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Super Micro Computer, Inc. (SMCI) Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered sequential acceleration: net sales $5.76B vs $4.60B in Q3 and $5.35B in Q4 FY2024; GAAP gross margin 9.5% and non-GAAP diluted EPS $0.41 .
  • Versus consensus, revenue modestly missed ($5.76B vs $5.91B*) and EPS was slightly below ($0.41 vs $0.439*), amid ongoing platform transition and margin pressure; FY2025 revenue finished at $22.0B .
  • Management introduced Q1 FY2026 guidance: revenue $6.0–$7.0B, GAAP diluted EPS $0.30–$0.42, non-GAAP $0.40–$0.52; FY2026 net sales guided to “at least $33.0B” (below prior $40B commentary earlier in FY2025) .
  • Strategic focus: first-to-market AI platforms, ramp of Data Center Building Block Solutions (DCBBS), and DLC-2 liquid cooling; growing enterprise and sovereign AI demand and broader geographic penetration (Europe/Middle East) .

Consensus values marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

  • What Went Well

    • Sequential revenue re-acceleration with Q4 net sales $5.76B (+$1.16B QoQ), driven by AI demand; FY2025 revenue reached $22.0B (+47% YoY) .
    • Strong operating cash generation: Q4 cash flow from operations $864M; adjusted EBITDA $339M (5.9% margin) as the platform transition progresses .
    • Management emphasized DCBBS one-stop shop and margin/value superiority vs commodity products; expanding customer base and large-scale DC wins targeted from four in FY25 to six–eight in FY26 .

  • What Went Wrong

    • Margins compressed: GAAP gross margin fell to 9.5% (vs 10.2% YoY; 9.6% QoQ), reflecting product/customer mix and competitive dynamics in mature platforms .
    • EPS below prior-year levels: GAAP diluted EPS $0.31 vs $0.46 YoY; non-GAAP diluted EPS $0.41 vs $0.54 YoY, impacted by lower gross margin and higher stock comp .
    • FY2026 revenue guide of at least $33B is below earlier $40B commentary (Q2 call), tempering expectations amid tariff/macroeconomic caution and supply allocations for newer platforms .

Financial Results

MetricQ4 2024Q3 2025Q4 2025Q4 2025 Consensus
Revenue ($USD Billions)$5.35 $4.60 $5.76 $5.91*
GAAP Diluted EPS ($)$0.46 $0.17 $0.31 $0.439*
Non-GAAP Diluted EPS ($)$0.54 $0.31 $0.41 —
GAAP Gross Margin (%)10.2% 9.6% 9.5% —
Adjusted EBITDA ($USD Millions)$387.16 $258.18 $338.99 —
Adjusted EBITDA Margin (%)7.2% 5.6% 5.9% —

Consensus values marked with * are retrieved from S&P Global.

KPIs and Balance Sheet

MetricQ4 2025
Cash from Operations ($USD Millions)$864
Capital Expenditures & Investments ($USD Millions)$79
Cash & Equivalents ($USD Millions, 6/30/25)$5,169.9
Total Bank Debt & Convertible Notes ($USD Billions, 6/30/25)$4.8
Inventories ($USD Millions, 6/30/25)$4,680.4
Accounts Receivable, net ($USD Millions, 6/30/25)$2,374.6

Note: Company did not disclose Q4 segment/vertical revenue mix; last disclosed mix (Q3 FY2025) was 42% enterprise/channel and 57% OEM/large data center .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)Q1 FY2026N/A$6.0–$7.0Introduced
GAAP Diluted EPS ($)Q1 FY2026N/A$0.30–$0.42Introduced
Non-GAAP Diluted EPS ($)Q1 FY2026N/A$0.40–$0.52Introduced
Assumed Tax Rate (%)Q1 FY2026N/AGAAP ~13.0%; Non-GAAP ~15.5%Introduced
Diluted Shares (Millions)Q1 FY2026N/AGAAP 631; Non-GAAP 644Introduced
Revenue ($USD Billions)FY2026Commentary: $40B (Q2 call) At least $33.0Lowered from prior commentary

Earnings Call Themes & Trends

TopicQ2 FY2025 (Prev.)Q3 FY2025 (Prev.)Q4 FY2025 (Current)Trend
AI Platform Transition (Hopper→Blackwell)Shipping B200/GB200 platforms; strong backlog, allocation visibility building Customers delayed platform decisions; inventory reserves on older generation; guidance prudent B300 ramp discussed; position “second to none” once vendor supply available Improving allocation; ramp building
Liquid Cooling (DLC/DLC-2)Expect >30% of new DCs to adopt DLC within 12 months; first-to-market positioning DLC shipped ~4,000 racks prior year; DLC-2 touted for power/water savings and low noise Ongoing ramp of DLC components (power shelf, sidecar, BBU) and readiness for volume Scaling breadth and integration
DCBBS (Data Center Building Block Solutions)Highlighted as end-to-end DC solution with faster TTD/TTO Emphasis on DCBBS ramp and broader scope; Q4 guide noted Margin/value “much better than commodity,” one-stop shop strategy Execution progressing
Tariffs/MacroCaution; headwind risks; conservatism in margins Prudence in GM due to tariffs and platform transition Expanding global ops to mitigate tariffs/regional costs Mitigation efforts ongoing
Regional/Sovereign DemandBroadening beyond U.S.; Asia/Europe scaling; sovereign AI rising U.S. 60% rev; Asia up 76% QoQ; Europe down on mix (Q3 detail) Growing customer base in Europe/Middle East Diversifying geography

Management Commentary

  • “We made solid progress in FY25… 47% annual growth… excited about our new DCBBS… expanding global operations that help mitigate tariffs… on track to grow more large-scale datacenter customers from four in FY25 to six to eight in FY26.” — Charles Liang, Founder, President & CEO .
  • On DCBBS margins: “Profit margin, the value to customer ratio are both good… much better than commodity product… much less competition.” — CEO (Q4 call) .
  • On B300 ramp/positioning: “We work with our vendor very closely… our position will be second to none… once it’s available… we are very happy to promote quickly.” — CEO (Q4 call) .

Q&A Highlights

  • DCBBS expected to deliver higher margin/value vs commodity products; one-stop shop to optimize efficiency, quality, and cost when integrating components .
  • B300 ramp visibility and competitive position once vendor supply lands; emphasis on rapid promotion and allocation readiness .
  • DC infrastructure components: sidecar, CPU, BBU, power shelf “ready to ship this quarter”; broader parts shipping over coming months/quarters to scale the product line .
  • Geographic expansion: growing customer base in Europe/Middle East as demand broadens beyond U.S. .

Estimates Context

  • Q4 FY2025 revenue modestly missed consensus: $5.76B actual vs $5.91B* estimate; EPS slightly below: $0.41 actual vs $0.439* estimate. Mixed print with sequential growth but continued margin pressure during platform transition .
  • Q1 FY2026 guide ($6.0–$7.0B revenue; non-GAAP EPS $0.40–$0.52) likely prompts near-term estimate recalibration higher for revenue but cautious on margins given tariff/customer mix assumptions .

Consensus values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential growth resumed: $5.76B Q4 revenue vs $4.60B Q3 as Blackwell/DLC/DCBBS ramps; FY2025 revenue $22.0B (47% YoY) .
  • Margins remain the swing factor: GAAP GM 9.5% and adjusted EBITDA margin 5.9%; DCBBS and DLC-2 are management’s margin-defense levers .
  • Guidance reset: FY2026 “at least $33B” is below prior $40B commentary, likely lowering multi-year topline expectations and focusing attention on execution cadence and allocation .
  • Cash generation and liquidity: Q4 CFO $864M; cash $5.17B vs $4.65B convertible notes (net leverage manageable with ongoing growth needs) .
  • Watch catalysts: Blackwell allocation/ramp, DLC-2 adoption in sovereign/enterprise builds, tariff mitigation via global ops, and Q1 FY2026 delivery vs the $6–$7B revenue guide .
  • Near-term trading: stock likely sensitive to margin trajectory and FY2026 guide credibility; evidence of DCBBS-driven mix improvement and DC-level wins could unlock re-rating .
  • Medium-term thesis: if SMCI sustains first-to-market execution across AI racks and DC infrastructure (DCBBS/DLC), share gains and operating scale could offset price competition in mature GPU cycles .

Appendix: Prior Two Quarters’ Context (for trend)

MetricQ2 2025 (Prelim.)Q3 2025 (Actual)
Revenue ($USD Billions)$5.6–$5.7 $4.60
Non-GAAP Gross Margin (%)~11.9 9.7
GAAP Diluted EPS ($)$0.50–$0.52 $0.17
Non-GAAP Diluted EPS ($)$0.58–$0.60 $0.31
Guidance (next quarter)Q3 rev $5.0–$6.0B Q4 rev $5.6–$6.4B; GM ~10%

Notes

  • Non-GAAP adjustments include stock-based compensation and loss on extinguishment of convertible notes; see reconciliations for detail .
  • Consensus values are retrieved from S&P Global.

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