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Super Micro Computer (SMCI) Q4 Earnings Miss, Revenues Up Y/Y
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Super Micro Computer (SMCI - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of $6.25 per share, which surged 78.1% year over year. The figure missed the Zacks Consensus Estimate by 22.2%.
Revenues surged 143% on a year-over-year basis to $5.31 billion. The top line surpassed the Zacks Consensus Estimate by 0.3%.
Year-over-year revenue growth was driven by strong momentum across the Server and Storage Systems and Subsystems & Accessories businesses.
Strength across Enterprise & Channel and OEM Appliance & Large Data Center (DC) markets contributed well to top-line growth.
The company’s technology and product leadership in the AI infrastructure market, especially with generative AI training and inferencing, also acted as a tailwind.
Super Micro Computer, Inc. Price, Consensus and EPS Surprise
Server and Storage Systems (95% of Net Revenues): The company generated Server and Storage Systems revenues of $5.04 billion, up 148% year over year. The figure beat the consensus mark of $5.02 billion.
Subsystems & Accessories (5% of Net Revenues): The company generated $272 million in revenues from this category, jumping 78% from the year-ago quarter. The figure lagged the Zacks Consensus Estimate of $280.85 million.
By Vertical Markets:
Enterprise & Channel (34% of Net Revenues): The market generated revenues of $1.83 billion, up 87% year over year.
OEM Appliance & Large DC (64% of Net Revenues): The company generated $3.41 billion in revenues from this market, jumping 192% from the year-ago quarter.
5G, Telco & Edge/IOT (2% of Net Revenues): The market generated revenues of $75 million.
Operating Details
In fourth-quarter fiscal 2024, the gross margin was 11.2%, contracting 580 basis points (bps) on a year-over-year basis.
Operating expenses were $252.94 million, up 74.5% from the prior-year quarter. As a percentage of revenues, operating expenses contracted 180 bps year over year to 4.8%.
Research and development expenses were $126.85 million, up 49.6% year over year.
General and administrative expenses were $70.36 million, up 149.2% from the prior-year quarter.
Sales and marketing costs were $55.74 million, up 74.7% year over year.
The non-GAAP operating margin of 7.8% for the reported quarter contracted 320 bps from the prior-year period.
Balance Sheet & Cash Flows
As of Jun 30, 2024, cash and cash equivalents were $1.67 billion, down from $2.12 billion as of Mar 31, 2024.
Total bank debt and convertible notes was $2.17 billion at the end of fourth-quarter fiscal 2024 compared with $1.86 billion at the end of third-quarter fiscal 2024.
The company used $635 million in cash from operations in the reported quarter compared with $1.52 billion used in the previous quarter.
In the fiscal fourth quarter, capital expenditures were $27 million. Also, the free cash outflow was $662 million.
Guidance
For the first quarter of fiscal 2025, Super Micro Computer expects total revenues of $6-$7 billion. The Zacks Consensus Estimate for the same is pegged at $5.25 billion.
SMCI’s non-GAAP earnings per share are anticipated to be within $6.69-$8.27 per share. The consensus mark for the same is pegged at $7.66 per share.
The company also expects a non-GAAP income tax rate of 14.6% and 66.0 million fully diluted shares outstanding.
For fiscal year 2025, Super Micro Computer expects net sales of $26.0 billion to $30.0 billion. The Zacks Consensus Estimate for the same is pegged at $23.92 billion.
Zacks Rank & Stocks to Consider
Super Micro Computer currently carries a Zacks Rank #4 (Sell).
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Super Micro Computer (SMCI) Q4 Earnings Miss, Revenues Up Y/Y
Super Micro Computer (SMCI - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of $6.25 per share, which surged 78.1% year over year. The figure missed the Zacks Consensus Estimate by 22.2%.
Revenues surged 143% on a year-over-year basis to $5.31 billion. The top line surpassed the Zacks Consensus Estimate by 0.3%.
Year-over-year revenue growth was driven by strong momentum across the Server and Storage Systems and Subsystems & Accessories businesses.
Strength across Enterprise & Channel and OEM Appliance & Large Data Center (DC) markets contributed well to top-line growth.
The company’s technology and product leadership in the AI infrastructure market, especially with generative AI training and inferencing, also acted as a tailwind.
Super Micro Computer, Inc. Price, Consensus and EPS Surprise
Super Micro Computer, Inc. price-consensus-eps-surprise-chart | Super Micro Computer, Inc. Quote
Top-Line Details
By Business Line:
Server and Storage Systems (95% of Net Revenues): The company generated Server and Storage Systems revenues of $5.04 billion, up 148% year over year. The figure beat the consensus mark of $5.02 billion.
Subsystems & Accessories (5% of Net Revenues): The company generated $272 million in revenues from this category, jumping 78% from the year-ago quarter. The figure lagged the Zacks Consensus Estimate of $280.85 million.
By Vertical Markets:
Enterprise & Channel (34% of Net Revenues): The market generated revenues of $1.83 billion, up 87% year over year.
OEM Appliance & Large DC (64% of Net Revenues): The company generated $3.41 billion in revenues from this market, jumping 192% from the year-ago quarter.
5G, Telco & Edge/IOT (2% of Net Revenues): The market generated revenues of $75 million.
Operating Details
In fourth-quarter fiscal 2024, the gross margin was 11.2%, contracting 580 basis points (bps) on a year-over-year basis.
Operating expenses were $252.94 million, up 74.5% from the prior-year quarter. As a percentage of revenues, operating expenses contracted 180 bps year over year to 4.8%.
Research and development expenses were $126.85 million, up 49.6% year over year.
General and administrative expenses were $70.36 million, up 149.2% from the prior-year quarter.
Sales and marketing costs were $55.74 million, up 74.7% year over year.
The non-GAAP operating margin of 7.8% for the reported quarter contracted 320 bps from the prior-year period.
Balance Sheet & Cash Flows
As of Jun 30, 2024, cash and cash equivalents were $1.67 billion, down from $2.12 billion as of Mar 31, 2024.
Total bank debt and convertible notes was $2.17 billion at the end of fourth-quarter fiscal 2024 compared with $1.86 billion at the end of third-quarter fiscal 2024.
The company used $635 million in cash from operations in the reported quarter compared with $1.52 billion used in the previous quarter.
In the fiscal fourth quarter, capital expenditures were $27 million. Also, the free cash outflow was $662 million.
Guidance
For the first quarter of fiscal 2025, Super Micro Computer expects total revenues of $6-$7 billion. The Zacks Consensus Estimate for the same is pegged at $5.25 billion.
SMCI’s non-GAAP earnings per share are anticipated to be within $6.69-$8.27 per share. The consensus mark for the same is pegged at $7.66 per share.
The company also expects a non-GAAP income tax rate of 14.6% and 66.0 million fully diluted shares outstanding.
For fiscal year 2025, Super Micro Computer expects net sales of $26.0 billion to $30.0 billion. The Zacks Consensus Estimate for the same is pegged at $23.92 billion.
Zacks Rank & Stocks to Consider
Super Micro Computer currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) , and Apple (AAPL - Free Report) . While Badger Meter and Arista Networks sport a Zacks Rank #1 (Strong Buy) each, Apple carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Badger Meter shares have gained 32.7% in the year-to-date period. The long-term earnings growth rate for BMI is currently projected at 17.92%.
Arista Networks shares have gained 41.5% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 17.20%.
Apple shares have gained 16.4% in the year-to-date period. The long-term earnings growth rate for AAPL is currently projected at 12.69%.