Key Highlights

  • USD 19.9 billion: net sales for the quarter ended September 30, 2026 at Super Micro Computer (NASDAQ:SMCI), versus USD 11.1 billion in the prior quarter and USD 5.0 billion a year earlier.
  • 12.7%: GAAP gross margin, down from 17.5% in the prior quarter but up from 9.3% a year earlier, on Net Income of USD 1,594 million and diluted EPS of USD 1.75.
  • USD 434 million: cash used in Operating Activities in the quarter, as Accounts Receivable rose by USD 3.56 billion and inventories by USD 2.48 billion.
  • USD 72.0 billion to USD 82.0 billion: the company's fiscal year 2027 net sales outlook, with second quarter sales guided to USD 19.5 billion to USD 21.5 billion.

Sales Reach USD 19.9 Billion but Gross Margin Slips to 12.7%

Supermicro announced unaudited results for the first quarter of fiscal year 2027 on November 3, 2026, for the quarter ended September 30, 2026. Net sales were USD 19.9 billion, roughly 80% above the prior quarter's USD 11.1 billion, our own arithmetic. Gross margin was 12.7% against 17.5% in the prior quarter, and non-GAAP gross margin was 12.8% against 9.5% a year earlier. Net income was USD 1,594 million, or USD 1.75 per diluted share, with non-GAAP EPS of USD 1.81. Operating expenses were USD 476.6 million, and the tax provision of USD 435.5 million was about 21% of pretax income, a ratio we calculated. The CEO called it record Revenue and credited its Data Center Building Block Solutions.

Why Rapid Growth Consumed Cash Instead of Producing It

Cash used in operations was USD 434 million despite USD 1.6 billion of profit. Accounts receivable climbed to USD 9.7 billion from USD 6.1 billion at June 30, 2026, and inventories rose to USD 15.1 billion from USD 12.9 billion. Deferred revenue rose by USD 3.05 billion, partly offsetting the Working Capital drag. Cash and equivalents fell to USD 6.9 billion from USD 7.5 billion, while bank Debt and convertible notes totaled USD 8.6 billion. Interest expense rose to USD 82.5 million from USD 24.9 million a year earlier, and the company paid USD 63.7 million of preferred dividends. When sales scale this fast, customers pay after products ship, so profit shows up before cash does.

Preliminary Numbers, Thinner Margins and the Second Quarter Guide

The company stressed that the figures are preliminary because financial closing procedures are not complete, and its auditor has not audited, reviewed or performed any procedures on them. Final results could differ materially. For the second quarter ending December 31, 2026, it expects net sales of USD 19.5 billion to USD 21.5 billion and GAAP EPS of USD 1.59 to USD 1.83, which implies only modest sequential growth at the midpoint, our own comparison. Listed risks include a more concentrated customer base, lower margins as it targets larger deals, falling average selling prices and tariffs. A call was held at 5:00 p.m. ET on November 3, 2026.

Where Things Stand

The cash burn reflects working capital, not a failed quarter. Super Micro Computer (NASDAQ:SMCI) recorded USD 1,594 million of net income, but receivables and inventory absorbed more cash than profits generated, leaving USD 434 million of operating cash outflow. The caution is that the numbers are unaudited and preliminary, margins are lower than the prior quarter, and debt and convertible notes of USD 8.6 billion exceed cash of USD 6.9 billion. The next tests are collection of the USD 9.7 billion of receivables, the final audited figures, and whether second quarter sales reach the guided USD 19.5 billion to USD 21.5 billion.