All figures are for Supermicro's first fiscal quarter of 2027, which ended Sep 30, 2026, from the company's release on Nov 3, 2026. The results are preliminary and unaudited. Figures marked as our math are our own calculations.
Supermicro, which builds the GPU servers and racks that go into AI data centers, had its biggest quarter yet. Its Q1 FY2027 release reports net sales of $19.9B, up from $11.1B in the June quarter and $5.0B a year earlier. That's about 80% growth in three months and roughly four times the year-ago level (our math).
The catch is margin. GAAP gross margin was 12.7%, down from 17.5% in the June quarter, though still above 9.3% a year earlier. Non-GAAP gross margin was 12.8%. Thin margins are normal for server makers, because much of the cost of an AI server is GPUs and memory bought from other suppliers. Even so, net income rose to $1.6B, from $1.2B in the June quarter and $168M a year earlier, and diluted earnings per share were $1.75 GAAP and $1.81 non-GAAP.
Building that much hardware tied up cash. Operations used $434M of cash in the quarter and Supermicro spent $47M on capital expenditures and investments, so free cash flow was about negative $481M (our math). Inventory climbed to $15.1B from $12.9B at the end of June, and accounts receivable rose to $9.7B from $6.1B. Current deferred revenue, which reflects payments received before revenue is recognized, grew to $4.3B from $1.6B. The company ended the quarter with $6.9B of cash against $8.6B of bank debt and convertible notes.
For the December quarter, Supermicro expects net sales of $19.5B to $21.5B, with GAAP diluted EPS of $1.59 to $1.83. For the full fiscal year ending June 2027, it expects sales of $72B to $82B. Our explainer on EPS, beats and guidance covers how to read a GAAP figure next to a non-GAAP one, and why the outlook can matter more than the quarter.
Supermicro builds many of its AI systems on NVIDIA platforms, including the rack-scale designs in our look at NVIDIA's DSX pods and Vera Rubin AI factories. Every rack also needs power, a constraint we laid out in AI data centres and the power grid. And free cash flow, explained shows why fast-growing hardware makers can report profits while burning cash.
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Kelly B.Hardware & Infra desk
Kelly B. is a Codema.ai house byline: a pen name used by our editorial desk, not one individual journalist. It covers Hardware & Infra: GPUs and the memory inside them (HBM, GDDR7, DDR5, NAND), hardware for running AI locally, GPU rental prices, chipmaking, and the data centres and power behind AI. Pieces under this name are written with AI assistance and reviewed by a human editor before they're published.
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