Supermicro shares fell as the company showed good quarterly results, but analysts expected more

Supermicro, an American supplier of servers, storage systems and integrated IT solutions, announced financial results for the fourth quarter and the entire 2024 fiscal year, ending June 30, 2024. The company’s shares fell after the report as the quarterly results fell short of analysts’ expectations.

Supermicro’s revenue was $5.31 billion, topping the prior-year quarter’s $3.85 billion and the year-earlier quarter’s $2.18 billion. It also beat the LSEG analysts’ consensus estimate of $5.30 billion. At the same time, adjusted earnings per share (Non-GAAP) turned out to be much lower than Wall Street analysts’ forecast – $6.25 versus the expected $8.07. Let us add that a year earlier this figure was $3.51 per share.

Image source: Supermicro

Supermicro reported that gross margin decreased to 11.2% from 15.5% in the prior quarter and 17% in the fourth quarter of fiscal 2023. This means the company is making less profit on each product sold, despite reporting that it “continues to experience record demand for new AI infrastructure.” The company’s GAAP net income for the quarter was $352.7 million, or $5.51 per share, up from earnings in the same period a year earlier of $193.5 million, or $3.43 per share.

Supermicro’s fiscal 2025 first-quarter revenue forecast is in the range of $6 billion to $7 billion, above Wall Street’s forecast of $5.46 billion. The company also expects earnings per share in the range of $5.59 to $8.27, or the average is $7.48, while experts are forecasting $7.58 in earnings per share.

As for the FY 2024 results, Supermicro’s revenue was $14.94 billion, up from $7.12 billion in FY 2023. Net income was $1.21 billion, or $20.09 per diluted share, up from $640 million. US or $11.43 per diluted share for fiscal 2023. Net income (Non-GAAP) for fiscal 2024 was $1.34 billion, or $22.09 per diluted share, compared to $673 million, or $11.81 per diluted share, for fiscal 2023. The company expects total revenues of $26.0 billion to $30.0 billion for fiscal 2025 ending June 30, 2025.

Supermicro shares, which entered the S&P 500 in March of this year and peaked at nearly $1,200, are up 246% since 2023 and up 117% since the start of 2024. The company’s share price at the close of trading on Wednesday dropped below $500, although at the beginning of the month it exceeded $700. During the report, Supermicro also announced an upcoming stock split of 10:1, which will take place on October 1.