Super Micro Computer, Inc. · Q4 FY2026 call

In our pre-announcement, we disclosed over $60 billion in new orders, driving our order book and backlog to new record levels as we enter fiscal year 2027. While Q4 revenue came in at $11.1 billion due to some short-term customer delay in power shortage, cooling, and networking. We know this is purely a timing story.

This margin expansion mainly came from our strategy focused on balancing customer mix and product mix while having a few one-time positive contributions for the quarter.

putting our total manufacturing capacity on track to exceed 6,000 racks per month, including more than 3,000 direct liquid cooling racks per month.

Following our $5.6 billion financial in June, our balance sheet fully supports our component supply and business needs. […] We currently have no plan to utilize our ATM program, which we initiated a few months ago.

Our customer base is diversifying, and we had nine customers in fiscal year 2026 with revenues greater than $1 billion each versus four such customers in fiscal year 2025.

Our AI solutions contributed approximately 60% of total revenue in Q4 versus over 80% in Q3 due to the timing of some large AI project ramps. Based on our backlog, we believe greater than 80% of revenues will be AI-related solutions going forward.

For fiscal year 2026, we had one large data center/CSP customer, which represented 28% of revenue.

Q4 non-GAAP gross margin was 17.6% versus our guidance of 8.2%-8.4%. This was up from 10.1% in Q3.

Gross margins improved by 750 basis points sequentially due to a better than anticipated customer and product mix, including the deferral of several contracts from Q4 fiscal year 2026 to Q1 fiscal year 2027, and perhaps the subsequent quarter. This favorable mix contributed approximately 75% of the gross margin improvement. Lower tariff costs and lower inventory reserves drove the remaining 25% of the gross margin improvement.

At quarter end, cash and cash equivalents totaled $7.5 billion. Bank borrowings and convertible note debt totaled $8.7 billion, resulting in net debt of $1.2 billion, compared with net debt of $7.5 billion at the end of the prior quarter.

The cash conversion cycle increased by 43 days from 106 days in Q3 to 149 days in Q4. Days of inventory increased by 13 days to 119 days from 106 days in the prior quarter as we built inventory in anticipation of higher revenues going into fiscal year 2027.

We expect net sales to be in the range of $14.5 billion-$15.5 billion. GAAP diluted net income per share to be between $0.89 and $0.98, and non-GAAP diluted net income per share to be between $1.01 and $1.10. Based on the expected customer and product mix, we expect gross margin to be in the range of 10.4%-10.8%.

We will be very carefully control of balance between revenue and profitability. As you know, high volume GPU margin usually much lower. CPU, storage, IoT, enterprise application, on the other hand, have a higher margin. We will try to balance between the two vertical.

we expect to provide an update shortly, and that's all we can share on this call.

Around $60 billion, I would like to say 70% are pure AI. The other 30% is either CPU or CPU-based AI, or end of edge AI application. Overall, I believe our profit margin mix will be getting better.

You probably saw that we elevated a few of our individuals, Matt Thauberger as Chief Revenue Officer, Vik Malyala as Chief Business Officer. There's been a focus on efficiency and aligning the sales force with a solution sale element to address the AI opportunity ahead, which is supportive of better margins.

we do expect the cash conversion cycle to improve, and the reason for that is when we look at our backlog, we have improved terms, which will help us on our cash flow conversion. Therefore, we expect that this will allow us to carry a greater volume of business.

Once we take between $65 billion to $72 billion, I guess our cash flow now is pretty enough. But if there are chances to grow much higher revenue, then we may need more cash flow. For example, $80 billion or beyond $80 billion.

We like to support as many customers as we can, but the business has to be healthy. The margin has to be at a decent, meet the minimum financial kind of demand.

we did not book a tariff rebate in our numbers. We are actively pursuing refunds, but we did not take a benefit for those until we see them. I think the rest of the industry is expecting that the tariffs may go back up. […] So, that's why we still look at this as perhaps a one-time benefit.

I think there's no question that we had good results on our E&O this quarter. So that was what we would consider a non-recurring event.