Supermicro Revenue Jumps 93% as $60B AI Orders Drive FY2027 Outlook

Supermicro reported Q4 revenue of $11.12 billion, compared with $10.2 billion in Q3 and $5.76 billion in Q4 FY2025 or a 93% increase from the prior year. GAAP gross margin restored to 17.5% from 9.9% in Q3 and 9.5% in Q4 FY2025 and 17.6% non-GAAP. Management said the customer and product mix changed positively. GAAP net income rose to $1.18 billion in Q4 from $483 million in Q3 and$195 million a year ago. 

GAAP EPS was $1.62 and adjusted EPS was $1.70. Increase in Operating Cash Flow Operating cash flow for the quarter was $747 million, while capital expenditures and investments totaled $25 million. 

For FY2026, net sales increased approximately 78% to $39.06 billion from $21.97 billion in FY2025. GAAP net income was $2.23 billion, or $3.26 per diluted share. This compared to $1.05 billion, or $1.68 per diluted share. Non-GAAP net income attributable to common shareholders was $2.5 billion, or $3.63 per diluted share, for the year.

For the year, GAAP gross margin was 10.8% versus 11.1%. The 4th quarter gross margin was 17.5%. These results illustrate the volatility during the year during Supermicro’s profitability expanstion when compared to the full year gross margin.

Supermicro announced that it has booked new orders of over $60 billion during its last quarte, forecasting that it will begin its 2027 fiscal year with a record backlog.

Though it has forecast a record backlog, orders in excess of $60 billion do not imply revenues in that amount. Some orders may not be firm commitments and may still be canceled or postponed. Revenues may be recognized only after the contractual requirements are satisfied and the customer's data center has the capability.

Even with the caveats that may limit conversion into firm commitments, these orders reflect a strong demand for Supermicro's AI servers and related infrastructure.

Supermicro expects to achieve $14.5-$15.5 billion for Q1 of FY2027. The company forecasts GAAP diluted EPS at $0.89-$0.98, and non-GAAP diluted EPS at $1.01-$1.10.

Management is targeting a revenue range of $65-$72 billion for FY2027, with the $68.5 billion midpoint targeted for an approximate 75% increase from FY2026.

Financing of data center deployments, Supre micro's capacity for converting large orders to deployments, and customers' data center readiness will determine if the forecast is met.

Super micro is moving beyond selling servers with its Data Center Building Block Solutions. The platform integrates servers, networking, storage, and services.

Direct liquid cooling is critical because newer AI accelerators generate a lot of power and a high density of heat, beyond the capability of traditional cooled systems.

SuperMicro claims DLC-2 can accommodate 362kW per rack, while its Vera Rubin NVL4 design can house a scalable 3.2MW unit with up to 1,152 Rubin GPUs and 576 Vera CPUs.

Greater deployment potential equates to greater potential company earnings per deployment. However, the capability to deploy massive infrastructure comes at a great expenditure with upfront cost of expensive components before customers start paying.

While FY2026 closed out with $7.52 billion in cash and equivalents, a $2.35 billion increase from FY2025, total bank debt and convertible notes were at $8.7 billion.

Inventory reached $12.90 billion, up from $4.68 billion, and accounts receivables were at $6.13 billion compared to $2.20 billion. The increases reflect planned deployments and will constrain capital.

The worst of all, $6.81 billion of cash was used in operating activities in FY2026, compared to $1.66 billion cash outflow in FY2025. This was driven primarily by an $8.88 billion increase to inventory and a $3.92 billion increase to receivables.

The company raised capital during the year to meet component purchases for AI contigent orders. Inventory conversion will be crucial, along with customer collections and improving cash flow for FY2027, more than revenue growth.

The board is conducting a review of transactions with possible export-control implications. The review will be based on allegations around the company and/or employees.

The review likely will impact Supermicro’s forecasts for FY2026, its preliminary FY2026 results and its previously reported results. With the unlisted status of the latest financials, overall, this is a significant concern.

Supermicro is consolidating around $37.41 after a drop from $41.47. The stock is still in an uptrend with all principal moving averages below. Weakening momentum is of concern.

SMCI Price Chart - Source: Tradingview

Immediate Support is at $36.39. Holding this level would maintain the higher-low structure and allow for another test at $41.47. A clearance above $41.47 would bring $44.93 and $48.35 into view.

RSI has declined to about 54 and is still under its signal line at around 64. Buying interest is weakening, but RSI above 50 shows that the recovery structure is intact.

A break of $36.39 would bring moving average support into view at $34.67. Below that, the 32.48-32.58 zone is the more important support zone on the downside.

Increasing quarterly revenue by nearly 93% puts Supermicro in a strong position to reach management’s target for yearly revenue growth of $65B to $72B, which is driven by demand for rack-scale computing and liquid-cooled AI infrastructure. The company saw new AI orders of $60B with a gross margin of 17.5%.

Despite the impressive growth figures, the company faces growing pains of increased spending related to the rapid expansion. Stock increased to $12.9B, accounts receivable rose to $6.1B, operating cash flow negatively stood at $6.81B for the year, and the total of debt and convertible notes was $8.7B. The preliminary results of the export-control review add to the aporia.

While the numbers still look good for Supermicro, technically SMCI is only constructive above $36.39, and must move above $41.47 to continue the rally to $44.93.