On Tuesday, Super Micro Computer (NASDAQ:SMCI) discussed third-quarter financial results during its earnings call. The full transcript is provided below.
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The full earnings call is available at https://events.q4inc.com/attendee/464075960
Summary
Leverage Shares PLC reported significant growth in business value, driven by technology leadership and market expansion, despite industry-wide shortages impacting revenue.
The company achieved a gross margin recovery to 10.1%, a 58% increase from the previous quarter, and aims to maintain a sustainable double-digit gross margin model.
Leverage Shares PLC highlighted the expansion of their Data Center Building Block Solutions (DCBBS) and software, expecting this to significantly contribute to future profitability.
Strategic initiatives include strengthening the Global Trade Compliance program and expanding manufacturing footprint in the U.S. and globally.
Future guidance reflects an optimistic outlook with expected Q4 revenue of $11-12.5 billion and a full-year target of $40 billion, indicating confidence in overcoming current challenges.
Full Transcript
OPERATOR
Thank you for standing by. My name is Krista and I will be your conference operator today. At this time I would like to welcome everyone to the Super Micro Computer Inc. Third quarter 2026 earnings call. With us today are Charles Liang, Founder, President and Chief Executive Officer David Wiegand, Chief Financial Officer and Michael Sager, Senior Vice President of Corporate Development. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press Star followed by the number one on your telephone keypad and if you’d like to withdraw your question again, press Star one. Thank you. I would now like to turn the conference over to Michael Sager. Please go ahead.
Michael Sager (Senior Vice President of Corporate Development)
Hey, Good afternoon. Thank you for attending Super Micro call to discuss financial results for third quarter fiscal 2026 which ended March 31, 2026. As you know, with me today are Charles Liang, Founder, Chairman and Chief Executive Officer David Wiegand, Chief Financial Officer. By now you should have received a copy of the press release from the company that was distributed at the close of regular trading and is available on the company’s website. As a reminder, during today’s call, the company will refer to a presentation that is available to participants in the Investor Relations section of the Company’s website under the Events and Presentations tab. We also publish management’s scripted commentary on our website. Please note that some of the information you’ll hear during our discussion today will consist of forward looking statements including without limitation, those regarding revenue, gross margin, operating expenses, other income and expenses, taxes, capital allocation, future Business Outlook, including guidance for the fourth quarter fiscal year 2026 and the full fiscal year 2026. These statements and other comments are based on management’s current expectations and assumptions and involve material risks and uncertainties that could cause the actual results or even events to materially differ from those anticipated and you should not place undue reliance on forward looking statements. You can learn more about these risks and uncertainties in the press release we issued earlier today, Our most recent 10k filing for fiscal 25 and other SEC filings. All these documents are available on the IR page of Supermicro’s website. We assume no obligation to update any forward looking statements. Most of today’s presentation refer to non GAAP Financial Results and Business Outlook. For an explanation of our non GAAP financial measures, please refer to the Company presentation or to our press release published earlier today. The non GAAP measures are presented as we believe that provide investors with a means of evaluating and understanding how management’s evaluates the company’s operating performance. These non GAAP measures should not be considered in isolation from, as substitute for or superior to financial measures prepared in accordance with US gaap. In addition, a reconciliation of GAAP to non GAAP results contained in today’s press release and in the supplemental information attached to today’s presentation. At the end of today’s prepared remarks, we will have a Q and A session for sell side analysts for fourth quarter fiscal 2026. Quiet period begins at the close of business Friday, June 12, 2026 and for now I will turn the call over
Charles Liang (Founder, President and Chief Executive Officer)
to Charles thank you Michael and thank you all for joining today’s call. We had significant business value growth with our technology leadership and market expansion. However, before I discuss the specific of the quarter, I want to provide an update on a recent development regarding the indictment of certain individuals formerly associated with the company. I must be clear, Super Micro is not a defendant nor a target or a grand jury investigation and Super Micro had zero tolerance to any employee who violated fatal law and regulation. I am personally shocked and saddened by these allergic actions which in no way represented the value or ethics of this company. We took immediate action by terminating our relationship with the defendants and helping and cooperate fully with the US Government. Additionally, our independent directors have launched a thorough independent investigation with cut forensic and legal forms to ensure we continue to maintain the highest standard of integrity. We are not waiting for this process to finish. We are further strengthening our Global Trade Compliance program under expert leadership. Not only is Chibumica fully committed to protecting advanced American technology and following the highest and business standard, but continue to expand our manufacturing footprint right here in United States. Again, the alleged actions of few individuals do not define us. Our focus remains on doing extraordinary work for our customer and partner and leading the industry with transparency and excellence. Now let’s talk about a quota. This was a quarter defined by value and focus for Shibu Micro. Despite the industry wide shortage of key components including cpu, GPU and memory, our business continues to grow and expand. Indeed, our back order is now in another record high. We advance and optimize the orders data center infrastructure using our leading direct liquid cooling Direct Liquid Cooling (DLC) technology. Our focus remains on delivering the fastest time to online Time to Online (TTO) in the industry, ensuring our customers can scale their AI factories quickly and most efficient. While our fiscal Q3 revenue of 10.2 billion was impacted by customers site readiness delay, our business fundamentals are stronger than ever. This is purely a short term delay. Several customer side were not yet equipped with the power and networking required for their cloud deployment and we expect to capture this revenue in the coming quarters. One of the most significant achievements this quarter was our gross margin recovery which increased significantly to 10.1% non-GAAP representing a 58% improvement over the 6.4% non GAAP reported in the previous quarter. We are committed to achieving a sustainable double digital gross margin model by increasing our focus on enterprise market and our CCPPS business. Here are some key growth drivers. First, market strength business remains very strong in the near cloud solving AI and authentic AI segment. We have been aggressively fostering the traditional enterprise and storage business for about one year and we start to see strong growth Growing Opportunities Our Data center building block solution DC BBs continue to attract old and new customers, interest and create new popular streams. By offering a total data center solution that includes complete degree cooling for facility management, software, networking and service. We are providing much more value to our customers as they commit to our total solutions product mix and efficiency. We improve our product mix with some more unique value product in this quarter and thereafter. We also advance our design of manufacturing, EFN and more automation in our factories to build products faster with higher era and quality and supply chain. We successfully manage inventory through a dynamic supply environment and took actions to reduce tariff related cost operation. These efforts help improve flexibility of tax margin and support customer delivery timeline. Here is the bigger story. Supermico is evolving former US based server designer and manufacturer into a total data center solution provider. We expand our business to have customer planning, building, deploying and servicing data center infrastructure for global enterprise and new cloud provider. Especially our PCPPS business is essential to this transformation, providing almost everything a customer needs to to build an AI factory including cooling units, networking, PowerShell battery, backup management software and many other data center subsystems. Our DCPPS business continues to grow exactly as what we plan, showing a consistent and accelerating contribution to our top line and bottom line quarter over quarter and I believe our TCPPAS will soon contribute more than 25% of our total profit in the coming few years. As an IT technology leader for more than 30 years we have consistently turn industry disruption into innovation and new strong opportunities. One of the key value and drivers of our TCPBS business is our data center end to end management software. We see significant demand for the shipumicro data center and cloud software suite including our Super Cloud Composer that manage tens of thousands of systems or racks in real time. It provides comprehensive control over system and rack level power usage, cooling status, safety condition and device utilization alongside many other critical features management software feature also include advanced CPU and GPU workload orchestration which is a critical function for today’s AI data center. The revenue from this new software product line is finally growing at a tremendous pace, increasing from less than $10 million per quarter just a few quarters ago to 34 million last quarter and more than $46 million books for this quarter. By bundling subscription based software and service alongside our hardware, we are strengthening our customer relationship and improving our long term profitability. We expect DCBBs including software and service to continue its rapid growth and to become a major part of our key value very soon. We continue to grow and expand our partnership with many key suppliers, especially with Nvidia. We are currently shipping many SKU oil rack scale systems including GP300MV LR72, many B300HGX SKU B200MV LR4 and inferencing application optimized RTX product lines and we are preparing to be among the first to market with the new Vera Lubin Systems including the MVL72 Supercast. We continue to build on strong momentum of our AMD Mi350 platform as we prepare for the next generation of AMD helios solutions featuring APEC, Venus and Mi 400 series our products. In addition, we are working closely with intel and ARM on the development of upcoming Geom 6+ platforms and a new addition to our portfolio including ARM AGI GPU based solutions. This system will deliver exceptional performance per watt, specifically optimum for our growing demand of agentic AI workloads. By leveraging shipment code system building block solution, RAC and data center scale building block architecture, we can efficiently support a wide variety of compute platform and optimize them for different business verticals. Moving on to our footprint, we are expanding our global production capacity with new facility to better support AI demand across the world. Our site in Taiwan, Malaysia and NEZER are all ramping up aggressively domestically. We recently announced our largest US site to date, a new DC BBS campus in Silicon Valley just one mile away from our headquarters. This brings our total Bay Area footprint to nearly 4 million square feet featuring eight new buildings optimized for innovation, design, production and validation or next generation end to end data center total solutions. Within this new campus we are building multiple large scale validation and production facilities, some of them including Clean Room specifically to Support our new DLC 2 subsystem and next generation networking solutions including advanced optical photonics based devices. With these expansions we are on track to produce more than 6,000 or award’s most powerful state of the art rack for months. In closing, Shibu Mango continues to scale out revenue and scale up value. We have strengthened our governance delivering a meaningful margin Recovery and expanded DCPPAs growing in both volume and value through software, networking service and more. Our leadership in DLLC technology pair our ability to deliver large scale total solution and industries fastest time to online. We are continuing to fuel our strong growth keeping Chupamanga at the center for our AI revolution. With that I remain very bullish about our growth in the AI and data center market. For the first quarter we target $12 billion given stable supply Confucius for the full year we target $40 billion. I will turn this over to David
David Wiegand (Chief Financial Officer)
thank you Charles Fiscal Q3FY26 revenue was 10.2 billion, up 123% year over year and down 19% quarter over quarter. As Charles mentioned, Q3 revenue was impacted by data center and customer readiness together with industry wide supply chain constraints. We expect to recognize the deferred revenue in the upcoming quarters. Orders and backlog remain strong across our customer base driven by AI infrastructure demand with AI GPU related platforms contributing over 80% of revenue. During Q3, the enterprise channel revenue totaled 2.8 billion, representing about 28% of revenue versus 15% in the prior quarter. This was up 46% year over year and up 45% quarter over …
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