Super Micro’s third quarter results were met with a negative market reaction, as both revenue and adjusted profits came in below Wall Street expectations. Management attributed the shortfall to a significant shift in customer demand, with large-scale orders for advanced AI hardware requiring last-minute product configuration changes and causing shipment delays. CEO Charles Liang noted that the company is in the “early phases of the dynamic AI growth trend,” but acknowledged that the complexity of new GPU racks and the need for intricate integration and validation extended delivery timelines. CFO David Weigand further explained that the delayed shipments were primarily linked to a major design win, resulting in revenues being pushed to future quarters.
Is now the time to buy SMCI? Find out in our full research report (it’s free for active Edge members).
Super Micro (SMCI) Q3 CY2025 Highlights:
- Revenue: $5.02 billion vs analyst estimates of $5.78 billion (15.5% year-on-year decline, 13.2% miss)
- Adjusted EPS: $0.35 vs analyst expectations of $0.39 (10.1% miss)
- Adjusted EBITDA: $283.7 million vs analyst estimates of $337.6 million (5.7% margin, 16% miss)
- The company lifted its revenue guidance for the full year to $36 billion at the midpoint from $33 billion, a 9.1% increase
- Adjusted EPS guidance for Q4 CY2025 is $0.50 at the midpoint, below analyst estimates of $0.62
- Operating Margin: 3.6%, down from 8.6% in the same quarter last year
- Market Capitalization: $23.99 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Super Micro’s Q3 Earnings Call
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Samik Chatterjee (JPMorgan) asked if increased guidance was more driven by chipset availability or market share expansion. CEO Charles Liang pointed to increased NVIDIA allocations and emphasized both volume growth and DCBBS as dual drivers.
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Asiya Merchant (Citigroup) questioned the sustainability of margin improvement as revenue climbs. CFO David Weigand noted ramping costs for new clusters but expects efficiency and margin gains as scale is achieved.
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Ananda Baruah (Loop Capital) pressed on the conservativeness of full-year guidance and potential revenue flattening. Liang described the $36 billion target as “very conservative” and highlighted DCBBS as a future profit driver.
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Ruplu Bhattacharya (Bank of America) asked about manufacturing capacity and working capital needs. Liang and Weigand stated the new facilities could theoretically support over $100 billion in annual revenue, but added that revenue growth would be managed in line with cash flow.
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Mark Newman (Bernstein) sought clarity on long-term gross margin targets. Weigand said the company aims for double-digit margins but will only guide higher once the current platform transition is stabilized.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will closely track (1) the pace at which deferred AI infrastructure orders are delivered and recognized as revenue, (2) the adoption rates and margin contribution of DCBBS solutions as they expand to more customers, and (3) the company’s ability to scale global production efficiently while managing working capital and supporting new mega-projects. Execution in balancing growth with profitability will be a critical marker for Super Micro’s evolving strategy.
Super Micro currently trades at $40.75, down from $47.51 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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