Super Micro raises fiscal 2027 outlook after record quarter

Super Micro Computer reported record quarterly revenue on Tuesday, November 3, and forecast second-quarter sales above Wall Street expectations. Demand for its AI-optimized servers kept growing, Reuters reported. The San Jose, California-based company also raised its fiscal 2027 revenue outlook to between $72 billion and $82 billion, up from its earlier range of $65 billion to $72 billion. Shares rose about 6% after the report.reuters.com+2

Record quarter

In the quarter ended September 30, net sales came to $19.9 billion. That compares with $11.1 billion in the prior quarter and $5.0 billion a year earlier, according to the company's earnings release. GAAP net income was $1.59 billion, or $1.75 per diluted share, up from $168 million a year before. Adjusted earnings were $1.81 per share. Analysts had expected adjusted earnings of $1.23 per share on revenue of $16.26 billion.businesswire.com+1

Revenue also came in above the $18.5 billion to $19.5 billion range the company gave in an October preliminary update. That update had already lifted the outlook from an original $14.5 billion to $15.5 billion, which the company credited to stronger demand for AI platforms. GAAP gross margin was 12.7%, up from 9.3% a year earlier but below the prior quarter's 17.5%.sec.gov+1

"Supermicro's transformation into a Total AI and IT Datacenter Solution provider continues to accelerate," founder and CEO Charles Liang said in the release.businesswire.com

Outlook tops consensus

For the quarter ending December 31, Super Micro expects net sales of $19.5 billion to $21.5 billion and adjusted earnings of $1.66 to $1.90 per share. Analysts had expected $17.51 billion in revenue and $1.14 per share. The $77 billion midpoint of the new full-year range is also above the $70.27 billion analyst estimate. The company has gained from the AI infrastructure boom through demand for systems built on Nvidia ↘ 3.17% chips, as cloud providers keep adding data-center capacity.uk.investing.com+2

Cash remains a question

Growth has put pressure on working capital. Super Micro used $434 million in operating cash flow during the quarter. It ended September with $6.9 billion in cash against $8.6 billion in bank debt and convertible notes. Before the report, investors were watching whether a tightening memory supply would squeeze margins. The open question is whether the company can turn its fast sales growth into steady cash generation.finance.yahoo.com+2