Super Micro’s second quarter was met with a significant negative market reaction, as revenue and adjusted earnings both missed Wall Street expectations. Management pointed to a combination of capital constraints and delayed revenue recognition for a major customer, in part due to late-stage specification changes. CEO Charles Liang described these as temporary setbacks, noting that strong demand for AI and green computing solutions continued to drive underlying growth. He acknowledged, however, that “the shortfall stemmed from capital constraint that limited our ability to rapidly scale production and specification changes from a major new customer that delayed revenue recognition.”
Is now the time to buy SMCI? Find out in our full research report (it’s free).
Super Micro (SMCI) Q2 CY2025 Highlights:
- Revenue: $5.76 billion vs analyst estimates of $6.01 billion (7.5% year-on-year growth, 4.2% miss)
- Adjusted EPS: $0.41 vs analyst expectations of $0.44 (6.6% miss)
- Adjusted EBITDA: $330.6 million vs analyst estimates of $369.1 million (5.7% margin, 10.4% miss)
- Revenue Guidance for Q3 CY2025 is $6.5 billion at the midpoint, below analyst estimates of $6.69 billion
- Adjusted EPS guidance for Q3 CY2025 is $0.46 at the midpoint, below analyst estimates of $0.59
- Operating Margin: 4%, down from 5.4% in the same quarter last year
- Market Capitalization: $27.71 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Super Micro’s Q2 Earnings Call
- Simon Leopold (Raymond James) pressed management on the reasons for the back-end loaded revenue outlook and chip supply constraints. CEO Charles Liang explained that improved availability of new hardware and the ramp of DCBBS solutions should drive growth later in the year.
- Ruplu Bhattacharya (Bank of America) asked whether Super Micro can balance margin expansion with aggressive revenue and market share growth in the AI server market. Liang responded that DCBBS and bundled software/services are intended to support both goals, but noted that competition remains high.
- Ananda Baruah (Loop Capital) questioned whether customer purchasing cycles have normalized given ongoing product launches and decision delays. Liang acknowledged elongated cycles, especially as customers evaluate new NVIDIA products, but said Super Micro’s modular solutions help shorten deployment timelines.
- Michael Ng (Goldman Sachs) sought detail on large customer exposure and the outlook for gross margins. CFO David Weigand provided high-level customer concentration figures but declined to offer annual gross margin guidance, reiterating optimism about DCBBS-driven improvement.
- Nehal Chokshi (Northland) asked why increased revenue would not translate into immediate operating leverage. Weigand explained that new platform ramps involve production learning curves, limiting short-term margin gains despite higher sales.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely monitor (1) the pace and scale of customer adoption for Super Micro’s DCBBS platform, (2) progress on securing and deploying next-generation NVIDIA and AMD hardware across enterprise and hyperscale customers, and (3) signs of margin stabilization as the product mix shifts toward bundled solutions and services. Continued geographic expansion and diversification into higher-margin enterprise and IoT segments will also be key areas of focus.
Super Micro currently trades at $46.51, down from $57.30 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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