W.005Super Micro’s sales quadrupled. Its cash went the other way
Super Micro sold $19.95B of servers and storage in the quarter to September, 4.0 times a year earlier, and raised its fiscal 2027 range to $72–82B. Operating cash flow was −$434M: inventory and receivables rose $5.7B in three months. Its own guidance, at the midpoints, has the second half of the fiscal year 10% below the first.
Net sales rose fourfold in a year, on a 12.7% gross margin
Net sales by fiscal quarter (years end June 30), $, with GAAP gross margin over each bar. The last bar is the low end of guidance for the quarter to December, $19.5–21.5B.
Data
| Quarter | Net sales | GAAP gross margin | Change on a year earlier |
|---|---|---|---|
| Q1 FY25 | $5.94B | 13.1% | – |
| Q2 FY25 | $5.68B | 11.8% | – |
| Q3 FY25 | $4.60B | 9.6% | – |
| Q4 FY25 | $5.76B | 9.5% | – |
| Q1 FY26 | $5.02B | 9.3% | −15% |
| Q2 FY26 | $12.68B | 6.3% | +123% |
| Q3 FY26 | $10.24B | 9.9% | +123% |
| Q4 FY26 | $11.12B | 17.5% | +93% |
| Q1 FY27 | $19.95B | 12.7% | +298% |
A quarter a third above its own guidance
Super Micro guided to $14.5–15.5B for the quarter in August, raised it to an estimated $18.5–19.5B on October 20, and reported $19.95B. That is $4.95B above the August midpoint, and above the $17.53B analysts expected, according to TipRanks and MarketBeat. Gross profit was $2.54B, 5.4 times a year earlier, and operating income $2.06B, a 10.4% operating margin. Non-GAAP earnings per share were $1.81, against $1.23 expected. The October update put the jump down to “increased demand for AI platforms.”
The release gives no customer or product breakdown; the call did. According to MarketBeat’s recap of the call, AI systems were about 71% of revenue in the quarter, and one large data-center customer accounted for 44%, against 28% for all of fiscal 2026. Neither figure is in the filing.
The stock, at $31.39 at Tuesday’s close, rose about 7% after hours. MarketBeat had it at $33.66 at 8 pm Eastern.
Inventory has nearly quadrupled in eighteen months
Inventory at each fiscal quarter end, $B.
Five quarters, four of them cash-negative
Operating cash flow by fiscal quarter, $B. Q3 FY26 is derived from the nine-month figure in that quarter’s release. Over the last five quarters the total is −$7.2B.
Balance sheet, June 30 → September 30, 2026
| Item | Jun 30 | Sep 30 | Change |
|---|---|---|---|
| Inventory | $12.90B | $15.05B | +17% |
| Accounts receivable | $6.13B | $9.69B | +58% |
| Deferred revenue, current and non-current | $2.61B | $5.67B | +117% |
| Cash and equivalents | $7.52B | $6.90B | −8% |
Where the cash went
Profit was booked, but not yet collected. Super Micro earned $1,594M in the quarter and used $434M of cash in operations. Inventory rose $2.16B to $15.05B and receivables $3.56B to $9.69B; deferred revenue, billed ahead of recognition, helped the other way, up $3.05B. After $42M of capital spending, free cash flow was about −$476M. Cash fell to $6.90B, against $8.65B of bank debt and convertible notes, net debt of about $1.75B.
It is the pattern of the last year. Super Micro used about $6.6B of operating cash in the March quarter alone, as inventory went past $11B; only the June quarter, with its 17.5% gross margin, was clearly positive.
The raised year puts the second half below the first
Net sales, $B. Fiscal 2026 as reported; fiscal 2027 guidance in August (solid to its low end, outlined to its high end) and on November 3, split into Q1 as reported, the Q2 guidance midpoint and what is left for the second half at the midpoints.
Q1’s $19.95B and Q2’s $19.5–21.5B leave $32.6B for the second half at the low ends, $36.6B at the midpoints and $40.6B at the high ends: about $18.3B a quarter at the midpoints, below the first two quarters. The range was raised by $8.5B at the midpoint. Super Micro has lowered its full-year outlook within a year before: it guided to at least $40B for fiscal 2026 in February and reported $39.1B.
What this changes on 06.ai
- Series lead: server makers’ working capital (inventory, receivables, operating cash flow) against sales, quarterly, for Super Micro, Dell and HPE. Super Micro’s $5.7B working-capital build in one quarter is a cost of the rack ramp that revenue figures don’t show.
- Pack lead (008, Blackwell per dollar): one customer was 44% of Super Micro’s quarter, per the call. If the 10-Q names the share of revenue from customers above 10%, the pack’s map of who buys the racks should take it.
Sources and method
| Item | Figure | Source |
|---|---|---|
| Q1 FY27 results | Net sales $19,945.8M (Q1 FY26 $5,017.8M); GAAP gross margin 12.7%, non-GAAP 12.8%; operating income $2,064.5M; net income $1,594.2M; EPS $1.75 GAAP, $1.81 non-GAAP; operating cash flow −$434.0M; balance sheet; Q2 guidance $19.5–21.5B; FY27 guidance $72.0–82.0B | Super Micro 8-K, exhibit 99.1, Nov 3 |
| Preliminary update | Q1 net sales estimated at $18.5–19.5B, gross margin 12.0–12.5%, against guidance of $14.5–15.5B and 10.4–10.8% | Super Micro 8-K, Oct 20 |
| Q4 FY26 results | Q4 sales $11.1B, gross margin 17.5%; FY26 sales $39.1B; FY27 guidance $65.0–72.0B; Q1 guidance $14.5–15.5B | Super Micro, Aug 11 |
| Earlier quarters | Q3 FY26 sales $10.2B, gross margin 9.9%, inventory $11.1B; nine-month operating cash flow | Super Micro, May 5 |
| Earlier quarters | Q2 FY26 sales $12.7B, gross margin 6.3%, inventory $10.6B | Super Micro, Feb 3 |
| Earlier quarters | Q1 FY26 and Q1 FY25 | Super Micro, Nov 4, 2025 |
| Earlier quarters | Q4 FY25 | Super Micro, Aug 5, 2025 |
| Earlier quarters | Q3 FY25 and Q2 FY25 | Super Micro, May 6, 2025 |
| Call and consensus | AI about 71% of Q1 revenue; one customer 44%; consensus EPS $1.23 and revenue $17.53B; Nov 3 close $31.39; $33.66 after hours | MarketBeat |
| Consensus | Q1 consensus EPS $1.23 and revenue $17.53B | TipRanks, Nov 3 |
Quarterly sales and margins are from each quarter’s release; Q2 FY25 is as rounded there ($5.68B); the others are the exact figures. Growth: $19.95B ÷ $5.02B = 3.98×. Working capital: the changes in inventory and accounts receivable between the June 30 and September 30 balance sheets. Free cash flow: operating cash flow less capital expenditure (−$434M − $42M); Super Micro’s release also counts about $5M of investments. Debt adds current and non-current lines of credit and term loans and the convertible notes; net debt subtracts cash and equivalents.
The implied second half is the fiscal 2027 guidance less Q1 as reported less the Q2 guidance, at matching ends of each range: low − $19.95B − $19.5B, and so on. Mixing ends gives a wider range. Customer and AI shares come from the call as recapped by MarketBeat and are not in the filing. Q3 FY26 operating cash flow is the release’s nine-month figure less Q1 and Q2, about −$6.6B.
Wire reports are written within hours of the news, on a six-hour schedule. Each lists its sources and shows the arithmetic behind its figures. Not investment advice.