SUPER MICRO COMPUTER, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) – Marketscreener.com

Overview
The following is a summary of our financial highlights of the first quarter of fiscal year 2023:
•Net sales increased by 79.3% in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.
•Gross margin increased to 18.8% in the three months ended September 30, 2022 from 13.4% in the three months ended September 30, 2021.
•Effective tax rate increased to 17.4% in the three months ended September 30, 2022 from 11.7% in the three months ended September 30, 2021.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our 2022 10-K. For a description of our critical accounting policies and estimates, see Part I, Item 1, Note 1, “Summary of Significant Accounting Policies” in our notes to condensed consolidated financial statements in this Quarterly Report.
The following table presents certain items of our condensed consolidated statements of operations expressed as a percentage of revenue.
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Table of Contents The following table presents net sales by product type for the three months ended September 30, 2022 and 2021 (dollars in millions):
Comparison of Three Months Ended September 30, 2022 and 2021
The following table presents net sales by geographic region for the three months ended September 30, 2022 and 2021 (dollars in millions):
Comparison of Three Months Ended September 30, 2022 and 2021
Cost of sales and gross margin for the three months ended September 30, 2022 and 2021 are as follows (dollars in millions):
Comparison of Three Months Ended September 30, 2022 and 2021
Operating Expenses
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Operating expenses for the three months ended September 30, 2022 and 2021 are as follows (dollars in millions):
10.6 %
Comparison of Three Months Ended September 30, 2022 and 2021
General and administrative expenses. The period-over-period increase in general and administrative expenses was primarily due to a $1.6 million increase in personnel expenses and a higher headcount.
Interest Expense and Other Income, Net
Other income, net consists primarily of interest earned on our investment and cash balances and foreign exchange gains and losses.
Interest expense represents interest expense on our term loans and lines of credit.
Interest expense and other income, net for the three months ended September 30, 2022 and 2021 are as follows (dollars in millions):
Income Tax Provision
Provision for income taxes and effective tax rates for the three months ended September 30, 2022 and 2021 are as follows (dollars in millions):
35.6 1,078.8 %
Comparison of Three Months Ended September 30, 2022 and 2021
Share of (Loss) Income from Equity Investee, Net of Taxes
Share of (loss) income from equity investee, net of taxes represents our share of income from the Corporate Venture in which we have 30% ownership.
Share of (loss) income from equity investee, net of taxes for the three months ended September 30, 2022 and 2021 are as follows (dollars in millions):
Comparison of Three Months Ended September 30, 2022 and 2021
Our key cash flow metrics were as follows (dollars in millions):
Investing Activities
Financing Activities
Capital Expenditure Requirements
Recent Accounting Pronouncements
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