After a strong start to the year, SMCI stock fell 50% since the March highs. In today's video, I will talk about Super Micro Computer's (SMCI 1.33%) fourth-quarter earnings report. Check out the short video to learn more, consider subscribing, and click the special offer link below. *Stock prices used were from the trading day of Aug. 6, 2024. The video was published on Aug. 6, 2024. ...

For several months in 2024, the server company Super Micro Computer (NASDAQ): SMCI) was the absolute star of the stock market as it, between January and March, managed a rise from about $285 to above $1,000. 588.82 Div yield 226.59 Low 52-wk low Supermicro's performance since has, however, been less than stellar as the company's shares entered a months-long period of stagnation that has, with the release of the latest earnings report, ended with an extended session crash for SMCI. Indeed, while the technolo ...

Super Micro Computer, Inc. SMCI, which manufactures servers for artificial intelligence applications and processes, reported its fiscal fourth-quarter results Tuesday after the market closed and its stock reacted to the report with a sharp move to the downside. Quarterly sales jumped about 144% year-over-year to $5.31 billion, with the topline rising about 38% sequentially. The revenue growth was in line with the consensus. Non-GAAP earnings per share came in at $6.25 versus $3.51 a year ago and $6.65 in th ...

The demand for AI servers continues to grow. In today's video, I discuss Super Micro Computer (SMCI 1.33%) and other companies providing AI servers. Check out the short video to learn more, consider subscribing, and click the special offer link below. *Stock prices used were the after-market prices of Aug. 5, 2024. The video was published on Aug. 5, 2024. ...

Key Takeaways Super Micro Computer shares slumped 13% in extended trading on Tuesday after the server maker reported earnings that fell short of expectations, issued a light profit forecast and disclosed a surprise drop in adjusted gross margin, as the cost of transitioning to more expensive AI chips weighed on the bottom line. The shares broke down below a descending triangle last month, with the price closing beneath the closely watched 200-day moving average in early August. Super Micro Computer shares m ...

This marks the first-ever stock split for the AI-centric server specialist. Recent advancements in the field of artificial intelligence (AI) sparked a flurry of interest from consumers and investors alike. The dawn of generative AI early last year has also had an impact on companies at the cutting edge of the technology, sending sales and profits to new heights. This, in turn, has sent the stock prices of these companies surging as investors scramble to get in on the ground floor of the paradigm shift in th ...

Financial Data and Key Metrics - Q4 2024 revenue reached a record $5.31 billion, a 143% YoY growth, with fiscal 2024 revenue at $14.94 billion, a 110% YoY increase [6] - Q4 non-GAAP earnings per share were $6.25, up 78% YoY, while operating margin was 7.8%, lower than expected due to higher hyperscale datacenter business mix and expedited DLC liquid cooling component costs [7] - Q4 gross margin was 11.3%, down from 15.6% in Q3, primarily due to product and customer mix, competitive pricing for strategic designs, and higher initial costs for DLC AI GPU clusters [18] - Q4 operating expenses increased by 15% QoQ and 75% YoY to $253 million on a GAAP basis, driven by higher compensation and headcount [19] - Q4 cash flow used in operations was $635 million, with closing inventory at $4.4 billion in anticipation of future growth [20] Business Line Data and Key Metrics - Enterprise-channel vertical revenue was $1.83 billion, representing 34% of Q4 revenue, up 87% YoY but down 3% QoQ [16] - OEM appliance and large datacenter segment revenue was $3.41 billion, representing 64% of Q4 revenue, up 192% YoY and 76% QoQ [16] - Emerging 5G, Telco, Edge/IoT revenues were $75 million, or 2% of Q4 revenue [17] - Server and Storage Systems comprised 95% of Q4 revenue, while Subsystems and Accessories represented 5% [17] Market Data and Key Metrics - US represented 61% of Q4 revenue, Asia 24%, Europe 10%, and Rest of World 5% [17] - YoY revenue growth: US increased 94%, Asia 437%, Europe 128%, and Rest of World 386% [18] - QoQ revenue growth: US increased 20%, Asia 66%, Europe 74%, and Rest of World 187% [18] Company Strategy and Industry Competition - The company is focusing on DLC liquid cooling solutions, targeting 25%-30% of new global datacenter deployments to use DLC in the next 12 months [9] - Supermicro is expanding its Datacenter Building Block Solutions (DCBBS), aiming to reduce datacenter build time from three years to two years, with smaller facilities or transformations taking less than a year [10] - The company is leveraging its new Malaysia facility, expected to start production in November 2024, to improve cost structure and shipping volume [11] - Supermicro is positioning itself as a leader in AI infrastructure, particularly in Generative AI training and inferencing, with a strong backlog and design win pipeline [15] Management Commentary on Operating Environment and Future Outlook - Management expects Q1 fiscal 2025 revenue between $6 billion to $7 billion, with fiscal 2025 revenue guidance of $26 billion to $30 billion [12] - Short-term margin pressure is expected to ease by the end of fiscal 2025, driven by high-volume shipments of DLC liquid cooling and Datacenter Building Block Solutions [12] - The company announced a 10-for-1 forward stock split, targeting trading on a split-adjusted basis starting October 1, 2024 [12] Other Important Information - The company faced a delay in revenue shipments of approximately $800 million due to component shortages, which will be recognized in the September quarter [7] - Supermicro is targeting to make DLC liquid cooling a mainstream solution, with over 1,000 DLC racks delivered to multiple customers [8] - The company is expanding its global manufacturing footprint, including new buildings and production capacity near its Silicon Valley headquarters [11] Q&A Session Summary Question: Revenue guidance assumptions and supply chain contingencies [24] - The company expects strong demand for DLC liquid cooling and Datacenter Building Block Solutions, with a target of $26 billion to $30 billion in revenue for fiscal 2025 [25] Question: Gross margin performance and sustainability [27] - The company is focusing on large-scale datacenter customers while maintaining its enterprise customer base, with long-term gross margin improvement expected from cost advantages in Taiwan and Malaysia [28] Question: Impact of NVIDIA Blackwell delays [29] - The company anticipates minimal impact from NVIDIA Blackwell delays, as it can provide alternative solutions like H200 liquid cooling [30] Question: Gross margin decline breakdown [33] - Approximately half of the 430 bps gross margin decline was due to customer mix, while the other half was due to higher supply chain costs for DLC liquid cooling [50] Question: Competitive positioning in liquid cooling [38] - Supermicro claims a 70%-80% market share in DLC liquid cooling, with significant energy savings and performance advantages over traditional air-cooled solutions [39][40] Question: Rack capacity expansion [41] - The company plans to increase liquid cooling rack capacity to 3,000 racks per month by the end of 2024, driven by strong customer demand [42] Question: Blackwell platform shipping timeline [46] - The company does not expect significant Blackwell volume until March 2025, with minimal impact on fiscal 2025 revenue guidance [47] Question: Working capital needs [54] - The company has secured a $500 million credit line and is exploring additional financing options to support growth [56] Question: Pricing strategy for liquid cooling [57] - The company is prioritizing market share growth over pricing, aiming to make DLC liquid cooling a mainstream solution [58] Question: Gross margin target range [59] - The company expects to return to its target gross margin range of 14%-17% by the end of fiscal 2025, driven by improved manufacturing efficiencies and higher-margin solutions [59][60] Question: Free cash flow and CapEx [64] - The company does not expect to burn $2.5 billion in free cash flow for fiscal 2025, as it focuses on balanced growth and leveraging its balance sheet [64][65] Question: DLC failure rates [67] - The company has optimized its DLC solutions, resulting in lower failure rates and improved datacenter performance compared to air-cooled solutions [67][68] Question: AI rack scale revenue mix [73] - Q4 revenue growth was primarily driven by liquid-cooled racks, with significant demand for high-density computing solutions [73][75]

Financial Performance - Net sales for Q4 FY2024 were $5.31 billion, up from $3.85 billion in Q3 FY2024 and $2.18 billion in the same quarter last year[1] - Gross margin for Q4 FY2024 was 11.2%, down from 15.5% in Q3 FY2024 and 17.0% in the same quarter last year[1] - Net income for Q4 FY2024 was $353 million, compared to $402 million in Q3 FY2024 and $194 million in the same quarter last year[1] - Fiscal year 2024 net sales were $14.94 billion, up 110% year-over-year from $7.12 billion in FY2023[3] - Net sales for Q3 2024 increased to $5.31 billion, up 143% from $2.18 billion in Q3 2023[12] - Gross profit for Q3 2024 rose to $596.3 million, a 60% increase from $371.7 million in Q3 2023[12] - Net income for Q3 2024 reached $352.7 million, up 82% from $193.6 million in Q3 2023[12] - Non-GAAP net income for Q3 2024 was $404.2 million, a 101% increase from $201.1 million in Q3 2023[15] Non-GAAP Metrics - Non-GAAP diluted net income per common share for Q4 FY2024 was $6.25, compared to $6.65 in Q3 FY2024 and $3.51 in the same quarter last year[2] - Non-GAAP net income for FY2024 was $1.34 billion, or $22.09 per diluted share, compared to $673 million, or $11.81 per diluted share, in FY2023[3] - Non-GAAP gross margin for Q3 2024 was 11.3%, compared to 17.1% in Q3 2023[15] - Non-GAAP operating margin for Q3 2024 was 7.8%, down from 11.0% in Q3 2023[15] - Diluted non-GAAP net income per share for Q3 2024 was $5.51, up from $3.43 in Q3 2023[15] - Non-GAAP net income per common share (basic) for the three months ended June 30, 2024, was $6.89, compared to $3.82 for the same period in 2023[16] - Non-GAAP net income per common share (diluted) for the twelve months ended June 30, 2024, was $22.09, compared to $11.81 for the same period in 2023[16] - 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 and a related tax effect of $47 million[17] Cash and Debt - Total cash and cash equivalents as of June 30, 2024, was $1,670 million, with total bank debt and convertible notes at $2,174 million[3] - Net cash provided by financing activities for FY 2024 was $3.91 billion, compared to a net cash used of $448.3 million in FY 2023[14] - Cash, cash equivalents, and restricted cash at the end of FY 2024 stood at $1.67 billion, up from $441.0 million at the end of FY 2023[14] Stock and Share Information - The company's Board of Directors has authorized a 10-for-1 forward split of its common stock, with trading expected to commence on a split-adjusted basis on October 1, 2024[2] - Stock-based compensation expense for Q3 2024 totaled $71.7 million, a 460% increase from $12.8 million in Q3 2023[13] - Weighted-average shares used in computing diluted GAAP net income per common share for the twelve months ended June 30, 2024, were 60,215, compared to 55,970 for the same period in 2023[17] - Weighted-average shares used in computing diluted Non-GAAP net income per common share for the twelve months ended June 30, 2024, were 60,886, compared to 57,027 for the same period in 2023[17] Future Guidance - For Q1 FY2025, the company expects net sales of $6.0 billion to $7.0 billion and non-GAAP net income per diluted share of $6.69 to $8.27[4] - For FY2025, the company expects net sales of $26.0 billion to $30.0 billion[4] GAAP Metrics - GAAP net income per common share (basic) for the three months ended June 30, 2024, was $6.01, compared to $3.67 for the same period in 2023[16] - GAAP net income per common share (diluted) for the twelve months ended June 30, 2024, was $20.09, compared to $11.43 for the same period in 2023[16]

Super Micro Computer (NASDAQ:SMCI) is currently an investment of interest due to its importance in the AI and cloud computing industries. The strong financial status of the company and wise investments have pushed up its share price and drew the attention of bullish investors. However, its high valuation and competition from other big companies have worried bearish analysts. This article provides an analysis of the bull, bear and hold opinions on Super Micro Computer stock and discusses the company's market ...

Earlier this year in April, I warned investors that the artificial intelligence (AI) industry has put Super Micro Computer (NASDAQ:SMCI) stock on too high of a pedestal, making it inevitably overvalued. Since then, the stock has lost 45% of its value but is still up 135% year-to-date (YTD). For investors, the company's new 37x price-to-earnings ratio approaching the Q2 earnings call on August 6 might represent an exciting investing opportunity. But consider a few factors before buying the stock, even at thi ...