c7359acc6134938c568aecfcc48ee5e5ba2b20e51649a7df43d8718e1659afa6

The documents indicate that **Basic EPS was 1.32 USD in Q2 2024**.  **[0001375365-24-000011_smci-20231231.htm:3]**  However, none of the documents explicitly explain why this figure was so low. While one explanation discusses factors that improved net income per common share—including revenue growth, operating leverage, and cost management affecting non-GAAP measures  **[0001375365-24-000008_exhibit991_20231231.htm:0]** —there is no definitive discussion regarding the lower Basic EPS.

Why was Basic EPS so low in Q2 2024?

The documents do not provide any factors explaining a drop in net income in Q2 2024. In fact, the narrative details drivers for a significant **year-over-year increase** in Q2 2024 – such as **record-breaking revenue growth**, strong **demand for AI solutions**, improved **operational leverage**, and better **supply chain conditions**.  **[0001375365-24-000008_exhibit991_20231231.htm:0]** **[SMCI_3371108_4]** **[SMCI_3371108_1]**  If you are referring to the drastic drop from **Q1 2024** (with net income of **402,459 thousand USD**  **[0001375365-24-000022_smci-20240331.htm:3]** ) to **Q2 2024** (with net income of **50,504 thousand USD**  **[0001375365-24-000011_smci-20231231.htm:3]** ), the documents do not mention any specific reasons for that quarter-over-quarter decline.

What factors led to the drastic drop in Net Income in Q2 2024?

The significant jump in **Income from Operations** in **Q4 2023** was driven primarily by **record revenue growth**—with revenues reaching **$2.18 billion**, which represented a **34% YoY** and **70% QoQ increase**—and by achieving higher **operating leverage** as revenues grew faster than operating expenses. Additionally, a **favorable product mix** that emphasized high-value AI and rack-scale solutions, along with strategic investments such as the NVIDIA HGX-based Delta Next solution, helped to boost profitability despite a rise in operating costs. These factors combined to markedly improve the operating margin and drive the strong performance in Q4 2023.  **[SMCI_3384589_4]** **[SMCI_3308161_4]** **[SMCI_3384589_1]** 

Why did Income from Operations jump significantly in Q4 2023?

Based on the available documents, there is no explanation provided for a sharp dip in net sales in Q2 2024. In fact, one document explains that **Q2 2024 saw record-breaking net sales** driven by **strong demand for AI and rack-scale IT solutions**, **growth in key customer segments**, **geographic expansion**, an **improving supply chain**, increased **ASPs**, and **strategic investments**.  **[0001375365-24-000008_exhibit991_20231231.htm:0]** **[SMCI_3371108_4]** **[SMCI_3371108_1]**  This suggests that Q2 2024 experienced a significant **increase**, not a dip.

What caused the sharp dip in Net Sales in Q2 2024?

Other income swung to a negative value in **Q2 2024** primarily because of an **increase in interest expense by $6.3 million** due to higher outstanding loan balances and **an increase in foreign exchange losses by $3.0 million** driven by the weakening of the US dollar. These factors more than offset a **$1.4 million increase in interest and other income** that partially mitigated the expense increase.  **[0001375365-24-000011_smci-20231231.htm:38]** 

Why did Other income swing to a negative value in Q2 2024?

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41408960a252fbfb184d5f17c3b2f55a6af183bf6d8208e93afa56edab26b7cc

Net sales (USD, thousands)

Cost of sales (USD, thousands)

Gross profit (USD, thousands)

Research and development (USD, thousands)

Sales and marketing (USD, thousands)

General and administrative (USD, thousands)

Total operating expenses (USD, thousands)

Income from operations (USD, thousands)

Other income (expense), net (USD, thousands)

Interest expense (USD, thousands)

Income before income tax provision (USD, thousands)

Income tax benefit (provision) (USD, thousands)

Share of income (loss) from equity investee, net of taxes (USD, thousands)

Net income (USD, thousands)

Net income per common share - Basic (USD)

Net income per common share - Diluted (USD)

Weighted-average shares used in the calculation of net income per common share - Basic (shares, thousands)

Weighted-average shares used in the calculation of net income per common share - Diluted (shares, thousands)

a9848352e606be06788d364a2aef5d23b294b3e0898a4cd14dac40d08381cbfa

Server and Storage Systems

Subsystems and Accessories

Server Systems

Total Revenue

4f252ef6eff044a1c10034f684218e822d83357812789a854de7a332f29f75e1

United States

Asia

Europe

Other

- China

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9be4064e1716b4575a4a906ecb89b62e99e9f0e7f409c468b4cb19b40a62af80

Super Micro Computer Inc (SMCI)

Financials