Key Notes
- Supermicro reported record first-quarter sales of $19.9 billion and adjusted earnings of $1.81 per share.
- Management expects second-quarter sales of $19.5 billion to $21.5 billion.
- Supermicro raised its fiscal 2027 sales forecast to $72 billion to $82 billion from $65 billion to $72 billion.
Super Micro Computer (Nasdaq: SMCI) raised its fiscal 2027 sales forecast to $72 billion to $82 billion after reporting record first-quarter sales of $19.9 billion. Revenue nearly quadrupled from a year earlier, while adjusted earnings of $1.81 per share exceeded the $1.06 estimate. The company described the results as preliminary and unaudited as it completes its quarter-end review. Earnings filing
Sales in the quarter ended September 30 rose from $5 billion a year earlier and $11.1 billion in the preceding quarter. They also exceeded the upper end of the $18.5 billion to $19.5 billion range Supermicro gave in its October update. Adjusted earnings rose from 35 cents a share a year earlier. On a GAAP basis, the server maker earned $1.75 per diluted share, up from 26 cents. October update
Second-Quarter Forecast Clears Estimates
For the fiscal second quarter ending December 31, Supermicro expects sales of $19.5 billion to $21.5 billion, above the $16.53 billion estimate. The $20.5 billion midpoint is about 24% higher than that estimate and about 3% above the September quarter’s reported figure. Management expects adjusted earnings of $1.66 to $1.90 per share.
The new full-year forecast lifts the sales midpoint by $8.5 billion to $77 billion. The low end now matches the high end of the previous $65 billion to $72 billion range. Supermicro is expanding global production and selling systems that combine computing, networking and services for customers building AI data centers. Prior guidance
Margins and Cash Flow Tell a More Mixed Story
GAAP gross margin rose to 12.7% from 9.3% a year earlier but fell from 17.5% in the preceding quarter. In other words, Supermicro kept a larger share of each sales dollar after direct costs than it did a year ago, while the latest quarter’s sales carried a lower margin than the June quarter’s.
The business used $434 million in operating cash during the quarter and spent $47 million on capital expenditures and investments. Supermicro ended September with $6.9 billion in cash and equivalents and $8.6 billion in bank debt and convertible notes. For investors, the stronger sales outlook puts more attention on how much cash the company generates as shipments grow.
Other suppliers are also adding capacity. We previously reported on Foxconn’s plan to expand US production as it pursues a larger share of the AI server market. Supermicro’s December-quarter results will show whether it can meet the higher sales forecast while improving cash generation.
