Super Micro Computer, Inc. (SMCI.US) Q1 revenue surged nearly 3-fold year-over-year to a record high, while operating cash flow remained negative.

Super Micro Computer, Inc. (SMCI.US) reported first-quarter fiscal 2027 results on Tuesday. Driven by demand for AI data center infrastructure, the company's quarterly revenue hit a record high, nearly tripling year-over-year, while net income rose more than 8-fold year-over-year. However, operating cash flow remained negative, and gross margin declined noticeably from the previous quarter. The results showed that for the first fiscal quarter ended September 30, 2026, Super Micro Computer, Inc.'s revenue reached US$19.946 billion, up about 298% from US$5.018 billion a year earlier and up about 80% from US$11.1 billion in the previous quarter. Under U.S. generally accepted accounting principles (GAAP), net income for the first fiscal quarter was US$1.594 billion, up about 847% from US$168 million a year earlier; diluted earnings per share were US$1.75, compared with US$0.26 a year earlier. On a non-GAAP basis, adjusted diluted earnings per share were US$1.81, up from US$0.35 a year earlier, a year-over-year increase of about 417%. In terms of profitability, Super Micro Computer, Inc.'s first-quarter GAAP gross margin was 12.7%, up from 9.3% a year earlier but down 4.8 percentage points from 17.5% in the previous quarter. Non-GAAP gross margin was 12.8%, compared with 9.5% a year earlier. First-quarter operating income reached US$2.064 billion, a sharp increase from US$182 million a year earlier. Adjusted EBITDA was US$2.227 billion, compared with US$335 million a year earlier, and the adjusted EBITDA margin rose to 11.2% from 6.7%. AI data center business drives record revenue Charles Liang, founder, president and chief executive officer of Super Micro Computer, Inc., said the company's transformation into a total solutions provider for AI and IT data centers continued to accelerate, driving first-quarter fiscal 2027 revenue to a record US$19.9 billion. Liang noted that the company's modular data center solutions are creating greater value for customers, spanning applications from gigawatt-scale large data centers to single-container-scale data center deployments. At the same time, the company continues to expand its software, proactive services and networking solutions, which help improve profitability and create long-term shareholder value. He also said that by strengthening enterprise partnerships and expanding global production capacity, Super Micro Computer, Inc. is committed to helping customers deploy AI infrastructure faster, improve system operating stability and reduce costs. However, despite the sharp quarterly revenue growth, the company's gross margin still fell noticeably from the previous quarter. In its earnings risk disclosure, Super Micro Computer, Inc. noted that as the company increasingly pursues large customers and large-scale sales projects, customer concentration may increase, cost of sales may rise, and margins may come under pressure. Operating cash flow still negative; accounts receivable and inventory rise Of note, Super Micro Computer, Inc.'s first-quarter operating cash flow remained negative. The results showed net cash outflow from operating activities of US$434 million in the first fiscal quarter, an improvement from net outflow of US$918 million a year earlier but in contrast with the sharply higher book profit. The cash flow statement showed that accounts receivable increased by about US$3.560 billion and inventory increased by about US$2.477 billion in the first fiscal quarter, putting pressure on operating cash flow. At the same time, deferred revenue increased by about US$3.054 billion, partially offsetting the impact. As of the end of September, the company's accounts receivable reached US$9.685 billion, up from US$6.125 billion at the end of June; inventory rose to US$15.054 billion, up from US$12.896 billion at the end of the previous quarter. First-quarter capital expenditures and investments totaled about US$47 million. As of the end of September, cash and cash equivalents were about US$6.9 billion, and bank debt and convertible notes totaled about US$8.6 billion. Q2 revenue forecast of up to US$21.5 billion; full-year revenue guidance of up to US$82 billion Looking ahead to the second quarter of fiscal 2027, Super Micro Computer, Inc. expects revenue of between US$19.5 billion and US$21.5 billion, which at the midpoint of US$20.5 billion would represent further growth of about 3% from the first fiscal quarter. The company expects second-quarter GAAP diluted earnings per share of US$1.59 to US$1.83 and non-GAAP diluted earnings per share of US$1.66 to US$1.90. For the full fiscal year 2027, Super Micro Computer, Inc. expects revenue of between US$72 billion and US$82 billion, with a midpoint of US$77 billion. Overall, Super Micro Computer, Inc.'s latest results show that demand for AI data center infrastructure is driving rapid expansion of the company's revenue and profit. However, the sequential decline in quarterly gross margin, the rise in accounts receivable and inventory, and persistently negative operating cash flow remain financial indicators investors need to watch.