Super Micro stock plunges by over 10% after Q3 revenue shortfall and weaker profit outlook

Super Micro’ stock plunged by more than 10% on Tuesday during after-hours trading, after the server maker reported worse-than-expected earnings for the first quarter of its fiscal year.

The company brought in just $5.02 billion in revenue, falling far below the $6 billion analysts predicted, according to the earnings report released after the bell. Adjusted earnings landed at 35 cents per share, also missing the expected 40 cents.

But oh that wasn’t the only red flag. Revenue fell 15% compared to the same period last year, when the company reported $5.94 billion.

The warning signs were there two weeks ago when Super Micro gave an early peek and slashed its revenue guidance to $5 billion, down from the earlier $6 billion to $7 billion range. The company said some expected revenue had been delayed to the next quarter due to “design win upgrades.”

Super Micro’s net income got hammered too, dropping to $168.3 million, or 26 cents a share, compared to $424.3 million, or 67 cents a share, in the year-ago quarter. Even for a company tied to the AI server boom, these numbers showed a sharp slowdown.

Super Micro says better Q2 is coming despite AI slowdown concerns

In the middle of the earnings call, Super Micro tried to calm investors by raising guidance for the current quarter. The company now expects revenue between $10 billion and $11 billion, which is well above the $7.83 billion analyst consensus from LSEG.

The delayed server builds are expected to ship this quarter, which may explain the bullish outlook.

Even with the company’s tight grip on the AI server market, there are signs of pressure. Some analysts say Dell has started to pull ahead in market share.

Though Super Micro has benefited from high demand for servers packed with Nvidia GPUs, growth has clearly slowed. Before this earnings report, the stock had jumped 55% this year. That gain now looks shaky.

For the full fiscal year that ended June 30, Super Micro reported $22.0 billion in revenue, up from $15.0 billion in the previous fiscal year.

But profit dropped, as net income came in at $1.0 billion, or $1.68 per diluted share, down from $1.2 billion, or $1.92 per diluted share, the year before.

Profit margins shrink as company outlines fiscal 2026 expectations

The company’s non-GAAP gross margin for fiscal 2025 was 11.2%, after adjusting for $25 million in stock-based compensation. Non-GAAP net income totaled $1.3 billion, or $2.06 per diluted share, compared to $2.12 the previous year.

The adjustments included a $239 million loss tied to extinguishing convertible notes and related tax effects of $75 million. There was also a $23 million write-off and $8 million in tax impacts.

As of the end of June, Super Micro reported $5.2 billion in cash and equivalents, and $4.8 billion in total bank debt and convertible notes.

Rounding up the earnings press release, Super Micro said it expects net sales between $6.0 billion and $7.0 billion for the first quarter of fiscal 2026, ending September 30, 2025. It also guided GAAP earnings per diluted share of $0.30 to $0.42, and non-GAAP earnings of $0.40 to $0.52, “assuming tax rates of 13.0% and 15.5%, and share counts of 631 million and 644 million, respectively,” said the earnings report.

Included in the GAAP forecast is a $69 million in stock-based compensation, with $20 million in excluded tax effects under the non-GAAP metric.

And for the full fiscal year 2026, Super Micro is projecting at least $33.0 billion in revenue.

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