Executive Summary
Super Micro Computer Inc (SMCI) reported a record-breaking quarter for Q3 2024, with revenues reaching $3.85 billion, reflecting a remarkable 200% year-over-year increase. Non-GAAP earnings per share soared to $6.65, representing over 308% growth compared to the previous year. The surge in performance is attributed to robust demand for the company’s AI-oriented server solutions amid ongoing supply chain challenges, particularly concerning new product components. SMCI's strategic investments in production and service capabilities are setting the stage for continued growth, especially as it prepares for its new Malaysia manufacturing facility to commence operations later this year. Management remains optimistic about the sustained demand for AI-related solutions, projecting strong revenue growth into the next quarter and beyond.
Key Performance Indicators
QoQ: 35.98% | YoY:368.82%
QoQ: 29.09% | YoY:343.75%
Key Insights
Revenue: $3.85 billion (+200% YoY, +5% QoQ)
Net Income: $402 million (+369% YoY, +36% QoQ)
Gross Margin: 15.6% (up from 15.5% QoQ)
Operating Margin: 11.3%
EPS: $6.65 (up 308% YoY)
Free Cash Flow: -$1.61 billion
Inventories: $4.1 billion (up 67% from Q2)
Current Ratio: 4.69
Debt-to-Equity Ratio: 0.367
Noteworthy trends include a strong market position in the AI server segment, significant revenue boosts from servings related to liquid cooling technologies, and aggressive expansion plans amid ...
Financial Highlights
Revenue: $3.85 billion (+200% YoY, +5% QoQ)
Net Income: $402 million (+369% YoY, +36% QoQ)
Gross Margin: 15.6% (up from 15.5% QoQ)
Operating Margin: 11.3%
EPS: $6.65 (up 308% YoY)
Free Cash Flow: -$1.61 billion
Inventories: $4.1 billion (up 67% from Q2)
Current Ratio: 4.69
Debt-to-Equity Ratio: 0.367
Noteworthy trends include a strong market position in the AI server segment, significant revenue boosts from servings related to liquid cooling technologies, and aggressive expansion plans amid capital raises which totaled $3.28 billion in the quarter.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.85B |
200.01% |
5.05% |
| Gross Profit |
597.37M |
163.90% |
5.86% |
| Operating Income |
378.31M |
413.85% |
1.84% |
| Net Income |
402.46M |
368.82% |
35.98% |
| EPS |
0.71 |
343.75% |
29.09% |
Key Financial Ratios
operatingProfitMargin
9.83%
operatingCashFlowPerShare
$-2.69
freeCashFlowPerShare
$-2.86
Management Commentary
AI Revolution Focus: CEO Charles Liang emphasized that Supermicro is at the forefront of the AI revolution, citing this as a key driver of their growth.
Supply Chain Challenges: Liang acknowledged ongoing supply chain issues related to new product components but expressed confidence in gradual improvements.
Liquid Cooling Solutions: Management stressed the significance of liquid cooling technology in AI data centers, projecting growth in demand for these solutions as they help customers reduce cooling costs up to 40%.
Revenue Guidance: For Q4 2024, management provided guidance of $5.1 billion to $5.5 billion in revenue, reinforcing the belief in a strong growth trajectory going forward.
"We achieved another record-breaking quarter, with revenue of $3.85 billion, a 200% increase from same time last year..." - Charles Liang, CEO
— Charles Liang
"To support this scale-up, we raised an additional $3.28 billion through a convertible note and secondary equity offering in the quarter." - Charles Liang, CEO
— Charles Liang
Forward Guidance
Management expects significant revenue acceleration moving into fiscal Q4 2024, projecting revenues between $5.1 billion and $5.5 billion as the supply chain improves. A full-year guidance revision projects total revenues of $14.7 billion to $15.1 billion for fiscal 2024. Key drivers include increasing customer adoption of AI solutions and operational scalability as new facilities become operational. Investors should closely monitor upcoming product launches, customer demand in the AI segment, and any developments affecting supply chain resilience.