The Company applies the optional exemption to not disclose information about remaining performance obligations that are part of a contract that has an original expected duration of one year or less. These performance obligations generally consist of services, such as on-site integration services that are contracted for one year or less, and products for which control has not yet been transferred. The value of the transaction price allocated to remaining performance obligations as of March 31, 2019 was approximately $193.3 million . The Company expects to recognize approximately 45% of remaining performance obligations as revenue in the next 12 months , and the remainder thereafter. Capitalized Contract Acquisition Costs and Fulfillment Cost Contract acquisition costs are those incremental costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Contract acquisition costs consist primarily of incentive bonuses. Contract acquisition costs are considered incremental and recoverable costs of obtaining and fulfilling a contract with a customer and are therefore capitalizable. The Company applies the practical expedient to expense incentive bonus costs as incurred if the amortization period would be one year or less, generally upon delivery of the associated server and storage systems or components. Where the amortization period of the contract cost would be more than a year, the Company allocates the incentive bonus cost asset between hardware and service performance obligations and expenses the cost allocated to the hardware performance obligations upon delivery of associated server and storage systems or components and amortizes the cost allocated to service performance obligations over the period the services are expected to be provided. Such contract acquisition costs that are subject to capitalization are insignificant to the Company’s condensed consolidated financial statements. Contract fulfillment costs consist of costs paid in advance for outsourced services provided by third parties to the extent they are not in the scope of other guidance. Fulfillment costs paid in advance for outsourced services provided by third parties are capitalized and amortized over the period the services are expected to be provided. Such fulfillment costs are insignificant to the Company’s condensed consolidated financial statements. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Equity Incentive Plan In January 2016, the Board of Directors approved the 2016 Equity Incentive Plan (the "2016 Plan") and reserved for issuance 4,700,000 shares of common stock for awards of stock options, stock appreciation rights, restricted stock, RSUs and other equity-based awards. The 2016 Plan was approved by the stockholders of the Company and became effective on March 8, 2016. As of the date the 2016 Plan became effective, 8,696,444 shares of common stock were reserved for outstanding awards under the Company's 2006 Equity Incentive Plan (the "2006 Plan"). Such awards remained outstanding under the 2006 Plan following the adoption of the 2016 Plan, although no further awards have been or will be granted under the 2006 Plan. Up to 2,800,000 shares subject to awards that remained outstanding under the 2006 Plan at the time the 2016 Plan became effective, if those awards were or are forfeited at any time after the 2016 Plan became effective, will become available for use under the 2016 Plan. At the time the 2016 Plan became effective, all remaining ungranted shares under the 2006 Plan were canceled. Under the 2016 Plan, the exercise price per share for incentive stock options granted to employees owning shares representing more than 10% of the Company's outstanding voting stock at the time of grant cannot be less than 110% of the fair value of the underlying shares on the grant date. Nonqualified stock options and incentive stock options granted to all other persons are granted at a price not less than 100% of the fair value. Options generally expire ten years after the date of grant. Stock options and RSUs generally vest over four years ; 25% at the end of one year and one sixteenth per quarter thereafter. Under the 2016 Plan, the Company granted PRSUs to its Chief Executive Officer, 50% of which vest based on the achievement of certain performance metrics at the end of the performance period while the remainder vest in equal amounts over the following ten quarters provided he continues to be employed by the Company. As of March 31, 2019 , the Company had 1,193,710 authorized shares available for future issuance under the 2016 Plan. Determining Fair Value The Company's fair value of RSUs and PRSUs is based on the closing market price of the Company's common stock on the date of grant. The Company estimates the fair value of stock options granted using the Black-Scholes-option-pricing model. This fair value is then amortized ratably over the requisite service periods of the awards, which is generally the vesting period. The key inputs in using the Black-Scholes-option-pricing model were as follows: Expected Term—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on the Company's historical experience. Expected Volatility—Expected volatility is based on the Company's implied and historical volatility. Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input and the Company has no plans to pay dividends. Risk-Free Interest Rate—The risk-free interest rate used in the Black-Scholes valuation method is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. The fair value of stock option grants for the three and nine months ended March 31, 2019 and 2018 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Risk-free interest rate 2.56 % 2.47 % 2.56% - 2.97% 1.92% - 2.47% Expected term 6.05 years 5.82 years 6.05 years 5.82 years Dividend yield — % — % — % — % Volatility 50.25 % 47.39 % 47.34% - 50.25% 45.32% - 48.07% Weighted-average fair value $ 7.55 $ 10.79 $ 8.56 $ 11.45 The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Cost of sales $ 390 $ 449 $ 1,256 $ 1,362 Research and development 3,107 3,494 9,816 10,412 Sales and marketing 418 482 1,359 1,545 General and administrative 1,045 1,663 3,650 5,330 Stock-based compensation expense before taxes 4,960 6,088 16,081 18,649 Income tax impact (1,016 ) (1,506 ) (3,339 ) (5,385 ) Stock-based compensation expense, net $ 3,944 $ 4,582 $ 12,742 $ 13,264 As of March 31, 2019 , $6.6 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.54 years, $28.3 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.66 years and $0.4 million of unrecognized compensation cost related to unvested PRSUs is expected to be recognized over a period of 1.75 years. Stock Option Activity The following table summarizes stock option activity during the nine months ended March 31, 2019 under all plans: Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in Years) Balance as of June 30, 2018 8,301,138 $ 16.50 Granted 321,920 $ 17.24 Exercised — $ — Forfeited/Cancelled (1,110,289 ) $ 9.61 Balance as of March 31, 2019 7,512,769 $ 17.55 3.84 Options vested and exercisable at March 31, 2019 6,769,528 $ 17.13 3.32 RSU and PRSU Activity In January 2015, the Company began to grant RSUs to employees. The Company grants RSUs to certain employees as part of its regular employee equity compensation review program as well as to selected new hires. RSUs are share awards that entitle the holder to receive freely tradable shares of the Company's common stock upon vesting. In August 2017, the Compensation Committee granted two PRSU awards to the Company's Chief Executive Officer, both of which have both performance and service conditions. The first award was a one -year PRSU and the second award was a two -year PRSU. The one -year PRSUs would be earned based on the Company’s performance as it relates to a revenue growth metric and a minimum non-GAAP operating margin metric during the fiscal year ended June 30, 2018 with eligibility up to 200% of the targeted number of units based on revenue growth if the minimum non-GAAP operating margin is achieved. If the performance metrics were met, 50% of the PRSUs would vest at June 30, 2018 while the remainder would vest in equal amounts over the following ten quarters if the Company's Chief Executive Officer continued to be employed during those ten quarters. In December 2019, the Compensation Committee of the Company's Board of Directors determined that the Company achieved the revenue and non-GAAP operating margin metrics for the fiscal year ended June 30, 2018 at a level that entitled the Chief Executive Officer to 200% of the originally targeted number of shares subject to the one -year PRSU. 50% of the PRSUs so earned were vested as of June 30, 2018, and an additional 20% of the PRSUs vested during the four quarters ended June 30, 2019, in accordance with the terms of the grant. The two -year PRSUs would be earned based on the Company’s performance for the average non-GAAP operating margin metric for the two fiscal years ended June 30, 2019 with eligibility up to 100% of the targeted number of units. If the performance metrics would have been met, 50% of the PRSUs would have vested at June 30, 2019 while the remainder would have been vested in equal amounts over the following ten quarters if the Chief Executive Officer continued to be employed during those ten quarters. In December 2019, the Compensation Committee of the Company's Board of Directors has determined that the Company did not achieve the required performance metrics for these two -year PRSUs to be earned and, consequently, this PRSU terminated in December 2019. The following table summarizes RSUs and PRSUs activity during the nine months ended March 31, 2019 under all plans: Time-Based RSUs Outstanding Weighted Average Grant-Date Fair Value per Share PRSUs Outstanding Weighted Average Grant-Date Fair Value per Share Balance as of June 30, 2018 1,480,605 $ 23.34 120,000 (1) $ 27.10 Granted 738,880 $ 16.46 — Released (2) (439,379 ) $ 24.83 — Forfeited (114,018 ) $ 20.76 — Balance as of March 31, 2019 1,666,088 $ 20.08 120,000 $ 27.10 __________________________ (1) Reflects the number of PRSUs that have been earned based on the achievement of performance metrics. (2) The number of shares released excludes 101,952 RSUs that were vested but not released as of March 31, 2019 . The number of shares released excludes 78,000 PRSUs that were vested but not released as of March 31, 2019 , of which 60,000 PRSUs were vested as of June 30, 2018 . These vested RSUs and PRSUs will be released upon the effectiveness of the Company's Registration Statement on Form S-8. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The following table shows the computation of basic and diluted net income per common share for the three and nine months ended March 31, 2019 and 2018 (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Numerator: Net income $ 10,646 $ 14,595 $ 48,208 $ 19,891 Denominator: Weighted-average shares outstanding 49,988 49,425 49,845 49,285 Effect of dilutive securities 1,570 2,254 1,712 2,805 Weighted-average diluted shares 51,558 51,679 51,557 52,090 Basic net income per common share $ 0.21 $ 0.30 $ 0.97 $ 0.40 Diluted net income per common share $ 0.21 $ 0.28 $ 0.94 $ 0.38 For the three and nine months ended March 31, 2019 and 2018 , the Company had stock options and RSUs outstanding that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net income per share in the periods presented, as their effect would have been anti-dilutive. The anti-dilutive common share equivalents resulting from outstanding equity awards were 4,443,127 and 4,194,283 for the three and nine months ended March 31, 2019 , respectively, and 3,241,873 and 2,302,333 for the three and nine months ended March 31, 2018 , respectively. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components The following tables provide details of the selected balance sheet items (in thousands): Inventories: March 31, June 30, Finished goods $ 525,344 $ 633,348 Work in process 84,293 61,162 Purchased parts and raw materials 151,476 158,742 Total inventories $ 761,113 $ 853,252 The Company recorded a provision for excess and obsolete inventory totaling $4.7 million and $17.3 million in the three and nine months ended March 31, 2019 , respectively, and $1.9 million and $6.2 million in the three and nine months ended March 31, 2018 , respectively, excluding a provision for adjusting the cost of certain inventories to net realizable value of $5.7 million and $7.3 million for the three and nine months ended March 31, 2019 , respectively. The provision for adjusting the cost of certain inventories to net realizable value was not material for the three and nine months ended March 31, 2018 . Prepaid Expenses and Other Current Assets: March 31, June 30, Receivables from vendors (1) $ 60,741 $ 93,003 Restricted cash 17,234 2,803 Prepaid expenses 7,578 6,321 Deferred service costs 3,354 2,920 Others 8,950 5,809 Total prepaid expenses and other current assets $ 97,857 $ 110,856 __________________________ (1) Includes receivables from contract manufacturers based on certain buy-sell arrangements of $59.7 million and $87.4 million as of March 31, 2019 and June 30, 2018 , respectively. Cash, cash equivalents and restricted cash: March 31, June 30, Cash and cash equivalents $ 169,735 $ 115,377 Restricted cash included in prepaid expenses and other current assets 17,234 2,803 Restricted cash included in other assets 2,301 2,202 Total cash, cash equivalents and restricted cash $ 189,270 $ 120,382 Property, Plant, and Equipment: March 31, June 30, Buildings $ 86,136 $ 88,689 Machinery and equipment 78,666 71,081 Land 74,922 74,919 Building and leasehold improvements 22,018 18,760 Furniture and fixtures 19,957 18,475 Software 18,046 15,522 Buildings construction in progress (1) 7,930 1,779 307,675 289,225 Accumulated depreciation and amortization (104,233 ) (92,594 ) Property, plant and equipment, net $ 203,442 $ 196,631 __________________________ (1) Primarily relates to the development and construction costs associated with the Company’s Green Computing Park located in San Jose, California. Other Assets: March 31, June 30, Deferred service costs, non-current $ 3,473 $ 3,583 Non-marketable equity securities (1) 2,878 3,539 Restricted cash, non-current 2,301 2,202 Investment in auction rate security 1,571 1,571 Deposits 607 671 Prepaid expense, non-current 1,763 2,471 Total other assets $ 12,593 $ 14,037 __________________________ (1) As of March 31, 2019, the balance represents investments in non-marketable equity securities without readily determinable fair values. As of June 30, 2018, the balance represents investments in equity securities accounted for under the cost method. Accrued Liabilities: March 31, June 30, Accrued payroll and related expenses $ 24,621 $ 25,532 Contract manufacturers liability 20,748 28,754 Customer deposits 17,895 14,938 Accrued professional fees 10,937 6,626 Accrued warranty costs 8,200 7,589 Accrued cooperative marketing expenses 6,910 6,413 Others 23,640 12,626 Total accrued liabilities $ 112,951 $ 102,478 Other Long-term Liabilities: March 31, June 30, Accrued unrecognized tax benefits including related interest and penalties $ 17,926 $ 17,872 Accrued warranty costs, non-current 2,316 2,295 Others 4,199 4,398 Total other long-term liabilities $ 24,441 $ 24,565 Product Warranties: Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance, beginning of the period $ 10,434 $ 8,796 $ 9,884 $ 7,721 Provision for warranty 5,510 5,126 17,163 15,380 Costs utilized (6,346 ) (4,959 ) (18,083 ) (15,387 ) Change in estimated liability for pre-existing warranties 918 151 1,552 1,400 Balance, end of the period 10,516 9,114 10,516 9,114 Current portion 8,200 7,013 8,200 7,013 Non-current portion $ 2,316 $ 2,101 $ 2,316 $ 2,101 |
Fair Value Disclosure
Fair Value Disclosure | 9 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosure | Fair Value Disclosure The financial assets of the Company measured at fair value on a recurring basis are included in cash equivalents and other assets. The Company classifies its cash equivalents and other assets, except for its investment in an auction rate security within Level 1 or Level 2 in the fair value hierarchy because the Company uses quoted prices in active markets or alternative pricing sources and models using market observable inputs to determine their fair value. The Company’s investment in an auction rate security is classified within Level 3 of the fair value hierarchy as the determination of its fair value was not based on observable inputs as of March 31, 2019 and June 30, 2018. The Company used discounted cash flows to estimate the fair value of the auction rate security as of March 31, 2019 and June 30, 2018. The material factors used in preparing the discounted cash flows are (i) the discount rate utilized to present value the cash flows, (ii) the time period until redemption and (iii) the estimated rate of return. Financial Assets and Liabilities Measured on a Recurring Basis The following table sets forth the Company’s cash equivalents, certificates of deposit and investment in an auction rate security as of March 31, 2019 and June 30, 2018 which are measured at fair value on a recurring basis by level within the fair value hierarchy. These are classified based on the lowest level of input that is significant to the fair value measurement (in thousands): March 31, 2019 Level 1 Level 2 Level 3 Asset at Fair Value Money market funds (1) $ 1,149 $ — $ — $ 1,149 Certificates of deposit (2) — 30,788 — 30,788 Auction rate security — — 1,571 1,571 Total assets measured at fair value $ 1,149 $ 30,788 $ 1,571 $ 33,508 June 30, 2018 Level 1 Level 2 Level 3 Asset at Fair Value Money market funds (1) $ 1,136 $ — $ — $ 1,136 Certificates of deposit (2) — 30,219 — 30,219 Auction rate security — — 1,571 1,571 Total assets measured at fair value $ 1,136 $ 30,219 $ 1,571 $ 32,926 __________________________ (1) $0.3 million and $0.3 million in money market funds are included in cash and cash equivalents and $0.8 million and $0.8 million in money market funds are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of March 31, 2019 and June 30, 2018 , respectively. (2) $29.7 million and $29.2 million in certificates of deposit are included in cash and cash equivalents and $1.1 million and $1.0 million in certificates of deposit are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of March 31, 2019 and June 30, 2018 , respectively. The above table excludes $139.7 million and $85.9 million of cash included in cash and cash equivalents, $17.2 million and $2.8 million of restricted cash included in prepaid expenses and other current assets, and $0.4 million and $0.4 million of restricted cash, non-current included in other assets in the condensed consolidated balance sheets as of March 31, 2019 and June 30, 2018 , respectively. There were no transfers between Level 1, Level 2 or Level 3 securities in the three and nine months ended March 31, 2019 and 2018 . The following table provides a reconciliation of the Company’s financial assets measured at fair value on a recurring basis, consisting of auction rate securities, using significant unobservable inputs (Level 3) for the three and nine months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance as of the beginning of the period $ 1,571 $ 2,571 $ 1,571 $ 2,625 Sales and settlements at par — (1,000 ) — (1,000 ) Total unrealized loss included in other comprehensive income — — — (54 ) Balance as of the end of the period $ 1,571 $ 1,571 $ 1,571 $ 1,571 The following is a summary of the Company’s investment in an auction rate security as of March 31, 2019 and June 30, 2018 (in thousands): March 31, 2019 and June 30, 2018 Cost Basis Gross Gross Fair Value Auction rate security $ 1,750 $ — $ (179 ) $ 1,571 The Company measures the fair value of outstanding debt for disclosure purposes on a recurring basis. As of March 31, 2019 and June 30, 2018 , total debt of $22.7 million and $116.2 million , respectively, are reported at amortized cost. This outstanding debt is classified as Level 2 as it is not actively traded. The amortized cost of the outstanding debt approximates the fair value. Financial Assets Measured on a Non-recurring Basis The Company's non-marketable equity securities are investments in privately held companies without readily determinable fair values. Prior to July 1, 2018, the Company accounted for its investment in non-marketable equity securities at cost less impairment. Realized gains and losses on non-marketable equity securities sold or impaired were recognized in other income (expense), net. Upon adoption of the new guidance, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, on July 1, 2018, the Company classifies its investment in non-marketable equity instruments as Level 3 as the fair value is determined using significant unobservable inputs. During the three and nine months ended March 31, 2019 the Company did not record any upward or downward adjustments to the carrying values of the non-marketable equity securities. During the three months ended March 31, 2019, the Company recorded impairment charges of $0.7 million for its non-marketable equity securities which had an initial cost basis of $0.7 million as it was determined the carrying value of the investments were not recoverable. For the three and nine months ended March 31, 2018, the Company did not record any other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis. There were no transfers of financial assets measured on a non-recurring basis between Level 1, Level 2 or Level 3 securities during the three and nine months ended March 31, 2019 and 2018. |
Short-term Debt
Short-term Debt | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Short-term Debt | Short-term Debt Short-term debt obligations as of March 31, 2019 and June 30, 2018 consisted of the following (in thousands): March 31, June 30, 2019 2018 Line of credit: Bank of America $ — $ 67,346 CTBC Bank — 25,900 Total line of credit — 93,246 Term loan: CTBC Bank 22,660 22,935 Total short-term debt $ 22,660 $ 116,181 Activities under Revolving Lines of Credit and Term Loans Bank of America 2016 Bank of America Credit Facility In June 2016, the Company entered into a credit agreement with Bank of America (the “2016 Bank of America Credit Facility”). Prior to its maturity in April 2018, the Company repaid and terminated the 2016 Bank of America Credit Facility using the proceeds from its 2018 Bank of America Credit Facility (defined below). Immediately prior to its termination, the 2016 Bank of America Credit Facility (giving effect to all amendments since the inception of the 2016 Bank of America Credit Facility), provided for (i) a $85.0 million revolving line of credit including a $5.0 million letter of credit sublimit (ii) a $20.0 million revolving line of credit for the Company's Taiwan and the Netherlands entities, and (iii) a five -year $50.0 million term loan. The 2016 Bank of America Credit Facility term loan was secured by seven buildings located in San Jose, California and the property, plant and equipment and the inventory in those buildings. The principal and interest of the 2016 Bank of America Credit Facility term loan were payable monthly through June 30, 2021 with an interest rate at the LIBOR rate plus 1.25% per annum. The interest rate for the $85.0 million revolving line of credit was at the LIBOR rate plus 1.25% per annum. The interest rate of the $20.0 million revolving line of credit was equal to a minimum of 0.9% per annum plus the lender's cost of funds, as defined in the agreements. 2018 Bank of America Credit Facility In April 2018, the Company entered into a revolving line of credit with Bank of America (the "2018 Bank of America Credit Facility"), which replaced the 2016 Bank of America Credit Facility. The 2018 Bank of America Credit Facility provides for a revolving credit line and other financial accommodations of up to $250.0 million extended by certain lenders, including a $5.0 million letter of credit sublimit, which was extended to $15.0 million in October 2019. The 2018 Bank of America Credit Facility was originally set to expire after 364 days and has been extended to June 30, 2020 through subsequent amendments. Prior to its maturity, at the Company's option and if certain conditions are satisfied, including the Company being current on all of its delinquent quarterly and annual filings with the SEC, the 2018 Bank of America Credit Facility may convert into a five -year revolving credit facility. If and upon such conversion, the lenders for the 2018 Bank of America Credit Facility shall extend, in aggregate, a principal amount of up to $400.0 million . Prior to the 2018 Bank of America Credit Facility’s conversion to the five -year revolving credit facility, interest shall accrue at the LIBOR rate plus 2.75% per annum. Upon the 2018 Bank of America Credit Facility converting to the five -year revolving credit facility, interest shall accrue at the LIBOR rate plus an amount between 1.50% and 2.00% for loans to both Super Micro Computer and Super Micro Computer B.V. Under the terms of the 2018 Bank of America Credit Facility, the Company is required to grant the lenders a continuing security interest in and lien upon all amounts credited to any of the Company's deposit accounts. Interest accrued on any loans under the 2018 Bank of America Credit Facility is due on the first day of each month, and the loans are due and payable in full on the termination date of the 2018 Bank of America Credit Facility, unless payment is required earlier as determined by the lenders. Voluntary prepayments are permitted without early repayment fees or penalties. The terms of the arrangement require any amounts in the deposit accounts to be applied against the Company's line of credit the next business day. Subject to customary exceptions, the 2018 Bank of America Credit Facility is secured by substantially all of Super Micro Computer’s assets. If converted to the five-year revolving credit facility, Super Micro Computer’s assets, and at the Company's option, Super Micro Computer B.V.'s assets will be used as collateral for the 2018 Bank of America Credit Facility. Under the terms of the 2018 Bank of America Credit Facility, the Company is not permitted to either repurchase its common stock or pay any dividends. In the fourth fiscal quarter of 2018, the Company paid $3.2 million in fees to the lenders and third parties in connection with the 2018 Bank of America Credit Facility. The replacement of the 2016 Bank of America Credit Facility by the 2018 Bank of America Credit Facility is accounted for as a modification of the existing credit facility to the extent the lenders before and after the modification were the same. Any unamortized fees relating to the 2016 Bank of America Credit Facility and the fees paid for the 2018 Bank of America Credit Facility are amortized over the term of the 2018 Bank of America Credit Facility as interest expense in the Company's consolidated statements of operation and any unamortized amounts are classified within prepaid and other current assets in the Company's consolidated balance sheets. On January 31, 2019, the Company paid a fee and entered into an amendment of the 2018 Bank of America Credit Facility that resulted in the extension of the maturity date from April 19, 2019 to June 30, 2019. On June 27, 2019, the Company entered into a second amendment of the 2018 Bank of America Credit Facility that extended the maturity date from June 30, 2019 to June 30, 2020. As of March 31, 2019 and June 30, 2018 , the total outstanding borrowings under the 2018 Bank of America Credit Facility were $0.0 million and $67.3 million , respectively. The interest rates under the 2018 Bank of America Credit Facility as of March 31, 2019 and June 30, 2018 were 5.25% per annum and 4.75% per annum, respectively. In October 2018, a $3.2 million letter of credit was issued under the 2018 Bank of America Credit Facility. The balance of debt issuance costs outstanding were $0.7 million and $2.8 million as of March 31, 2019 and June 30, 2018, respectively. As of March 31, 2019 , the Company's available borrowing capacity under the 2018 Bank of America Credit Facility was $246.8 million , subject to the borrowing base limitation and compliance with other applicable terms. CTBC Bank In April 2016, the Company entered into a credit agreement with CTBC Bank Co., Ltd ("CTBC Bank") that provides for (i) a 12 -month NTD $700.0 million ( $21.6 million U.S. dollar equivalent) term loan facility secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum, which was adjusted monthly, the term loan facility also included a 12 -month guarantee of up to NTD $100.0 million ( $3.1 million U.S. dollar equivalent) with an annual fee equal to 0.50% per annum, and (ii) a 12 -month revolving line of credit of up to 80.0% of eligible accounts receivable in an aggregate amount of up to $40.0 million with an interest rate equal to the lender's established USD interest rate plus 0.30% per annum which was adjusted monthly (collectively, the “2016 CTBC Credit Facility”). The total borrowings allowed under the 2016 CTBC Credit Facility was capped at $40.0 million . The Company extended the 2016 CTBC Credit Facility to mature on May 31, 2017. In May 2017, the Company renewed the 2016 CTBC Credit Facility, such that it provided for (i) a 12 -month NTD $700.0 million ( $23.0 million U.S. dollar equivalent) term loan facility secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum, which was adjusted monthly, which term loan facility also included a 12 -month guarantee of up to NTD $100.0 million ( $3.3 million U.S. dollar equivalent) with an annual fee equal to 0.5% per annum, and (ii) a 12 -month revolving line of credit of up to 80.0% of eligible accounts receivable in an aggregate amount of up to $50.0 million with an interest rate equal to the lender's established USD interest rate plus an interest rate ranging from 0.40% to 0.45% per annum which was adjusted monthly. The total borrowings allowed under the renewed 2016 CTBC Credit Facility were capped at $50.0 million . The 2016 CTBC Credit Facility was to mature on April 30, 2018 but prior to the maturity, the Company entered into the 2018 CTBC Credit Facility (defined below) with CTBC Bank in January 2018, which replaced the 2016 CTBC Credit Facility. In January 2018, the Company entered into a credit agreement with CTBC Bank that provided for (i) a 12 -month NTD $700.0 million ( $23.6 million U.S. dollar equivalent) term loan facility secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum, which was adjusted monthly, which term loan facility also included a 12 -month guarantee of up to NTD $100.0 million ( $3.4 million U.S. dollar equivalent) with an annual fee equal to 0.50% per annum, and (ii) a 12 -month NTD $1,500.0 million ( $50.5 million U.S. dollar equivalent) term loan facility with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum, which was adjusted monthly (collectively, the “2018 CTBC Credit Facility”). The total borrowings allowed under the 2018 CTBC Credit Facility was initially capped at $50.0 million and in August 2018 was reduced to $40.0 million . In June 2019 prior to its maturity, the 2018 CTBC Credit Facility was replaced by the 2019 CTBC Credit Facility (defined below). In June 2019, the Company entered into a credit agreement with CTBC Bank that provides for (i) a 12 -month NTD $700.0 million ( $22.5 million U.S. dollar equivalent) term loan facility secured by the land and building located in Bade, Taiwan with an interest rate equal to the lender's established NTD interest rate plus 0.25% per annum which is adjusted monthly, which term loan facility also includes a 12 -month guarantee of up to NTD $100.0 million ( $3.2 million U.S. dollar equivalent) with an annual fee equal to 0.50% per annum, (ii) a 180 -day NTD $1,500.0 million ( $48.2 million U.S. dollar equivalent) term loan facility up to 100% of eligible accounts receivable in an aggregate amount with an interest rate equal to the lender's established NTD interest rate ranging from 0.30% to 0.50% per annum which is adjusted monthly, and (ⅲ) a 12 -month revolving line of credit of up to 100% of eligible accounts receivable in an aggregate amount of up to $50.0 million with an interest rate equal to the lender's established USD interest rate plus an interest rate ranging from 0.30% to 0.50% per annum which is adjusted monthly (collectively, the “2019 CTBC Credit Facility”). The total borrowings allowed under the 2019 CTBC Credit Facility was capped at $50.0 million . The 2019 CTBC Credit Facility is to mature on June 30, 2020. The total outstanding borrowings under the 2018 CTBC Credit Facility term loan were denominated in NTD and remeasured into U.S. dollars of $22.7 million and $22.9 million at March 31, 2019 and June 30, 2018 , respectively. At March 31, 2019 and June 30, 2018 , the total outstanding borrowings under the 2018 CTBC Credit Facility revolving line of credit were $0.0 million and $25.9 million , respectively, in U.S. dollars. The interest rate for these loans was 0.92% and 0.95% as of March 31, 2019 and June 30, 2018 , respectively. At March 31, 2019 , the amount available for future borrowing under the 2018 CTBC Credit Facility was $17.3 million . As of March 31, 2019 , the net book value of land and building located in Bade, Taiwan, collateralizing the 2018 CTBC Credit Facility term loan was $26.0 million . Covenant Compliance 2018 Bank of America Credit Facility The credit agreement with Bank of America related to the 2018 Bank of America Credit Facility contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries. The credit agreement contains a financial covenant, which requires that the Company maintain a Fixed Charge Coverage Ratio, as defined in the agreement of at least 1.00 for each twelve-month period while a Trigger Period, as defined in the agreement, is in effect. The Company has been in compliance with all the covenants under the 2018 Bank of America Credit Facility. On September 7, 2018, Bank of America issued an extension letter to the Company in connection with the 2018 Bank of America Credit Facility, which extended the delivery date of the Company's audited consolidated financial statements, compliance certificates and other material reports for the fiscal year ended June 30, 2018 to January 31, 2019. On January 31, 2019, the Company entered into an amendment of the loan and security agreement with respect to the 2018 Bank of America Credit Facility to, among other matters, (a) extend the delivery date of the Company's audited consolidated financial statements, compliance certificates and other material reports for the fiscal year ended June 30, 2018 to June 30, 2019, and (b) require the delivery, by no later than March 31, 2019 of the Company's audited consolidated financial statements for the fiscal year ended June 30, 2019. In April 2019, the Company paid a fee to extend the delivery to June 30, 2019 of its audited consolidated financial statements for the fiscal year ended June 30, 2017. In connection with the second amendment of the 2018 Bank of America Credit Facility to extend the maturity of the 2018 Bank of America Credit Facility, the Company is required to deliver its audited consolidated financial statements for the fiscal year ended June 30, 2018 by December 31, 2019, and deliver its audited consolidated financial statements for the fiscal year ended June 30, 2019 by March 31, 2020. If the Company elects to deliver the audited consolidated financial statements for the fiscal years ended June 30, 2019 and 2018 together in a combined filing with the SEC, the Company is required to deliver its audited financial statements by March 31, 2020. CTBC Bank There are no financial covenants associated with the 2018 CTBC Credit Facility or the 2019 CTBC Credit Facility. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company has a variety of business relationships with Ablecom and Compuware. Ablecom and Compuware are both Taiwan corporations. Ablecom is one of the Company’s major contract manufacturers; Compuware is both a distributor of the Company’s products and a contract manufacturer for the Company. Ablecom’s Chief Executive Officer, Steve Liang, is the brother of Charles Liang, the Company’s President, Chief Executive Officer and Chairman of the Board of Directors. Steve Liang owned approximately 0.4% of the Company's common stock as of June 30, 2017, but owned no shares as of June 30, 2018 and thereafter. As of March 31, 2019 , Charles Liang and his spouse, Sara Liu, who is also an officer and director of the Company, collectively owned approximately 10.5% of Ablecom’s capital stock. Certain family members of Yih-Shyan (Wally) Liaw, who until January 2018 was the Senior Vice President of International Sales and a director of the Company, owned approximately 11.7% of Ablecom’s capital stock as of March 31, 2019 . The Company does not own, nor has it ever owned, any of Ablecom’s capital stock. Steve Liang and his family members owned approximately 28.8% of Ablecom’s stock as of March 31, 2019. Bill Liang, a brother of both Charles Liang and Steve Liang, is a member of the Board of Directors of Ablecom. Bill Liang is also the Chief Executive Officer of Compuware, a member of Compuware’s Board of Directors and a holder of a significant equity interest in Compuware. Steve Liang is also a member of Compuware’s Board of Directors and is an equity holder of Compuware. None of the Company, Charles Liang or Sara Liu own any capital stock of Compuware. Dealings with Ablecom The Company has entered into a series of agreements with Ablecom, including multiple product development, production and service agreements, product manufacturing agreements, manufacturing services agreements and lease agreements for warehouse space. Under these agreements, the Company outsources to Ablecom a portion of its design activities and a significant part of its server chassis manufacturing as well as an immaterial portion of other components. Ablecom manufactured approximately 96.0% and 97.6% of the chassis included in the products sold by the Company during the three months ended March 31, 2019 and 2018 , respectively; and approximately 95.5% and 97.7% of the chassis included in the products sold by the Company during the nine months ended March 31, 2019 and 2018 , respectively. With respect to design activities, Ablecom generally agrees to design certain agreed-upon products according to the Company’s specifications, and further agrees to build the tools needed to manufacture the products. The Company pays Ablecom for the design and engineering services, and further agrees to pay Ablecom for the tooling. The Company retains full ownership of any intellectual property resulting from the design of these products and tooling. With respect to the manufacturing aspects of the relationship, Ablecom purchases most of materials needed to manufacture the chassis from third parties and the Company provides certain components used in the manufacturing process (such as power supplies) to Ablecom through consignment or sales transactions. Ablecom uses these materials and components to manufacture the completed chassis and then sell them back to the Company. For the components purchased from the Company, Ablecom sells the components back to the Company at a price equal to the price at which the Company sold the components to Ablecom. The Company and Ablecom frequently review and negotiate the prices of the chassis the Company purchases from Ablecom. In addition to inventory purchases, the Company also incurs other costs associated with design services, tooling and other miscellaneous costs from Ablecom. The Company’s exposure to financial loss as a result of its involvement with Ablecom is limited to potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products. Outstanding purchase orders from the Company to Ablecom were $28.3 million and $39.3 million at March 31, 2019 and June 30, 2018 , respectively, representing the maximum exposure to financial loss. The Company does not directly or indirectly guarantee any obligations of Ablecom, or any losses that the equity holders of Ablecom may suffer. Since Ablecom manufactures substantially all the chassis that the Company incorporates into its products, if Ablecom were to suddenly be unable to manufacture chassis for the Company, the Company’s business could suffer if the Company is unable to quickly qualify substitute suppliers who can supply high-quality chassis to the Company in volume and at acceptable prices. Dealings with Compuware The Company has entered into a distribution agreement with Compuware, under which the Company appointed Compuware as a non-exclusive distributor of the Company’s products in Taiwan, China and Australia. Compuware assumes the responsibility to install the Company's products at the site of the end customer, if required, and administers customer support in exchange for a discount from the Company's standard price for its purchases. The Company also has entered into a series of agreements with Compuware, including a multiple product development, production and service agreements, product manufacturing agreements, and lease agreements for office space. Under these agreements, the Company outsources to Compuware a portion of its design activities and a significant part of its power supplies manufacturing as well as an immaterial portion of other components. With respect to design activities, Compuware generally agrees to design certain agreed-upon products according to the Company’s specifications, and further agrees to build the tools needed to manufacture the products. The Company pays Compuware for the design and engineering services, and further agrees to pay Compuware for the tooling. The Company retains full ownership of any intellectual property resulting from the design of these products and tooling. With respect to the manufacturing aspects of the relationship, Compuware purchases most of materials needed to manufacture the power supplies from outside markets and uses these materials to manufacture the products and then sell those products to the Company. The Company and Compuware frequently review and negotiate the prices of the power supplies the Company purchases from Compuware. Compuware also manufactures motherboards, backplanes and other components used on printed circuit boards for the Company. The Company sells to Compuware most of the components needed to manufacture the above products. Compuware uses the components to manufacture the products and then sells the products back to the Company at a purchase price equal to the price at which the Company sold the components to Compuware, plus a “manufacturing value added” fee and other miscellaneous material charges and costs. The Company and Compuware frequently review and negotiate the amount of the “manufacturing value added” fee that will be included in the price of the products the Company purchases from Compuware. In addition to the inventory purchases, the Company also incurs costs associated with design services, tooling assets, and miscellaneous costs. The Company’s exposure to financial loss as a result of its involvement with Compuware is limited to potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products. Outstanding purchase orders from the Company to Compuware were $67.3 million and $111.7 million at March 31, 2019 and June 30, 2018 , respectively, representing the maximum exposure to financial loss. The Company does not directly or indirectly guarantee any obligations of Compuware, or any losses that the equity holders of Compuware may suffer. The Company’s results from transactions with Ablecom and Compuware for each of the three and nine months ended March 31, 2019 , and 2018 , are as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Ablecom Purchases (1) $ 29,372 $ 37,405 $ 110,290 $ 107,644 Compuware Net sales $ 3,846 $ 14,528 $ 13,628 $ 31,645 Purchases (1) 34,140 27,969 111,629 91,925 __________________________ (1) Includes principally purchases of inventory and other miscellaneous items. The Company's net sales to Ablecom were not material for the three and nine months ended March 31, 2019 and 2018 . The Company had the following balances related to transactions with Ablecom and Compuware as of March 31, 2019 and June 30, 2018 (in thousands): March 31, June 30, Ablecom Accounts receivable and other receivables $ 5,950 $ 7,884 Accounts payable and accrued liabilities 26,925 49,187 Compuware Accounts receivable and other receivables $ 8,588 $ 16,295 Accounts payable and accrued liabilities 33,109 45,617 In October 2016, the Company entered into agreements pursuant to which the Company contributed certain technology rights in connection with an investment in the Corporate Venture, which is accounted for using the equity method. See Note 1, "Organization and Summary of Significant Accounting Policies" for a discussion of the investment and the transactions that took place during the three and nine months ended March 31, 2019 and 2018 . |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded provisions for income taxes of $0.5 million and $10.5 million for three and nine months ended March 31, 2019 , respectively, and $4.2 million and $25.7 million for the three and nine months ended March 31, 2018 , respectively. The effective tax rate was 4.3% and 16.9% for the three and nine months ended March 31, 2019 , respectively, and 21.4% and 53.5% for the three and nine months ended March 31, 2018 , respectively. The effective tax rates for the three and nine months ended March 31, 2019 were lower than the statutory tax rate of 21%, primarily due to releases of unrecognized tax benefits as a result of lapse of statute of limitations. The effective tax rates for the three and nine months ended March 31, 2018 were higher than that for the three and nine months ended March 31, 2019 , primarily due to a one-time $12.9 million write down of U.S. deferred tax assets and liabilities, and a one-time transition tax of $2.8 million , as a result of the 2017 Tax Reform Act. As of March 31, 2019 , the Company had a liability for gross unrecognized tax benefits of $26.3 million , substantially all of which, if recognized, would affect the Company's effective tax rate. During the nine months ended March 31, 2019 , there were no material changes in the total amount of the liability for gross unrecognized tax benefits. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes on the condensed consolidated statements of operations. As of March 31, 2019 , the Company had accrued $1.5 million of interest and penalties relating to unrecognized tax benefits. In December 2017, the U.S. federal government enacted the 2017 Tax Reform Act. The 2017 Tax Reform Act reduced the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018 and created a one-time transition tax on foreign earnings of U.S. subsidiaries that were not previously subject to U.S. income tax. Under U.S. GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate. As a result, the Company has completed its analysis and recorded a one-time $12.9 million , net write down of its U.S. deferred tax assets and liabilities resulting from the U.S. federal corporate income tax rate decrease from 35% to 21%, and a one-time transition tax of $2.8 million , in the Company's income tax provision for the fiscal year ended June 30, 2018 . The Company expects further guidance may be forthcoming from the federal and state tax agencies, which could result in additional impacts. The 2017 Tax Reform Act also creates a new requirement that Global Intangible Low-Taxed Income (“GILTI”) earned by controlled foreign corporations (“CFCs”) that must be included currently in the gross income of a CFC’s U.S. stockholder starting in the tax year that begins after 2017. The tax impact from GILTI will be recorded in the Company's income tax provision for the fiscal year ended June 30, 2019, net of foreign tax credit, and will not be material to the Company's income tax provision for the fiscal year ended June 30, 2019. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (i) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (ii) factoring such amounts into a company’s measurement of its deferred taxes. The Company's selection of an accounting policy for the fiscal year ended June 30, 2019 with respect to the GILTI tax rules is to treat GILTI tax as a current period expense under the period cost method. Under the 2017 Tax Reform Act, starting on July 1, 2018 , the company is no longer subject to federal income tax on earnings remitted from our foreign subsidiaries. The Company previously asserted that all of its foreign undistributed earnings were indefinitely reinvested. As a result of the 2017 Tax Reform Act, the Company has determined that its foreign undistributed earnings are indefinitely reinvested except for Netherlands. The Company may repatriate certain foreign earnings from Netherlands that have been previously taxed in the U.S. The tax impact of such repatriation is estimated to be immaterial. In October 2019, the Taiwan tax authority completed its audit in Taiwan for fiscal year 2018 and proposed a transfer pricing adjustment on the Company which resulted in additional tax liability of $1.6 million . The Company accepted the proposed adjustment in October 2019 and intends to pay the $1.6 million tax liability in January 2020. The impact of this adjustment on the income statement will be offset by the recognition of previously unrecognized tax benefits related to the fiscal year audited in the period in which the proposed adjustment was accepted. The Company believes that it has adequately provided reserves for all uncertain tax positions; however, amounts asserted by tax authorities could be greater or less than the Company’s current position. Accordingly, the Company’s provision on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made as or the underlying matters are settled or otherwise resolved. The federal statute of limitations remains open in general for tax years ended June 30, 2016 through 2019. Various states statute of limitations remain open in general for tax years ended June 30, 2015 through 2019. Certain statutes of limitations in major foreign jurisdictions remain open in general for the tax years ended June 30, 2013 through 2019. The Company does not expect its unrecognized tax benefits to change materially over the next 12 months, except for the reductions arising from the lapse of the statute of limitations. It is reasonably possible that our gross unrecognized tax benefits will decrease by approximately $4.0 million in the next 12 months, primarily due to the lapse of the statute of limitations and settlement with the Tax Authorities. These adjustments, if recognized, would positively impact our effective tax rate, and would be recognized as additional tax benefits. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Claims — In February 2018, the Company became a party to legal proceedings whereby complainants have alleged that it has violated Section 10(b) of the Securities Exchange Act due to alleged misrepresentations and/or omissions. In July 2019, the Company filed a motion to dismiss which remains pending. See Note 12, "Subsequent Events" for further details. From time to time, the Company has been involved in various legal proceedings arising from the normal course of business activities. In management’s opinion, the resolution of any matters will not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity. The Company has entered into indemnification agreements with its current and former directors and executive officers. Under these agreements, the Company has agreed to indemnify such individuals to the fullest extent permitted by law against liabilities that arise by reason of their status as directors or officers and to advance expenses incurred by such individuals in connection with related legal proceedings. It is not possible to determine the maximum potential amount of payments the Company could be required to make under these agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each claim. However, the Company maintains directors and officers liability insurance coverage to reduce its exposure to such obligations. Purchase Commitments — The Company has agreements to purchase inventory and non-inventory items primarily through the next 12 months. As of March 31, 2019 , these remaining noncancelable commitments were $262.8 million , including $95.6 million for related parties. Standby Letter of Credit — In October 2018, Bank of America issued a standby letter of credit on behalf of the Company to a beneficiary for an initial value of $3.2 million to facilitate the ongoing operations of the Company. The standby letter of credit is automatically extended without amendment for successive one-year periods from the original expiration date of November 1, 2019 and will do so until canceled through written notice from the issuer. In October 2019, upon the Company's request, Bank of America increased the amount under the letter of credit issued to the beneficiary to $6.4 million . No amounts have been drawn under the standby letter of credit. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company operates in one operating segment that develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. The Company’s chief operating decision maker is the Chief Executive Officer. The following is a summary of property, plant and equipment, net (in thousands): March 31, June 30, 2019 2018 Long-lived assets: United States $ 158,307 $ 151,567 Asia 42,530 42,533 Europe 2,605 2,531 $ 203,442 $ 196,631 The Company’s revenue is presented on a disaggregated basis in Note 2, “Revenue” by type of product, by geographical market, and by products sold through its indirect sales channel or to its direct customers and OEMs. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 8, 2018, two putative class action complaints were filed against us, our Chief Executive Officer, and our former Chief Financial Officer in the U.S. District Court for the Northern District of California (Hessefort v. Super Micro Computer, Inc., et al., No. 18-cv-00838 and United Union of Roofers v. Super Micro Computer, Inc., et al., No. 18-cv-00850). The complaints contain similar allegations, claiming that the defendants violated Section 10(b) of the Securities Exchange Act due to alleged misrepresentations and/or omissions in public statements regarding recognition of revenue. The court subsequently appointed New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund as lead plaintiff and it filed an amended complaint naming our Senior Vice President of Investor Relations as an additional defendant. On June 21, 2019, plaintiff filed a further amended complaint naming our former Senior Vice President of International Sales, Corporate Secretary, and Director as an additional defendant. On July 26, 2019, we filed a motion to dismiss which remains pending. We believe the allegations filed are without merit and intend to vigorously defend against the lawsuit. As a result of the 2017 Tax Reform Act, in December 2019, the Company realigned its international business operations and group structure. As a part of this restructuring, the Company moved certain intellectual property back to the United States. This tax restructuring is not expected to have a material impact to the estimated annual effective tax rate. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The condensed consolidated financial statements of Super Micro Computer include the accounts of Super Micro Computer and entities consolidated under the variable interest model or the voting interest model. Noncontrolling interests are not presented separately in the condensed consolidated statements of operations and condensed consolidated statements of comprehensive income as the amounts are immaterial. All intercompany accounts and transactions of Super Micro Computer and its consolidated entities (collectively, the "Company") have been eliminated in consolidation. For equity investments over which the Company is able to exercise significant influence over the investee but does not control the investee, and is not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments in equity securities which do not have readily determinable fair values and for which the Company is not able to exercise significant influence over the investee are accounted for under the measurement alternative which is the cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar securities of the same investee. Prior to July 1, 2018, investments for which the Company was not able to exercise significant influence over the investee were accounted for under the cost method. The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and include the accounts of Super Micro Computer and its consolidated subsidiaries. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements included herein reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations and cash flows for the periods presented. The consolidated results of operations for the three and nine months ended March 31, 2019 are not necessarily indicative of the results that may be expected for future quarters or for the fiscal year ending June 30, 2019. |
Use of Estimates | Use of Estimates U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to: allowances for doubtful accounts and sales returns, inventory valuation, useful lives of property, plant and equipment, product warranty accruals, stock-based compensation, impairment of investments and long-lived assets, and income taxes. The Company’s estimates are evaluated on an ongoing basis and changes in the estimates are recognized prospectively. Actual results could differ from those estimates. |
Product Warranties | Product Warranties The Company offers product warranties ranging from 15 to 39 months against any defective products. These standard warranties are assurance type warranties and the Company does not offer any services beyond the assurance that the product will continue working as specified. Therefore, under recently adopted guidance, Revenue from Contracts with Customers , (“ASC 606”), these warranties are not considered separate performance obligations in the arrangement. Based on historical experience, the Company accrues for estimated returns of defective products at the time revenue is recognized. The Company monitors warranty obligations and may make revisions to its warranty reserve if actual costs of product repair and replacement are significantly higher or lower than estimated. Accruals for anticipated future warranty costs are charged to cost of sales and included in accrued liabilities and other long-term liabilities. Warranty accruals are based on estimates that are updated on an ongoing basis taking into consideration inputs such as new product introductions, changes in the volume of claims compared with the Company's historical experience, and the changes in the cost of servicing warranty claims. The Company accounts for the effect of such changes in estimates prospectively. |
Inventories | Inventories Inventories are stated at weighted average cost, subject to lower of cost or net realizable value. Net realizable value is the estimated selling price of our products in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventories consist of purchased parts and raw materials (principally electronic components), work in process (principally products being assembled) and finished goods. The Company evaluates inventory on a quarterly basis for lower of cost or net realizable value and excess and obsolescence and, as necessary, writes down the valuation of units based upon the Company's forecasted usage and sales, anticipated selling price, product obsolescence and other factors. Once inventory is written down, its new value is maintained until it is sold or scrapped. The Company receives various rebate incentives from certain suppliers based on its contractual arrangements, including volume-based rebates. The rebates earned are recognized as a reduction of cost of inventories and reduce the cost of sales in the period when the related inventory is sold. |
Income Taxes | Income Taxes The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax reporting purposes, net operating loss carry-forwards and other tax credits measured by applying enacted tax laws related to the financial statement periods. Valuation allowances are provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized. The Company recognizes tax liabilities for uncertain income tax positions on the income tax return based on the two-step process. The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires the Company to determine the probability of various possible outcomes. The Company evaluates these uncertain tax positions on a quarterly basis. This evaluation is based on the consideration of several factors, including changes in facts or circumstances, changes in applicable tax law, settlement of issues under audit and new exposures. If the Company later determines that its exposure is lower or that the liability is not sufficient to cover its revised expectations, the Company adjusts the liability and effects a related charge in its tax provision during the period in which the Company makes such a determination. |
Share-Based Compensation | Stock-Based Compensation The Company measures and recognizes compensation expense for all share-based awards made to employees and non-employees, including stock options and restricted stock units ("RSUs"). The share-based awards granted to non-employees have not been material to date. The Company is required to estimate the fair value of share-based awards on the date of grant. The Company recognizes the grant date fair value of all share-based awards over the requisite service period and accounts for forfeitures as they occur. The fair value of RSUs with service conditions or performance conditions is based on the closing market price of the Company's common stock on the date of grant. The fair value for RSUs with service conditions, or time-based RSUs, is amortized on a straight-line basis over the requisite service period. The fair value for RSUs with performance conditions ("PRSUs") is recognized on a ratable basis over the requisite service period when it is probable the performance conditions of the awards will be met. The Company reassesses the probability of vesting at each reporting period and adjusts the total compensation expense of the award based on this probability assessment. The Company estimates the fair value of stock options granted using a Black-Scholes option pricing model. This model requires the Company to make estimates and assumptions with respect to the expected term of the option and the expected volatility of the price of the Company's common stock. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on the Company's historical experience. The expected volatility is based on the implied and historical volatility of the Company’s common stock. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. |
Variable Interest Entity | Variable Interest Entities The Company determines at the inception of each arrangement whether an entity in which the Company holds an investment or in which the Company has other variable interests is considered a variable interest entity ("VIE"). The Company consolidates VIEs when it is 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, the Company assesses 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 the Company is the primary beneficiary. If the Company is not the primary beneficiary in a VIE, the Company accounts for the investment or other variable interest in accordance with applicable GAAP. The Company has concluded that Ablecom Technology, Inc. (“Ablecom”) and its affiliate, Compuware Technology, Inc. ("Compuware") are VIEs in accordance with applicable accounting standards and guidance; however, the Company is not the primary beneficiary as it does not have the power to direct the activities that are most significant to the entities and therefore, the Company does not consolidate these entities. In performing its analysis, the Company considered its explicit arrangements with Ablecom and Compuware, including the supplier arrangements. Also, as a result of the substantial related party relationships between the Company and these entities, the Company considered whether any implicit arrangements exist that would cause the Company to protect those related parties’ interests from suffering losses. The Company determined it has no material implicit arrangements with Ablecom, Compuware or their shareholders. The Company and Ablecom jointly established Super Micro Asia Science and Technology Park, Inc. (the "Management Company") in Taiwan to manage the common areas shared by the Company and Ablecom for its separately constructed manufacturing facilities. In fiscal year 2012, each company contributed $0.2 million and owns 50% of the Management Company. The Company has concluded that the Management Company is a VIE, and the Company is the primary beneficiary as it has the power to direct the activities that are most significant to the Management Company. For the three and nine months ended March 31, 2019 and 2018, the accounts of the Management Company have been consolidated with the accounts of Super Micro Computer, and a noncontrolling interest has been recorded for Ablecom's interest in the net assets and operations of the Management Company. Net income (loss) attributable to Ablecom's interest was not material for the periods presented and was included in general and administrative expenses in the Company's condensed consolidated statements of operations. |
Investment in a Corporate Venture | Investment in a Corporate Venture In October 2016, the Company entered into agreements pursuant to which the Company contributed certain technology rights in connection with an investment in a privately-held company (the "Corporate Venture") located in China to expand the Company's presence in China. The Corporate Venture is 30% owned by the Company and 70% owned by another company in China. The transaction was closed in the third fiscal quarter of 2017 and the investment has been accounted for using the equity method. As such, the Corporate Venture is also a related party. As of March 31, 2019 and June 30, 2018 , the Company's equity investment in the Corporate Venture was $1.4 million and $2.4 million , respectively, and was recorded under investment in equity investee on the Company's condensed consolidated balance sheet. The Company's share of losses of the Corporate Venture were $0.4 million and $0.7 million for the three months ended March 31, 2019 and 2018, respectively, and $3.6 million and $2.5 million for the nine months ended March 31, 2019 and 2018, respectively. The Company recorded a deferred gain related to the contribution of certain technology rights of $7.0 million in the third fiscal quarter of 2017. The amortization of the deferred gain is being recognized as a credit to research and development expenses in the Company's condensed consolidated statement of operations over a period of five years which represents the estimated period over which the remaining obligations will be fulfilled. As a result of the adoption of new accounting guidance as of the beginning of fiscal year 2019, the Company recorded an increase of $3.0 million to the investment in equity investee for the contribution of those technology rights, and corresponding increases in deferred gain and retained earnings of $2.1 million and $0.9 million , respectively. As of March 31, 2019 and June 30, 2018 , the Company had unamortized deferred gain balance of $2.0 million and $1.4 million , respectively, in accrued liabilities and $3.5 million and $3.5 million , respectively, in other long-term liabilities in the Company’s condensed consolidated balance sheets. The Company monitors the investment for events or circumstances indicative of potential other-than-temporary impairment and makes appropriate reductions in carrying values if it determines that an impairment charge is required. No impairment charge was recorded for the three and nine months ended March 31, 2019 and March 31, 2018 , respectively. Additionally, the Company sold products worth $13.7 million and $3.1 million to the Corporate Venture in the three months ended March 31, 2019 and March 31, 2018 , respectively, and $35.2 million and $14.5 million in the nine months ended March 31, 2019 and March 31, 2018 , respectively, and the Company's share of intra-entity profits on the products that remained unsold by the Corporate Venture as of March 31, 2019 and June 30, 2018 have been eliminated and have reduced the Company's investment in the Corporate Venture. The Company had $11.6 million and $2.9 million due from the Corporate Venture in accounts receivable, net as of March 31, 2019 and June 30, 2018 , respectively, in its condensed consolidated balance sheets. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, investment in an auction rate security and accounts receivable. Concentration of Supplier Risk Certain materials used by the Company in the manufacture of its products are available from a limited number of suppliers. Shortages could occur in these materials due to an interruption of supply or increased demand in the industry. |
Accounting Pronouncements Recently and Not Yet Adopted | Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance,ASC 606, that supersedes nearly all U.S. GAAP on revenue recognition and eliminates industry-specific guidance. ASC 606 provides a unified model in determining when and how revenue is recognized with the core principle that revenue should be recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its issuance, the FASB has issued several amendments to ASC 606. The Company adopted ASC 606 on July 1, 2018 using the modified retrospective method. In connection with the adoption of ASC 606, the Company recorded a transition adjustment to increase retained earnings by $6.8 million as of July 1, 2018. The comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. The primary impact of the adoption of ASC 606 was the acceleration of revenue recognition for (i) sales to distributors where the Company previously accounted for such sales on a sell-through basis and (ii) software arrangements. The following tables summarize the impacts of the adoption of ASC 606 on the Company’s condensed consolidated financial statements. The adoption of ASC 606 did not have any impact on the net cash provided by operating activities. Selected Captions from the Condensed Consolidated Balance Sheet as of March 31, 2019 (in thousands) As Reported Adjustments Balances without adoption of ASC 606 ASSETS Accounts receivable, net of allowances $ 327,366 $ (17,367 ) $ 309,999 Inventories 761,113 11,808 772,921 Prepaid expenses and other current assets 97,857 (1,916 ) 95,941 Deferred income taxes, net 33,776 1,558 35,334 LIABILITIES AND STOCKHOLDERS' EQUITY Accrued liabilities $ 112,951 $ (4,655 ) $ 108,296 Deferred revenue 87,746 653 88,399 Income taxes payable 8,729 71 8,800 Deferred revenue, non-current 105,584 2,783 108,367 Retained earnings 588,193 (4,769 ) 583,424 Selected Captions from the Condensed Consolidated Statement of Operations for the Three and Nine Months ended March 31, 2019 (in thousands) Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 As Reported Adjustments Balances without adoption of ASC 606 As Reported Adjustments Balances without adoption of ASC 606 Net sales $ 743,499 $ (1,621 ) $ 741,878 $ 2,646,126 $ 18,449 $ 2,664,575 Cost of sales 631,172 (403 ) 630,769 2,282,638 18,995 2,301,633 Gross profit 112,327 (1,218 ) 111,109 363,488 (546 ) 362,942 General and administrative 36,174 (1,626 ) 34,548 106,214 (2,662 ) 103,552 Income before income tax provision 11,502 408 11,910 62,320 2,116 64,436 Income tax provision 497 (244 ) 253 10,540 71 10,611 Net income 10,646 652 11,298 48,208 2,045 50,253 In January 2016, the FASB issued new guidance, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changes the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The most significant impact of this accounting standard update is that it requires the remeasurement of equity investments not accounted for under the equity method to be recorded at fair value through the consolidated statement of operations at the end of each reporting period. The Company adopted this accounting standard update as of July 1, 2018. The result of the adoption did not have a material impact on the consolidated financial statements. As a result of the adoption of the new standard, the Company’s equity investments are accounted for as follows: • Marketable equity securities that have a readily determinable fair value are measured and recorded at fair value. • Non-marketable equity securities that do not have a readily determinable fair value and for which the Company does not control the investee nor is it able to exert significant influence over the investee are measured using a measurement alternative recorded at cost less any impairment, plus or minus changes resulting from qualifying observable price changes. • Equity method investments are equity securities for which the Company does not control the investee but is able to exert significant influence over the investee. These investments are measured at cost less any impairment, plus or minus the Company's share of equity method investee income or loss. In August 2016, the FASB issued an amendment to the accounting guidance, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This amendment consists of eight provisions that provide guidance on the classification of certain cash receipts and cash payments. If practicable, this amendment should be applied using a retrospective transition method to each period presented. For the provisions that are impracticable to apply retrospectively, those provisions may be applied prospectively as of the earliest date practicable. The Company adopted the accounting guidance on July 1, 2018. The result of the adoption did not have a material impact on the consolidated statements of cash flows. In October 2016, the FASB issued an amendment to the accounting guidance, Intra-Entity Transfers of Assets Other Than Inventory . This amendment simplifies the accounting for income tax consequences of intra-entity transfers of assets other than inventory by requiring recognition of current and deferred income tax consequences when such transfers occur. The Company adopted the accounting guidance on July 1, 2018. The result of the adoption did not have a material impact on the consolidated financial statements and related disclosures. In November 2016, the FASB issued an amendment to the accounting guidance, Statement of Cash Flows: Restricted Cash. This amendment addresses presentations of total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted the accounting guidance on July 1, 2018 using a retrospective transition method to each period presented. The adoption did not have a material impact on the consolidated statements of cash flows. Presentation of prior period information has been retrospectively adjusted. In February 2017, the FASB issued new accounting guidance, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This guidance clarifies the scope and application on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The Company adopted this guidance on July 1, 2018. Prior to adoption, the Company had previously contributed certain technology rights in exchange for 30% ownership in a privately-held company (the “Corporate Venture”) and accounted for the transaction in accordance with the guidance related to exchanges of a nonfinancial asset for a noncontrolling ownership interest in ASC 845 - Nonmonetary Transactions, which has been eliminated by the new guidance. As a result of the adoption of the new guidance, the Company recognized $3.0 million increase in the carrying value of the equity-method investment, a $2.1 million increase in deferred gain, and a $0.9 million increase in retained earnings. In August 2018, the Securities and Exchange Commission (“SEC”) adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification . The amendments became effective on November 5, 2018. The SEC staff subsequently indicated that it would not object if a filer’s first presentation of changes in stockholders’ equity is included in its Form 10-Q for the quarter that begins after the final rule’s effective date. Among the amendments is the requirement to present the changes in stockholders’ equity in the interim financial statements (either in a separate statement or footnote) in Quarterly Reports on Form 10-Q. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a consolidated statement of operations is required to be filed. The Company adopted this guidance in the first quarter of fiscal year 2019. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued an amendment to the accounting guidance, Leases. The amendment will supersede the existing lease guidance, including on-balance sheet recognition of operating leases for lessees. Since its issuance, the FASB has issued several amendments to the new lease standard. The standard is effective for the Company from July 1, 2019 and the Company will apply this standard using the modified retrospective approach and will not restate prior comparative periods. The Company will elect the “package of practical expedients” under the transition guidance of the new standard, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs, for leases that are in effect as of the date of adoption of the new lease guidance. While the Company is currently finalizing its implementation of new policies, processes and internal controls to comply with the new rules, it is anticipated that the adoption of the new standard will result in the recognition of right-of-use assets and lease liabilities on the Company’s consolidated balance sheet of $14.8 million and $15.2 million , respectively, as of July 1, 2019, primarily related to real estate leases. The adoption of the new standard will not have a material impact on the Company’s consolidated statement of operations or consolidated statement of cash flows. In June 2016, the FASB issued authoritative guidance, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments , that amends the impairment model for certain financial assets by requiring the use of an expected loss methodology, which will result in more timely recognition of credit losses. The amendment is effective for the Company from July 1, 2020. Early adoption is permitted. The Company is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures, results of operations and financial position. In February 2018, the FASB issued Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act ("2017 Tax Reform Act"), from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election and is effective for the Company from July 1, 2019. The adoption of the guidance will not have a material impact on its consolidated financial statements. In June 2018, the FASB issued amended guidance to expand the scope of ASC 718 - Compensation-Stock Compensation , to include share-based payment transactions for acquiring goods and services from non-employees. The amendments specify that the guidance applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The new amendment is effective for the Company from July 1, 2019. The adoption of the new standard will not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued amended guidance, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, to modify the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The new standard is effective for the Company from July 1, 2020. The Company is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures. In August 2018, the FASB issued amended guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. According to the amendments, the entity shall determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. It requires the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The new standard is effective for the Company from July 1, 2020. The Company is currently evaluating the effect the guidance will have on its consolidated financial statement disclosures, results of operations and financial position. |
Revenue | Revenue recognition for periods after the Company’s adoption of ASC 606 as of July 1, 2018 The Company adopted ASC 606 as of July 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company considered the effect of all modifications when identifying performance obligations and allocating transaction price, which did not have a material effect on the adjustment to retained earnings. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. ASC 606 provides a unified model in determining when and how revenue is recognized with the core principle that revenue should be recognized when a customer obtains control of the promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generates revenues from the sale of server and storage systems, subsystems, accessories, services, server software management solutions, and support services. Product sales . The Company recognizes revenue from sales of products as control is transferred to customers, which generally happens at the point of shipment or upon delivery, unless customer acceptance is uncertain. Products sold by the Company are delivered via shipment from the Company’s facilities or drop shipment directly to its customer from a Company vendor. The Company may use distributors to sell products to end customers. Revenue from distributors is recognized when the distributor obtains control of the product, which generally happens at the point of shipment or upon delivery, unless customer acceptance is uncertain, and in the amount of consideration to which the Company expects to be entitled. As part of determining the transaction price in contracts with customers, the Company estimates reserves for future sales returns based on a review of its history of actual returns for each major product line. Based upon historical experience a refund liability is recorded at the time of sale for estimated product returns and an asset is recognized for the amount expected to be recorded in inventory upon product return, less the expected recovery costs. The Company also reduces revenue for the estimated costs of customer and distributor programs and incentive offerings such as price protection and 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. Any provision for customer and distributor programs and other discounts is recorded as a reduction of revenue at the time of sale based on an evaluation of the contract terms and historical experience. Services sales. The Company’s sale of services mainly consists of extended warranty and on-site services. Revenue related to extended warranty commences upon the expiration of the standard warranty period and is recognized ratably over the contractual period as the Company stands ready to perform any required warranty service. Revenue related to on-site services commences upon recognition of the product sale and is recognized ratably over the contractual period as the on-site services are made available to the customer. These service contracts are typically one to five years in length. Service revenue has been less than 10% of net sales for all periods presented and is not separately disclosed. Contracts with multiple promised goods and services. Certain of the Company’s contracts contain multiple promised goods and services. Performance obligations in a contract are identified based on the promised goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. Revenue allocated to each performance obligation is recognized at the time the related performance obligation is satisfied by transferring control of the promised good or service to a customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information, such as internally approved pricing guidelines with respect to geographies, customer type, internal costs, and gross margin objectives, for the related performance obligations. When the Company receives consideration from a customer prior to transferring goods or services to the customer, the Company records a contract liability (deferred revenue). The Company also recognizes deferred revenue when it has an unconditional right to consideration (i.e., a receivable) before transfer of control of goods or services to a customer. The Company considers shipping & handling activities as costs to fulfill the sales of products. Shipping revenue is included in net sales when control of the product is transferred to the customer, and the related shipping and handling costs are included in cost of products sold. Taxes imposed by governmental authorities on the Company's revenue producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales. Revenue recognition for periods prior to the Company’s adoption of ASC 606 as of July 1, 2018 Product sales. The Company recognizes revenue from sales of products upon meeting all of the following revenue recognition criteria, which is typically met upon shipment or delivery of its products to customers, unless customer acceptance is uncertain or significant obligations to the customer remain: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders and (iv) collectibility is reasonably assured. The Company estimates reserves for future sales returns based on a review of its history of actual returns for each major product line. The Company also reduces revenue for customer and distributor programs and incentive offerings such as price protection and rebates as well as cooperative marketing arrangements where the fair value of the benefit identified from the costs cannot be reasonably estimated. The Company may use distributors to sell products to end customers. Revenue from distributors may be recognized on sell-in or sell-through basis depending on the terms of the arrangement between the Company and the distributor. The Company records costs related to shipping and handling in sales and marketing expenses. Shipping and handling fees billed to customers are included in net sales. Services sales . The Company’s sale of services mainly consists of extended warranty and on-site services. These services are sold at the time of the sale of the underlying products. Revenue related to extended warranty commences upon the expiration of the standard warranty period and is recognized ratably over the contractual period. Revenue related to on-site services commences upon recognition of the product sale and is recognized ratably over the contractual period. These service contracts are typically one to five years in length. Service revenue has been less than 10% of net sales for all periods presented and is not separately disclosed. Multiple-element arrangements. Certain of the Company’s arrangements contain multiple elements, consisting of both the Company’s products and services. Revenue allocated to each element is recognized when all the revenue recognition criteria are met for that element. The Company allocates arrangement consideration at the inception of an arrangement to all deliverables, if they represent a separate unit of accounting, based on their relative estimated stand-alone selling prices. A deliverable qualifies as a separate unit of accounting when the delivered element has stand-alone value to the customer. The guidance establishes the following hierarchy to determine the relative estimated stand-alone selling price to be used for allocating arrangement consideration to deliverables: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence of selling price (“TPE”) if VSOE is not available, or (iii) the vendor's best estimated selling price (“BESP”) if neither VSOE nor TPE are available. The Company does not have VSOE for deliverables in its arrangements, and TPE is generally not available because its products are highly differentiated, and the Company is unable to obtain reliable information on the products and pricing practices of the Company’s competitors. BESP reflects the Company’s estimate of what the selling price of a deliverable would be if it were sold regularly on a stand-alone basis. As such, BESP is generally used to allocate the total arrangement consideration at the arrangement inception. The Company determines BESP for a product by considering multiple factors including, but not limited to, geographies, customer types, internal costs, gross margin objectives and pricing practices. Disaggregation of Revenue The Company disaggregates revenue by type of product, by geographical market, and by products sold to indirect sales channel partners or direct customers and original equipment manufacturers ("OEMs") that depict the nature, amount, and timing of revenue and cash flows. Service revenues are not a significant component of total revenue and are aggregated within the respective categories. |
Fair Value of Financial Instruments | The financial assets of the Company measured at fair value on a recurring basis are included in cash equivalents and other assets. The Company classifies its cash equivalents and other assets, except for its investment in an auction rate security within Level 1 or Level 2 in the fair value hierarchy because the Company uses quoted prices in active markets or alternative pricing sources and models using market observable inputs to determine their fair value. The Company’s investment in an auction rate security is classified within Level 3 of the fair value hierarchy as the determination of its fair value was not based on observable inputs as of March 31, 2019 and June 30, 2018. The Company used discounted cash flows to estimate the fair value of the auction rate security as of March 31, 2019 and June 30, 2018. The material factors used in preparing the discounted cash flows are (i) the discount rate utilized to present value the cash flows, (ii) the time period until redemption and (iii) the estimated rate of return. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of the impact ASC 606 adoption | The following tables summarize the impacts of the adoption of ASC 606 on the Company’s condensed consolidated financial statements. The adoption of ASC 606 did not have any impact on the net cash provided by operating activities. Selected Captions from the Condensed Consolidated Balance Sheet as of March 31, 2019 (in thousands) As Reported Adjustments Balances without adoption of ASC 606 ASSETS Accounts receivable, net of allowances $ 327,366 $ (17,367 ) $ 309,999 Inventories 761,113 11,808 772,921 Prepaid expenses and other current assets 97,857 (1,916 ) 95,941 Deferred income taxes, net 33,776 1,558 35,334 LIABILITIES AND STOCKHOLDERS' EQUITY Accrued liabilities $ 112,951 $ (4,655 ) $ 108,296 Deferred revenue 87,746 653 88,399 Income taxes payable 8,729 71 8,800 Deferred revenue, non-current 105,584 2,783 108,367 Retained earnings 588,193 (4,769 ) 583,424 Selected Captions from the Condensed Consolidated Statement of Operations for the Three and Nine Months ended March 31, 2019 (in thousands) Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 As Reported Adjustments Balances without adoption of ASC 606 As Reported Adjustments Balances without adoption of ASC 606 Net sales $ 743,499 $ (1,621 ) $ 741,878 $ 2,646,126 $ 18,449 $ 2,664,575 Cost of sales 631,172 (403 ) 630,769 2,282,638 18,995 2,301,633 Gross profit 112,327 (1,218 ) 111,109 363,488 (546 ) 362,942 General and administrative 36,174 (1,626 ) 34,548 106,214 (2,662 ) 103,552 Income before income tax provision 11,502 408 11,910 62,320 2,116 64,436 Income tax provision 497 (244 ) 253 10,540 71 10,611 Net income 10,646 652 11,298 48,208 2,045 50,253 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following is a summary of net sales by product type (in thousands): Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 2018 Amount Percent of Amount Percent of Amount Percent of Amount Percent of Server and storage systems $ 592,783 79.7 % $ 669,114 80.1 % $ 2,161,321 81.7 % $ 1,841,218 77.4 % Subsystems and accessories 150,716 20.3 % 165,996 19.9 % 484,805 18.3 % 537,612 22.6 % Total $ 743,499 100.0 % $ 835,110 100.0 % $ 2,646,126 100.0 % $ 2,378,830 100.0 % Server and storage systems constitute an assembly and integration of subsystems and accessories, and related services. Subsystems and accessories are comprised of serverboards, chassis and accessories. International net sales are based on the country and region to which the products were shipped. The following is a summary for the three and nine months ended March 31, 2019 and 2018, of net sales by geographic region (in thousands): Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 2018 Net sales: United States $ 436,734 $ 455,021 $ 1,516,262 $ 1,317,175 Europe 128,789 150,319 472,325 392,797 Asia 146,120 188,101 549,296 561,807 Others 31,856 41,669 108,243 107,051 $ 743,499 $ 835,110 $ 2,646,126 $ 2,378,830 The following table presents the percentages of net sales from products sold through the Company's indirect sales channel and to its direct customers and OEMs for the three and nine months ended March 31, 2019 and 2018: Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 over 2018 2019 2018 2019 over 2018 Indirect sales channel 38.2 % 42.8 % (4.6 )% 37.7 % 43.7 % (6.0 )% Direct customers and OEMs 61.8 % 57.2 % 4.6 % 62.3 % 56.3 % 6.0 % Total net sales 100.0 % 100.0 % 100.0 % 100.0 % |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of assumptions used to estimate fair value of stock options granted using Black-Scholes option pricing model | The fair value of stock option grants for the three and nine months ended March 31, 2019 and 2018 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Risk-free interest rate 2.56 % 2.47 % 2.56% - 2.97% 1.92% - 2.47% Expected term 6.05 years 5.82 years 6.05 years 5.82 years Dividend yield — % — % — % — % Volatility 50.25 % 47.39 % 47.34% - 50.25% 45.32% - 48.07% Weighted-average fair value $ 7.55 $ 10.79 $ 8.56 $ 11.45 |
Schedule of stock-based compensation expense | The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Cost of sales $ 390 $ 449 $ 1,256 $ 1,362 Research and development 3,107 3,494 9,816 10,412 Sales and marketing 418 482 1,359 1,545 General and administrative 1,045 1,663 3,650 5,330 Stock-based compensation expense before taxes 4,960 6,088 16,081 18,649 Income tax impact (1,016 ) (1,506 ) (3,339 ) (5,385 ) Stock-based compensation expense, net $ 3,944 $ 4,582 $ 12,742 $ 13,264 |
Summary of stock option activity | The following table summarizes stock option activity during the nine months ended March 31, 2019 under all plans: Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in Years) Balance as of June 30, 2018 8,301,138 $ 16.50 Granted 321,920 $ 17.24 Exercised — $ — Forfeited/Cancelled (1,110,289 ) $ 9.61 Balance as of March 31, 2019 7,512,769 $ 17.55 3.84 Options vested and exercisable at March 31, 2019 6,769,528 $ 17.13 3.32 |
Summary of restricted stock unit activity | The following table summarizes RSUs and PRSUs activity during the nine months ended March 31, 2019 under all plans: Time-Based RSUs Outstanding Weighted Average Grant-Date Fair Value per Share PRSUs Outstanding Weighted Average Grant-Date Fair Value per Share Balance as of June 30, 2018 1,480,605 $ 23.34 120,000 (1) $ 27.10 Granted 738,880 $ 16.46 — Released (2) (439,379 ) $ 24.83 — Forfeited (114,018 ) $ 20.76 — Balance as of March 31, 2019 1,666,088 $ 20.08 120,000 $ 27.10 __________________________ (1) Reflects the number of PRSUs that have been earned based on the achievement of performance metrics. (2) The number of shares released excludes 101,952 RSUs that were vested but not released as of March 31, 2019 . The number of shares released excludes 78,000 PRSUs that were vested but not released as of March 31, 2019 , of which 60,000 PRSUs were vested as of June 30, 2018 . These vested RSUs and PRSUs will be released upon the effectiveness of the Company's Registration Statement on Form S-8. |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net income per share | The following table shows the computation of basic and diluted net income per common share for the three and nine months ended March 31, 2019 and 2018 (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Numerator: Net income $ 10,646 $ 14,595 $ 48,208 $ 19,891 Denominator: Weighted-average shares outstanding 49,988 49,425 49,845 49,285 Effect of dilutive securities 1,570 2,254 1,712 2,805 Weighted-average diluted shares 51,558 51,679 51,557 52,090 Basic net income per common share $ 0.21 $ 0.30 $ 0.97 $ 0.40 Diluted net income per common share $ 0.21 $ 0.28 $ 0.94 $ 0.38 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventory | Inventories: March 31, June 30, Finished goods $ 525,344 $ 633,348 Work in process 84,293 61,162 Purchased parts and raw materials 151,476 158,742 Total inventories $ 761,113 $ 853,252 |
Schedule of prepaid expenses and other current assets | Prepaid Expenses and Other Current Assets: March 31, June 30, Receivables from vendors (1) $ 60,741 $ 93,003 Restricted cash 17,234 2,803 Prepaid expenses 7,578 6,321 Deferred service costs 3,354 2,920 Others 8,950 5,809 Total prepaid expenses and other current assets $ 97,857 $ 110,856 __________________________ (1) Includes receivables from contract manufacturers based on certain buy-sell arrangements of $59.7 million and $87.4 million as of March 31, 2019 and June 30, 2018 , respectively. |
Schedule of cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash: March 31, June 30, Cash and cash equivalents $ 169,735 $ 115,377 Restricted cash included in prepaid expenses and other current assets 17,234 2,803 Restricted cash included in other assets 2,301 2,202 Total cash, cash equivalents and restricted cash $ 189,270 $ 120,382 |
Schedule of property, plant, and equipment | Property, Plant, and Equipment: March 31, June 30, Buildings $ 86,136 $ 88,689 Machinery and equipment 78,666 71,081 Land 74,922 74,919 Building and leasehold improvements 22,018 18,760 Furniture and fixtures 19,957 18,475 Software 18,046 15,522 Buildings construction in progress (1) 7,930 1,779 307,675 289,225 Accumulated depreciation and amortization (104,233 ) (92,594 ) Property, plant and equipment, net $ 203,442 $ 196,631 __________________________ (1) Primarily relates to the development and construction costs associated with the Company’s Green Computing Park located in San Jose, California. |
Schedule of other assets | Other Assets: March 31, June 30, Deferred service costs, non-current $ 3,473 $ 3,583 Non-marketable equity securities (1) 2,878 3,539 Restricted cash, non-current 2,301 2,202 Investment in auction rate security 1,571 1,571 Deposits 607 671 Prepaid expense, non-current 1,763 2,471 Total other assets $ 12,593 $ 14,037 __________________________ (1) As of March 31, 2019, the balance represents investments in non-marketable equity securities without readily determinable fair values. As of June 30, 2018, the balance represents investments in equity securities accounted for under the cost method. |
Schedule of accrued liabilities | Accrued Liabilities: March 31, June 30, Accrued payroll and related expenses $ 24,621 $ 25,532 Contract manufacturers liability 20,748 28,754 Customer deposits 17,895 14,938 Accrued professional fees 10,937 6,626 Accrued warranty costs 8,200 7,589 Accrued cooperative marketing expenses 6,910 6,413 Others 23,640 12,626 Total accrued liabilities $ 112,951 $ 102,478 |
Schedule of other long-term liabilities | Other Long-term Liabilities: March 31, June 30, Accrued unrecognized tax benefits including related interest and penalties $ 17,926 $ 17,872 Accrued warranty costs, non-current 2,316 2,295 Others 4,199 4,398 Total other long-term liabilities $ 24,441 $ 24,565 |
Reconciliation of the changes in accrued warranty costs | Product Warranties: Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance, beginning of the period $ 10,434 $ 8,796 $ 9,884 $ 7,721 Provision for warranty 5,510 5,126 17,163 15,380 Costs utilized (6,346 ) (4,959 ) (18,083 ) (15,387 ) Change in estimated liability for pre-existing warranties 918 151 1,552 1,400 Balance, end of the period 10,516 9,114 10,516 9,114 Current portion 8,200 7,013 8,200 7,013 Non-current portion $ 2,316 $ 2,101 $ 2,316 $ 2,101 |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | The following table sets forth the Company’s cash equivalents, certificates of deposit and investment in an auction rate security as of March 31, 2019 and June 30, 2018 which are measured at fair value on a recurring basis by level within the fair value hierarchy. These are classified based on the lowest level of input that is significant to the fair value measurement (in thousands): March 31, 2019 Level 1 Level 2 Level 3 Asset at Fair Value Money market funds (1) $ 1,149 $ — $ — $ 1,149 Certificates of deposit (2) — 30,788 — 30,788 Auction rate security — — 1,571 1,571 Total assets measured at fair value $ 1,149 $ 30,788 $ 1,571 $ 33,508 June 30, 2018 Level 1 Level 2 Level 3 Asset at Fair Value Money market funds (1) $ 1,136 $ — $ — $ 1,136 Certificates of deposit (2) — 30,219 — 30,219 Auction rate security — — 1,571 1,571 Total assets measured at fair value $ 1,136 $ 30,219 $ 1,571 $ 32,926 __________________________ (1) $0.3 million and $0.3 million in money market funds are included in cash and cash equivalents and $0.8 million and $0.8 million in money market funds are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of March 31, 2019 and June 30, 2018 , respectively. (2) $29.7 million and $29.2 million in certificates of deposit are included in cash and cash equivalents and $1.1 million and $1.0 million in certificates of deposit are included in restricted cash, non-current in other assets in the condensed consolidated balance sheets as of March 31, 2019 and June 30, 2018 , respectively. |
Reconciliation of financial assets measured at fair value on a recurring basis | The following table provides a reconciliation of the Company’s financial assets measured at fair value on a recurring basis, consisting of auction rate securities, using significant unobservable inputs (Level 3) for the three and nine months ended March 31, 2019 and 2018 (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance as of the beginning of the period $ 1,571 $ 2,571 $ 1,571 $ 2,625 Sales and settlements at par — (1,000 ) — (1,000 ) Total unrealized loss included in other comprehensive income — — — (54 ) Balance as of the end of the period $ 1,571 $ 1,571 $ 1,571 $ 1,571 |
Summary of investments | The following is a summary of the Company’s investment in an auction rate security as of March 31, 2019 and June 30, 2018 (in thousands): March 31, 2019 and June 30, 2018 Cost Basis Gross Gross Fair Value Auction rate security $ 1,750 $ — $ (179 ) $ 1,571 |
Short-term Debt (Tables)
Short-term Debt (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of short-term debt | Short-term debt obligations as of March 31, 2019 and June 30, 2018 consisted of the following (in thousands): March 31, June 30, 2019 2018 Line of credit: Bank of America $ — $ 67,346 CTBC Bank — 25,900 Total line of credit — 93,246 Term loan: CTBC Bank 22,660 22,935 Total short-term debt $ 22,660 $ 116,181 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The Company’s results from transactions with Ablecom and Compuware for each of the three and nine months ended March 31, 2019 , and 2018 , are as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Ablecom Purchases (1) $ 29,372 $ 37,405 $ 110,290 $ 107,644 Compuware Net sales $ 3,846 $ 14,528 $ 13,628 $ 31,645 Purchases (1) 34,140 27,969 111,629 91,925 __________________________ (1) Includes principally purchases of inventory and other miscellaneous items. The Company's net sales to Ablecom were not material for the three and nine months ended March 31, 2019 and 2018 . The Company had the following balances related to transactions with Ablecom and Compuware as of March 31, 2019 and June 30, 2018 (in thousands): March 31, June 30, Ablecom Accounts receivable and other receivables $ 5,950 $ 7,884 Accounts payable and accrued liabilities 26,925 49,187 Compuware Accounts receivable and other receivables $ 8,588 $ 16,295 Accounts payable and accrued liabilities 33,109 45,617 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of property, plant and equipment | The following is a summary of property, plant and equipment, net (in thousands): March 31, June 30, 2019 2018 Long-lived assets: United States $ 158,307 $ 151,567 Asia 42,530 42,533 Europe 2,605 2,531 $ 203,442 $ 196,631 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2012 | Jul. 01, 2019 | Jul. 01, 2018 | Oct. 31, 2016 | |
Concentration Risk [Line Items] | ||||||||||
Investment in equity investee | $ 1,370,000 | $ 1,370,000 | $ 2,376,000 | |||||||
Share of loss from equity investee | 359,000 | $ 717,000 | 3,572,000 | $ 2,508,000 | ||||||
Other long-term liabilities (including related party balance of $3,500 at March 31, 2019 and June 30, 2018, respectively) | 24,441,000 | 24,441,000 | 24,565,000 | |||||||
Retained earnings | $ 588,193,000 | $ 588,193,000 | $ 532,271,000 | |||||||
Supplier concentration risk | Purchases | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk | 20.10% | 26.90% | 21.20% | 26.20% | ||||||
Customer concentration risk | Accounts receivable | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk | 14.90% | 11.60% | ||||||||
Corporate Venture | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Ownership percentage | 30.00% | 30.00% | ||||||||
Investment in equity investee | $ 1,400,000 | $ 1,400,000 | $ 2,400,000 | |||||||
Other long-term liabilities (including related party balance of $3,500 at March 31, 2019 and June 30, 2018, respectively) | $ 7,000,000 | |||||||||
Service contracts length | 5 years | |||||||||
Equity method investment, impairment | 0 | |||||||||
Products sold | 13,700,000 | $ 3,100,000 | 35,200,000 | $ 14,500,000 | ||||||
Amount due from Corporate Venture | $ 11,600,000 | $ 11,600,000 | 2,900,000 | |||||||
Management Company | Super Micro Asia Science and Technology Park, Inc. | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Contribution in variable interest entity | $ 200,000 | |||||||||
Ownership percentage of variable interest entity | 50.00% | |||||||||
Minimum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Product warranty period | 15 months | |||||||||
Maximum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Product warranty period | 39 months | |||||||||
Accrued liabilities | Corporate Venture | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Deferred gain on sale | $ 2,000,000 | 1,400,000 | ||||||||
Long-term liabilities | Corporate Venture | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Deferred gain on sale | $ 3,500,000 | $ 3,500,000 | ||||||||
Investor In China | Corporate Venture | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Ownership percentage | 70.00% | |||||||||
Affiliated | Supplier concentration risk | Cost of sales | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk | 9.90% | 8.60% | 9.40% | 9.20% | ||||||
ASU 2017-05 | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Investment in equity investee | $ 3,000,000 | |||||||||
Other long-term liabilities (including related party balance of $3,500 at March 31, 2019 and June 30, 2018, respectively) | 2,100,000 | |||||||||
Retained earnings | 900,000 | |||||||||
United States | Geographic Concentration Risk | Net sales | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk | 55.40% | |||||||||
CHINA | Geographic Concentration Risk | Net sales | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk | 11.40% | |||||||||
Forecast | ASU 2016-02 | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Operating lease, right-of-use asset | $ 14,800,000 | |||||||||
Operating lease, liability | $ 15,200,000 | |||||||||
Adjustments | ASU 2014-09 | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Retained earnings | $ (4,769,000) | $ (4,769,000) | $ 6,800,000 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Summary of the impact ASC 606 adoption (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jul. 01, 2018 | Jun. 30, 2018 | |
ASSETS | ||||||
Accounts receivable, net of allowances | $ 327,366 | $ 327,366 | $ 451,393 | |||
Inventories | 761,113 | 761,113 | 853,252 | |||
Prepaid expenses and other current assets (including receivables from related parties of $14,275 and $24,016 at March 31, 2019 and June 30, 2018, respectively) | 97,857 | 97,857 | 110,856 | |||
Deferred income taxes, net | 33,776 | 33,776 | 25,583 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Accrued liabilities (including amounts due to related parties of $9,106 and $18,394 at March 31, 2019 and June 30, 2018, respectively) | 112,951 | 112,951 | 102,478 | |||
Deferred revenue | 87,746 | 87,746 | ||||
Income taxes payable | 8,729 | 8,729 | 7,191 | |||
Deferred revenue, non-current | 105,584 | 105,584 | ||||
Retained earnings | 588,193 | 588,193 | $ 532,271 | |||
INCOME STATEMENT | ||||||
Net sales (including related party sales of $17,590 and $17,614 in the three months ended March 31, 2019 and 2018, respectively, and $48,849 and $46,199 in the nine months ended March 31, 2019 and 2018, respectively) | 743,499 | $ 835,110 | 2,646,126 | $ 2,378,830 | ||
Cost of sales (including related party purchases of $62,624 and $62,861 in the three months ended March 31, 2019 and 2018, respectively, and $215,331 and $191,805 in the nine months ended March 31, 2019 and 2018, respectively) | 631,172 | 729,193 | 2,282,638 | 2,081,165 | ||
Gross profit | 112,327 | 105,917 | 363,488 | 297,665 | ||
General and administrative | 36,174 | 23,555 | 106,214 | 68,286 | ||
Income before income tax provision | 11,502 | 19,471 | 62,320 | 48,124 | ||
Income tax provision | 497 | 4,159 | 10,540 | 25,725 | ||
Net income | 10,646 | $ 14,595 | 48,208 | $ 19,891 | ||
Adjustments | ASU 2014-09 | ||||||
ASSETS | ||||||
Accounts receivable, net of allowances | (17,367) | (17,367) | ||||
Inventories | 11,808 | 11,808 | ||||
Prepaid expenses and other current assets (including receivables from related parties of $14,275 and $24,016 at March 31, 2019 and June 30, 2018, respectively) | (1,916) | (1,916) | ||||
Deferred income taxes, net | 1,558 | 1,558 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Accrued liabilities (including amounts due to related parties of $9,106 and $18,394 at March 31, 2019 and June 30, 2018, respectively) | (4,655) | (4,655) | ||||
Deferred revenue | 653 | 653 | ||||
Income taxes payable | 71 | 71 | ||||
Deferred revenue, non-current | 2,783 | 2,783 | ||||
Retained earnings | (4,769) | (4,769) | $ 6,800 | |||
INCOME STATEMENT | ||||||
Net sales (including related party sales of $17,590 and $17,614 in the three months ended March 31, 2019 and 2018, respectively, and $48,849 and $46,199 in the nine months ended March 31, 2019 and 2018, respectively) | (1,621) | 18,449 | ||||
Cost of sales (including related party purchases of $62,624 and $62,861 in the three months ended March 31, 2019 and 2018, respectively, and $215,331 and $191,805 in the nine months ended March 31, 2019 and 2018, respectively) | (403) | 18,995 | ||||
Gross profit | (1,218) | (546) | ||||
General and administrative | (1,626) | (2,662) | ||||
Income before income tax provision | 408 | 2,116 | ||||
Income tax provision | (244) | 71 | ||||
Net income | 652 | 2,045 | ||||
Balances without adoption of ASC 606 | ||||||
ASSETS | ||||||
Accounts receivable, net of allowances | 309,999 | 309,999 | ||||
Inventories | 772,921 | 772,921 | ||||
Prepaid expenses and other current assets (including receivables from related parties of $14,275 and $24,016 at March 31, 2019 and June 30, 2018, respectively) | 95,941 | 95,941 | ||||
Deferred income taxes, net | 35,334 | 35,334 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Accrued liabilities (including amounts due to related parties of $9,106 and $18,394 at March 31, 2019 and June 30, 2018, respectively) | 108,296 | 108,296 | ||||
Deferred revenue | 88,399 | 88,399 | ||||
Income taxes payable | 8,800 | 8,800 | ||||
Deferred revenue, non-current | 108,367 | 108,367 | ||||
Retained earnings | 583,424 | 583,424 | ||||
INCOME STATEMENT | ||||||
Net sales (including related party sales of $17,590 and $17,614 in the three months ended March 31, 2019 and 2018, respectively, and $48,849 and $46,199 in the nine months ended March 31, 2019 and 2018, respectively) | 741,878 | 2,664,575 | ||||
Cost of sales (including related party purchases of $62,624 and $62,861 in the three months ended March 31, 2019 and 2018, respectively, and $215,331 and $191,805 in the nine months ended March 31, 2019 and 2018, respectively) | 630,769 | 2,301,633 | ||||
Gross profit | 111,109 | 362,942 | ||||
General and administrative | 34,548 | 103,552 | ||||
Income before income tax provision | 11,910 | 64,436 | ||||
Income tax provision | 253 | 10,611 | ||||
Net income | $ 11,298 | $ 50,253 |
Revenue - Summary of Net Sales
Revenue - Summary of Net Sales by Product Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 743,499 | $ 835,110 | $ 2,646,126 | $ 2,378,830 |
Server and storage systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 592,783 | 669,114 | 2,161,321 | 1,841,218 |
Subsystems and accessories | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 150,716 | $ 165,996 | $ 484,805 | $ 537,612 |
Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of Net Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Revenue from Contract with Customer Benchmark | Product Concentration Risk | Server and storage systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of Net Sales | 79.70% | 80.10% | 81.70% | 77.40% |
Revenue from Contract with Customer Benchmark | Product Concentration Risk | Subsystems and accessories | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of Net Sales | 20.30% | 19.90% | 18.30% | 22.60% |
Revenue - Summary of Net Sale_2
Revenue - Summary of Net Sales by Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 743,499 | $ 835,110 | $ 2,646,126 | $ 2,378,830 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 436,734 | 455,021 | 1,516,262 | 1,317,175 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 128,789 | 150,319 | 472,325 | 392,797 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 146,120 | 188,101 | 549,296 | 561,807 |
Others | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 31,856 | $ 41,669 | $ 108,243 | $ 107,051 |
Revenue - Summary of Revenue by
Revenue - Summary of Revenue by Customer Type (Details) - Sales Channel Concentration - Revenue from Contract with Customer Benchmark | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Percent of Net Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Indirect sales channel | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of Net Sales | 38.20% | 42.80% | 37.70% | 43.70% |
Net sales, year over year change as a percent | (4.60%) | (6.00%) | ||
Direct customers and OEMs | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of Net Sales | 61.80% | 57.20% | 62.30% | 56.30% |
Net sales, year over year change as a percent | 4.60% | 6.00% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | Jul. 01, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with customer liability | $ 143.5 | ||
Contract with customer liability, revenue recognized in the period | $ 14.1 | $ 39.8 |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) $ in Millions | Mar. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining revenue performance obligation, amount | $ 193.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining revenue performance obligation, percent to be recognized | 45.00% |
Service contracts length |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ in Millions | Mar. 08, 2016 | Aug. 31, 2017 | Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for outstanding awards (in shares) | 7,512,769 | 8,301,138 | ||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost related to non-vested stock-based awards | $ 6.6 | |||||
Unrecognized compensation cost related to non-vested stock based awards, period for recognition | 2 years 6 months 14 days | |||||
RSU | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost related to non-vested stock-based awards | $ 28.3 | |||||
Unrecognized compensation cost related to non-vested stock based awards, period for recognition | 2 years 7 months 27 days | |||||
PRSU | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option expected life | 1 year | |||||
Number of awards | 2 | |||||
Unrecognized compensation cost related to non-vested stock-based awards | $ 0.4 | |||||
Unrecognized compensation cost related to non-vested stock based awards, period for recognition | 1 year 9 months | |||||
Performance-Based Restricted Stock Units (PRSUs) Two-Year | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ownership percentage threshold for employee owned incentive stock options to qualify for exercise price per share | 100.00% | |||||
Stock option expected life | 2 years | |||||
Performance-Based Restricted Stock Units (PRSUs) Two-Year | Year one | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 50.00% | |||||
Performance-Based Restricted Stock Units (PRSUs) Two-Year | Quarterly | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 5.00% | |||||
Performance-Based Restricted Stock Units (PRSUs), One-Year | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ownership percentage threshold for employee owned incentive stock options to qualify for exercise price per share | 200.00% | 200.00% | ||||
Performance-Based Restricted Stock Units (PRSUs), One-Year | Year one | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 50.00% | 50.00% | ||||
Performance-Based Restricted Stock Units (PRSUs), One-Year | Quarterly | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 5.00% | |||||
Equity Incentive Plan, 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance (in shares) | 4,700,000 | |||||
Increase in units for meeting metrics, percentage | 10.00% | |||||
Authorized shares available for future issuance (in shares) | 1,193,710 | |||||
Equity Incentive Plan, 2016 | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option expected life | 10 years | |||||
Equity Incentive Plan, 2016 | Employee stock options and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Equity Incentive Plan, 2016 | Employee stock options and restricted stock units | Year one | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 25.00% | 25.00% | ||||
Equity Incentive Plan, 2016 | Employee stock options and restricted stock units | Quarterly | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 6.25% | |||||
Equity Incentive Plan, 2006 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance (in shares) | 2,800,000 | |||||
Shares reserved for outstanding awards (in shares) | 8,696,444 | |||||
Equity Incentive Plan, 2016, more than 10% ownership | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of fair market value | 110.00% | |||||
Equity Incentive Plan, 2016, less than 10% ownership | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of fair market value | 100.00% | |||||
Subsequent event | Performance-Based Restricted Stock Units (PRSUs), One-Year | Year one | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and restricted stock units vesting rights, percentage | 20.00% |
Stock-based Compensation - Dete
Stock-based Compensation - Determining Fair Value (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Risk-free interest rate | 2.56% | 2.47% | ||
Expected term | 6 years 18 days | 5 years 9 months 26 days | ||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Volatility | 50.25% | 47.39% | ||
Weighted-average fair value (in dollars per share) | $ 7.55 | $ 10.79 | $ 8.56 | $ 11.45 |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Stock-based compensation expense before taxes | $ 4,960 | $ 6,088 | $ 16,081 | $ 18,649 |
Income tax impact | (1,016) | (1,506) | (3,339) | (5,385) |
Stock-based compensation expense, net | 3,944 | 4,582 | 12,742 | 13,264 |
Cost of sales | ||||
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Stock-based compensation expense before taxes | 390 | 449 | 1,256 | 1,362 |
Research and development | ||||
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Stock-based compensation expense before taxes | 3,107 | 3,494 | 9,816 | 10,412 |
Sales and marketing | ||||
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Stock-based compensation expense before taxes | 418 | 482 | 1,359 | 1,545 |
General and administrative | ||||
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Stock-based compensation expense before taxes | $ 1,045 | $ 1,663 | $ 3,650 | $ 5,330 |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Risk-free interest rate | 2.56% | 1.92% | ||
Expected term | 6 years 18 days | 5 years 9 months 26 days | ||
Volatility | 47.34% | 45.32% | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Risk-free interest rate | 2.97% | 2.47% | ||
Volatility | 50.25% | 48.07% |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Option Activity (Details) | 9 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Options Outstanding | |
Balance at beginning of period (in shares) | shares | 8,301,138 |
Granted (in shares) | shares | 321,920 |
Exercised (in shares) | shares | 0 |
Forfeited/Cancelled (in shares) | shares | (1,110,289) |
Balance at end of period (in shares) | shares | 7,512,769 |
Options vested and exercisable (in shares) | shares | 6,769,528 |
Weighted Average Exercise Price per Share | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 16.50 |
Granted (in dollars per share) | $ / shares | 17.24 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 9.61 |
Balance at end of period (in dollars per share) | $ / shares | 17.55 |
Options vested and exercisable (in dollars per share) | $ / shares | $ 17.13 |
Weighted Average Remaining Contractual Term (in Years) | |
Weighted average remaining contractual term, options outstanding | 3 years 10 months 2 days |
Weighted average remaining contractual term, options vested and exercisable | 3 years 3 months 25 days |
Stock-based Compensation - RSU
Stock-based Compensation - RSU Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Jun. 30, 2018 | |
RSU | ||
RSUs Outstanding | ||
Balance at beginning of period (in shares) | 1,480,605 | |
Granted (in shares) | 738,880 | |
Vested (in shares) | (439,379) | |
Forfeited (in shares) | (114,018) | |
Balance at end of period (in shares) | 1,666,088 | 1,480,605 |
Weighted Average Grant-Date Fair Value per Share | ||
Balance at beginning of period (in dollars per share) | $ 23.34 | |
Granted (in dollars per share) | 16.46 | |
Vested (in dollars per share) | 24.83 | |
Forfeited (in dollars per share) | 20.76 | |
Balance at end of period (in dollars per share) | $ 20.08 | $ 23.34 |
Vested in period, not released (in shares) | 101,952 | |
PRSU | ||
RSUs Outstanding | ||
Balance at beginning of period (in shares) | 120,000 | |
Granted (in shares) | 0 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Balance at end of period (in shares) | 120,000 | 120,000 |
Weighted Average Grant-Date Fair Value per Share | ||
Balance at beginning of period (in dollars per share) | $ 27.10 | |
Balance at end of period (in dollars per share) | $ 27.10 | $ 27.10 |
Vested in period, not released (in shares) | 78,000 | 60,000 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||||
Net income | $ 10,646 | $ 14,595 | $ 48,208 | $ 19,891 |
Denominator: | ||||
Weighted-average shares outstanding (in shares) | 49,988,000 | 49,425,000 | 49,845,000 | 49,285,000 |
Effect of dilutive securities (in shares) | 1,570,000 | 2,254,000 | 1,712,000 | 2,805,000 |
Weighted-average diluted shares (in shares) | 51,558,000 | 51,679,000 | 51,557,000 | 52,090,000 |
Basic net income per share (in dollars per share) | $ 0.21 | $ 0.30 | $ 0.97 | $ 0.40 |
Diluted net income per share (in dollars per share) | $ 0.21 | $ 0.28 | $ 0.94 | $ 0.38 |
Employee stock options and restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive outstanding equity awards (in shares) | 4,443,127 | 3,241,873 | 4,194,283 | 2,302,333 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Inventory, Net [Abstract] | |||||
Finished goods | $ 525,344 | $ 525,344 | $ 633,348 | ||
Work in process | 84,293 | 84,293 | 61,162 | ||
Purchased parts and raw materials | 151,476 | 151,476 | 158,742 | ||
Total inventories | 761,113 | 761,113 | $ 853,252 | ||
Provision for lower of cost or market and excess and obsolete inventory | 4,700 | $ 1,900 | 17,300 | $ 6,200 | |
Provision for adjusting cost to net realizable value | $ 5,700 | $ 7,300 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Receivables from vendors | $ 60,741 | $ 93,003 |
Restricted cash | 17,234 | 2,803 |
Prepaid expenses | 7,578 | 6,321 |
Deferred service costs | 3,354 | 2,920 |
Others | 8,950 | 5,809 |
Total prepaid expenses and other current assets | 97,857 | 110,856 |
Receivables from contract manufacturers, buy-sell arrangement | $ 59,700 | $ 87,400 |
Balance Sheet Components - Cash
Balance Sheet Components - Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 169,735 | $ 115,377 | ||
Restricted cash included in prepaid expenses and other current assets | 17,234 | 2,803 | ||
Restricted cash included in other assets | 2,301 | 2,202 | ||
Total cash, cash equivalents and restricted cash | $ 189,270 | $ 120,382 | $ 138,137 | $ 112,797 |
Balance Sheet Components - Prop
Balance Sheet Components - Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 307,675 | $ 289,225 |
Accumulated depreciation and amortization | (104,233) | (92,594) |
Property, plant and equipment, net | 203,442 | 196,631 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 86,136 | 88,689 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 78,666 | 71,081 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 74,922 | 74,919 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 22,018 | 18,760 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 19,957 | 18,475 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 18,046 | 15,522 |
Buildings construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 7,930 | $ 1,779 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Other Assets [Abstract] | ||
Deferred service costs, non-current | $ 3,473 | $ 3,583 |
Non-marketable equity securities | 2,878 | |
Non-marketable equity securities | 3,539 | |
Restricted cash included in other assets | 2,301 | 2,202 |
Investment in auction rate security | 1,571 | 1,571 |
Deposits | 607 | 671 |
Prepaid expense, non-current | 1,763 | 2,471 |
Total other assets | $ 12,593 | $ 14,037 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Accrued Liabilities [Abstract] | |||
Accrued payroll and related expenses | $ 24,621 | $ 25,532 | |
Contract manufacturers liability | 20,748 | 28,754 | |
Customer deposits | 17,895 | 14,938 | |
Accrued professional fees | 10,937 | 6,626 | |
Accrued warranty costs | 8,200 | 7,589 | $ 7,013 |
Accrued cooperative marketing expenses | 6,910 | 6,413 | |
Others | 23,640 | 12,626 | |
Total accrued liabilities | $ 112,951 | $ 102,478 |
Balance Sheet Components - Ot_2
Balance Sheet Components - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Other Long-term Liabilities [Abstract] | |||
Accrued unrecognized tax benefits including related interest and penalties | $ 17,926 | $ 17,872 | |
Accrued warranty costs, non-current | 2,316 | 2,295 | $ 2,101 |
Others | 4,199 | 4,398 | |
Total other long-term liabilities | $ 24,441 | $ 24,565 |
Balance Sheet Components - Prod
Balance Sheet Components - Product Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Product Warranties: | |||||
Balance, beginning of the period | $ 10,434 | $ 8,796 | $ 9,884 | $ 7,721 | |
Provision for warranty | 5,510 | 5,126 | 17,163 | 15,380 | |
Costs utilized | (6,346) | (4,959) | (18,083) | (15,387) | |
Change in estimated liability for pre-existing warranties | 918 | 151 | 1,552 | 1,400 | |
Balance, end of the period | 10,516 | 9,114 | 10,516 | 9,114 | |
Current portion | 8,200 | 7,013 | 8,200 | 7,013 | $ 7,589 |
Non-current portion | $ 2,316 | $ 2,101 | $ 2,316 | $ 2,101 | $ 2,295 |
Fair Value Disclosure - Schedul
Fair Value Disclosure - Schedule of financial assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Asset at Fair Value | ||
Restricted cash | $ 400 | $ 400 |
Auction rate security | ||
Asset at Fair Value | ||
Auction rate security | 1,571 | |
Money market funds | ||
Asset at Fair Value | ||
Cash and cash equivalents | 300 | 300 |
Other assets | ||
Asset at Fair Value | ||
Restricted cash | 800 | 800 |
Certificates of deposit | ||
Asset at Fair Value | ||
Cash and cash equivalents | 29,700 | 29,200 |
Restricted cash | 1,100 | 1,000 |
Fair Value, Measurements, Recurring | ||
Asset at Fair Value | ||
Total assets measured at fair value | 33,508 | 32,926 |
Fair Value, Measurements, Recurring | Auction rate security | ||
Asset at Fair Value | ||
Auction rate security | 1,571 | 1,571 |
Fair Value, Measurements, Recurring | Money market funds | ||
Asset at Fair Value | ||
Cash and cash equivalents | 1,149 | 1,136 |
Fair Value, Measurements, Recurring | Certificates of deposit | ||
Asset at Fair Value | ||
Cash and cash equivalents | 30,788 | 30,219 |
Fair Value, Measurements, Recurring | Level 1 | ||
Asset at Fair Value | ||
Total assets measured at fair value | 1,149 | 1,136 |
Fair Value, Measurements, Recurring | Level 1 | Auction rate security | ||
Asset at Fair Value | ||
Auction rate security | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds | ||
Asset at Fair Value | ||
Cash and cash equivalents | 1,149 | 1,136 |
Fair Value, Measurements, Recurring | Level 1 | Certificates of deposit | ||
Asset at Fair Value | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Asset at Fair Value | ||
Total assets measured at fair value | 30,788 | 30,219 |
Fair Value, Measurements, Recurring | Level 2 | Auction rate security | ||
Asset at Fair Value | ||
Auction rate security | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Money market funds | ||
Asset at Fair Value | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Certificates of deposit | ||
Asset at Fair Value | ||
Cash and cash equivalents | 30,788 | 30,219 |
Fair Value, Measurements, Recurring | Level 3 | ||
Asset at Fair Value | ||
Total assets measured at fair value | 1,571 | 1,571 |
Fair Value, Measurements, Recurring | Level 3 | Auction rate security | ||
Asset at Fair Value | ||
Auction rate security | 1,571 | 1,571 |
Fair Value, Measurements, Recurring | Level 3 | Money market funds | ||
Asset at Fair Value | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Certificates of deposit | ||
Asset at Fair Value | ||
Cash and cash equivalents | $ 0 | $ 0 |
Fair Value Disclosure - Narrati
Fair Value Disclosure - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Jul. 01, 2018 | Jun. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Prepaid expenses and other current | $ 97,857 | $ 110,856 | |
Restricted cash | 400 | 400 | |
Impairment charges | 700 | ||
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of debt | 22,700 | 116,200 | |
Fair Value, Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cost basis, non-marketable equity security | $ 700 | ||
Cash | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Prepaid expenses and other current | $ 17,200 | $ 2,800 |
Fair Value Disclosure - Reconci
Fair Value Disclosure - Reconciliation of financial assets measured at fair value on a recurring basis (Details) - Fair Value, Measurements, Recurring - Level 3 - Auction rate security - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance as of beginning of period | $ 1,571 | $ 2,571 | $ 1,571 | $ 2,625 |
Sales and settlements at par | 0 | (1,000) | 0 | (1,000) |
Total unrealized loss included in other comprehensive income | 0 | 0 | 0 | (54) |
Balance as of the end of the period | $ 1,571 | $ 1,571 | $ 1,571 | $ 1,571 |
Fair Value Disclosure - Summary
Fair Value Disclosure - Summary of investments (Details) - Auction rate security - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Cost Basis | $ 1,750 | |
Gross Unrealized Holding Gains | 0 | |
Gross Unrealized Holding Losses | 179 | |
Fair Value | 1,571 | |
Fair Value, Measurements, Recurring | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Cost Basis | $ 1,750 | |
Gross Unrealized Holding Gains | 0 | |
Gross Unrealized Holding Losses | (179) | |
Fair Value | 1,571 | |
Fair Value | $ 1,571 | $ 1,571 |
Short-term Debt - Schedule of s
Short-term Debt - Schedule of short-term debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||
Total short-term debt | $ 22,660 | $ 116,181 |
Line of credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total short-term debt | 0 | 93,246 |
Line of credit | Revolving Credit Facility | Bank of America | ||
Debt Instrument [Line Items] | ||
Total short-term debt | 0 | 67,346 |
Line of credit | Revolving Credit Facility | CTBC Bank | ||
Debt Instrument [Line Items] | ||
Total short-term debt | 0 | 25,900 |
Term loan | Secured debt | CTBC Bank | ||
Debt Instrument [Line Items] | ||
Total short-term debt | $ 22,660 | $ 22,935 |
Short-term Debt - Bank of Ameri
Short-term Debt - Bank of America (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Apr. 30, 2018USD ($) | Jun. 30, 2016USD ($)building | Jun. 30, 2018USD ($) | Jun. 30, 2016USD ($)building | Oct. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Oct. 31, 2018USD ($) | |
Short-term Debt [Line Items] | |||||||
Total short-term debt | $ 116,181,000 | $ 22,660,000 | |||||
Line of credit | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Total short-term debt | $ 93,246,000 | $ 0 | |||||
Bank of America | Bank of America 2016 Amended Credit Agreement | Line of credit | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 85,000,000 | $ 85,000,000 | |||||
Credit facility, basis spread on variable rate | 1.25% | ||||||
Bank of America | Bank of America 2016 Credit Agreement | Term loan | Secured debt | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, term | 5 years | ||||||
Debt, face amount | $ 50,000,000 | $ 50,000,000 | |||||
Number of buildings as collateral | building | 7 | 7 | |||||
Bank of America | Bank of America 2016 Credit Agreement | Term loan | Secured debt | LIBOR | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, basis spread on variable rate | 1.25% | ||||||
Bank of America | Bank of America 2016 Credit Agreement | Line of credit | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 5,000,000 | $ 5,000,000 | |||||
Bank of America | Bank of America loan and security agreement | |||||||
Short-term Debt [Line Items] | |||||||
Interest rate | 4.75% | 5.25% | |||||
Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 5,000,000 | $ 3,200,000 | |||||
Credit facility, term | 5 years | ||||||
Expiration period | 364 days | ||||||
Commitment fee amount | $ 3,200,000 | ||||||
Debt issuance costs | $ 2,800,000 | $ 700,000 | |||||
Credit facility, remaining borrowing capacity | $ 246,800,000 | ||||||
Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 400,000,000 | ||||||
Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility | LIBOR | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, basis spread on variable rate | 2.75% | ||||||
Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility | LIBOR | Minimum | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, basis spread on variable rate | 1.50% | ||||||
Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility | LIBOR | Maximum | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, basis spread on variable rate | 2.00% | ||||||
Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility And Other Financial Accommodations | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 250,000,000 | ||||||
Taiwan And Netherlands | Bank of America | Bank of America 2016 Amended Credit Agreement | Line of credit | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 20,000,000 | $ 20,000,000 | |||||
Taiwan And Netherlands | Bank of America | Bank of America 2016 Amended Credit Agreement | Line of credit | Revolving Credit Facility | Minimum | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, basis spread on variable rate | 0.90% | ||||||
Subsequent event | Bank of America | Bank of America loan and security agreement | Line of credit | Revolving Credit Facility | |||||||
Short-term Debt [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 15,000,000 |
Short-term Debt - CTBC (Details
Short-term Debt - CTBC (Details) | 1 Months Ended | |||||||||||
Jun. 30, 2019USD ($) | Jan. 31, 2018USD ($) | May 31, 2017USD ($) | Apr. 30, 2016 | Jun. 30, 2019TWD ($) | Mar. 31, 2019USD ($) | Aug. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Jan. 31, 2018TWD ($) | May 31, 2017TWD ($) | Apr. 01, 2016USD ($) | Apr. 01, 2016TWD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Total short-term debt | $ 22,660,000 | $ 116,181,000 | ||||||||||
Line of credit | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total short-term debt | 0 | 93,246,000 | ||||||||||
CTBC Bank | Term loan | Secured debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total short-term debt | 22,660,000 | 22,935,000 | ||||||||||
CTBC Bank | Line of credit | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total short-term debt | 0 | $ 25,900,000 | ||||||||||
Credit facility, unused amount | $ 17,300,000 | |||||||||||
CTBC Bank | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate | 0.92% | 0.95% | ||||||||||
CTBC Bank | CTBC Bank | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 40,000,000 | |||||||||||
CTBC Bank | CTBC Bank | Term loan | Secured debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | 12 months | 12 months | |||||||||
Credit facility, maximum borrowing capacity | $ 23,600,000 | $ 23,000,000 | $ 700,000,000 | $ 700,000,000 | 21,620,000 | $ 700,000,000 | ||||||
Collateral amount | $ 26,000,000 | |||||||||||
CTBC Bank | CTBC Bank | Term loan | Secured debt | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Credit facility, maximum borrowing capacity | $ 22,500,000 | $ 700,000,000 | ||||||||||
CTBC Bank | CTBC Bank | Term loan | Secured debt | CTBC's Established NTD Interest Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.25% | 0.25% | 0.25% | |||||||||
CTBC Bank | CTBC Bank | Term loan | Secured debt | CTBC's Established NTD Interest Rate | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.25% | |||||||||||
CTBC Bank | CTBC Bank | Term loan | Customs Bond | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Credit facility, maximum borrowing capacity | $ 3,300,000 | $ 100,000,000 | $ 3,100,000 | $ 100,000,000 | ||||||||
Interest rate, stated percentage | 0.50% | 0.50% | 0.50% | 0.50% | ||||||||
CTBC Bank | CTBC Bank | Line of credit | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Credit facility, maximum borrowing capacity | $ 50,000,000 | $ 40,000,000 | ||||||||||
Percent of eligible accounts receivable | 80.00% | 80.00% | 80.00% | 80.00% | ||||||||
CTBC Bank | CTBC Bank | Line of credit | Revolving Credit Facility | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 50,000,000 | |||||||||||
CTBC Bank | CTBC Bank | Line of credit | Revolving Credit Facility | CTBC's Established USD Interest Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.30% | |||||||||||
CTBC Bank | CTBC Bank | Line of credit | Revolving Credit Facility | CTBC's Established USD Interest Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.40% | |||||||||||
CTBC Bank | CTBC Bank | Line of credit | Revolving Credit Facility | CTBC's Established USD Interest Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.45% | |||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 0.50% Interest | Term loan | Customs Bond | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Credit facility, maximum borrowing capacity | $ 3,400,000 | $ 100,000,000 | ||||||||||
Interest rate, stated percentage | 0.50% | 0.50% | ||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 0.50% Interest | Term loan | Customs Bond | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Credit facility, maximum borrowing capacity | $ 3,200,000 | $ 100,000,000 | ||||||||||
Interest rate, stated percentage | 0.50% | 0.50% | ||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 0.25% Interest | Line of credit | Customs Bond | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Credit facility, maximum borrowing capacity | $ 50,500,000 | $ 1,500,000,000 | ||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 0.25% Interest | Line of credit | Customs Bond | CTBC's Established NTD Interest Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.25% | |||||||||||
CTBC Bank | CTBC Credit Facility, 180 Day, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Revolving Credit Facility | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Percent of eligible accounts receivable | 100.00% | 100.00% | ||||||||||
CTBC Bank | CTBC Credit Facility, 180 Day, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Revolving Credit Facility | CTBC's Established USD Interest Rate | Minimum | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.30% | |||||||||||
CTBC Bank | CTBC Credit Facility, 180 Day, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Revolving Credit Facility | CTBC's Established USD Interest Rate | Maximum | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.50% | |||||||||||
CTBC Bank | CTBC Credit Facility, 180 Day, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Customs Bond | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 180 days | |||||||||||
Credit facility, maximum borrowing capacity | $ 48,200,000 | $ 1,500,000,000 | ||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Term loan | Customs Bond | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, term | 12 months | |||||||||||
Percent of eligible accounts receivable | 100.00% | 100.00% | ||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Revolving Credit Facility | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 50,000,000 | |||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Revolving Credit Facility | Minimum | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.30% | |||||||||||
CTBC Bank | CTBC Credit Facility, 12 Month, Up To 100% Of Eligible Accounts Receivable, Between 0.30% And 0.50% Interest | Line of credit | Revolving Credit Facility | Maximum | Subsequent event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, basis spread on variable rate | 0.50% | |||||||||||
CTBC Bank | CTBC 2018 Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Credit facility, maximum borrowing capacity | $ 50,000,000 | $ 40,000,000 |
Short-term Debt - Covenant Comp
Short-term Debt - Covenant Compliance (Details) | 1 Months Ended |
Apr. 30, 2018 | |
Line of credit | Bank of America | Bank of America loan and security agreement | Revolving Credit Facility | Super Micro Computer B.V. | |
Debt Instrument [Line Items] | |
Fixed charge coverage ratio | 1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related Party Transaction [Line Items] | ||||||
Outstanding purchase order | $ 262,800 | $ 262,800 | ||||
Purchases | 62,624 | $ 62,861 | 215,331 | $ 191,805 | ||
Net sales | 17,590 | $ 17,614 | 48,849 | $ 46,199 | ||
Affiliated | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding purchase order | $ 95,600 | $ 95,600 | ||||
Super Micro Computer | Ablecom Technology | Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 0.00% | 0.00% | 0.00% | 0.40% | ||
Ablecom Technology | ||||||
Related Party Transaction [Line Items] | ||||||
Related party, product purchase percent | 96.00% | 97.60% | 95.50% | 97.70% | ||
Ablecom Technology | Management and immediate family member of management | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 11.70% | 11.70% | ||||
Ablecom Technology | Affiliated | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding purchase order | $ 28,300 | $ 28,300 | $ 39,300 | |||
Purchases | 29,372 | $ 37,405 | 110,290 | $ 107,644 | ||
Accounts receivable and other receivables | 5,950 | 5,950 | 7,884 | |||
Accounts payable and accrued liabilities | $ 26,925 | $ 26,925 | 49,187 | |||
Ablecom Technology | Charles Liang and wife | Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 10.50% | 10.50% | ||||
Ablecom Technology | Steve Liang and other family members | Management and immediate family member of management | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 28.80% | 28.80% | ||||
Compuware | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding purchase order | $ 67,300 | $ 67,300 | 111,700 | |||
Compuware | Affiliated | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases | 34,140 | 27,969 | 111,629 | 91,925 | ||
Net sales | 3,846 | $ 14,528 | 13,628 | $ 31,645 | ||
Accounts receivable and other receivables | 8,588 | 8,588 | 16,295 | |||
Accounts payable and accrued liabilities | $ 33,109 | $ 33,109 | $ 45,617 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Oct. 31, 2019 | |
Income Tax Examination [Line Items] | |||||
Income tax provision | $ 497 | $ 4,159 | $ 10,540 | $ 25,725 | |
Effective tax rate | 4.30% | 21.40% | 16.90% | 53.50% | |
Unrecognized tax benefits that would impact effective tax rate, if recognized | $ 26,300 | $ 26,300 | |||
Tax Cuts and Jobs Act of 2017, U.S. deferred tax assets and liabilities write-down | 12,900 | ||||
Tax Cuts and Jobs Act of 2017, Transition tax for accumulated foreign earnings | 2,800 | ||||
Interest and penalties relating to unrecognized tax benefits | 1,500 | 1,500 | |||
Decrease in unrecognized tax benefits reasonably possible | $ 4,000 | $ 4,000 | |||
Subsequent event | Taiwan Tax Authority | |||||
Income Tax Examination [Line Items] | |||||
Income tax examination, increase liability | $ 1,600 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Oct. 31, 2019 | Mar. 31, 2019 | Oct. 31, 2018 |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Purchase commitments, total | $ 262,800,000 | ||
Affiliated | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Purchase commitments, total | $ 95,600,000 | ||
Bank of America loan and security agreement | Revolving Credit Facility | Bank of America | Standby Letter of Credit | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 3,200,000 | ||
Subsequent event | Bank of America loan and security agreement | Revolving Credit Facility | Bank of America | Standby Letter of Credit | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 6,400,000 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 9 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment Reporting - Property, P
Segment Reporting - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 203,442 | $ 196,631 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 158,307 | 151,567 |
Asia | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 42,530 | 42,533 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 2,605 | $ 2,531 |
Subsequent Events (Details)
Subsequent Events (Details) | Feb. 08, 2018claim |
Subsequent Events [Abstract] | |
Number of putative class action complaints | 2 |
Uncategorized Items - smci-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 185,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 7,714,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 133,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 7,714,000 |
Common Stock Including Additional Paid in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 52,000 |
Cash [Member] | ||
Cash and Cash Equivalents, Fair Value Disclosure | us-gaap_CashAndCashEquivalentsFairValueDisclosure | 85,900,000 |
Cash and Cash Equivalents, Fair Value Disclosure | us-gaap_CashAndCashEquivalentsFairValueDisclosure | $ 139,700,000 |