Supermicro Beats Estimates as Sales Nearly Quadruple, Raises Full-Year Outlook to $72 Billion to $82 Billion

Super Micro Computer reported record first-quarter sales on Tuesday, nearly quadrupling revenue from a year earlier on demand for its AI servers.

Super Micro Computer, Inc. (NASDAQ: SMCI) is a San Jose, California server maker. It builds AI-optimized servers and full data center systems. Its Data Center Building Block Solutions, called DCBBS, package servers with networking, software and service.

Sales cleared the preview and estimates

Net sales were $19.95 billion for the quarter ended September 30, 2026. That is nearly four times the $5.02 billion reported a year earlier. By TickerGrove's calculation, sales rose 297.5% from a year earlier.

The result cleared the top of Supermicro's own October preview. The company had estimated sales of $18.5 billion to $19.5 billion in that update. It had originally guided the quarter to $14.5 billion to $15.5 billion.

The LSEG consensus estimate for sales was $16.39 billion, according to Reuters. By TickerGrove's calculation, reported sales beat that estimate by 21.7%. The quarter also rose from $11.1 billion in the fourth quarter.

Adjusted earnings per share were $1.81, against an LSEG estimate of $1.23. Adjusted earnings per share means profit excluding stock-based pay and similar items. By TickerGrove's calculation, the adjusted earnings beat was 47.2%.

Profit rose, but margins stepped down

Net income was $1.59 billion, up from $168 million a year earlier. Diluted earnings per share were $1.75 on a reported basis. GAAP means the standard accounting rules. A year earlier, diluted earnings were $0.26 a share.

GAAP gross margin was 12.7%, up from 9.3% a year earlier. Gross margin is the share of sales left after production costs. The adjusted gross margin, called non-GAAP in the release, was 12.8%. That adjusted margin was up from 9.5% a year earlier.

Both margins fell sharply from the fourth quarter, though. GAAP margin was 17.5% in that quarter, and the adjusted margin was 17.6%. The step-down came even as sales jumped sequentially.

Liang called it a record quarter

"Supermicro'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," said Charles Liang, founder, president and chief executive.

Liang said the DCBBS approach is driving value for customers. He cited systems from gigawatt-scale data centers down to single-container pods. He also cited expanding software, proactive service and networking offers.

Shares rose after hours on the report

Shares rose 8.31% in after-hours trading to $34.00 as of 4:57 p.m. ET on Tuesday, according to Nasdaq quote data. The official regular close was $31.39, up 3.12% on the day. That reaction figure is an after-hours snapshot, not a close.

Supermicro had closed Monday at $30.44, the prior close. It rose in Tuesday's regular session before the report. The after-hours move extends that gain, on this one snapshot.

Cash was used as receivables and inventories jumped

Cash flow used in operations was $434 million in the quarter. Capital expenditures and investments were $47 million. A year earlier, operations had also used cash, at $918 million.

Cash and cash equivalents were $6.9 billion at September 30, 2026. Total bank debt and convertible notes were $8.6 billion. Receivables and inventories both rose sharply as sales scaled.

Second-quarter and full-year guidance move higher

For the second quarter of fiscal 2027, Supermicro said it expects net sales of $19.5 billion to $21.5 billion. That outlook is announced, not reported. The LSEG estimate for the quarter was $17.14 billion, according to Reuters.

By TickerGrove's calculation, the outlook midpoint sits 19.6% above that estimate. Announced adjusted earnings guidance is $1.66 to $1.90 a share. Announced GAAP guidance is $1.59 to $1.83 a share. The outlook gives no second-quarter margin range.

For fiscal 2027, the company raised its sales outlook to $72.0 billion to $82.0 billion. The prior outlook was $65.0 billion to $72.0 billion. The LSEG estimate for the year was $69.17 billion, according to Reuters.

Results are preliminary, and a new CFO is in place

The release describes its own figures as preliminary estimated unaudited results. Supermicro said its closing procedures for the quarter are not yet complete. Final results could differ from the figures reported Tuesday.

Reuters reported that Supermicro appointed former Western Digital executive Mark Long as chief financial officer last month, ending a search of nearly two years amid concerns over its financial and accounting practices.

What remains unknown

What remains unknown includes whether the after-hours gain holds into Wednesday's regular session. After-hours snapshots can fade or reverse. The official test is the next regular close.

Second-quarter gross margin also remains unknown, because the outlook gives no margin range. Management's earnings call, set for 5:00 p.m. ET, had not begun at reporting time. Whether the preliminary figures change as closing procedures finish is also unknown.

What to watch next

What to watch next is call commentary on demand, customer mix and the margin step-down. Detail there would show whether the step-down reflects customer mix or a lasting level.

Watch second-quarter results against the $19.5 billion to $21.5 billion outlook. Watch fiscal 2027 sales against the raised $72.0 billion to $82.0 billion range. Watch the next regular close against the after-hours snapshot.