Super Micro Computer reported fiscal third-quarter revenue of $10.24 billion, falling short of analyst expectations, but the company's stock rose about 18% in extended trading after it issued guidance that topped estimates for the current quarter.
The server maker's fiscal Q3 revenue came in at $10.2 billion, well below estimates, but guidance for the current quarter sent stock higher
Cheng Xin / Getty Images
Super Micro Computer reported fiscal third-quarter revenue of $10.24 billion, falling short of analyst expectations, but the company's stock rose about 18% in extended trading after it issued guidance that topped estimates for the current quarter.
Compared with the same quarter last year, revenue more than doubled, rising 123%, in the period that closed on March 31. Wall Street had penciled in $12.33 billion in revenue, per CNBC. On the earnings side, the company delivered adjusted EPS of 84 cents, well ahead of the 62-cent consensus.
On the cost side, adjusted gross margin of 10.1% came in well above what analysts had forecast at 6.75%, per Bloomberg.
CEO Charles Liang attributed the revenue shortfall to timing. "Several customers were not yet equipped with the power and networking required for their cloud deployment, and we expect to capture this revenue in the coming quarters," Liang told analysts on a conference call. Finance chief David Weigand pointed to broader supply chain pressures across the industry, with tight availability of GPUs and Intel $INTC chips alongside rising memory costs adding to the headwinds.
Looking ahead to the fiscal fourth quarter, which ends June 30, the company guided for revenue between $11 billion and $12.5 billion, with adjusted per-share earnings in a range of 65 cents to 79 cents. Those figures compared favorably to the Street's expectations of $11.07 billion in revenue and 55-cent EPS, according to CNBC. For the full fiscal year, the company said it expects revenue of $38.9 billion to $40.4 billion.
"Our margin recovery and the rapid growth of our DCBBS business demonstrate that our business remains robust," Liang said in a statement. DCBBS, which bundles chips, networking, cooling equipment, and software management tools into integrated offerings, is increasingly driving revenue and profitability. Liang told analysts on the call that he expects the unit to account for more than a quarter of total company profit within a few years, per Bloomberg.
The company has been expanding its domestic footprint as well. A new Bay Area campus announced in April — the company's fourth in the region — is set to span more than 714,000 square feet, per CNBC.
Overshadowing the results is an ongoing legal matter stemming from a federal indictment out of the Southern District of New York, which accused unnamed individuals tied to an unidentified U.S. server company of funneling billions of dollars worth of Nvidia $NVDA-equipped servers to China in violation of export controls. Though Super Micro was not named in the indictment, the company acknowledged that three of the charged individuals had ties to the firm — one a co-founder and executive, one a manager, and one a contractor. Per Bloomberg, Liaw — identified in public reports as co-founder Yih-Shyan "Wally" Liaw — has departed the board and severed all ties with Super Micro. Weigand added that the company does not anticipate any need to restate previously reported financial results.
Liang sought to reassure investors that client loyalty has held firm through the controversy. "At this moment, I personally don't feel a negative feeling," he told analysts, adding that ties with key partners including Nvidia and Broadcom $AVGO continue to be strong, per CNBC.
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