Supermicro reported third quarter fiscal 2025 revenue of $4.60 billion, a sequential decline from $5.68 billion in Q2, but a 19% increase over the $3.85 billion posted in the same quarter a year ago. Net income for the quarter was $109 million, down significantly from $321 million in the prior quarter and $402 million in Q3 FY2024. Gross margin declined to 9.6%, compared to 11.8% in Q2 and 15.5% a year earlier. The company attributed the quarterly softness to customer delays in making platform decisions, though it expects stronger activity in the June and September quarters.
Non-GAAP diluted earnings per share came in at $0.31, factoring out stock-based compensation and debt extinguishment losses. Cash flow from operations remained robust at $627 million. Supermicro ended the quarter with $2.54 billion in cash and $2.49 billion in outstanding debt. Looking ahead, the company lowered its full-year revenue outlook to $21.8–$22.6 billion from the previous $23.5–$25.0 billion, citing ongoing macroeconomic uncertainty and tariff impacts.
- Q3 FY2025 revenue: $4.60 billion, down 19% sequentially, up 19% year-over-year
- GAAP EPS: $0.17; Non-GAAP EPS: $0.31
- Gross margin: 9.6% GAAP, 9.7% non-GAAP
- Cash from operations: $627 million; Capital expenditures: $33 million
- Total cash: $2.54 billion; Total debt: $2.49 billion
- Q4 FY2025 revenue outlook: $5.6–$6.4 billion
- FY2025 revenue guidance lowered to $21.8–$22.6 billion
“We continue to make great progress with our DCBBS, DLC, and AI technology leadership, but some customers delayed making platform decisions in the quarter,” said Charles Liang, Founder, President, and CEO of Supermicro. “We believe that we are well positioned in the long-term to capitalize on the growing market opportunity.”
Supermicro CEO Commentary – Charles Liang
- Q3 Revenue Miss Driven by Platform Transition: Customers delayed decisions between NVIDIA’s Hopper and Blackwell GPU platforms, pushing revenue into Q4 and Q1 FY2026.
- Q3 Inventory Write-Down: Non-GAAP EPS impacted by a one-time write-down on older-generation GPU inventory.
- AI Ramp Underway: High-volume deliveries began at the end of March for NVIDIA B200 HGX systems, GB200 NVL72 racks, and AMD MI-325X solutions.
- New Platforms Coming Soon: Supermicro expects to deliver NVIDIA B300, GB300, and AMD MI-350-based systems by summer 2025.
- Launch of DCBBS and DLC-2: New Data Center Building Block Solution (DCBBS) will simplify deployments, lower TCO by up to 30%, and accelerate data center time-to-deployment.
- DLC-2 Innovations: Second-generation Direct Liquid Cooling reduces power and water usage by up to 40% and noise levels to 50 dB.
- AI Rack Volumes to Double: Supermicro shipped 4,000 100kW AI racks in FY2024 and plans to double that in FY2025.
- Global Capacity Expansion: Malaysia site began shipments; Taiwan and Europe scaling; U.S. manufacturing expansion continues, including new Midwest facilities.
- Outlook: Strong confidence in Q4 rebound, projecting revenue of at least $6 billion, but broader forecast range deferred due to macro uncertainty.
Supermicro CFO Commentary – David Weigand
- Revenue Mix Shifting to Enterprise: Enterprise/Channel vertical up 38% QoQ, now 42% of revenue, as hyperscaler share decreased.
- Geographic Performance: U.S. accounted for 60% of Q3 revenue (down 28% QoQ), Asia 30% (up 76%), Europe 6% (down 69%), Rest of World 4% (up 45%).
- Q3 Margins Affected: Non-GAAP gross margin declined to 9.7% due to inventory reserves, lower volumes, and cost accelerations for new product ramps.
- Cash Flow Rebound: Operating cash flow rebounded to $627 million in Q3 vs. outflow of $240M in Q2; free cash flow hit $594 million.
- Convertible Debt Update: Raised $700 million via new 2028 notes; net cash position turned positive at $44 million vs. negative $479 million in Q2.
- Inventory Build for Q4: Inventory rose to $3.9 billion, anticipating stronger shipments; Days Sales Outstanding up to 56 days.
- Q4 Guidance: Revenue between $5.6B and $6.4B, GAAP EPS of $0.30–$0.40, non-GAAP EPS of $0.40–$0.50, capex of $45–$55 million.
- FY25 Outlook: Company lowered full-year revenue guidance to $21.8B–$22.6B.
