TLDR
- Fiscal Q2 revenue reached $12.7 billion versus $10.42 billion estimate, rising 123.4% year-over-year
- Adjusted EPS of $0.69 topped $0.49 consensus by 40.8%
- Q3 revenue forecast of $12.3 billion beats $10.25 billion Street estimate
- Annual revenue outlook increased to $40 billion minimum from $36.27 billion consensus
- Margin pressure and 63% revenue concentration in single customer raise concerns
Super Micro Computer posted fiscal second-quarter results that exceeded expectations across the board. The AI server manufacturer’s performance reflected surging demand for infrastructure supporting artificial intelligence applications.
The company reported $12.7 billion in revenue for the quarter ended December 31. Analysts had projected $10.42 billion. Last year’s comparable period brought in $5.7 billion, making this a 123.4% increase.
Adjusted earnings per share hit $0.69. The Street consensus called for $0.49. That represents a beat of more than 40%.
Super Micro Computer, Inc., SMCI
CEO Charles Liang pointed to the company’s server technology and expanding production capacity. He said the firm is ramping up quickly to meet demand from large-scale AI implementations and business customers.
Forward Projections Beat Expectations
The company’s outlook suggests momentum will continue. Third-quarter revenue should reach at least $12.3 billion. Analysts expected $10.25 billion.
Management projects adjusted EPS of at least $0.60 for Q3. Wall Street estimates sat at $0.52. The full-year revenue forecast now stands at a minimum of $40 billion, up from the prior $36.27 billion consensus.
Barclays analysts described the results as a “beat and raise” driven by customer demand. They flagged one notable risk in their analysis.
A single customer generated approximately 63% of quarterly revenue. That creates potential volatility if the relationship changes. The firm expects the customer base to diversify through the year’s second half.
Profitability Metrics Show Pressure
Gross margin decreased to 6.4% on an adjusted basis. The year-ago quarter showed 11.9%. The contraction points to potential challenges with pricing or product mix as competition intensifies.
The company held $4.1 billion in cash at December 31. Total bank debt and convertible notes amounted to $4.9 billion.
Analyst opinions vary following the report. The consensus rating remains at “Hold” with a $46.19 average price target. Eight analysts rate it a buy, eight have hold ratings, and two say sell.
Post-earnings, some firms lifted targets. Rosenblatt set a $55 price objective. Others cut their numbers. Citigroup reduced its target from $48 to $39, while JPMorgan Chase went from $43 to $40.
Stock Performance and Valuation
Shares closed at $29.67 on Tuesday. The 52-week range spans $27.35 to $66.44. Market capitalization sits at $17.71 billion.
The P/E ratio stands at 23.74 with a price-to-earnings-growth ratio of 0.60. The current ratio of 5.39 shows strong liquidity.
Institutional investors control 84.06% of shares. Recent quarters saw various hedge funds adjusting their positions in the company.
Trading volume reached 40.2 million shares on Tuesday. Average daily volume runs about 32.3 million shares. The debt-to-equity ratio measures 0.72.
The 50-day moving average sits at $31.42. The 200-day moving average stands at $41.54. Beta of 1.54 indicates higher volatility than the broader market.
Companies worldwide continue expanding AI infrastructure investments, driving demand for specialized server equipment and data center hardware.
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