Shares of Super Micro Computer Inc (NASDAQ:SMCI) surged in U.S. premarket trading after the AI-focused server maker reported fiscal second-quarter results that smashed expectations and prompted an upgrade to its full-year outlook.
For the quarter ended December 31, the company delivered adjusted earnings per share of $0.69, exceeding the consensus estimate of $0.49 by more than 40%. Revenue leapt to $12.7 billion, far ahead of analysts’ $10.42 billion forecast and up 123.4% year on year from $5.7 billion in the same period last year.
“With our leading AI server and storage technology foundation, strong customer engagements, and expanding global manufacturing footprint, we are scaling rapidly to support large AI and enterprise deployments while continuing to strengthen our operational and financial execution,” said CEO Charles Liang in a statement.
Looking ahead, Super Micro projected fiscal third-quarter revenue of at least $12.3 billion, well above the $10.25 billion consensus, and adjusted EPS of no less than $0.60, compared with analysts’ estimate of $0.52. The company also lifted its full-year revenue guidance to at least $40 billion, comfortably above the market consensus of $36.27 billion.
Analysts at Barclays said the “beat and raise” on Super Micro’s top line was “a testament” to strong customer demand, though they highlighted that a single customer accounted for roughly 63% of total quarterly revenue.
“Although customer diversification is expected to broaden in [Super Micro’s fiscal] second half, we view this level of customer concentration can make top-line cadence lumpy,” the analysts wrote.
Despite the explosive revenue growth, profitability came under pressure, with adjusted gross margin narrowing to 6.4% from 11.9% a year earlier. As of December 31, Super Micro reported a cash balance of $4.1 billion, while total bank debt and convertible notes stood at $4.9 billion.
Overall, the results underscore the powerful surge in demand for AI infrastructure, as companies around the world continue to ramp up investment in artificial intelligence technologies.