• New generation product design wins are robust
• Strong revenue guidance of $4.5B-$4.6B despite miss
• Revenue guidance missed previous target of $5.0B-$6.0B
• Customer platform decisions delayed to Q4
• Gross margin declined 220 basis points from Q2
• Higher inventory reserves due to older generation products
• GAAP EPS guidance lowered to $0.16-$0.17 from $0.36-$0.53
• Non-GAAP EPS guidance lowered to $0.29-$0.31 from $0.46-$0.62

Supermicro’s significant Q3 revenue and earnings miss raises concerns about execution despite management attributing shortfall to delayed customer decisions.

Supermicro’s preliminary Q3 FY2025 results show a substantial shortfall against previous guidance. Revenue is expected at $4.5-$4.6 billion versus prior guidance of $5.0-$6.0 billion – representing a 10-25% miss. The earnings disappointment is equally concerning, with non-GAAP EPS projected at $0.29-$0.31 compared to guided $0.46-$0.62, representing a 33-50% decline.

The gross margin deterioration of 220 basis points from Q2 compounds these concerns. This compression stems from two specific operational issues: higher inventory reserves for older generation products and expedite costs to accelerate new product launches. For hardware manufacturers like Supermicro, inventory management and margin preservation are critical operational metrics, making this decline particularly troubling.

Management attributes the revenue miss to “delayed customer platform decisions” that pushed sales into Q4, suggesting timing issues rather than lost business. However, the magnitude of the shortfall raises questions about visibility into the sales pipeline and forecasting accuracy. While the press release mentions “robust” design wins for new generation products, this qualitative statement requires validation through actual future revenue performance.

The fundamental question is whether these challenges represent temporary execution issues or signal broader changes in AI infrastructure demand patterns. The May 6th earnings call will be crucial for management to rebuild credibility around their forecasting and provide concrete evidence that Q4 will indeed capture the delayed sales as suggested.

04/29/2025 – 04:28 PM Super Micro Computer Inc. (Nasdaq: SMCI) announced preliminary financial results for its third quarter of fiscal year 2025 that fell short of the company’s prior guidance. The IT solutions provider reported expected net sales of $4.5 billion to $4.6 billion for the quarter ended March 31, 2025, significantly below its previous guidance of $5.0 billion to $6.0 billion.

According to the company’s business update, Supermicro expects GAAP diluted net income per common share of $0.16 to $0.17, compared to prior guidance of $0.36 to $0.53. Non-GAAP diluted net income per common share is projected to be $0.29 to $0.31, also falling short of previous guidance of $0.46 to $0.62.

The company attributed the performance shortfall primarily to “delayed customer platform decisions” that shifted sales into the fourth quarter. Supermicro also reported that its GAAP and Non-GAAP gross margin for the third quarter was 220 basis points lower than the second quarter, which the company said was primarily due to “higher inventory reserves resulting from older generation products and expedite costs to enable time-to-market for new products.”

Business Outlook

Despite the disappointing quarterly results, Supermicro characterized its new generation product design wins as “robust.” The company did not provide updated guidance for the fourth quarter or full fiscal year in this preliminary announcement.

Supermicro emphasized that the financial information provided is preliminary, unaudited, and subject to revision during the company’s financial closing procedures. Actual third quarter fiscal 2025 results “may differ materially from these preliminary unaudited financial results,” the company cautioned.

The IT solutions provider plans to present a live audio webcast and conference call to review its complete third quarter fiscal year 2025 results on Tuesday, May 6, 2025, at 5:00 p.m. ET / 2:00 p.m. PT. The webcast will be accessible through the company’s investor relations website and will remain available for one year.

For the reconciliation between GAAP and non-GAAP figures, Supermicro disclosed that the third quarter fiscal year 2025 calculations include stock-based compensation expense of approximately $85 million plus approximately $30 million of debt extinguishment expenses, less the related tax benefit of approximately $30 million for these two items. The company’s projections assume a tax rate of approximately 5.1% for GAAP and 15.5% for non-GAAP, with fully diluted share counts of 621.8 million shares for GAAP and 635.9 million shares for non-GAAP.

This article is based solely on information provided in Super Micro Computer Inc.’s press release dated 29 April, 2025. The content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Stock Titan and its writers make no representations as to the accuracy, completeness, or timeliness of the information. Investors should conduct their own due diligence before making any investment decisions.

Source: Supermicro

Supermicro expects Q3 2025 revenue between $4.5B to $4.6B, which is below their prior guidance of $5.0B to $6.0B due to delayed customer platform decisions that moved sales into Q4.

Supermicro reduced its Q3 2025 earnings guidance due to higher inventory reserves for older generation products, expedite costs for new products, and delayed customer platform decisions, resulting in a 220 basis point decrease in gross margin compared to Q2.

Supermicro expects GAAP earnings of $0.16-$0.17 per share and Non-GAAP earnings of $0.29-$0.31 per share for Q3 2025, down from previous guidance of $0.36-$0.53 (GAAP) and $0.46-$0.62 (Non-GAAP).

Supermicro will present its full Q3 2025 earnings results during a live audio webcast conference call on Tuesday, May 6, 2025, at 5:00 p.m. ET / 2:00 p.m. PT.

Supermicro reported approximately $85 million in stock-based compensation expense for Q3 2025, plus about $30 million in debt extinguishment expenses, with a related tax benefit of approximately $30 million for these items.