Supermicro Q1 FY2025 Preliminary Financial Update & Special Committee Report $SMCI
$SMCI (+6.15%)

Preliminary Financial Highlights:

• Net Sales: Expected between $5.9B and $6.0B, below prior guidance of $6.0B to $7.0B

• GAAP & Non-GAAP Gross Margin: Approximately 13.3%

• GAAP Diluted EPS: Projected at $0.68 to $0.70, up from prior guidance of $0.60 to $0.77

• Non-GAAP Diluted EPS: Expected at $0.75 to $0.76, compared to previous guidance of $0.67 to $0.83

• Adjustments: Non-GAAP figures include stock-based compensation adjustments of $50M, net of related tax effects of $17M

• Cash & Debt: Total cash of ~$2.1B and total debt of ~$2.3B, with $0.6B in bank debt and $1.7B in convertible notes

Q2 FY2025 Guidance:

• Net Sales: Anticipated between $5.5B and $6.1B

• GAAP EPS: Forecasted at $0.48 to $0.58

• Non-GAAP EPS: Estimated at $0.56 to $0.65, assuming a tax rate of ~15% and diluted share count of 648M

Special Committee Investigation Update:

• Outcome: No evidence of fraud or misconduct by management or the Board

• Recommendations: Series of remedial actions to enhance internal governance and oversight

• Report: Full findings expected within a week

Form 10-K & Nasdaq Compliance:

• Filing Delay: Form 10-K for FY2024 remains pending; initial deadline was August 29, 2024

• Nasdaq Plan: Company received non-compliance notice; has until mid-November to file or submit a compliance plan, potentially extending to February 2025

Traders' Takeaway:

• Although Q1 net sales fell short of earlier guidance, EPS exceeded initial projections, showing profitability management.

• The Special Committee’s report clears management, adding credibility amid governance enhancements.

• Q2 guidance reflects stability, but Supermicro’s compliance delay with Nasdaq remains a watch point for potential listing risk.