Supermicro shares jumped nearly 10% in after-hours trading Tuesday after the server maker reported quarterly results that showed gross margin nearly doubling and revenue doubling from a year earlier. The company also issued a bullish revenue forecast for the current quarter and the next fiscal year.
A margin rebound
For the quarter ended June 30, Supermicro posted a gross margin of 17.5%, up from 9.9% in the previous quarter and higher than the same period last year. Net sales reached $11.1 billion, almost double the $5.8 billion from a year ago. Net income climbed six-fold to $1.18 billion, and adjusted earnings per share came in at $1.70, beating the consensus estimate of 68 cents.
The company attributed the margin improvement to a richer enterprise customer mix and broader adoption of its Data Center Building Block Solutions (DCBBS) architecture. That shift, along with a record backlog, helped drive the numbers.
Guidance and order book
Supermicro projects September-quarter revenue of $14.5 billion to $15.5 billion, and full fiscal 2027 sales between $65 billion and $72 billion. The company said it booked over $60 billion in new orders and added several hundred enterprise customers over the past year.
That guidance suggests demand for AI servers and data center infrastructure remains strong, even as the company works through a period of rapid expansion.
The cost of growth
But the growth comes with a heavy price tag. Inventories nearly tripled to $12.9 billion, and operations consumed $6.8 billion in cash for the year. That cash burn is a red flag for some investors, especially given the company's history of accounting issues.
The accounting shadow
Supermicro has been under scrutiny since August 2024, when Hindenburg Research accused the company of accounting manipulation. Its auditor, Ernst & Young, resigned, and shares dropped roughly a third in a single day. The company filed its delayed reports in February 2025 and kept its Nasdaq listing.
Now, the latest results are preliminary and unaudited, and the board is reviewing certain transactions tied to export controls. That review is ongoing, and the company hasn't said when it will be complete.
