Supermicro: Fiscal 2Q25 Preliminary Financial Information

Super Micro Computer, Inc. announced preliminary financial information for its 2nd quarter of fiscal year 2025 ended December 31, 2024.

The company expects to report following financial information for quarter ended December 31, 2024:

• Net sales in the range of $5.6 billion to $5.7 billion, reflecting 54% Y/Y growth at the midpoint
• GAAP and non-GAAP gross margin in the range of 11.8% to 11.9%
• GAAP diluted net income per common share in the range of $0.50 to $0.52, flat Y/Y
• Non-GAAP diluted net income per common share in the range of $0.58 to $0.60, reflecting 5% Y/Y growth

The non-GAAP gross margin expected to be reported for the 2nd quarter of fiscal year 2025 adds back stock-based compensation expense of approximately $6.7 million. The non-GAAP diluted net income per common share expected to be reported for the second quarter of fiscal year 2025 includes adjustments for stock-based compensation expense of approximately $63.0 million, net of the related tax effects of approximately $19.1 million.

The company expects to report as of December 31, 2024 total cash and cash equivalents of approximately $1.4 billion and total debt of approximately $1.9 billion with bank debt comprising of approximately $0.2 billion and convertible notes of approximately $1.7 billion.

“With our leading direct-liquid cooling (DLC) technology and over 30% of new data centers expected to adopt it in the next 12 months, Supermicro is well positioned to grow AI infrastructure designs wins based on NVIDIA Blackwell and more,” said Charles Liang,  founder, president and CEO, Supermicro. “Combined with exceptional product quality, service, software, networking, and security with data center building blocks, Supermicro will expand our leadership as the premier US-based data center infrastructure solution provider. We anticipate this technology transition sets a strong foundation for us now, resulting in FY25 revenue in the range of $23.5 billion to $25 billion, paving the way for $40 billion revenue in FY26.“

Business Outlook
The company expects net sales in the range of $5.0 billion to $6.0 billion for the 3rd quarter of the fiscal year 2025 ending March 31, 2025, GAAP net income per diluted share of $0.36 to $0.53 and non-GAAP net income per diluted share of $0.46 to $0.62. The company’s projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately 10.7% and 12.7%, respectively, and a fully diluted share count of approximately 642 million shares for GAAP and fully diluted share count of approximately 653 million shares for non-GAAP. The outlook for Q3 of fiscal year 2025 GAAP net income per diluted share includes approximately $65 million in expected stock-based compensation expense and other expenses, net of related tax effects of approximately $17 million, which are excluded from non-GAAP net income per diluted share.

For fiscal year 2025, the company is updating its revenue guidance from a range of $26 billion to $30 billion to a new range of $23.5 billion to $25 billion.

Financial Information is Preliminary and May be Subject to Change
The unaudited interim financial information presented in this press release is preliminary. The final financial results reported for this period may also differ from the results reported in this release.

In particular, the data relating to the company’s financial results for the quarter ended December 31, 2024 and the adjustments to its financial results for the fourth quarter of fiscal year 2024 presented in this press release reflect the company’s preliminary estimated unaudited financial results, based upon information available to the company as of the date of this press release. The company has provided preliminary estimates of financial results primarily because its financial closing procedures for the quarter ended December 31, 2024 and preliminary estimated adjustments to results for the fiscal year ended June 30, 2024 are not yet complete. The data are not a comprehensive statement of the company’s results for such periods, and the actual results may differ materially from these preliminary estimated data.

The company’s actual results remain subject to the completion of management’s and its audit committee’s review and other financial closing processes as well as the completion and preparation of its financial data for such periods. The company’s independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to such preliminary data. During the course of the preparation of the company’s financial statements and related notes and the completion of the review for such periods, additional adjustments to the preliminary estimated financial information presented here may be identified, and its final results for these periods may vary from these preliminary estimates. This preliminary estimated data should not be considered a substitute for the financial statements to be prepared in accordance with accounting principles generally accepted in the US and to be filed with the SEC once available.

Corporate Updates
Supermicro continues to work diligently toward the filing of its Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and its Quarterly Report on Form 10-Q for the period ended September 30, 2024. Based on information currently available, the company believes it will make such filings by February 25, 2025. Additionally, the company filed a Form 12b-25 for its 2nd fiscal quarter and expects to file its Quarterly Report on Form 10-Q for period ended December 31, 2024, also by February 25, 2025.

In a separate press release, the company announced that it had agreed to issue in a private placement $700 million of new 2.25% Convertible Senior Notes due 2028 and to amend the terms of its existing Convertible Senior Notes due 2029.

In late 2024, the company received subpoenas from the Department of Justice and the SEC seeking certain documents following the publication of allegations in a short seller report which was published in August 2024. The company is cooperating with these document requests. In addition, in connection with the delay in filing the periodic reports, several securities litigation complaints and derivative suits were filed vs. the company. Management believes these complaints are without merit.

Updates to Unaudited Preliminary Fiscal 2024 and 4th Quarter Fiscal 2024 Results
The company is reconfirming that no previously issued financial statements require a restatement. As the company works toward completing the audit, it made certain adjustments to the preliminary unaudited results for the 4th quarter of fiscal year 2024 that it announced on August 6, 2024. The adjustments recorded in the results for the 4th quarter of fiscal year 2024 include an increase in net sales of approximately $46 million, an increase in cost of sales of approximately $96 million, which includes a charge due to an increase in inventory reserves of approximately $45 million, and an increase in operating expenses of approximately $5 million. Until the company’s fiscal year 2024 financial statements are filed, the company is required to reassess its accounting estimates for financial reporting. The charge for inventory reserves results from an unanticipated decline in the market value of certain components that were held in the company’s inventory or on non-cancellable purchase orders at the end of fiscal year 2024.

Collectively, these changes resulted in a downward adjustment to the previously announced preliminary unaudited fiscal year 2024 and 4th quarter of fiscal year 2024 GAAP and non-GAAP diluted net income per common share of approximately $0.09 based on post-split diluted shares outstanding. The foregoing adjustments are to previously announced preliminary unaudited financial results and, as such, do not constitute a restatement.