SUPER MICRO COMPUTER INC (SMCI) plans to release its Q1 FY2026 earnings report after the market closes on November 4. The market is focusing on order conversion for AI systems and racks, gross margin continuation, and supply chain assurance, with a predominantly bullish view from institutions.
Forecast
According to Tiger Trade data, the market consensus expects SUPER MICRO COMPUTER INC's revenue for the first quarter of FY2026 to be $5.9 billion, marking a 1.03% YoY increase, with an EPS of $0.403.
Previous Quarter Review
In the fourth quarter of FY2025, SUPER MICRO COMPUTER INC reported a revenue of $5.757 billion, up 25% QoQ and 8% YoY. The total annual revenue reached $22 billion. The company’s outlook for FY2026 overall revenue is projected to be at least $33 billion.
Details of Q4 FY2025 Performance
Revenue:: $5.757 billion, a 25% QoQ increase and an 8% YoY increase.
Total annual revenue:: $22 billion, a 47% YoY increase.
Non-GAAP EPS:: $0.41, lower than the same period last year due to a decline in gross margin and an increase in operating expenses.
Current Quarter Outlook
Improved Delivery Efficiency and Stable Rack Deployment Pace
Recent forecasts and media reports emphasize that the company's guidance range for Q1 FY2026 remains unchanged, with a core focus on delivery pace and supply assurance. This reflects improved capacity and supply alignment. The market is paying attention to conversion efficiency of orders and delivery of backlogged projects, especially concerning AI rack and system shipments. The consensus from various forward-looking information sources suggests that rack-level integrated solutions feature higher order quality and larger contract size, with improved delivery efficiency as core component supply cycles shorten, reducing project delay risks. Stabilized delivery aids the conversion of backlogged orders from the previous quarter into current period revenue and cash flow, considered key to achieving Q1 guidance. If rack deployments continue to be stably released this quarter, it will directly optimize the revenue tempo and profit structure, establishing a virtuous cycle and laying the foundation for growth in subsequent quarters.
Sustained Gross Margin Improvement and Product Mix Optimization
The improvement in gross margin in Q4 FY2025 was related to product portfolio optimization and the release of scale effects. Institutions generally believe this trend may continue into Q1 FY2026. Rack-level integration and modular designs have enhanced cost efficiency in system delivery and maintenance, increasing the gross profit margin of the entire solution. According to several institutional research reports, the higher proportion of high-value-added product lines enhances contract pricing and project gross margin optimization opportunities. If supply chain stability and delivery quality are maintained, EPS performance will be more sustainable, and profit quality will be more stable. The market is watching whether gross margin will maintain the level of the previous period or further improve with the rising proportion of rack solutions. Synchronizing gross margin recovery with order structure improvement will be a key driver in raising capital market expectations.
Supply Chain Assurance and Key Components Availability
Forecasts and research summaries consistently highlight the supply of critical components as a significant variable affecting revenue recognition for the season. Management stresses the synergistic advancement of supply chain and capacity, with core component supply cycles gradually shortening, improving system and rack delivery efficiency. In analyzing the performance, institutions suggest that if stable delivery pace is confirmed, it will directly improve revenue tempo and profitability. Conversely, a supply bottleneck in critical components may impact delivery and revenue recognition for some projects. Market focus includes the delivery pace of GPUs and high-speed interconnect modules, integration testing and shipment arrangements for rack-level systems. Improved supply and capacity matching not only aids in meeting delivery targets per guidance for the season but also lays the groundwork for continuous delivery and stable revenue in subsequent quarters.
Order Quality and Operating Cash Flow
Discussions surrounding the earnings preview show that efficient conversion of orders to revenue and improved cash recovery pace are critical to mitigating seasonal or individual project delivery fluctuations. If system and rack orders continue to be stably fulfilled this quarter, improved operating cash flow will support subsequent R&D and capacity investments, creating a positive cycle. Institutional views emphasize optimizing the existing order structure and ensuring delivery pace to enhance profit quality and expectation anchors. Improved order quality means higher gross margin structure and better cash recovery efficiency. If cash flow improvement and gross margin recovery proceed concurrently, it will provide a more robust financial foundation for the company’s investment and expansion in new product cycles.
New Product Cycle and Customer Structure Upgrade
Several forward-looking articles mention the company's ongoing iterations in AI-related product lines, where integrated solutions for systems, racks, and storage better meet customer computational deployment needs. The customer structure is advancing towards higher compute density and greater emphasis on energy efficiency and total cost of ownership, with increased adoption of standardized modules and rack solutions. If performance and energy efficiency advantages are stably released and reliable delivery is maintained, it will support order quality and profitability in this and subsequent quarters. The market is tracking guidance execution, believing that while optimizing the product mix, ensuring delivery and service quality is crucial to maintaining expectations. Improved customer stickiness and rising penetration of rack solutions mean larger individual customer project sizes, increased certainty of repeat purchases and expansion, smoothing revenue tempo for Q1 and subsequent quarters.
Ecosystem Collaboration and Partner Support
Reports indicate enhanced collaboration between the company and ecosystem partners on AI platforms and system solutions. Around rack-level solution software and hardware adaptation and performance verification, partner relationships can improve delivery reliability and predictability. Institutions focus on the role of ecosystem cooperation in advancing the priority supply of core components and integration efficiency, viewing this as further reducing uncertainty in delivery stages. If ecosystem collaboration results in more stable component arrival and more efficient system integration, system and rack shipments will be smoother, enhancing the quality of revenue and gross margin realization for the season. Ecosystem-level collaboration also provides a validation environment and customer engagement channels for new product cycles, increasing commercialization certainty.
Analyst Opinions
Recent rating tracking and research reports show that bullish sentiment prevails. Some international investment banks maintain "buy" or "outperform" ratings, citing stable Q1 guidance and ongoing AI rack orders, focusing on gross margin and supply chain execution. Certain institutions raise target prices, emphasizing improvements in order quality driven by rack deployments and certainty in converting backlog orders; meanwhile, some remain cautious, noting that the availability of critical components and the sustainability of gross margin require observation. A synthesis of multiple views presents three main optimistic theories: first, unchanged guidance range with communication stressing delivery and supply control, reducing short-term uncertainty; second, continued product portfolio shift towards higher value-added systems, racks, and storage, with gross margin recovery having an ongoing basis; third, AI-related orders remain the core driver for Q1 revenue and profit, with successful execution likely benefiting EPS and cash flow performance concurrently.