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Super Micro Computer Inc

Supermicro Announces Third Quarter Fiscal Year 2024 Financial Results

SAN JOSE, Calif.--(BUSINESS WIRE)--Apr. 30, 2024-- Super Micro Computer, Inc. (Nasdaq: SMCI), a Total IT Solution Provider for AI, Cloud, Storage and 5G/Edge, today announced financial results for its third quarter of fiscal year 2024 ended March 31, 2024.

Third Quarter Fiscal Year 2024 Highlights

  • Net sales of $3.85 billion versus $3.66 billion in the second quarter of fiscal year 2024 and $1.28 billion in the same quarter of last year.
  • Gross margin of 15.5% versus 15.4% in the second quarter of fiscal year 2024 and 17.6% in the same quarter of last year.
  • Net income of $402 million versus $296 million in the second quarter of fiscal year 2024 and $86 million in the same quarter of last year.
  • Diluted net income per common share of $6.56 versus $5.10 in the second quarter of fiscal year 2024 and $1.53 in the same quarter of last year.
  • Non-GAAP diluted net income per common share of $6.65 versus $5.59 in the second quarter of fiscal year 2024 and $1.63 in the same quarter of last year.
  • Cash flow used in operations for the third quarter of fiscal year 2024 of $1,520 million and capital expenditures of $93 million.

Non-GAAP gross margin for the third quarter of fiscal year 2024 was 15.6% with adjustments for stock-based compensation expenses of $3 million. Non-GAAP diluted net income per common share for the third quarter of fiscal year 2024 was $6.65, with adjustments for stock-based compensation expenses of $9 million, net of the related tax effect of $47 million.

As of March 31, 2024, total cash and cash equivalents was $2,115 million and total bank debt and convertible notes were $1,863 million.

“We had yet another record quarter with fiscal Q3 revenue of $3.85 billion with non-GAAP EPS of $6.65 per share. This year-over-year revenue growth of 200% and year-over-year non-GAAP EPS growth of 308% was well above our industry peers,” said Charles Liang, President and CEO of Supermicro. “Strong demand for AI rack scale PnP solutions, along with our team’s ability to develop innovative DLC designs, enabled us to expand our market leadership in AI infrastructure. As new solutions ramp, including fully production ready DLC, we expect to continue gaining market share. As such, we are raising our fiscal year 2024 revenue outlook from $14.3 to $14.7 billion to a new range of $14.7 to $15.1 billion.”

Business Outlook and Management Commentary

For the fourth quarter of fiscal year 2024 ending June 30, 2024, the Company expects net sales of $5.1 billion to $5.5 billion, GAAP net income per diluted share of $7.20 to $8.05 and non-GAAP net income per diluted share of $7.62 to $8.42. The Company’s projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately -2.9% and 2.6%, respectively, and a fully diluted share count of 64.8 million shares for GAAP and fully diluted share count of 65.3 million shares for non-GAAP. The outlook for fourth quarter of fiscal year 2024 GAAP net income per diluted share includes approximately $30 million in expected stock-based compensation, net of related tax effects of $28 million that are excluded from non-GAAP net income per diluted share.

For fiscal year 2024 ending June 30, 2024, the Company is raising its guidance for revenues from a range of $14.3 billion to $14.7 billion to a range of $14.7 billion to $15.1 billion and establishing guidance for GAAP net income per diluted share of $21.61 to $22.46 and non-GAAP net income per diluted share of $23.29 to $24.09. The Company’s projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately 3.6% and 9.2%, respectively, and a fully diluted share count of 61.2 million shares for GAAP and fully diluted share count of 61.8 million shares for non-GAAP. The outlook for fiscal year 2024 GAAP net income per diluted share includes approximately $116 million in expected stock-based compensation, net of related tax effects of $98 million that are excluded from non-GAAP net income per diluted share.

Conference Call and Webcast Information

Supermicro will present a live audio webcast of a conference call to review its third quarter of fiscal year 2024 on Tuesday, April 30, 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 fourth quarter of fiscal year 2024 and updated full year fiscal 2024 guidance, the ability of the team to develop innovative DLC designs, the ability to expand market leadership in AI infrastructure, the ability of new systems to ramp, and the 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 San Jose, California, Supermicro is committed to delivering first to market innovation for Enterprise, Cloud, AI, and 5G Telco/Edge IT Infrastructure. We are a Total IT Solutions manufacturer with server, AI, storage, IoT, switch systems, software, and support services. Supermicro's motherboard, power, and chassis design expertise further enable our development and production, enabling next generation innovation from cloud to edge for our global customers. Our products are designed and manufactured in-house (in the US, Taiwan, and the Netherlands), leveraging global operations for scale and efficiency and optimized to improve TCO and reduce environmental impact (Green Computing). The award-winning portfolio of Server Building Block Solutions® allows customers to optimize for their exact workload and application by selecting from a broad family of systems built from our flexible and reusable building blocks that support a comprehensive set of form factors, processors, memory, GPUs, storage, networking, power, and cooling solutions (air-conditioned, free air cooling or liquid cooling).

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)

 

 

March 31,

 

June 30,

 

2024

 

2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

2,115,476

 

$

440,459

Accounts receivable, net of allowance for credit losses

 

1,650,153

 

 

1,148,259

Inventories

 

4,124,587

 

 

1,445,564

Prepaid expenses and other current assets

 

173,716

 

 

145,144

Total current assets

 

8,063,932

 

 

3,179,426

Property, plant and equipment, net

 

385,566

 

 

290,240

Deferred income taxes, net

 

330,248

 

 

162,654

Other assets

 

83,035

 

 

42,409

Total assets

$

8,862,781

 

$

3,674,729

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

1,092,445

 

$

776,831

Accrued liabilities

 

290,370

 

 

163,865

Income taxes payable

 

20,021

 

 

129,166

Short-term debt

 

81,566

 

 

170,123

Deferred revenue

 

233,293

 

 

134,667

Total current liabilities

 

1,717,695

 

 

1,374,652

Deferred revenue, non-current

 

203,198

 

 

169,781

Long-term debt

 

85,646

 

 

120,179

Convertible notes

 

1,696,255

 

 

—

Other long-term liabilities

 

65,831

 

 

37,947

Total liabilities

 

3,768,625

 

 

1,702,559

Stockholders’ equity:

 

 

 

Common stock and additional paid-in capital

 

2,805,008

 

 

538,352

Accumulated other comprehensive income

 

549

 

 

639

Retained earnings

 

2,288,436

 

 

1,433,014

Total Super Micro Computer, Inc. stockholders’ equity

 

5,093,993

 

 

1,972,005

Noncontrolling interest

 

163

 

 

165

Total stockholders’ equity

 

5,094,156

 

 

1,972,170

Total liabilities and stockholders’ equity

$

8,862,781

 

$

3,674,729

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended
March 31,

 

Nine Months Ended

March 31,

 

2024

 

 

2023

 

2024

 

2023

Net sales

$

3,850,066

 

 

$

1,283,296

 

 

$

9,634,662

 

 

$

4,938,621

 

Cost of sales

 

3,252,698

 

 

 

1,056,937

 

 

 

8,119,281

 

 

 

4,027,305

 

Gross profit

 

597,368

 

 

 

226,359

 

 

 

1,515,381

 

 

 

911,316

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

116,226

 

 

 

77,515

 

 

 

336,077

 

 

 

222,458

 

Sales and marketing

 

49,691

 

 

 

25,312

 

 

 

133,775

 

 

 

83,120

 

General and administrative

 

53,137

 

 

 

24,450

 

 

 

123,241

 

 

 

71,351

 

Total operating expenses

 

219,054

 

 

 

127,277

 

 

 

593,093

 

 

 

376,929

 

Income from operations

 

378,314

 

 

 

99,082

 

 

 

922,288

 

 

 

534,387

 

Other income (expense), net

 

10,035

 

 

 

(78

)

 

 

8,762

 

 

 

1,641

 

Interest expense

 

(6,246

)

 

 

(1,288

)

 

 

(16,240

)

 

 

(6,982

)

Income before income tax provision

 

382,103

 

 

 

97,716

 

 

 

914,810

 

 

 

529,046

 

Income tax benefit (provision)

 

19,983

 

 

 

(10,857

)

 

 

(61,735

)

 

 

(79,364

)

Share of income (loss) from equity investee, net of taxes

 

373

 

 

 

(1,013

)

 

 

2,347

 

 

 

(3,253

)

Net income

$

402,459

 

 

$

85,846

 

 

$

855,422

 

 

$

446,429

 

Net income per common share:

 

 

 

 

 

 

 

Basic

$

7.13

 

 

$

1.61

 

 

$

15.68

 

 

$

8.42

 

Diluted

$

6.56

 

 

$

1.53

 

 

$

14.53

 

 

$

8.00

 

Weighted-average shares used in calculation of net income per common share:

 

 

 

 

 

 

 

Basic

 

56,478

 

 

 

53,280

 

 

 

54,562

 

 

 

53,011

 

Diluted

 

61,431

 

 

 

56,233

 

 

 

58,889

 

 

 

55,796

 

Stock-based compensation is included in the following cost and expense categories by period (in thousands):

 

Three Months Ended
March 31,

 

Nine Months Ended
March 31,

 

2024

 

2023

 

2024

 

2023

Cost of sales

$

3,221

 

 

$

1,215

 

 

$

12,680

 

 

$

3,585

 

Research and development

 

24,856

 

 

8,097

 

 

86,005

 

 

23,549

Sales and marketing

 

4,993

 

 

 

1,214

 

 

 

14,998

 

 

 

3,471

 

General and administrative

 

23,037

 

 

 

3,126

 

 

 

42,864

 

 

 

11,042

 

Stock-based compensation expense

$

56,107

 

 

$

13,652

 

 

$

156,547

 

 

$

41,647

 

SUPER MICRO COMPUTER, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)

(unaudited)

 

 

Nine Months Ended
March 31,

 

2024

 

2023

Net cash (used in) provided by operating activities

$

(1,844,158

)

 

$

672,919

 

Net cash used in investing activities

 

(131,969

)

 

 

(28,618

)

Net cash provided by (used in) financing activities

 

3,652,783

 

 

 

(547,291

)

Effect of exchange rate fluctuations on cash

 

(1,634

)

 

 

(2,269

)

Net increase in cash, cash equivalents and restricted cash

 

1,675,022

 

 

 

94,741

 

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

$

2,115,982

 

 

$

363,300

 

SUPER MICRO COMPUTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

March 31, 2024

 

March 31, 2023

 

March 31, 2024

 

March 31, 2023

GAAP GROSS PROFIT

$

597,368

 

 

$

226,359

 

 

$

1,515,381

 

 

$

911,316

 

Stock-based compensation

 

3,221

 

 

 

1,215

 

 

 

12,680

 

 

 

3,585

 

NON-GAAP GROSS PROFIT

$

600,589

 

 

$

227,574

 

 

$

1,528,061

 

 

$

914,901

 

 

 

 

 

 

 

 

 

GAAP GROSS MARGIN

 

15.5

%

 

 

17.6

%

 

 

15.7

%

 

 

18.5

%

Stock-based compensation

 

0.1

%

 

 

0.1

%

 

 

0.1

%

 

 

0.1

%

NON-GAAP GROSS MARGIN

 

15.6

%

 

 

17.7

%

 

 

15.8

%

 

 

18.6

%

 

 

 

 

 

 

 

 

GAAP OPERATING EXPENSE

$

219,054

 

 

$

127,277

 

 

$

593,093

 

 

$

376,929

 

Stock-based compensation

 

(52,886

)

 

 

(12,437

)

 

 

(143,867

)

 

 

(38,062

)

Litigation recovery

 

—

 

 

 

1,540

 

 

 

—

 

 

 

3,770

 

NON-GAAP OPERATING EXPENSE

$

166,168

 

 

$

116,380

 

 

$

449,226

 

 

$

342,637

 

 

 

 

 

 

 

 

 

GAAP INCOME FROM OPERATIONS

$

378,314

 

 

$

99,082

 

 

$

922,288

 

 

$

534,387

 

Stock-based compensation

 

56,107

 

 

 

13,652

 

 

 

156,547

 

 

 

41,647

 

Litigation recovery

 

—

 

 

 

(1,540

)

 

 

—

 

 

 

(3,770

)

NON-GAAP INCOME FROM OPERATIONS

$

434,421

 

 

$

111,194

 

 

$

1,078,835

 

 

$

572,264

 

 

 

 

 

 

 

 

 

GAAP OPERATING MARGIN

 

9.8

%

 

 

7.7

%

 

 

9.6

%

 

 

10.8

%

Stock-based compensation

 

1.5

%

 

 

1.1

%

 

 

1.6

%

 

 

0.8

%

Litigation recovery

 

—

%

 

 

(0.1

)%

 

 

—

%

 

 

(0.1

)%

NON-GAAP OPERATING MARGIN

 

11.3

%

 

 

8.7

%

 

 

11.2

%

 

 

11.5

%

 

 

 

 

 

 

 

 

GAAP TAX (BENEFIT) EXPENSE

$

(19,983

)

 

$

10,857

 

 

$

61,735

 

 

$

79,364

 

Adjustments to tax provision

 

47,023

 

 

 

4,433

 

 

 

72,641

 

 

 

11,963

 

NON-GAAP TAX EXPENSE

$

27,040

 

 

$

15,290

 

 

$

134,376

 

 

$

91,327

 

 

 

 

 

 

 

 

 

GAAP NET INCOME

$

402,459

 

 

$

85,846

 

 

$

855,422

 

 

$

446,429

 

Stock-based compensation

 

56,107

 

 

 

13,652

 

 

 

156,547

 

 

 

41,647

 

Litigation recovery

 

—

 

 

 

(1,540

)

 

 

—

 

 

 

(3,770

)

Adjustments to tax provision

 

(47,023

)

 

 

(4,433

)

 

 

(72,641

)

 

 

(11,963

)

NON-GAAP NET INCOME

$

411,543

 

 

$

93,525

 

 

$

939,328

 

 

$

472,343

 

 

 

 

 

 

 

 

 

GAAP NET INCOME - BASIC

$

402,459

 

 

$

85,846

 

 

$

855,422

 

 

$

446,429

 

Convertible notes interest charge, net of tax

 

385

 

 

 

—

 

 

 

385

 

 

 

—

 

GAAP NET INCOME - DILUTED

$

402,844

 

 

$

85,846

 

 

$

855,807

 

 

$

446,429

 

NON-GAAP NET INCOME - DILUTED

$

411,928

 

 

$

93,525

 

 

$

939,713

 

 

$

472,343

 

 

 

 

 

 

 

 

 

GAAP NET INCOME PER COMMON SHARE – BASIC

$

7.13

 

 

$

1.61

 

 

$

15.68

 

 

$

8.42

 

Impact of Non-GAAP adjustments

 

0.16

 

 

 

0.15

 

 

 

1.54

 

 

 

0.49

 

NON-GAAP NET INCOME PER COMMON SHARE – BASIC

$

7.29

 

 

$

1.76

 

 

$

17.22

 

 

$

8.91

 

 

 

 

 

 

 

 

 

GAAP NET INCOME PER COMMON SHARE – DILUTED

$

6.56

 

 

$

1.53

 

 

$

14.53

 

 

$

8.00

 

Impact of Non-GAAP adjustments

 

0.09

 

 

 

0.10

 

 

 

1.24

 

 

 

0.29

 

NON-GAAP NET INCOME PER COMMON SHARE – DILUTED

$

6.65

 

 

$

1.63

 

 

$

15.77

 

 

$

8.29

 

 

 

 

 

 

 

 

 

WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC – GAAP

 

56,478

 

 

 

53,280

 

 

 

54,562

 

 

 

53,011

 

BASIC – NON-GAAP

 

56,478

 

 

 

53,280

 

 

 

54,562

 

 

 

53,011

 

 

 

 

 

 

 

 

 

DILUTED – GAAP

 

61,431

 

 

 

56,233

 

 

 

58,889

 

 

 

55,796

 

DILUTED – NON-GAAP

 

61,953

 

 

 

57,315

 

 

 

59,578

 

 

 

56,966

 

Non-GAAP diluted net income per common share for the second quarter of fiscal year 2024 was $5.59, with adjustments for stock-based compensation expenses of $33 million, net of the related tax effects of $10 million.

Investor Relations Contact
Nicole Noutsios
email: ir@supermicro.com

Source: Super Micro Computer, Inc.