Supermicro (SMCI) Q4 FY2025 Earnings Disappoint Investors

Supermicro shares closed at $46.79, down 18.3% following Q4 FY2025 earnings despite posting record revenue growth. The selloff reflects market concerns over tightening margins and a lighter-than-expected earnings outlook.

Q4 FY2025 Highlights (ended June 30, 2025):

• Revenue: $5.98 billion (record high, inline with expectations)
• Non-GAAP EPS: $0.41
• Non-GAAP Gross Margin: 9.6%
• GAAP EPS: $0.34

Margins remained under pressure even as top-line grew, signaling higher component costs and competitive pricing in AI server deployments.

Full Fiscal Year 2025:

• Revenue: $22.0 billion, up ~47% from $15.0 billion in FY2024
• Non-GAAP Net Income: $1.3 billion or $2.06 per share
• GAAP Net Income: $1.0 billion or $1.68 per share
• Non-GAAP Gross Margin: 11.2%

Despite record sales, net income per share remained flat year-over-year, pointing to operating efficiency challenges.

Outlook – Q1 FY2026:

• Revenue: $6.0B–$7.0B
• Non-GAAP EPS: $0.40–$0.52
• GAAP EPS: $0.30–$0.42
• FY2026 Revenue Goal: $33 billion

The earnings guide for Q1 fell short of street expectations, contributing to the sharp decline in share price.

Strategic and Operational Developments:

• Strong demand for AI server platforms including NVIDIA Blackwell and DLC-2 liquid cooling
• $20B deal secured with DataVolt for large-scale AI campuses in Saudi Arabia and the U.S.
• Expanded manufacturing globally in the U.S., Taiwan, and Netherlands
• Strengthened governance and internal controls following 2024 audit scrutiny

Key Takeaway:

While Supermicro is capitalizing on AI infrastructure demand and growing rapidly, investors are increasingly focused on profitability. Margin compression and cautious guidance are pressuring sentiment despite a bullish long-term revenue target.