Super Micro Computer (NASDAQ:SMCI) Issues Quarterly Earnings Results

Super Micro Computer (NASDAQ:SMCI) posted its quarterly earnings results on Tuesday. The company reported $1.81 earnings per share for the quarter, beating the consensus estimate of $1.23 by $0.58, FiscalAI reports. The business had revenue of $19.95 billion for the quarter, compared to the consensus estimate of $17.53 billion. Super Micro Computer had a return on equity of 27.83% and a net margin of 5.71%. The company’s quarterly revenue was up 297.5% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.35 EPS.

Here are the key takeaways from Super Micro Computer’s conference call:

• Record growth and raised outlook: Q1 revenue reached $19.9 billion, up 298% year over year and above guidance, prompting the company to raise fiscal 2027 revenue guidance to $72 billion-$82 billion from $65 billion-$72 billion.
• Improved profitability and operating leverage: Non-GAAP gross margin expanded to 12.8%, up 330 basis points year over year, while revenue growth substantially outpaced operating-expense growth. Management attributed the improvement to customer mix, DCBBS solutions, and higher-margin software and services.
• AI-heavy mix is expected to pressure margins: AI solutions represented 71% of Q1 revenue and are expected to reach 70%-80% of fiscal 2027 revenue; because large-scale AI deployments carry lower margins than enterprise and channel business, full-year gross margin is guided to 11.8%-12.2%, implying a weaker second half.
• Working-capital efficiency improved materially: The cash conversion cycle fell from 149 days to 97 days, inventory days declined to 74, and customer deferred revenue rose by approximately $3.1 billion, helping fund much of the working-capital investment needed for growth.
• Execution remains exposed to constraints and concentration: Key component shortages, GPU availability, power, land, and data-center readiness could delay deployments, while one customer accounted for 44% of quarterly revenue. The company also reported negative free cash flow of $481 million and expects customer and product concentration to remain elevated during major AI build-outs.

Super Micro Computer Stock Up 3.1%

Shares of SMCI stock opened at $31.39 on Wednesday. Super Micro Computer has a twelve month low of $19.48 and a twelve month high of $51.40. The stock has a market cap of $20.62 billion, a P/E ratio of 9.81, a P/E/G ratio of 0.48 and a beta of 2.17. The stock has a 50 day moving average of $38.02 and a 200 day moving average of $32.70. The company has a current ratio of 3.87, a quick ratio of 2.07 and a debt-to-equity ratio of 0.65.

Analyst Ratings Changes

A number of brokerages recently commented on SMCI. Barclays set a $39.00 target price on Super Micro Computer and gave the company an “equal weight” rating in a research report on Wednesday, August 12th. Needham & Company LLC reissued a “buy” rating and set a $46.00 price target on shares of Super Micro Computer in a research report on Wednesday, August 12th. Wedbush lifted their price objective on shares of Super Micro Computer from $34.00 to $40.00 and gave the company a “neutral” rating in a research note on Wednesday, August 12th. Mizuho upped their price objective on shares of Super Micro Computer from $35.00 to $43.00 and gave the company a “neutral” rating in a report on Tuesday, October 6th. Finally, Oppenheimer raised shares of Super Micro Computer to an “outperform” rating in a report on Wednesday. Five research analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Hold” and an average target price of $45.60.

Insider Activity at Super Micro Computer

In related news, CEO Charles Liang sold 100,000 shares of the business’s stock in a transaction on Wednesday, October 7th. The shares were sold at an average price of $45.02, for a total value of $4,502,000.00. Following the completion of the transaction, the chief executive officer directly owned 337,506 shares in the company, valued at $15,194,520.12. The trade was a 22.86% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Chiu-Chu Liang sold 100,000 shares of the business’s stock in a transaction on Wednesday, October 7th. The shares were sold at an average price of $45.02, for a total transaction of $4,502,000.00. Following the completion of the transaction, the director owned 337,506 shares of the company’s stock, valued at approximately $15,194,520.12. This represents a 22.86% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 400,000 shares of company stock worth $16,442,000. Insiders own 16.10% of the company’s stock.

Super Micro Computer News Roundup

Here are the key news stories impacting Super Micro Computer this week:

• Positive Sentiment: Results substantially beat expectations: Revenue reached $19.95 billion, up nearly 298% year over year and above analysts’ estimates of $17.53 billion. Adjusted earnings of $1.81 per share also topped consensus of about $1.23–$1.24. Article: Super Micro Computer Beats Q1 Earnings and Revenue Estimates
• Positive Sentiment: Guidance points to sustained AI demand: The company forecast next-quarter revenue of about $20.5 billion at the midpoint, above analyst expectations, and raised its full-year outlook. Executives said an individual AI deployment can now exceed the size of a quarter’s revenue a year ago. Article: Executive Says a Single AI Order Can Exceed a Year-Ago Quarter
• Positive Sentiment: Analyst reaction added support: One analyst described the earnings report as among the season’s strongest, as the figures offered fresh evidence of robust spending on AI infrastructure. Article: Analyst Calls SMCI Print One of the Best of the Season
• Neutral Sentiment: Recent volatility is a backdrop: SMCI had been caught in a broader AI-hardware selloff, with shares down over the prior week despite the company’s preliminary revenue beat. The earnings report may ease concerns about demand, but sector sentiment remains a factor. Article: Super Micro Sinks Despite a Revenue Beat
• Negative Sentiment: Margins and cash use warrant attention: Gross margin declined to 12.7% from 17.5% in the prior quarter, while higher inventory and receivables contributed to cash outflow. If rapid growth requires heavy working-capital investment or margins weaken further, it could temper the positive earnings reaction. Article: Supermicro Sales Quadruple as Cash Drains

Super Micro Computer Company Profile

Super Micro Computer, Inc develops and sells high-performance server and storage systems for data centers, cloud computing, enterprise IT, telecommunications, and other demanding computing environments. The company offers application-optimized servers, workstations, blade and rack systems, storage solutions, networking products, and related infrastructure.

Supermicro also provides systems designed for artificial intelligence, machine learning, accelerated computing, and other workloads that use graphics processing units and specialized processors.