Update, August 20, 2026: this piece records that the earnings release carried no update on the export-control review, and its sourcing note says the review's status "is not held here and is not asserted." It is now held. The board's independent investigation completed on August 20, finding no evidence that previously issued financial statements cannot be relied upon — and we price what that is worth against our Supermicro model.
Supermicro reported fiscal Q4 2026 — the June quarter and the close of its fiscal year — after the market closed on August 11.
Net sales were $11.12B, up 93.2%. Gross margin was 17.47%, above the 15–17% range the company itself pre-announced on July 21. GAAP diluted EPS was $1.62 against a third-party consensus that spanned $0.71 to $1.33 — it beat the high end by 22%. Non-GAAP EPS was $1.70.
Then the outlook: fiscal Q1 2027 revenue of $14.5–15.5B, up 30–39% sequentially. And GAAP EPS of $0.89–0.98, down from the $1.62 just printed.
Both of those are in the same release. Reconciling them is the whole exercise.
The call, graded
We previewed this print yesterday morning around the question of whether the pre-announced margin was mix or a re-rating.
| What we said to watch | What the print says |
|---|---|
| Whether 15–17% is mix or a re-rating | Neither, yet — it printed 17.47%, above the range, and the guide takes it back. See below. |
| Cash, after −$6.70B in March | Turned positive: +$719M free cash flow in Q4. The full year still burned $6.97B. |
| What the $60B of orders actually is | Restated as ">$60 billion in new orders" and "record backlog entering fiscal 2027". Still no conversion schedule. |
| The export-control review | No update in the release. The Q4 exhibit does not mention it. |
| The new preferred stock | Now visible: $13.1M of preferred dividends, and the guided GAAP share count rises to 745M from 705M. |
We also flagged that consensus was scattered across $0.71–$1.33 and that estimates were probably not all on the same GAAP/non-GAAP basis. That mattered less than expected — $1.62 GAAP cleared all of them.
The margin, and why one quarter is not a trend
| Quarter | Net sales | Gross margin | GAAP diluted EPS |
|---|---|---|---|
| FY2025 Q4 | $5.76B | 9.45% | $0.31 |
| FY2026 Q1 | $5.02B | 9.31% | $0.26 |
| FY2026 Q2 | $12.68B | 6.30% | $0.60 |
| FY2026 Q3 | $10.24B | 9.95% | $0.72 |
| FY2026 Q4 | $11.12B | 17.47% | $1.62 |
Gross profit tripled — up 257% — on revenue that merely doubled. That is the entire earnings beat: operating expenses grew 44%, so almost all of the incremental gross profit fell through.
The full year tells the opposite story. FY2026 gross margin was 10.82%, below FY2025's 11.06%. One 17.47% quarter sits on top of 9.31%, 6.30% and 9.95%. Management attributes the improvement to "a richer enterprise customer mix and broader adoption" of its DCBBS architecture — a mix explanation, which is a claim about which customers bought, not about pricing power.
The guidance is the answer
Q1 FY2027 is guided to $14.5–15.5B of revenue and $0.89–0.98 of GAAP EPS on 745M diluted shares. That implies net income of roughly $663–730M, against $1,178M in the quarter just reported.
| Q4 FY2026 actual | Q1 FY2027 guided | |
|---|---|---|
| Net sales | $11.12B | $14.5–15.5B (+30–39%) |
| Implied net income | $1.178B | $0.66–0.73B (−38–44%) |
| Implied net margin | 10.6% | ~4.6% |
Revenue up by a third, profit down by nearly half. Supermicro is telling you, in the same document that reports 17.47%, that 17.47% is not the run rate. If it were, $15B of revenue would produce well over $2B of net income, not $0.7B.
That is the honest reading of the beat: a genuinely excellent quarter, explicitly guided as not repeating.
The full year, and what it cost
FY2026 net sales were $39.06B, up 77.8%, with net income of $2.23B and GAAP EPS of $3.26.
Getting there consumed cash on a scale the income statement does not show. Full-year operating cash flow was −$6.81B against +$2.23B of net income, driven by −$8.88B of inventory and −$3.92B of receivables. Free cash flow for the year was −$6.97B.
That was financed with $4.47B of loans, $1.41B of common stock, and $4.23B of Mandatory Convertible Preferred — which is why preferred dividends now appear ($13.1M) and the guided share count steps up to 745M.
The June quarter itself was cash-positive: +$747M of operating cash flow against just $28M of capex, for +$719M of free cash flow. One quarter of collection after three of building.
The score
On our house definition — revenue growth plus free-cash-flow margin:
| Quarter | Revenue YoY | FCF | FCF margin | R40 |
|---|---|---|---|---|
| FY2025 Q4 | +7.5% | $0.84B | 14.6% | 22.1 |
| FY2026 Q1 | −15.5% | −$0.95B | −18.9% | −34.4 |
| FY2026 Q2 | +123.4% | −$0.05B | −0.4% | 123.0 |
| FY2026 Q3 | +122.7% | −$6.70B | −65.4% | 57.3 |
| FY2026 Q4 | +93.2% | $0.72B | 6.5% | 99.6 |
A score of 99.6 is the best in the series, and it is the first quarter where both halves are positive at once. It is also the most volatile R40 line we track — swinging from −34 to +123 to +57 to +100 in four quarters — because the cash half is dominated by working capital rather than profitability. Read the level, not the direction.
What still isn't answered
The release makes no mention of the independent board review into alleged export-control issues — the review the company itself said "could affect our forecasts, these preliminary results and prior period results." Our July coverage set out why that matters. Silence in an earnings release is not resolution, and the results are labelled unaudited.
The $60B order book also still has no published conversion schedule. Against an FY2027 guide of $65–72B, the orders are roughly 1.5x one year of revenue — a useful ratio, but not a delivery date.
The bottom line
This was a real beat: margin above the company's own pre-announced range, EPS above every estimate published, and the first cash-positive quarter in a year. The full-year guide of $65–72B, up 66–84%, is one of the largest in large-cap hardware.
And the company guided next quarter's profit down 38–44% on 30–39% more revenue. The margin that produced the beat is not in the forward numbers. Whoever bought the 20–25% move on the July pre-announcement has now been told what the September quarter looks like — and it looks like the old Supermicro with a much bigger top line.
What we learned
- The quarter cleared every estimate and the guide takes the margin back. GAAP EPS of $1.62 against a $0.71–$1.33 consensus span — 22% past the high end — with gross margin of 17.47% above the company's own pre-announced 15–17%. Then Q1 FY2027 GAAP EPS is guided to $0.89–0.98 on revenue up 30–39% sequentially.
- The full year says the opposite of the quarter. FY2026 gross margin was 10.82%, below FY2025's 11.06%. One 17.47% quarter sits on top of 9.31%, 6.30% and 9.95%.
- The beat is operating leverage on a single quarter's gross profit. Gross profit rose 257% on revenue that roughly doubled while operating expenses grew 44%, so nearly all the incremental gross profit fell through.
- Management's explanation is mix, not price. "A richer enterprise customer mix and broader adoption" of DCBBS is a claim about which customers bought, not about pricing power — and it is the claim the next print tests.
- Cash turned in the quarter and the year still burned. +$719M of free cash flow in Q4 against −$6.97B for FY2026. The preferred is now visible too: $13.1M of preferred dividends and a guided share count rising to 745M from 705M.
Figures are from Supermicro's Q4 and full-year FY2026 earnings release, filed as Exhibit 99.1 to its 8-K on August 11, 2026 (accession 0001375365-26-000021), and its preliminary business update of July 21, 2026 (accession 0001375365-26-000019). The discrete Q4 cash-flow figures are derived by differencing the fiscal year against the nine months in the Q3 10-Q XBRL, and reconcile to the release's own "$747 million" operating cash flow highlight. Revenue growth, free-cash-flow margin and Rule of 40 scores are computed from our stored Supermicro series; free cash flow is operating cash flow less purchases of property, plant and equipment. EPS figures are GAAP diluted unless labelled non-GAAP. Consensus estimates were third-party and are not held in this repository. The status of the export-control review is not held here and is not asserted.
