Super Micro Computer, Inc. Q2 FY2026 earnings call

Key Points

• Super Micro delivered strong Q2 results with record revenue of $12.7 billion, reflecting sustained momentum in AI solutions and Rack Scale Systems.
• DCBBS solution is gaining customer preference, accounting for 4% of profit in H1 FY '26 and expected to grow in H2 FY '26.
• Focus on traditional enterprise, cloud, and edge IoT customers to diversify revenue with higher margin.
• Introduced X14 and H14 solutions for rapid deployment in specific workloads.
• Driving cost improvement through enhanced DFM and expanded global manufacturing footprint, including facilities in the U.S., Taiwan, Malaysia, Netherlands, etc.

In Q2 Fiscal Year '26, Super Micro achieved a record revenue of $12.7 billion, up 123% year-over-year. The enterprise channel revenue segment totaled $2 billion, representing about 16% of revenue. The OEM appliance and large data center segment revenue was $10.7 billion, accounting for approximately 84% of Q2 revenue.

Forward-Looking Statements

• Guided at least $12.3 billion for Q3 FY '26.
• Upgraded full year revenue guidance to at least $40 billion.
• Expect Q3 FY '26 net sales at least $12.3 billion, GAAP diluted net income per share at least $0.52, non-GAAP diluted net income per share at least $0.60. Anticipate gross margins to be up 30 basis points relative to Q2 FY '26 levels.

• Material risks and uncertainties including customer mix, tariff, international facility expansion, and key component shortages (memory and storage).

Q: Congrats on the solid results here relative to the guide. Just -- I want to just ask about margins. And I have a few day questions they want to ask you here, but they're all margin related. I guess the first is with regards to -- you mentioned, I think, 90 days ago that December quarter, you expect it to be the sort of the low watermark quarter in gross margins, and you're guiding for Q-over-Q improvement for the March quarter. Do you still think that things progress expansive from here, Charles, you made some comments around customer mix. It's been a headwind. Do you think it continues to improve? And I have 2 quick follow-ups, Dave, just margin related after that.

A: Yes. Thank you for the question. Yes, the customer mix, we are improving quarter after quarter. Now we have many more large-scale customer, I would like to say. So that will improve our profitability. The other factor is -- last quarter, I mean, December quarter, the GP300 was a little bit new to us. So a lot of expedite transportation cost. And now, I mean, product is getting mature. So those expedite transportation costs will be dramatically reduced and tariff impact also improving. And -- so overall, especially DCBBS also increasing for our -- for our gross margin. So I believe our gross margin will start to improve quarter after quarter.

Q: This is MP on behalf of Samik Chatterjee. I just wanted to double-click on your full year guidance. You said $40 billion for FY '26. If I back into the implied 4Q number, that implies significant quarter-over-quarter moderation. So is that just conservatism being embedded into the full year outlook? Or like do you see definite indications from your order trends that 4Q will imply sequential moderation? And I have a follow-up as well.

A: Yes. I believe we say minimum $40 billion is a relatively conservative number. So our business indeed will continue to grow, especially our DCBBS that attract a lot of customers who want to build a data center quicker, less power consumption, less cost -- I mean, better cost and also more reliable and easy for management. So we are getting more and more customers come to us.

Q: Good results here relative to the guide. I just had 2 quick ones. One, just there's a lot of discussion about component availability, supply constraints. If you could just talk to us about your guide and relative to that, is that minimum $40 billion guide a constraining number -- given the supply constraints? In other words, if supply wasn't an issue, could that number be greater? And then just on customer concentration, I think the commentary suggested that some of the geos did decline on a year-on-year basis as well as on a quarter-on-quarter basis. So again, relative to the guide, how should we think about the ramp of DCBBS across those various geographies for the back half of this fiscal year and into -- through calendar '26?

A: Yes, you are right. We already consider component price keeping growing. So with that, that's why we try to be conservative kind of commit to $40 billion. If the cost -- if the shortage situation improve quickly, for sure, our [indiscernible] revenue will be more than that. And as to DCBBS is globally almost every region, customer like DCBBS because it helps them easier to build a data center. It's kind of like a one-stop shop. We provide not just computing node, I mean storage node, switch node and disk cooling subsystem including battery cell, including some energy backup. So it kind of makes customers' job to build a data center much easier. So the impact is global. We see global-wide more and more customers like our DCBBS solution, and we are aggressively preparing to grow the support.