Data Center
Super Micro FYQ3: Cash is the Achilles Heel
This quarter, Super Micro reported revenue of $3.85 billion, reflecting a staggering growth rate of 200.7% YoY. This technically missed estimates by 1.3%. Management increased guidance to between $5.1 billion to $5.5 billion, up from $4.9 billion, indicating year-over-year growth of 142.6% at the midpoint. The company's GAAP EPS of $6.56, surpassed analyst expectations of $5.16. Next quarter, the expected GAAP EPS ranges from $7.20 to $8.05 compared to analyst expectations of $6.87 EPS. What lies beneath this phenomenal growth rate is the need to raise cash to fund operations, which for Super Micro means buying excess inventory to prepare for future growth, especially as it relates to liquid cooling. Inventory of $4.1 billion amounts to 85% of revenue, whereas SMCI held closer to 70% of revenue in the past.
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