Super Micro recently reported slightly lower revenue than expected for its fiscal third quarter, causing its shares to slip as much as 15% in extended trading. The company exceeded earnings per share expectations at $6.65 adjusted compared to $5.78 expected, but fell short in revenue with $3.85 billion, as opposed to the expected $3.95 billion. Despite this, the company saw a significant 200% year-over-year jump in revenue in the quarter, compared to a 103% increase in the previous quarter. Net income also increased to $402.5 million, or $6.56 per share.
Despite the slight miss in revenue, Super Micro is optimistic about its future growth. The company bumped up its fiscal 2024 revenue guidance to $14.7 billion to $15.1 billion from the previous range of $14.3 billion to $14.7 billion, surpassing analysts’ expectations of $14.6 billion. The middle of the new revenue range implies approximately 582% year-over-year growth. CEO Charles Liang mentioned during a conference call with analysts that they are experiencing strong growth in their customer base, which is contributing to their positive outlook.
Super Micro stock has performed exceptionally well so far this year, up 205%, compared to the 6% gain in the S&P 500 stock index. The company faces competition from legacy IT equipment providers like Hewlett Packard Enterprise, but investors have been optimistic about its potential to become a key provider of servers containing Nvidia graphics processing units for artificial intelligence models. This excitement has contributed to Super Micro’s stock increasing by 246% last year, and the company also took the place of Whirlpool in the S&P 500 in March.
Super Micro faced challenges during the quarter due to a key component shortage, which impacted its ability to deliver more. However, the company remains confident in the strong growth potential of AI in the coming quarters and years. To support this growth, Super Micro raised capital through a secondary offering this year. The company’s supply chain is also improving, according to finance chief David Weigand, which will help meet increasing demand.
Looking ahead, Super Micro is eager to introduce liquid-cooled servers that can offer lower energy costs compared to traditional air-cooled options. These servers align with the increasing focus on energy efficiency and sustainability in data centers. The company’s continued focus on innovation and meeting customer needs positions it well for future growth in the server market. Despite the short-term setback in its share price, Super Micro remains optimistic about its long-term prospects and its potential to continue its impressive revenue growth in the coming years.
