Super Micro Computer 2025 Q3 Earnings Misses Targets as Net Income Declines 73%

Super Micro Computer (SMCI) reported its fiscal 2025 Q3 earnings on May 12th, 2025. Despite an increase in revenue, the results fell short of analyst expectations, with earnings per share missing the consensus estimate of 50 cents, coming in at 31 cents per share. The company also adjusted its guidance, lowering fiscal 2025 revenue expectations to a range of $21.8 billion to $22.6 billion, down from previous forecasts. The company continues to navigate economic challenges while focusing on long-term growth objectives.

Revenue

Super Micro Computer saw its total revenue rise by 19.5% to $4.60 billion in 2025 Q3, compared to $3.85 billion in 2024 Q3. The server and storage systems segment contributed significantly, generating $4.46 billion, while the subsystems and accessories segment added $141.02 million to the total revenue, demonstrating a robust performance in both areas.

Earnings/Net Income

Super Micro Computer's EPS declined significantly by 74.6%, falling to $0.18 in 2025 Q3 from $0.71 in 2024 Q3. The net income also saw a substantial drop, decreasing to $108.78 million in 2025 Q3 from $402.46 million in the same quarter last year. The earnings per share reflect the company's struggles, indicating a challenging quarter.

Price Action

The stock price of Super Micro Computer has edged down 1.09% during the latest trading day, climbed 4.20% during the most recent full trading week, and tumbled 8.69% month-to-date.

Post Earnings Price Action Review

Over the past five years, a strategy of purchasing Super Micro Computer shares following a quarter-over-quarter revenue increase on earnings release day and holding them for 30 days has yielded exceptional returns. This approach delivered a remarkable 1024.28% return, significantly outperforming the benchmark's 95.08% growth. The strategy's excess return of 929.21% highlights its ability to capture substantial additional gains. The compound annual growth rate (CAGR) stood at 62.69%, underscoring its compounding effectiveness. Although the Sharpe ratio of 0.79 suggests a reasonable risk-adjusted return, the maximum drawdown of -84.22% points to high risk, emphasizing the need for risk management in such volatile conditions. With a volatility of 79.68%, the strategy demonstrated considerable growth potential but also considerable risk, making it suitable for investors with a high risk tolerance and a long-term investment horizon.

CEO Commentary

Charles Liang, CEO of Super Micro Computer, expressed that while the company faced challenges due to delayed customer platform decisions, the business performance remains resilient. He noted robust new generation product design wins and emphasized the company's strong positioning to capitalize on market opportunities driven by AI technology leadership. Liang conveyed optimism about the future, stating that he expects many customer commitments to materialize in upcoming quarters, despite acknowledging potential short-term impacts from economic uncertainty and tariff issues.

Guidance

Super Micro Computer provided guidance for the fiscal fourth quarter, expecting revenue in the range of $6 billion, with adjusted earnings per share anticipated at approximately $0.45. For fiscal 2025, the revenue guidance has been lowered to a range of $21.8 billion to $22.6 billion, down from previous expectations. The company continues to navigate economic challenges while focusing on long-term growth objectives.

Additional News

Super Micro Computer recently confirmed participation in upcoming investor events, emphasizing its commitment to shareholder engagement. In corporate governance updates, the company strengthened its management team with new executive appointments, including Scott Angel joining the board of directors, Yitai Hu as General Counsel & Senior VP of Corporate Development, and Kenneth Cheung as Senior VP and Chief Accounting Officer. Additionally, the firm continues to work on resolving legal compliance issues, ensuring all outstanding financial statements are filed in accordance with Nasdaq requirements. These actions reflect the company's focus on improving internal processes and maintaining investor confidence amid ongoing challenges.