Supermicro shares fall 5.7% after $19.9 billion quarterly sales

Supermicro (SMCI) said in a regulatory filing on Nov. 3 that net sales for its first quarter of fiscal 2027, ended Sept. 30, were $19.9 billion, up from $5.0 billion a year earlier.

Shares fell 5.7% in regular-session trading as of 3:59 p.m. ET on Nov. 4, from a regular-session close of $31.39.

The company provides server, AI, storage, IoT, switch systems, software and support services, and it designs and manufactures its products in-house in the US, Taiwan, Malaysia and the Netherlands.

The quarter came in above the $18.5 billion to $19.5 billion range the company had previewed on Oct. 20.

Here's how the company did:

• Net sales: $19.9 billion vs. $5.0 billion a year earlier
• Diluted EPS: $1.75 vs. $0.26 a year earlier
• Non-GAAP diluted EPS: $1.81 vs. $0.35 a year earlier
• Net income: $1.59 billion vs. $168 million a year earlier

CEO Charles Liang said the company’s transformation “into a Total AI and IT Datacenter Solution provider continues to accelerate, delivering record revenue of $19.9 billion for the first quarter fiscal 2027.”

The figures are unaudited. The company said its financial closing procedures for the quarter were not yet complete.

Margins and cash

Gross margin was 12.7%, up from 9.3% a year earlier. Non-GAAP gross margin was 12.8%, up from 9.5%. Both were above the 12.0% to 12.5% gross margin range the company previewed on Oct. 20.

Stock-based compensation was $100.2 million for the quarter, according to the filing.

Cash used in operations was $434 million in the quarter, and capital expenditures and investments totaled $47 million. As of Sept. 30, the company had $6.9 billion in cash and cash equivalents and $8.6 billion in bank debt and convertible notes.

Net income has risen in each of the last three quarters, from $168.3 million in the first quarter of fiscal 2026 to $1.18 billion in the fourth quarter of fiscal 2026, according to its SEC filings.

Outlook for fiscal 2027

For the second quarter ending Dec. 31, the company expects net sales of $19.5 billion to $21.5 billion. It expects GAAP diluted net income per share of $1.59 to $1.83 and non-GAAP diluted net income per share of $1.66 to $1.90.

For the full fiscal year, the company expects net sales of $72.0 billion to $82.0 billion.

Preferred dividend

The board declared a cash dividend of $17.50 per share on the 7.00% Series A Mandatory Convertible Preferred Stock, equal to 87.5 cents per depositary share. Each depositary share represents a one-twentieth interest in a preferred share and trades on the Nasdaq Global Select Market as SMCIP.

The dividend is payable Dec. 1, 2026, to holders of record at the close of business on Nov. 15, 2026.