Supermicro posts $19.9 billion in quarterly sales, but margins fall from prior quarter

Supermicro reported record quarterly sales on November 3, but its gross margin fell from the previous quarter. The preliminary earnings release put fiscal first-quarter revenue at $19.9 billion, nearly four times the year-earlier total. Net income reached $1.594 billion, up both annually and from the prior quarter, despite the margin decline.

The figures cover the quarter ended September 30, 2026, and remain unaudited. Supermicro said its closing procedures were incomplete and final results could differ materially. Its independent accounting firm had not audited, reviewed or performed procedures on the preliminary data.

More sales and profit, less margin than last quarter

Revenue rose from $5.0 billion a year earlier and $11.1 billion in the immediately preceding quarter. Net income increased from $168 million a year earlier and $1.178 billion the quarter before. Diluted earnings reached $1.75 a share, compared with 26 cents a year earlier and $1.62 in the previous quarter.

Gross margin—the share of revenue left after the cost of goods sold—was 12.7%. That exceeded the year-earlier 9.3%, but fell from 17.5% in the prior quarter.

Chief Executive Charles Liang credited the company’s Data Center Building Block Solutions with delivering customer value across projects ranging from large data centers to single-container installations. He said expanding software, services and networking was enhancing profitability.

For the December quarter, the company also forecasts:

• Under standard accounting rules: diluted earnings of $1.59 to $1.83 a share.
• On its adjusted, non-GAAP measure: diluted earnings of $1.66 to $1.90 a share, excluding expected stock-based compensation, net of related tax effects.

Profit did not translate into operating cash

Despite the reported profit, operations used $434 million in cash during the quarter. Supermicro also recorded $47 million in capital expenditures and investments. At September 30, it held $6.9 billion in cash and cash equivalents, against $8.6 billion in bank debt and convertible notes.

The balance sheet showed more money tied up in inventory and customer bills awaiting payment. Inventories rose to about $15.05 billion from $12.90 billion at June 30. Accounts receivable increased to about $9.69 billion from $6.13 billion.

Supermicro warned that pursuing larger customers and contracts could concentrate its customer base, increase cost of sales, reduce margins and make revenue less predictable. It presented these as risks to its outlook, not an explanation for this quarter’s margin decline.