Supermicro Announces Second Quarter Fiscal Year 2024 Financial Results
- Record net sales of $3.66 billion for the second quarter of fiscal year 2024, representing a 103% year-over-year growth.
- Raised revenue outlook for fiscal year 2024 to $14.3 billion to $14.7 billion.
- Strong net income of $296 million, with diluted net income per common share of $5.10.
- Total cash and cash equivalents of $726 million as of December 31, 2023.
- Decrease in gross margin to 15.4% compared to the previous quarter.
- Cash flow used in operations for the second quarter of fiscal year 2024 was $595 million.
Insights
The reported financial results by Super Micro Computer, Inc. reflect a significant year-over-year revenue growth, which is a strong indicator of the company's expanding market presence, particularly in the AI, Cloud, Storage and 5G/Edge sectors. The revenue increase from $1.80 billion to $3.66 billion suggests a robust demand for the company's products. However, the decline in gross margin from 18.7% to 15.4% could be a point of concern for investors, as it may indicate rising costs or pricing pressure. It is essential to assess whether this margin compression is a result of strategic investments that could yield long-term benefits or if it reflects challenges in cost management.
Furthermore, the substantial cash used in operations ($595 million) warrants a closer examination of the company's working capital management and operational efficiency. While the net income growth is indeed positive, it is important to contextualize the cash flow figures within the company's investment activities and overall financial health. The raised revenue outlook for fiscal year 2024 could signal management's confidence in sustained demand, but it also sets a high bar for performance expectations.
Supermicro's performance in the IT solutions market, with a focus on AI and cloud services, positions the company within a high-growth industry. The reported revenue growth rate of 103% year-over-year significantly outpaces average industry growth rates, indicating that Supermicro is capturing market share from competitors or expanding in underserved markets. The increased revenue outlook for fiscal year 2024 suggests that Supermicro anticipates continued strong demand for its optimized AI computer platforms and rack-scale Total IT Solutions.
However, the market will be looking closely at the company's ability to maintain or improve profit margins in the face of potential industry-wide challenges such as supply chain disruptions, component shortages, or shifts in customer spending due to macroeconomic factors. The company's forward-looking statements about expected net sales and earnings per share for the upcoming quarter will be scrutinized for sustainability in the face of such uncertainties.
The emphasis on AI, Cloud, Storage and 5G/Edge by Supermicro aligns with current technological trends and the increasing demand for high-performance computing solutions. Supermicro's record revenue results indicate that their product offerings are well-received in the market, which is an important consideration given the competitive nature of the tech industry. The company's strategic focus on optimized AI computer platforms and Total IT Solutions may be contributing to its strong performance.
However, investors should consider the implications of the company's operational cash flow usage and capital expenditures in relation to its innovation and growth strategies. The technology sector is capital-intensive and continuous investment is often necessary to maintain a competitive edge. It would be beneficial to analyze how these financial metrics compare with industry norms and the potential impact on the company's long-term technological leadership.
Second Quarter Fiscal Year 2024 Highlights
-
Net sales of
$3.66 billion $2.12 billion $1.80 billion -
Gross margin of
15.4% versus16.7% in the first quarter of fiscal year 2024 and18.7% in the same quarter of last year. -
Net income of
$296 million $157 million $176 million -
Diluted net income per common share of
$5.10 $2.75 $3.14 -
Non-GAAP diluted net income per common share of
$5.59 $3.43 $3.26 -
Cash flow used in operations for the second quarter of fiscal year 2024 of
$595 million $15 million
Non-GAAP gross margin for the second quarter of fiscal year 2024 was
As of December 31, 2023, total cash and cash equivalents was
“We continued to demonstrate our market leadership in fiscal Q2 2024, reporting record revenue results of
Business Outlook and Management Commentary
For the third quarter of fiscal year 2024 ending March 31, 2024, the Company expects net sales of
For fiscal year 2024 ending June 30, 2024, the Company is raising its guidance for revenues from a range of
Conference Call and Webcast Information
Supermicro will present a live audio webcast of a conference call to review its second quarter of fiscal year 2024 on Monday, January 29, 2024, at 5:00 p.m. ET / 2:00 p.m. PT.
The webcast will be available at https://ir.supermicro.com.
A replay of the webcast will be available shortly after the call at the same website and will remain accessible for one year.
Cautionary Statement Regarding Forward Looking Statements
Statements contained in this press release that are not historical fact may be forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may relate to, among other things, the third quarter of fiscal year 2024 and updated full year fiscal 2024 guidance, the ability to continue to demonstrate market leadership, the ability to continue to win new partners, and our ability to continue to gain market share. Such forward looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated, including: (i) our quarterly operating results may fluctuate, which could cause rapid declines in our stock price, (ii) as we increasingly target larger customers and larger sales opportunities, our customer base may become more concentrated, our cost of sales may increase, our margins may be lower and our sales may be less predictable, (iii) if we fail to meet publicly announced financial guidance or other expectations about our business, our stock could decline in value, (iv) the average sales prices for our server solutions could decline if customers do not continue to purchase our latest generation products or additional components, and (v) adverse economic conditions may harm our business. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings, particularly in our Annual Report on Form 10-K for our fiscal year ended June 30, 2023, and Quarterly Reports on Form 10-Q filed thereafter.
Use of Non-GAAP Financial Measures
Non-GAAP gross margin discussed in this press release adds back stock-based compensation expenses. Non-GAAP diluted net income per common share discussed in this press release adds back stock-based compensation expenses and litigation recovery adjusted for the related tax effects. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. A reconciliation of GAAP gross margin to non-GAAP gross margin and from GAAP diluted net income per common share to non-GAAP diluted net income per common share is included in the tables below.
About Super Micro Computer, Inc.
Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in
Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc.
SUPER MICRO COMPUTER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) |
|||||
|
December 31, |
|
June 30, |
||
|
2023 |
|
2023 |
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
725,660 |
|
$ |
440,459 |
Accounts receivable, net of allowance for credit losses |
|
1,502,971 |
|
|
1,148,259 |
Inventories |
|
2,466,997 |
|
|
1,445,564 |
Prepaid expenses and other current assets |
|
146,727 |
|
|
145,144 |
Total current assets |
|
4,842,355 |
|
|
3,179,426 |
Property, plant and equipment, net |
|
297,102 |
|
|
290,240 |
Deferred income taxes, net |
|
218,274 |
|
|
162,654 |
Other assets |
|
47,269 |
|
|
42,409 |
Total assets |
$ |
5,405,000 |
|
$ |
3,674,729 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
1,261,533 |
|
$ |
776,831 |
Accrued liabilities |
|
214,462 |
|
|
163,865 |
Income taxes payable |
|
46,453 |
|
|
129,166 |
Short-term debt |
|
276,307 |
|
|
170,123 |
Deferred revenue |
|
193,334 |
|
|
134,667 |
Total current liabilities |
|
1,992,089 |
|
|
1,374,652 |
Deferred revenue, non-current |
|
190,342 |
|
|
169,781 |
Long-term debt |
|
99,322 |
|
|
120,179 |
Other long-term liabilities |
|
46,173 |
|
|
37,947 |
Total liabilities |
|
2,327,926 |
|
|
1,702,559 |
Stockholders’ equity: |
|
|
|
||
Common stock and additional paid-in capital |
|
1,190,276 |
|
|
538,352 |
Accumulated other comprehensive income |
|
657 |
|
|
639 |
Retained earnings |
|
1,885,977 |
|
|
1,433,014 |
Total Super Micro Computer, Inc. stockholders’ equity |
|
3,076,910 |
|
|
1,972,005 |
Noncontrolling interest |
|
164 |
|
|
165 |
Total stockholders’ equity |
|
3,077,074 |
|
|
1,972,170 |
Total liabilities and stockholders’ equity |
$ |
5,405,000 |
|
$ |
3,674,729 |
SUPER MICRO COMPUTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net sales |
$ |
3,664,924 |
|
|
$ |
1,803,195 |
|
|
$ |
5,784,596 |
|
|
$ |
3,655,325 |
|
Cost of sales |
|
3,100,602 |
|
|
|
1,465,773 |
|
|
|
4,866,583 |
|
|
|
2,970,368 |
|
Gross profit |
|
564,322 |
|
|
|
337,422 |
|
|
|
918,013 |
|
|
|
684,957 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
108,824 |
|
|
|
70,700 |
|
|
|
219,851 |
|
|
|
144,943 |
|
Sales and marketing |
|
46,854 |
|
|
|
28,445 |
|
|
|
84,084 |
|
|
|
57,808 |
|
General and administrative |
|
37,180 |
|
|
|
23,095 |
|
|
|
70,104 |
|
|
|
46,901 |
|
Total operating expenses |
|
192,858 |
|
|
|
122,240 |
|
|
|
374,039 |
|
|
|
249,652 |
|
Income from operations |
|
371,464 |
|
|
|
215,182 |
|
|
|
543,974 |
|
|
|
435,305 |
|
Other (expense) income, net |
|
(7,886 |
) |
|
|
(6,335 |
) |
|
|
(1,273 |
) |
|
|
1,719 |
|
Interest expense |
|
(8,131 |
) |
|
|
(1,756 |
) |
|
|
(9,994 |
) |
|
|
(5,694 |
) |
Income before income tax provision |
|
355,447 |
|
|
|
207,091 |
|
|
|
532,707 |
|
|
|
431,330 |
|
Income tax provision |
|
(61,503 |
) |
|
|
(29,573 |
) |
|
|
(81,718 |
) |
|
|
(68,507 |
) |
Share of income (loss) from equity investee, net of taxes |
|
2,024 |
|
|
|
(1,351 |
) |
|
|
1,974 |
|
|
|
(2,240 |
) |
Net income |
$ |
295,968 |
|
|
$ |
176,167 |
|
|
$ |
452,963 |
|
|
$ |
360,583 |
|
Net income per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
5.47 |
|
|
$ |
3.31 |
|
|
$ |
8.45 |
|
|
$ |
6.84 |
|
Diluted |
$ |
5.10 |
|
|
$ |
3.14 |
|
|
$ |
7.86 |
|
|
$ |
6.51 |
|
Weighted-average shares used in calculation of net income per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
54,135 |
|
|
|
53,160 |
|
|
|
53,614 |
|
|
|
52,726 |
|
Diluted |
|
58,078 |
|
|
|
56,144 |
|
|
|
57,632 |
|
|
|
55,427 |
|
Stock-based compensation is included in the following cost and expense categories by period (in thousands):
|
Three Months Ended
|
|
Six Months Ended December 31, |
||||||||
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|||
Cost of sales |
$ |
3,555 |
|
$ |
1,486 |
|
$ |
9,459 |
|
$ |
2,370 |
Research and development |
|
25,439 |
|
|
9,334 |
|
|
61,149 |
|
|
15,452 |
Sales and marketing |
|
4,340 |
|
|
1,448 |
|
|
10,005 |
|
|
2,257 |
General and administrative |
|
9,727 |
|
|
4,713 |
|
|
19,827 |
|
|
7,916 |
Stock-based compensation expense |
$ |
43,061 |
|
$ |
16,981 |
|
$ |
100,440 |
|
$ |
27,995 |
SUPER MICRO COMPUTER, INC. SELECTED CASH FLOW INFORMATION (in thousands) (unaudited) |
|||||||
|
Six Months Ended
|
||||||
|
2023 |
|
2022 |
||||
Net cash (used in) provided by operating activities |
$ |
(324,620 |
) |
|
$ |
474,674 |
|
Net cash used in investing activities |
|
(22,535 |
) |
|
|
(20,631 |
) |
Net cash provided by (used in) financing activities |
|
632,194 |
|
|
|
(415,821 |
) |
Effect of exchange rate fluctuations on cash |
|
170 |
|
|
|
(1,693 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
285,209 |
|
|
|
36,529 |
|
Cash, cash equivalents and restricted cash at the beginning of the period |
|
440,960 |
|
|
|
268,559 |
|
Cash, cash equivalents and restricted cash at the end of the period |
$ |
726,169 |
|
|
$ |
305,088 |
|
SUPER MICRO COMPUTER, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in thousands, except per share amounts) (unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
||||||||
GAAP GROSS PROFIT |
$ |
564,322 |
|
|
$ |
337,422 |
|
|
$ |
918,013 |
|
|
$ |
684,957 |
|
Stock-based compensation |
|
3,555 |
|
|
|
1,486 |
|
|
|
9,459 |
|
|
|
2,370 |
|
NON-GAAP GROSS PROFIT |
$ |
567,877 |
|
|
$ |
338,908 |
|
|
$ |
927,472 |
|
|
$ |
687,327 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP GROSS MARGIN |
|
15.4 |
% |
|
|
18.7 |
% |
|
|
15.9 |
% |
|
|
18.7 |
% |
Stock-based compensation |
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
|
|
0.1 |
% |
NON-GAAP GROSS MARGIN |
|
15.5 |
% |
|
|
18.8 |
% |
|
|
16.0 |
% |
|
|
18.8 |
% |
|
|
|
|
|
|
|
|
||||||||
GAAP OPERATING EXPENSE |
$ |
192,858 |
|
|
$ |
122,240 |
|
|
$ |
374,039 |
|
|
$ |
249,652 |
|
Stock-based compensation |
|
(39,506 |
) |
|
|
(15,495 |
) |
|
|
(90,981 |
) |
|
|
(25,625 |
) |
Litigation recovery |
|
— |
|
|
|
2,230 |
|
|
|
— |
|
|
|
2,230 |
|
NON-GAAP OPERATING EXPENSE |
$ |
153,352 |
|
|
$ |
108,975 |
|
|
$ |
283,058 |
|
|
$ |
226,257 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP INCOME FROM OPERATIONS |
$ |
371,464 |
|
|
$ |
215,182 |
|
|
$ |
543,974 |
|
|
$ |
435,305 |
|
Stock-based compensation |
|
43,061 |
|
|
|
16,981 |
|
|
|
100,440 |
|
|
|
27,995 |
|
Litigation recovery |
|
— |
|
|
|
(2,230 |
) |
|
|
— |
|
|
|
(2,230 |
) |
NON-GAAP INCOME FROM OPERATIONS |
$ |
414,525 |
|
|
$ |
229,933 |
|
|
$ |
644,414 |
|
|
$ |
461,070 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP OPERATING MARGIN |
|
10.1 |
% |
|
|
11.9 |
% |
|
|
9.4 |
% |
|
|
11.9 |
% |
Stock-based compensation |
|
1.2 |
% |
|
|
1.0 |
% |
|
|
1.7 |
% |
|
|
0.8 |
% |
Litigation recovery |
|
— |
% |
|
|
(0.1 |
)% |
|
|
— |
% |
|
|
(0.1 |
)% |
NON-GAAP OPERATING MARGIN |
|
11.3 |
% |
|
|
12.8 |
% |
|
|
11.1 |
% |
|
|
12.6 |
% |
|
|
|
|
|
|
|
|
||||||||
GAAP TAX EXPENSE |
$ |
61,503 |
|
|
$ |
29,573 |
|
|
$ |
81,718 |
|
|
$ |
68,507 |
|
Adjustments to tax provision |
|
9,569 |
|
|
|
4,300 |
|
|
|
25,618 |
|
|
|
7,530 |
|
NON-GAAP TAX EXPENSE |
$ |
71,072 |
|
|
$ |
33,873 |
|
|
$ |
107,336 |
|
|
$ |
76,037 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP NET INCOME |
$ |
295,968 |
|
|
$ |
176,167 |
|
|
$ |
452,963 |
|
|
$ |
360,583 |
|
Stock-based compensation |
|
43,061 |
|
|
|
16,981 |
|
|
|
100,440 |
|
|
|
27,995 |
|
Litigation recovery |
|
— |
|
|
|
(2,230 |
) |
|
|
— |
|
|
|
(2,230 |
) |
Adjustments to tax provision |
|
(9,569 |
) |
|
|
(4,300 |
) |
|
|
(25,618 |
) |
|
|
(7,530 |
) |
NON-GAAP NET INCOME |
$ |
329,460 |
|
|
$ |
186,618 |
|
|
$ |
527,785 |
|
|
$ |
378,818 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP NET INCOME PER COMMON SHARE – BASIC |
$ |
5.47 |
|
|
$ |
3.31 |
|
|
$ |
8.45 |
|
|
$ |
6.84 |
|
Impact of Non-GAAP adjustments |
|
0.62 |
|
|
|
0.20 |
|
|
|
1.39 |
|
|
|
0.34 |
|
NON-GAAP NET INCOME PER COMMON SHARE – BASIC |
$ |
6.09 |
|
|
$ |
3.51 |
|
|
$ |
9.84 |
|
|
$ |
7.18 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP NET INCOME PER COMMON SHARE – DILUTED |
$ |
5.10 |
|
|
$ |
3.14 |
|
|
$ |
7.86 |
|
|
$ |
6.51 |
|
Impact of Non-GAAP adjustments |
|
0.49 |
|
|
|
0.12 |
|
|
|
1.18 |
|
|
|
0.18 |
|
NON-GAAP NET INCOME PER COMMON SHARE – DILUTED |
$ |
5.59 |
|
|
$ |
3.26 |
|
|
$ |
9.04 |
|
|
$ |
6.69 |
|
|
|
|
|
|
|
|
|
||||||||
WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
BASIC – GAAP |
|
54,135 |
|
|
|
53,160 |
|
|
|
53,614 |
|
|
|
52,726 |
|
BASIC – NON-GAAP |
|
54,135 |
|
|
|
53,160 |
|
|
|
53,614 |
|
|
|
52,726 |
|
|
|
|
|
|
|
|
|
||||||||
DILUTED – GAAP |
|
58,078 |
|
|
|
56,144 |
|
|
|
57,632 |
|
|
|
55,427 |
|
DILUTED – NON-GAAP |
|
58,962 |
|
|
|
57,318 |
|
|
|
58,404 |
|
|
|
56,641 |
|
Non-GAAP diluted net income per common share for the first quarter of fiscal year 2024 was
View source version on businesswire.com: https://www.businesswire.com/news/home/20240129226943/en/
Investor Relations Contact
Nicole Noutsios
email: ir@supermicro.com
Source: Super Micro Computer, Inc.
FAQ
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What was the gross margin for the second quarter of fiscal year 2024?
What is the company's revenue outlook for fiscal year 2024?
What was the total cash and cash equivalents as of December 31, 2023?
