Super Micro Computer's Sales Nearly Doubled Last Quarter; Current Quarter and New Fiscal Year Guidance Significantly Beat Expectations | Earnings Insights
In the fourth fiscal quarter, Super Micro Computer's sales were slightly below analysts' expectations, while EPS surged more than threefold year-over-year, beating estimates by nearly 7%. Gross margin exceeded 17%, surpassing the company's raised guidance. The midpoint of the first-quarter sales guidance was 25% higher than expected, and the midpoint of the EPS guidance was over 40% above expectations. The midpoint of the fiscal 2027 sales guidance was nearly 30% higher than analysts' forecasts. After-hours stock price rose more than 10% at one point
Super Micro Computer's financial report for the fourth fiscal quarter ended June 30, 2026, sent a clear signal: although revenue was slightly below Wall Street's expectations, profitability improved significantly, and guidance for the new fiscal quarter substantially exceeded market expectations, becoming the core driver of the sharp after-hours surge in its stock price.
In the fourth fiscal quarter, the company's net sales amounted to $11.12 billion, approximately 1.2% lower than analysts' expectations, but nearly doubling year-over-year. Non-GAAP adjusted earnings per share (EPS) rose 315% year-over-year to $1.70, nearly 7% higher than market expectations. More importantly, the company's gross margin showed significant recovery. The gross margin for the fourth fiscal quarter reached 17.5%, with an adjusted gross margin of 17.6%. This not only exceeded the company's previously raised range of 15% to 17% but was also far higher than the initial guidance of 8.2% to 8.4%.
Looking ahead to the current fiscal quarter, Super Micro Computer provided even stronger guidance. The company expects first-quarter net sales to be between $14.5 billion and $15.5 billion, with the midpoint 25% higher than analysts' expectations. It projects adjusted EPS to be between $1.01 and $1.10, nearly 43% higher than market expectations. This indicates that although the market had already anticipated demand for its AI servers, the company's order conversion and revenue growth path still exceeded expectations.
Management attributed the performance improvement to the advancement of its AI and overall IT solutions strategy, an increase in enterprise customers, optimization of customer and product portfolios, and the expanded adoption of its Data Center Building Block Solutions (DCBBS). CEO Charles Liang stated that the company added hundreds of enterprise and other customers over the past year, secured over $60 billion in new orders in the fourth fiscal quarter, and entered fiscal 2027 with a record backlog.
Following the earnings release, Super Micro Computer's stock, which had closed up 0.45% on Tuesday, jumped in after-hours trading, with gains exceeding 10% at one point. This performance reflects the market's reassessment of the company's growth and earnings elasticity. Analysts believe factors supporting the stock price rise include: adjusted EPS for the previous quarter significantly beating expectations, indicating stronger earnings elasticity than the market judged; a notable improvement in gross margin last quarter, alleviating concerns about margin pressure; and revenue guidance for the current quarter and fiscal year far exceeding expectations, reinforcing the logic of sustained expansion in AI server demand.
Revenue Slightly Misses Expectations, But Surges Over 90% Year-Over-Year
In the fourth fiscal quarter, Super Micro Computer's net sales were $11.12 billion, lower than the $11.26 billion expected by analysts, and near the lower end of the company's previous guidance range of $11 billion to $12.5 billion. However, compared to $5.76 billion in the same period last year, sales increased by 91.4% year-over-year, nearly doubling, demonstrating that demand for AI servers, data center infrastructure, and related IT solutions remains robust.
Company management explained that the revenue miss was primarily due to delays in power, cooling, and network deployment for some customers. These delays do not mean orders have disappeared, but rather that revenue recognition has been pushed back. The company stated it expects these delayed revenues to be recognized gradually over the next few quarters.
This was a relatively acceptable "flaw" in this earnings report: the revenue side did not significantly outperform, but the reasons were largely related to delivery and infrastructure support pacing, rather than weak demand. Given that the company also disclosed over $60 billion in new orders in the fourth fiscal quarter and a record-high backlog at year-end, investors are more focused on the company's ability to realize revenue in the coming quarters.
Earnings Significantly Beat Expectations, Net Income Increases Fivefold Year-Over-Year
Compared to the slight revenue miss, Super Micro Computer's earnings performance was significantly stronger than market expectations.
In the fourth fiscal quarter, the company's net income was $1.17 billion, approximately six times the level of $195.2 million in the same period last year, representing a fivefold year-over-year increase. Diluted EPS was $1.62, 5.2 times the $0.31 EPS from the same period last year. Excluding certain one-time items, adjusted EPS was $1.70, higher than the $1.59 expected by analysts.
This indicates that the company is not only benefiting from scale growth driven by expanding AI server demand but is also improving profit quality through better product and customer structures. For Super Micro Computer, which had previously faced market skepticism due to gross margin volatility and financial transparency issues, the improvement in profitability is particularly important.
From a market reaction perspective, investors did not focus on the revenue slightly missing expectations but placed greater emphasis on the EPS beat, gross margin improvement, and upward revision of future revenue guidance. This was the main reason for the sharp after-hours stock price increase.
Gross Margin Becomes the Highlight of This Earnings Report
One of the most closely watched metrics in this earnings report was gross margin.
Super Micro Computer's gross margin for the fourth fiscal quarter was 17.5%, with an adjusted gross margin of 17.6%. This level was higher than the 15% to 17% range provided in the company's July preview and far exceeded the initial guidance of 8.2% to 8.4%.
Management stated that the gross margin improvement was primarily driven by optimization of customer and product portfolios, including a more diverse enterprise customer structure, a broader product line, and optimized data center modular solutions. The company also mentioned that gross margin this quarter benefited from some one-time positive factors, but the core driver remained the strategic adjustment of customer and product structures.
For Super Micro Computer, the gross margin improvement has dual significance:
On one hand, the market had previously worried that intensified competition in the AI server industry, low margins on customized projects, and high concentration among major customers might compress profit margins. On the other hand, the significant rebound in gross margin this quarter demonstrates that the company is not solely relying on low-margin volume growth in the AI infrastructure supply chain but has the ability to enhance profitability through solution-based approaches, modularity, and enterprise customer expansion.
However, the company expects first-quarter gross margin to be between 10.4% and 10.8%, a significant decline from the fourth fiscal quarter. This implies that the high gross margin of the fourth quarter may not be linearly extrapolated, and investors will need to continue monitoring the sustainability of its high profit margins.
First-Quarter Guidance Significantly Beats Expectations, Showing AI Demand Is Still Accelerating
What truly ignited the after-hours stock price was the company's strong outlook for the first fiscal quarter.
Super Micro Computer expects first-quarter net sales to be between $14.5 billion and $15.5 billion, with a midpoint of $15 billion, significantly higher than the $11.99 billion expected by analysts. Calculated based on the midpoint, the company's first-quarter revenue will see further substantial growth compared to the fourth fiscal quarter.
Regarding profitability, the company expects first-quarter adjusted EPS to be between $1.01 and $1.10, higher than the market expectation of $0.74. Even considering the expected decline in gross margin compared to the fourth quarter, the expansion in revenue scale will still support earnings beating expectations.
This guidance indicates that Super Micro Computer's order backlog is gradually converting into revenue. Especially against the backdrop of continuous expansion in AI data center construction, strong demand for GPU servers, and power and liquid cooling becoming key infrastructure bottlenecks, the company, as an AI server and overall solutions provider, remains in a high-demand cycle.
Midpoint of Fiscal 2027 Sales Guidance 29% Higher Than Market Expectations
In addition to the first-quarter guidance, Super Micro Computer also provided a full-year outlook for fiscal 2027: it expects full-year net sales to be between $65 billion and $72 billion. The midpoint of this guidance range is more than 29% higher than the current analyst expectation of approximately $52.99 billion.
If the company ultimately achieves the midpoint of this range, it would mean revenue growth of approximately 75% year-over-year for this fiscal year, rather than the less than 36% increase expected by analysts. Compared to the company's guidance, Wall Street has significantly underestimated its full-year growth potential.
The confidence behind this full-year target comes from the order book. The company stated that new orders exceeded $60 billion in the fourth fiscal quarter, driving its backlog to a record level as it entered fiscal 2027. CEO Charles Liang stated that the company's "Total AI/IT Solutions" strategy continues to deliver strong results, adding hundreds of enterprise and other customers over the past year.
This also means that Super Micro Computer is striving to shed market concerns about being "highly dependent on a few hyperscale customers" by expanding its enterprise customer base, broadening its product line, and promoting modular data center solutions, thereby enhancing the stability of revenue sources and profit margins.
Delayed Deliveries to Some Customers Are Short-Term Disruptions; Key Lies in Revenue Recognition Pace
Although revenue was slightly below expectations, management attributed the cause to delays in power, cooling, and networking for some customers. This point is worth noting, as one of the biggest bottlenecks in AI data center expansion currently is infrastructure support.
For AI server manufacturers, orders do not equate to immediate revenue. Customers need to complete preparations for server rooms, power, cooling, networking, and deployment environments before server delivery and revenue recognition can be finalized. Therefore, Super Micro Computer's revenue being at the lower end of guidance this quarter does not necessarily indicate weakening demand but may reflect a mismatch in delivery pacing within the AI infrastructure construction chain.
However, this also brings a subsequent risk: if bottlenecks in power, liquid cooling, networking, and other supporting areas persist, the company's strong orders may continue to face delays in revenue recognition. The market will next focus on whether the company can successfully convert its record backlog into sales and cash flow in the coming quarters.
