ENGINEERING

Super Micro Computer, a leader in supercomputing, has announced financial results for its fiscal second quarter ended December 31, 2019. Net sales were $870.9 million, down 7%, versus $931.5 million in the same quarter of last year.

• GAAP gross margin of 15.9% versus 16.4% in the first quarter of fiscal year 2020 and 13.7% in the same quarter of last year.
• GAAP net income of $23.7 million versus $26.3 million in the first quarter of fiscal year 2020 and $18.2 million in the same quarter of last year.
• GAAP fully diluted earnings per share of $0.46 versus $0.51 in the first quarter of the fiscal year 2020 and $0.36 in the same quarter of last year.
• Non-GAAP fully diluted earnings per share of $0.57 versus $0.68 in the first quarter of the fiscal year 2020 and $0.66 in the same quarter of last year.
• Cash flow from operations of $81.6 million and capital expenditures of $10.8 million.

Non-GAAP gross margin for the fiscal second quarter of 2020 was 15.9%, which excludes stock-based compensation expenses of $0.4 million. Non-GAAP fully diluted earnings per share were $0.57, which excludes stock-based compensation expenses of $5.0 million and consulting expenses related to regaining SEC compliance and other non-recurring expenses of $3.8 million less the related tax effects of both.

As of December 31, 2019, total cash, cash equivalents, and short-term investments was $309.0 million and bank debt was $23.3 million.

“Over the last couple of years, Supermicro has been continuing our mission of becoming a strong global leader of server and storage solutions, especially the greenest and best TCO IT solutions. We have added many new product lines and dramatically increased our operational capacity worldwide. This quarter, our revenue exceeded the upper end of our original guidance which marks the beginning of our business reacceleration,” said Charles Liang, Chairman, and Chief Executive Officer. “We are the only server and storage solution provider with more than half of our engineering, product development and final assembly based in the USA. Our engineering and R&D strengths allow us to quickly deliver the most advanced technology with the broadest range of server and storage products in our industry. We are very excited by our product solutions targeting Artificial Intelligence, 5G / Edge, and the evolving needs of the Enterprise, which offer our company a substantial growth opportunity in a $100B market.” {module INSIDE STORY}

Third Quarter Fiscal 2020 Guidance

The Company expects net sales in a range of $770 million to $830 million for the third quarter of the fiscal year 2020 ending March 31, 2020. The Company expects non-GAAP earnings per diluted share of approximately $0.35 to $0.55 for the third quarter.

The Company expects to incur additional charges of $35 million to $40 million, which will be one-time in nature, in the third or fourth fiscal quarter of 2020. These one-time charges will address residual clean-up matters from our extended black-out period and have not been included in the above guidance.