Key points
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SMCI shares rose 16.86% in after-hours trading following third-quarter results.
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The company reports quarterly earnings of $483 million with improved margins.
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The unprecedented $60 billion order backlog indicates strong future demand.
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Q4 gross margin guidance jumps to 15%-17% range.
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The increasing requirements for AI infrastructure are fueling the company’s expansion trajectory.
Super Micro Computer, Inc. shares closed. (SMCI) Regular trading at $25.50, up 7.01%. After the close, the stock rose an additional 16.86% to $29.80 in extended trading. The impressive move came after the company revealed improved profitability metrics, improved margin performance, and revealed an exceptional order backlog that exceeded $60 billion.
Super Micro Computer Company, SMCI
Q3 results reveal improved profitability amid revenue normalization
Super micro It revealed preliminary revenues for the third quarter of fiscal year 2026 totaling $10.2 billion. While this represents a sequential decline from the previous quarter’s $12.7 billion, it represents a significant year-over-year increase from the $4.6 billion recorded in the comparable period.
The company achieved a gross margin of 9.9% during the quarter. This metric showed a significant improvement compared to 6.3% in the previous quarter and slightly exceeded the 9.6% recorded in the same period last year. On a non-GAAP basis, gross margin expanded to 10.1% versus 9.7% from the previous year.
Quarterly net income rose to $483 million, up from $401 million in the second quarter. This number represents significant growth compared to the $109 million achieved during the same quarter last year. Diluted EPS was $0.72, while non-GAAP diluted EPS jumped to $0.84 compared to $0.31 in the year-ago period.
The huge order backlog supports the optimistic outlook for the fourth quarter
The company also provided preliminary forecasts for the fourth quarter of fiscal 2026. Management expects revenue to track toward the lower part of the previous guidance range of $11.0 billion to $12.5 billion. Notably, gross profit margin forecasts showed significant improvement beyond initial expectations.
especially, Super micro It now expects both GAAP and non-GAAP gross margins to be between 15% and 17%. This represents a significant upgrade from the company’s previous forecast range of 8.2% to 8.4%. Management attributed this improvement to a more advantageous customer mix and increased demand across its product range.
Perhaps most importantly, the company revealed that its backlog reached an all-time high by the end of the fiscal year. The total accumulated new orders during the fourth quarter alone amounted to more than $60 billion. The company expects to meet these requests during the upcoming reporting periods.
Strategic investments in AI infrastructure strengthen competitive positions
Super Micro continues to establish itself in the market as a comprehensive data center infrastructure solutions provider. During the quarter, the company expanded its manufacturing footprint with new facilities in Silicon Valley. These additions enhance the production capabilities of both AI-focused computing systems and enterprise computing systems.
CEO Charles Liang commented on the company’s progress, saying, “Supermicro’s transformation into a comprehensive data center infrastructure provider is accelerating.” He continued: “Our margin recovery and the rapid growth of our DCBBS business demonstrate that our business remains strong.” Liang also noted, “With the addition of our new US manufacturing facilities in Silicon Valley, we are exceptionally well-positioned to meet the tremendous demand across various AI and enterprise sectors.”
The company’s balance sheet at the end of March showed $1.3 billion in cash and cash equivalents. Total debt obligations, including bank debt and convertible notes, were $8.8 billion. Operating activities consumed $6.6 billion in cash during the quarter, while capital expenditures and investments totaled $97 million.
Super micro It has established itself as a leading supplier of AI server systems and comprehensive data center solutions. Enterprise spending on generative AI technologies has accelerated dramatically, driving unprecedented demand for AI compute infrastructure. The combination of margin expansion and historical order volumes has boosted investor confidence despite sequential revenue declines for the quarter.
