Super Micro Computer Inc (SMCI.NE) reported QQ1 2026 revenue of $5.018 billion, marking a QoQ increase of approximately 9.1% but a YoY decline of about 6.3%. The quarter delivered a gross margin of 9.31% and an operating margin of 3.63%, with net income of $168.3 million and EPS of $0.28 (basic) / $0.26 (diluted). Despite a solid absolute profit level, operating cash flow was negative at approximately $(917.5) million, contributing to a negative free cash flow of about $(949.8) million for the period. The cash-outflow was driven primarily by significant working capital movements: a substantial rise in inventory and receivables, partially offset by working capital releases elsewhere. Balance sheet metrics show a robust liquidity position (cash and equivalents of ~$4.20 billion) alongside meaningful long-term debt (~$4.68 billion) and a net debt position of ~$0.58 billion, resulting in a healthy but levered financing profile. Management commentary (where available in the call context for AI/data-center demand) continues to emphasize execution in enterprise data centers, cloud, AI, 5G, and edge computing markets, while signaling attention to supply chain normalization and inventory management as the year progresses. In our view, the near-term risk is working capital headwinds and margin compression, but the longer-term growth runway remains anchored in hyperscale, AI acceleration, and modular server architectures. Investors should monitor quarterly inventory levels, working capital dynamics, and demand signals from hyperscale customers as key catalysts for the remainder of 2026.