Supermicro Announces First Quarter Fiscal Year 2024 Financial Results

SAN JOSE, Calif. -- November 1, 2023 (BUSINESS WIRE) -- Super Micro Computer, Inc. (Nasdaq: SMCI), a Total IT Solution Manufacturer for AI, Cloud, Storage and 5G/Edge, today announced financial results for its first quarter of fiscal year 2024 ended September 30, 2023.

First Quarter Fiscal Year 2024 Highlights

  • Net sales of $2.12 billion versus $2.18 billion in the fourth quarter of fiscal year 2023 and $1.85 billion in the same quarter of last year.
  • Gross margin of 16.7% versus 17.0% in the fourth quarter of fiscal year 2023 and 18.8% in the same quarter of last year.
  • Net income of $157 million versus $194 million in the fourth quarter of fiscal year 2023 and $184 million in the same quarter of last year.
  • Diluted net income per common share of $2.75 versus $3.43 in the fourth quarter of fiscal year 2023 and $3.35 in the same quarter of last year.
  • Non-GAAP diluted net income per common share of $3.43 versus $3.51 in the fourth quarter of fiscal year 2023 and $3.42 in the same quarter of last year.
  • Cash flow provided by operations for the first quarter of fiscal year 2024 of $271 million and capital expenditures of $3 million.

Non-GAAP gross margin for the first quarter of fiscal year 2024 was 17.0% which adds back stock-based compensation expenses of $6 million. Non-GAAP diluted net income per common share for the first quarter of fiscal year 2024 was $3.43, with adjustments for stock-based compensation expenses of $41 million, net of the related tax effects of $16 million.

As of September 30, 2023, total cash and cash equivalents was $543 million and total bank debt was $146 million. “I am pleased to announce that we are off to a good start to fiscal 2024, achieving first quarter revenue of $2.12B,” said Charles Liang, President and CEO of Supermicro. “Our teams executed with passion and precision despite the ongoing GPU supply constraints. We are working diligently to meet these challenges and given my confidence in my team and the strong demand we are seeing for AI infrastructure and compelling new and upcoming compute and storage products we are now raising our fiscal year 2024 outlook to $10B - $11B in revenue.”

Business Outlook and Management Commentary

For the second quarter of fiscal year 2024 ending December 31, 2023, the Company expects net sales of $2.7 billion to $2.9 billion, GAAP net income per diluted share of $3.75 to $4.24 and non-GAAP net income per diluted share of $4.40 to $4.88. The Company’s projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately 15.7% and 17.1%, respectively, and a fully diluted share count of 57.6 million shares for GAAP and fully diluted share count of 58.3 million shares for non-GAAP. The outlook for second quarter of fiscal year 2024 GAAP net income per diluted share includes approximately $40 million in expected stock-based compensation, net of related tax effects of $13 million that are excluded from non-GAAP net income per diluted share.

For fiscal year 2024 ending June 30, 2024, the Company maintains its guidance for net sales from a range of $10 billion to $11 billion.

Conference Call and Webcast Information

Supermicro will hold a public webcast at 2:00 p.m. PDT today to discuss the results for its first quarter of fiscal year 2024. Those wishing to access the live webcast may use the following link: https://events.q4inc.com/attendee/484918945

The conference call can be accessed by registering online at:
https://conferencingportals.com/event/dteAMPMM

After registering, a confirmation will be sent through email, including dial-in details and unique conference call codes for entry. Registration is open during the live call, but to ensure connectivity for the full call, it is recommended that participants register a day in advance and dial-in for the call at least 10 minutes before the start of the call.

A replay of the webcast will be available shortly after the call on the Company’s investor relations website (https://ir.supermicro.com) and will remain accessible for one year.

Cautionary Statement Regarding Forward Looking Statements

Statements contained in this press release that are not historical fact may be forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may relate to, among other things, the second quarter of fiscal year 2024 and updated full year fiscal 2024 guidance and the Company's ability to meet supply constraint challenges. Such forward looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated, including: (i) our quarterly operating results may fluctuate, which could cause rapid declines in our stock price, (ii) as we increasingly target larger customers and larger sales opportunities, our customer base may become more concentrated, our cost of sales may increase, our margins may be lower and our sales may be less predictable, (iii) if we fail to meet publicly announced financial guidance or other expectations about our business, our stock could decline in value, (iv) the average sales prices for our server solutions could decline if customers do not continue to purchase our latest generation products or additional components, and (v) adverse economic conditions may harm our business. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings, particularly in our Annual Report on Form 10-K for our fiscal year ended June 30, 2023, and Quarterly Reports on Form 10-Q filed thereafter.

Use of Non-GAAP Financial Measures

Non-GAAP gross margin discussed in this press release adds back stock-based compensation expenses. Non-GAAP diluted net income per common share discussed in this press release adds back stock-based compensation expenses adjusted for the related tax effects. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. A reconciliation of GAAP gross margin to non-GAAP gross margin and from GAAP diluted net income per common share to non-GAAP diluted net income per common share is included in the tables below.

About Super Micro Computer, Inc.

Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in San Jose, California, Supermicro is committed to delivering first to market innovation for Enterprise, Cloud, AI, and 5G/Edge IT Infrastructure. We are a Total IT Solutions manufacturer with server, AI, storage, IoT, switch systems, software, and support services. Supermicro’s motherboard, power, and chassis design expertise further enables our development and production, enabling next-generation innovation from cloud to edge for our global customers. Our products are designed and manufactured in-house (in the US, Taiwan, and the Netherlands), leveraging global operations for scale and efficiency and optimized to improve TCO and reduce environmental impact (Green Computing). The award-winning portfolio of Server Building Block Solutions® allows customers to optimize for their exact workload and application by selecting from a broad family of systems built from our flexible and reusable building blocks that support a comprehensive set of form factors, processors, memory, GPUs, storage, networking, power, and cooling solutions (air-conditioned, free air cooling or liquid cooling).

Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc.

Investor Relations Contact:
Nicole Noutsios
email: ir@supermicro.com

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 (unaudited)

 

September 30,

 

June 30,

 

2023

 

2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$      543,156 

 

$      440,459 

Accounts receivable, net of allowance for credit losses

        845,729 

 

     1,148,259 

Inventories

     2,052,805 

 

     1,445,564 

Prepaid expenses and other current assets

        129,144 

 

        145,144 

Total current assets

     3,570,834 

 

     3,179,426 

Property, plant and equipment, net

        291,669 

 

        290,240 

Deferred income taxes, net

        185,675 

 

        162,654 

Other assets

          47,786 

 

          42,409 

Total assets

$   4,095,964 

 

$   3,674,729 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$   1,084,058 

 

$      776,831 

Accrued liabilities

        152,500 

 

        163,865 

Income taxes payable

        161,395 

 

        129,166 

Short-term debt

          40,843 

 

        170,123 

Deferred revenue

        166,025 

 

        134,667 

Total current liabilities

     1,604,821 

 

     1,374,652 

Deferred revenue, non-current

        174,478 

 

        169,781 

Long-term debt

        105,389 

 

        120,179 

Other long-term liabilities

          45,737 

 

          37,947 

Total liabilities

     1,930,425 

 

     1,702,559 

Stockholders’ equity:

 

 

 

Common stock and additional paid-in capital

        574,718 

 

        538,352 

Accumulated other comprehensive income

               651 

 

               639 

Retained earnings

     1,590,009 

 

     1,433,014 

Total Super Micro Computer, Inc. stockholders’ equity

     2,165,378 

 

     1,972,005 

Noncontrolling interest

               161 

 

               165 

Total stockholders’ equity

     2,165,539 

 

     1,972,170 

Total liabilities and stockholders’ equity

$   4,095,964 

 

$   3,674,729 

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 (unaudited)

 

Three Months Ended
September 30,

 

2023

 

2022

Net sales

$ 2,119,672  

 

$ 1,852,130 

Cost of sales

 1,765,981 

 

 1,504,595 

Gross profit

    353,691 

 

    347,535 

Operating expenses:

 

 

 

Research and development 

    111,027  

 

      74,243 

Sales and marketing

      37,230 

 

      29,363 

General and administrative

      32,924 

 

      23,806 

Total operating expenses

    181,181 

 

    127,412 

Income from operations

    172,510 

 

    220,123 

Other income, net 

        6,613 

 

        8,054 

Interest expense

       (1,863)

 

       (3,938)

Income before income tax provision

    177,260 

 

    224,239 

Income tax provision

     (20,215)

 

     (38,934)

Share of loss from equity investee, net of taxes

            (50)

 

          (889)

Net income

$  156,995 

 

$  184,416 

Net income per common share:

 

 

 

Basic

$        2.96 

 

$        3.51 

Diluted

$        2.75 

 

$        3.35 

Weighted-average shares used in calculation of net income per common share:

 

 

 

Basic

      53,093 

 

      52,598 

Diluted

      57,185 

 

      55,017 

 

Stock-based compensation is included in the following cost and expense categories by period (in thousands):

 

 

Three Months Ended
September 30,

 

2023

 

2022

Cost of sales

$        5,904 

 

$           884 

Research and development

        35,710 

 

          6,118  

Sales and marketing

          5,665 

 

             809 

General and administrative

        10,100 

 

          3,203 

Stock-based compensation expense 

$      57,379 

 

$      11,014  

 

SUPER MICRO COMPUTER, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)

 (unaudited)

 

Three Months Ended
September 30,

 

2023

 

2022

Net cash provided by operating activities

$      270,465 

 

$      313,587 

Net cash used in investing activities

           (7,631)

 

         (10,746)

Net cash used in financing activities

       (159,941)

 

       (331,183)

Effect of exchange rate fluctuations on cash

              (203)

 

           (1,472)

Net increase (decrease) in cash, cash equivalents and restricted cash

        102,690 

 

         (29,813)

Cash, cash equivalents and restricted cash at the beginning of the period

        440,960 

 

        268,559 

Cash, cash equivalents and restricted cash at the end of the period

$      543,650 

 

$      238,746 

SUPER MICRO COMPUTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

 (unaudited)

 

Three Months Ended

 

September 30, 2023

 

June 30, 2023

 

September 30, 2022

GAAP GROSS PROFIT

$     353,691     

 

$     371,696     

 

$     347,535     

Stock-based compensation

           5,904     

 

              989     

 

              884     

NON-GAAP GROSS PROFIT

$     359,595     

 

$     372,685     

 

$     348,419     

 

 

 

 

 

 

GAAP GROSS MARGIN

 16.7 %

 

 17.0 %

 

 18.8 %

Stock-based compensation

 0.3 %

 

 0.1 %

 

 0.0 %

NON-GAAP GROSS MARGIN

 17.0 %

 

 17.1 %

 

 18.8 %

 

 

 

 

 

 

GAAP OPERATING EXPENSE

$     181,181     

 

$     144,941     

 

$     127,412     

Stock-based compensation 

       (51,475)   

 

       (11,797)   

 

       (10,130)   

NON-GAAP OPERATING EXPENSE

$     129,706     

 

$     133,144     

 

$     117,282     

 

 

 

 

 

 

GAAP INCOME FROM OPERATIONS

$     172,510     

 

$     226,755     

 

$     220,123     

Stock-based compensation 

         57,379     

 

         12,786     

 

         11,014     

NON-GAAP INCOME FROM OPERATIONS

$     229,889     

 

$     239,541     

 

$     231,137     

 

 

 

 

 

 

GAAP OPERATING MARGIN 

 8.1 %

 

 10.4 %

 

 11.9  %

Stock-based compensation

 2.7 %

 

 0.6 %

 

 0.6 %

NON-GAAP OPERATING MARGIN 

 10.8 %

 

 11.0  %

 

 12.5 %

 

 

 

 

 

 

GAAP TAX EXPENSE 

$       20,215     

 

$       31,302     

 

$       38,934     

Adjustments to tax provision

         16,049     

 

           5,304     

 

           3,230     

NON-GAAP TAX EXPENSE

$       36,264     

 

$       36,606     

 

$       42,164     

 

 

 

 

 

 

GAAP NET INCOME

$     156,995     

 

$     193,569     

 

$     184,416     

Stock-based compensation 

         57,379     

 

         12,786     

 

         11,014     

Adjustments to tax provision

       (16,049)   

 

         (5,304)   

 

         (3,230)   

NON-GAAP NET INCOME

$     198,325     

 

$     201,051     

 

$     192,200     

 

 

 

 

 

 

GAAP NET INCOME PER COMMON SHARE – BASIC

$           2.96     

 

$           3.67     

 

$           3.51     

Impact of Non-GAAP adjustments

             0.78     

 

             0.15     

 

             0.14     

NON-GAAP NET INCOME PER COMMON SHARE – BASIC

$           3.74     

 

$           3.82     

 

$           3.65     

 

 

 

 

 

 

GAAP NET INCOME PER COMMON SHARE – DILUTED

$           2.75     

 

$           3.43     

 

$           3.35     

Impact of Non-GAAP adjustments

             0.68     

 

             0.08     

 

             0.07     

NON-GAAP NET INCOME PER COMMON SHARE – DILUTED

$           3.43     

 

$           3.51     

 

$           3.42     

 

 

 

 

 

 

WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

BASIC – GAAP

         53,093     

 

         52,679     

 

         52,598     

BASIC – NON-GAAP

         53,093     

 

         52,679     

 

         52,598     

 

 

 

 

 

 

DILUTED – GAAP

         57,185     

 

         56,505     

 

         55,017     

DILUTED – NON-GAAP

         57,846     

 

         57,222     

 

         56,271