We Are on the Super Micro Call

On Super Micro’s conference call the company expressed optimism that sovereign AI deals (countries building large projects to ensure domestic capabilities) would begin scaling next fiscal year and would also provide margin expansion.

With investors fretting about margin compression after hours, this could be one path for Super Micro to grow margins in the year ahead.

Here’s something that was just said on Super Micro’s conference call:

“Non-GAAP earnings per share were $0.41, down year-over-year from 50% last year, primarily due to the tariff impact, although we have taken measures to reduce the impact, and we will see their results. Allow me to go a little deeper at the June revenue shortfall in what was otherwise a stronger quarter. Shortfall stem from 2 key factors: a capital constraint that limited our ability to rapidly scale production and specification changes from a major new customer that delay revenue recognition because of new ad of some new ad features.

The capital constraints will no longer an issue after we filed the fiscal year ’24 10-K and large customer orders are now slated for recognition in September and December quarters. Following close collaboration to align with the customers’ update future requirements. Despite this circumstance, we remain focused on our strategic priorities, optimizing our solutions and capturing market share. Notably, the number of large-scale product and play customers grew from in fiscal year ’24 to 4 in fiscal year ’25, signaling strong momentum and continuing growth potential across our customer base. We are also on track to add a few more in 3 year ’26. “

Super Micro’s conference call starts in 10 minutes; you can listen in by registering here.

The biggest area to watch for is commentary on margins next year. The company guided to a healthy revenue figure but Wall Street is clearly not loving Super Micro’s Q1 EPS guide. If management can lessen fears around margin erosion, the stock could lessen some of its current losses.

As of 4:50 p.m. ET, shares are down 14%.

Shares of Super Micro were up 90% headed into today’s earnings.

For comparison, Dell was up 12% at market close today.

The company is obviously rebounding after shares crashed during its accounting scandal last year.

However, investors appear to be taking profits tonight on fears margins will be under pressure across the next year.

Super Micro’s guidance for $33 billion in sales next fiscal year should have been ‘good enough.’

Yet, below consensus EPS last quarter and guidance for EPS that will remain under pressure appears to be what Wall Street is zooming in on.

AMD: Down 4.8%

Astera Labs: Up 11.8%

Arista Networks: Up 11.3%

Super Micro: Down 15.2%

SMCI | Super Micro Computer Q4’25 Earnings Highlights:

• Adj. EPS: $0.41 ✅; UP +5% YoY
• Revenue: $5.8B [✅]; UP +7% YoY
• Gross Margin: 9.5% [✅]; DOWN -70 bps YoY
• Net Income: $195M [✅]; DOWN -34% YoY
• Cash Flow from Operations: $864M; UP +35% YoY

Outlook:

• Revenue: $6.0B to $7.0B [✅]
  • The Company anticipates strong demand driven by its AI solutions and expanding customer base.
  • Expectations are bolstered by the introduction of new Datacenter Building Block Solutions (DCBBS) aimed at enhancing deployment speed for customers.
• GAAP Net Income per Diluted Share: $0.30 to $0.42 [✅]
• Non-GAAP Net Income per Diluted Share: $0.40 to $0.52 [✅]

Other Key Q4 Metrics:

• R&D Expenses: $183.2M; UP +44% YoY
• Effective Tax Rate: 8.7% (vs. 0.5% YoY)
• Cash and Cash Equivalents: $5.2B; UP +211% YoY
• Total Debt: $4.8B; UP +184% YoY

CEO Commentary:

• Charles Liang: “We made solid progress in FY25 by growing our AI solution leadership in Neoclouds, CSPs, Enterprises, and Sovereign entities, which fueled our 47% annual growth. I’m especially excited about our new Datacenter Building Block Solutions (DCBBS), which offer exceptional value to customers seeking faster datacenter deployment and time-to-online advantages. With support from our expanding global operations that help mitigate tariffs and regional costs, combined with a growing enterprise customer base, AI product innovations, and robust DCBBSpowered total solutions, we’re on track to grow more large-scale datacenter customers from four in FY25 to six to eight in FY26.”

Strategic Updates:

• The Company is focusing on expanding its AI solutions and enhancing its global operations to mitigate costs and tariffs.
• Plans to increase large-scale datacenter customers significantly in FY26, indicating a strong growth trajectory.

It will be very interesting where Wall Street’s reactions to Super Micro land. The company missed on EPS and revenue last quarter but guided to ‘at least’ $33 billion in revenue next year, which is above expectations.

An important note: the company’s guide for adjusted EPS in Q1 is $.40 to $.52, which is below expectations of $.56.

Fears of margin compression are likely weighing on the stock after hours.

Super Micro reported adjusted EPS of $.41, which is a miss.

Revenue of $5.91 billion is also a miss.

It’s 4 p.m. ET and we’re ready to break down Super Micro’s earnings right after they hit.

If you’re investing in Super Micro in large part because of bullishness on AI spending, make sure to also pay attention to AMD, Aster Lab, and Arista Networks’ earnings tonight.

Each will give read read-through into broader AI spending.

“This quarter’s revenue decline was primarily due to customers pausing to evaluate the new Blackwell GPUs; we expect those orders to flow into our June and September quarters.”

Charles Liang, Founder & CEO

Management is flagging a one-quarter timing shift in AI platform deployments—tonight’s outlook commentary will show if that backlog conversion is still intact.

“Our global rack capacity remains at 5,000 units per month, and we’re on track to bring Malaysia and Taiwan lines fully online by year-end.”

Charles Liang, Founder & CEO

With production capacity a gating factor, any delay in new lines could pinch growth; tonight’s update on capacity timing will directly impact SMCI’s next-quarter guide.

SMCI has delivered three straight beats heading into Q4, with an average 7-day move of +6.3 %—underscoring the market’s “buy the beat” mentality and setting a high bar for guidance.