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    SMCI
    Earnings call· Jun 2026(Q4 FY26)

    Super Micro Computer Q4 FY26 earnings call SMCI

    Aug 11, 2026 Source

    Executive summary

    Super Micro Computer Q4 FY26 — Record Revenue and Strong AI Backlog

    Super Micro achieved record FY26 revenue and built a substantial AI order backlog, positioning for strong FY27 growth. Despite Q4 revenue being at the low end of guidance due to customer readiness delays, profitability expanded significantly, driven by improved mix and operational efficiencies. The company is transforming into a total data center solution provider, balancing aggressive growth with a focus on higher-margin enterprise and DCBBS offerings.

    Highlights

    5

    • Fiscal year 2026 revenue nearly doubled to $39 billion, up 78% year-over-year.

    • Record order book and backlog with over $60 billion in new orders received during Q4 FY26.

    • Non-GAAP gross margin expanded to 17.6% in Q4, a 750 basis point sequential improvement.

    • Non-GAAP diluted EPS of $1.70 in Q4 exceeded guidance range of $0.65 to $0.79.

    • Customer base is diversifying, with 9 customers in FY26 generating over $1 billion each, up from 4 in FY25.

    Concerns

    5

    • Q4 revenue of $11.1 billion was at the low end of guidance ($11 billion to $12.5 billion) due to short-term customer delays related to power shortage, cooling, and networking.

    • AI solutions contributed 60% of total revenue in Q4, down from over 80% in Q3, due to timing of large AI project ramps.

    • Cash used in operating activities for fiscal year 2026 was $6.8 billion.

    • Cash conversion cycle increased by 43 days to 149 days in Q4.

    • Days payables outstanding decreased by 56 days to 29 days in Q4 due to significant reduction in average days' payables.

    Guidance & targets

    13
    CategoryTargetConfidence
    Full-year FY27 Net Sales
    $65 billion to $72 billion
    high materiality
    High
    Q1 FY27 Net Sales
    $14.5 billion to $15.5 billion
    high materiality
    High
    Q1 FY27 GAAP diluted net income per share
    $0.89 and $0.98
    medium materiality
    High
    Q1 FY27 Non-GAAP diluted net income per share
    $1.01 and $1.10
    high materiality
    High
    Q1 FY27 Gross Margin
    10.4% to 10.8%
    high materiality
    High
    Q1 FY27 GAAP Operating Expenses
    approximately $453 million
    medium materiality
    High
    Q1 FY27 Stock-based compensation (GAAP EPS)
    approximately $106 million
    low materiality
    High
    Q1 FY27 Other income and expense
    net expense of approximately $45 million
    low materiality
    High
    Q1 FY27 GAAP Tax Rate
    20.1%
    low materiality
    High
    Q1 FY27 Non-GAAP Tax Rate
    20.5%
    low materiality
    High
    Q1 FY27 Fully diluted share count (GAAP)
    745 million shares
    low materiality
    High
    Q1 FY27 Fully diluted share count (non-GAAP)
    761 million shares
    low materiality
    High
    Q1 FY27 Capital expenditures
    $50 million to $60 million
    medium materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    AI Solutions
    Contribution decreased in Q4 due to timing of some large AI project ramps, but is expected to rebound to over 80% going forward based on backlog.
    Contribution to total revenue Q4: 60%Contribution to total revenue Q3: >80%Expected contribution to total revenue going forward: >80%
    		————
    Enterprise and Channel
    Saw a pickup in demand during Q4 from customers upgrading compute, storage, and network infrastructure with more efficient CPU platforms.
    Percentage of total revenue Q4: 50%Percentage of total revenue FY26: 31%FY26 revenue growth: 39%
    		$5.6 billion172%98%—
    OEM Appliance and Large Data Center
    Revenue decreased quarter-over-quarter due to timing of large AI project ramps. One large data center/CSP customer represented 28% of FY26 revenue.
    Percentage of total revenue Q4: 50%Percentage of total revenue FY26: 69%FY26 revenue growth: 104%
    		$5.5 billion50%-26%—
    U.S. Geography
    Strong growth year-over-year and quarter-over-quarter.
    Percentage of Q4 revenue: 71%
    		—259%12%—
    Asia Geography
    Revenue decreased year-over-year and quarter-over-quarter.
    Percentage of Q4 revenue: 11%
    		—-50%-13%—
    Europe Geography
    Moderate growth year-over-year and strong growth quarter-over-quarter.
    Percentage of Q4 revenue: 8%
    		—4%25%—
    Rest of World Geography
    Significant growth year-over-year.
    Percentage of Q4 revenue: 10%
    		—296%1%—

    Operational metrics

    39
    FY26 Revenue
    $39.1 billionup 78% YoY
    FY26

    Record fiscal year revenue.

    Non-GAAP diluted EPS
    $3.63up 76% YoY
    FY26

    Record non-GAAP fully diluted EPS.

    Non-GAAP gross margin
    10.9%vs 11.2% in FY25
    FY26

    Slight decrease year-over-year.

    Non-GAAP operating margin
    8.1%from 7.1% in FY25
    FY26

    Expanded year-over-year.

    Revenue
    $11.1 billionup 93% YoY, up 9% QoQ
    Q4 FY26

    Near the low end of guidance range due to customer delays.

    Non-GAAP gross margin
    17.6%up from 10.1% in Q3
    Q4 FY26

    Exceeded guidance of 8.2% to 8.4%.

    GAAP operating expenses
    $455 millionup 44% YoY, 16% QoQ
    Q4 FY26

    Primarily reflected higher headcount-related and sales and marketing expenses.

    Non-GAAP operating expenses
    $357 millionup 49% YoY, 28% QoQ
    Q4 FY26

    Primarily reflected higher headcount-related and sales and marketing expenses.

    Non-GAAP operating margin
    14.3%compared with 7.2% in Q3
    Q4 FY26

    Significant sequential expansion.

    Other income and expense
    $19 million
    Q4 FY26

    Consisted of $61 million interest and other income offset by $80 million interest expense.

    Interest and other income
    $61 million
    Q4 FY26

    Component of other income and expense.

    Interest expense
    $80 million
    Q4 FY26

    Related to convertible notes and revolving credit facilities.

    GAAP tax provision
    $290 million
    Q4 FY26

    Tax provision for the quarter.

    Non-GAAP tax provision
    $316 million
    Q4 FY26

    Tax provision for the quarter.

    GAAP tax rate
    19.7%
    Q4 FY26

    Tax rate for the quarter.

    Non-GAAP tax rate
    20.1%
    Q4 FY26

    Tax rate for the quarter.

    GAAP tax rate
    19.9%compared with 12.9% in FY25
    FY26

    Increase year-over-year.

    Non-GAAP tax rate
    20.4%compared with 15.4% in FY25
    FY26

    Increase year-over-year.

    GAAP diluted EPS
    $1.62compared with guidance range of $0.53 to $0.67
    Q4 FY26

    Exceeded guidance primarily due to higher gross margin.

    Non-GAAP diluted EPS
    $1.70compared with guidance range of $0.65 to $0.79
    Q4 FY26

    Exceeded guidance primarily due to higher gross margin.

    GAAP diluted EPS
    $3.26compared with $1.68 in FY25
    FY26

    Significant increase year-over-year.

    GAAP diluted share count
    705 million sharesincreased sequentially from 692 million shares in Q3
    Q4 FY26

    Impacted by public equity offerings.

    Non-GAAP diluted share count
    721 million sharesincreased from 709 million shares in Q3
    Q4 FY26

    Impacted by public equity offerings.

    Cash provided by operating activities
    $747 millioncompared with cash used of $6.6 billion in Q3
    Q4 FY26

    Strong rebound in operating cash flow.

    Cash used in operating activities
    $6.8 billioncompared with cash provided of $1.66 billion in FY25
    FY26

    Significant cash usage for the full fiscal year.

    Closing inventory
    $12.9 billionup from $11.1 billion at end of Q3
    Q4 FY26

    Built in anticipation of higher revenues in FY27.

    CapEx
    $28 million
    Q4 FY26

    Investment in expanding capacity.

    CapEx
    $162 millioncompared with $127 million in FY25
    FY26

    Investment in expanding capacity globally.

    Cash and cash equivalents balance
    $7.5 billion
    Q4 FY26

    Strong cash position after public equity offerings.

    Bank borrowings and convertible note debt
    $8.7 billion
    Q4 FY26

    Total debt at quarter-end.

    Net debt
    $1.2 billioncompared with net debt of $7.5 billion at end of Q3
    Q4 FY26

    Significant reduction due to public equity offerings.

    Cash conversion cycle
    149 daysincreased by 43 days from 106 days in Q3
    Q4 FY26

    Expected to normalize going forward based on improved terms in backlog.

    Days of inventory
    119 daysincreased by 13 days to 119 days from 106 days in Q3
    Q4 FY26

    Built in anticipation of higher revenues in FY27.

    Days' sales outstanding
    59 daysdecreased by 26 days from 85 days in Q3
    Q4 FY26

    Realized collections from some large customers.

    Days payables outstanding
    29 daysdecreased by 56 days from 85 days in Q3
    Q4 FY26

    Due to significant reduction in average days' payables between Q3 and Q4, completion of large AI GPU projects, and timing of payments to suppliers.

    OEM appliance and large data center revenue growth
    104%
    FY26

    Represented 69% of total revenue for FY26.

    Q4 Gross margin improvement from mix
    $700 million
    Q4 FY26

    Approximately 75% of the gross margin improvement.

    Q4 Gross margin improvement from tariff and inventory write-downs
    $230 million
    Q4 FY26

    Approximately 25% of the gross margin improvement.

    Q1 FY27 Gross Margin guidance midpoint
    10.6%
    Q1 FY27

    Midpoint of the guided range of 10.4% to 10.8%.

    Industry KPIs

    9
    MetricValueDetails
    Capital return FCF$722 millionUSD
    Gross margin drivers17.6%%
    Company specific kpis9customers
    Services peripheral attach—
    Long term supply agreements—
    Component supply constraints—
    Capacity roadmap qualification—
    Ai server orders revenue backlogOver $60 billionUSD
    Revenue mix by end market segmentAI Solutions: 60%; Enterprise and Channel: 50%; OEM Appliance and Large Data Center: 50%%

    Orderbook & backlog

    2
    New orders receivedover $60 billionQ4 FY26

    Expected to fulfill over the coming quarters.

    Ending backlogrecord levelsFY26

    Driving strong future growth.

    Product announcements

    6
    ProductTypeDetails
    Proactive service modellaunch
    DCBBS campus in Silicon Valleyexpansion
    Vera Rubin VRNVL72, Rubin HGX, and Vera C1 systemsroadmap
    Helios product line and MI450 Total Solutionlaunch
    Panther Lake Edge AI systemslaunch
    Phoenix architecturesroadmap

    Risks & headwinds

    3
    Short-term customer delaysQ4 FY26

    Q4 revenue at low end of guidance ($11.1 billion vs $11 billion-$12.5 billion)

    Mitigation: These are timing issues, and revenue is anticipated to be recognized in subsequent quarters. DCBBS solutions aim to accelerate time-to-deployment and time-to-online.

    Potential for tariffs to increaseFuture

    Lower tariff costs contributed 25% to Q4 gross margin improvement

    Mitigation: Company is actively pursuing refunds for past tariffs but has not booked benefits. Management acknowledges tariffs may go back up.

    Inventory risk with GPU platform transitionsOngoing

    Days of inventory increased by 13 days to 119 days in Q4

    Mitigation: Ensuring non-cancelable POs, matching procurement with shipment schedules, and leveraging building block solution architecture for subsystem compatibility across generations.

    What to watch in Q1 FY27

    5

    Q1 FY27 Net Sales

    Q1 FY27
    CurrentQ4 FY26 revenue $11.1B (low end of guidance)
    Target$14.5B to $15.5B

    Why it matters

    Verifies if customer delays from Q4 FY26 are resolved and revenue is recognized as expected, indicating strong demand conversion.

    Now turning to our outlook for Q1 fiscal year '27, we expect net sales to be in the range of $14.5 billion to $15.5 billion

    Q&A highlights

    6

    How should investors think about FY27 gross margins, considering the Q4 mix benefit and Q1 guide, and the balance between high-volume GPU and higher-margin CPU/storage/networking?

    Management aims to balance revenue and profitability, acknowledging high-volume GPU has lower margins while CPU, storage, IoT, and enterprise applications have higher margins. They are aggressively growing the sales force for enterprise and application servers, and the DCBBS product line is maturing, expected to contribute significantly to long-term profit margins. The Q1 FY27 gross margin guide of 10.4% to 10.8% reflects current expectations.

    “As you know, high-volume GPU margin is usually much lower. CPU, storage, IoT, enterprise application, on the other hand, have a higher margin. So we will try to balance between the 2 verticals.”

    asked by Ananda Baruah · answered by Charles Liang

    2 min read6 chapters

    Detailed Narrative

    01

    AI/IT Data Center Transformation

    Super Micro is actively transforming from a USA-based server manufacturer into a leading AI/IT data center total solution company. This involves designing and manufacturing total Data Center Building Block Solutions (DCBBS) to serve as a one-stop shop for customers building data centers or AI factories. The company emphasizes accelerating 'time-to-deployment' (TTD) and 'time-to-online' (TTO) for customers, ensuring future growth and long-term value.

    02

    DCBBS Value Proposition and Software Integration

    The DCBBS strategy delivers total-solution value by seamlessly integrating GPU and CPU servers, enterprise storage, direct liquid cooling solutions (CDU, chilled door, water tower), high-speed data switch and networking, data center management software, and full life-cycle services. This turnkey ecosystem aims to enable rapid AI data center scaling, dramatically reducing TCO. New proactive service models, with software features and service products coming online by early next quarter, will enhance customer trust and drive long-term value by maintaining maximum availability.

    03

    Operational Disciplines and Margin Expansion

    Q4 gross margin expansion to 17.6% was primarily driven by a strategic focus on balancing customer and product mix, alongside some one-time📎 positive contributions. The company is complementing its high-value strategy by driving higher manufacturing yields through factory automation, design optimization, and versatile building block architecture. Focused efforts on logistics and inventory management are also reducing inventory reserves and expedite charges, aiming for consistent, growing gross margins and moderating quarter-to-quarter fluctuations.

    04

    Product Roadmap and Silicon Partnerships

    Super Micro's system building blocks allow for rapid optimization across major silicon platforms. Through its NVIDIA partnership, the company is shipping volume SKUs for GB300, HGX B300, B200 NVL4, and RTX 6000 Pro, while preparing first-to-market Vera Rubin VRNVL72, Rubin HGX, and Vera C1 systems. Collaborations with AMD include the new Helios product line and MI450 Total Solution, alongside EPYC, MI350, and MI355X. With Intel, Panther Lake Edge AI systems and Xeon 6+ platforms are in market. The company is also developing Arm AGI processor-based Phoenix architectures for high performance-per-watt inferencing workloads.

    05

    Manufacturing Expansion and Capacity

    To support massive demand, Super Micro is expanding its physical footprint. A new 32-acre DCBBS campus in Silicon Valley brings the USA footprint to nearly 4 million square feet. Global facilities in Taiwan, Malaysia, and the Netherlands are also ramping up, with total manufacturing capability on track to exceed 6,000 racks per month, including over 3,000 direct liquid-cooled racks per month. Most DLC rack production lines support the latest 250kW rack platforms.

    06

    Capital Structure and Financial Efficiency

    Following a $5.6 billion financing in June, comprising $1.4 billion of common stock and $4.2 billion of mandatory convertible preferred shares, the balance sheet is robust, fully supporting component supply and business needs. The company currently has no plans to utilize its ATM program and remains focused on building financial efficiency. Net debt decreased significantly to $1.2 billion at quarter-end from $7.5 billion in the prior quarter.

    AI-generated summary of the company’s earnings call. Not investment advice.