• Revenue: Preliminary fiscal Q1 net revenue in the range of $5.9 billion to $6 billion, up 181% year over year.

• Non-GAAP Earnings Per Share (EPS): Preliminary non-GAAP EPS in the range of $0.75 to $0.76, up approximately 122% year over year.

• Gross Margin: Preliminary non-GAAP gross margin approximately 13.3%.

• Operating Margin: Preliminary non-GAAP operating margin approximately 9.9%.

• Operating Cash Flow: Approximately $407 million, an improvement of $1 billion quarter over quarter.

• Free Cash Flow: Positive free cash flow of $365 million for the quarter.

• Inventory: Q1 closing inventory approximately $5 billion.

• Cash Position: Q1 closing balance sheet cash position $2.1 billion.

• Total Debt: Total debt $2.3 billion, with bank debt of $0.6 billion and convertible bond debt of $1.7 billion.

• Cash Conversion Cycle: 97 days, compared to 94 days in Q4.

• Days of Inventory: 85 days, compared to 82 days in the prior quarter.

• Days Sales Outstanding: 41 days, compared to 37 days last quarter.

• Days Payables Outstanding: 29 days, from 25 days last quarter.

• Warning! GuruFocus has detected 5 Warning Signs with SMCI.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Super Micro Computer Inc (NASDAQ:SMCI) reported a significant year-over-year revenue increase of 181%, driven by strong AI demand.

• The company achieved one of its strongest first quarters in history, with preliminary net revenue ranging from $5.9 billion to $6 billion.

• Non-GAAP gross margin improved to approximately 13.3%, and operating margin increased to approximately 9.9%, reflecting better customer mix and reduced supply chain costs.

• Super Micro Computer Inc (NASDAQ:SMCI) successfully deployed the world's largest DLC AI SuperCluster, showcasing its engineering expertise and logistics capabilities.

• The company is expanding its production facilities globally, including a new campus in Malaysia, to increase manufacturing capacity and support future growth.

Negative Points

• Revenue came in at the lower end of guidance due to customers waiting for new-generation GPU chips, impacting short-term sales.

• The resignation of the independent auditor and delay in filing the company's 10-K has raised concerns, although no evidence of fraud or misconduct was found.

• Gross margins are expected to decline in the next quarter due to customer and product mix, indicating potential pricing pressures.

• The company is facing challenges in maintaining inventory levels, with days of inventory increasing, which could impact cash flow.

• There is uncertainty regarding the appointment of a new auditor and the timeline for resolving financial reporting issues, which could affect investor confidence.