Super Micro’s Uncertain Future: Q1 Results Disappoint, Delisting Looms
Revenue Falls Short, Guidance Weakens
Embattled server maker Super Micro reported unaudited first-quarter results on Tuesday, sending its stock tumbling 12% in extended trading. The company’s revenue missed estimates, and guidance fell short of expectations. Moreover, Super Micro remains uncertain about when it will file its annual financial results for the latest fiscal year.
Accounting Irregularities and Export Control Concerns
Super Micro faces accusations of accounting irregularities and shipping sensitive chips to sanctioned nations and companies, violating export controls. The company’s auditor, Ernst & Young, recently resigned, citing concerns. CEO Charles Liang refused to address these issues during a call with analysts, stating that the company is focused on hiring a new auditor.
Racing Against Time to Avoid Delisting
Super Micro faces potential delisting from the Nasdaq stock exchange if it fails to file its annual report with the SEC by mid-November. The company has not reported audited results since May, and CEO Liang emphasized the urgency to become current with financial reporting.
Q1 Results: A Mixed Bag
For the quarter ending September 30, Super Micro generated net sales of between $5.9 billion and $6 billion, a 181% increase year-over-year. However, this fell short of analyst expectations of $6.45 billion. Adjusted net income for the quarter was 75 cents to 76 cents a share, in line with analyst expectations.
Nvidia Partnership and Blackwell GPU Demand
CEO Liang highlighted the strong demand for Nvidia’s Blackwell GPU, which has started shipping recently. When asked about Blackwell revenue, Liang stated that the company is working closely with Nvidia to resolve the issue.
Special Committee Investigation
Super Micro’s board of directors commissioned a special committee to investigate Ernst & Young’s concerns. The committee found no evidence of fraud or misconduct from management and recommended remedial measures to strengthen internal governance and oversight functions.
A Turbulent Year for Super Micro
Super Micro shares have plummeted 80% since March, wiping out over $55 billion in market capitalization. The company’s future remains uncertain as it navigates accounting irregularities, export control concerns, and delisting threats.
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