Super Micro Computer (SMCI) came in just under the wire as the troubled tech provider filed its delayed financial results on Feb. 25 just in time to avoid being delisted by the Nasdaq..
The San Jose, Calif-based company filed updated and audited financials with the SEC for its fiscal 2024, ending in June, and the first two quarters of the company’s fiscal 2025.
Shares of Super Micro soared after the filing, but the company's stock closed down roughly 12%.
Anxious investors vented their frustration at the delay and their relief at the filing on social media.
"YES!!!! Finally!” Michael Novello declared on X after Super Micro announced a webinar.
"This is psychological abuse," said Dani Bravo. "I have never been made so nervous by a company."
"Now yes, I'll join all the webinars you want! Thanks uncle Charlie," said Rozalia Loucharidi, a reference to Charles Liang, chairman, president and CEO.
Charles Liang, chief executive officer of Super Micro Computer, said the company had a fairly good quarter, Photographer: Annabelle Chih/Bloomberg via Getty ImagesBloomberg/Getty Images
Super Micro auditor: no evidence of misconduct
"If I die heart attack today .please sue this company” Joe khalife wrote.
The filing is the latest chapter in Super Micro's dramatic turnaround. The company benefited greatly from the artificial intelligence boom thanks to its relationship with AI-chip giant Nvidia (NVDA) .
But then, on Aug. 27, short-seller Hindenburg Research released a scathing accusing Super Micro of what it called “glaring accounting red flags, evidence of undisclosed related-party transactions, sanctions violations, and customer troubles.”
A day later, Super Micro said it would delay filing its Securities and Exchange Commission Form 10-K for the fiscal year ended June 30.
Super Micro's then-auditor, Ernst & Young, resigned in October, citing governance and transparency concerns.
The company appointed a special committee of the board and said it found “no evidence of misconduct” after an investigation.
“The Special Committee did not believe that the resignation of EY or the conclusions reached by EY...were supported by the facts,” the filing said.
Super Micro's shares have tumbled 45% from a year ago, and earlier this month the company released preliminary second-quarter results.
The company estimated adjusted earnings of 59 cents a share on sales of $5.65 billion, based on the midpoint of its estimates.
Analysts polled by FactSet were calling for earnings of 61 cents a share on sales of $5.77 billion.
Super Micro reduced its revenue guidance for fiscal 2025 to a range of $23.5 billion to $25 billion from its previous outlook for $26 billion to $30 billion. Wall Street was looking for $24.1 billion in fiscal 2025 sales.
"Despite some negative impacts on cash flow and market misperception due to the 10K delay, we achieved a fairly good quarter, driven by sustained AI demand from both existing and new customers," Liang said during a call with analysts.
Analyst cites $700 million in new funding
"Our growth trajectory for fiscal year '25 remains promising," he said.
Liang said the company's financial team and its new auditor, BDO, "have been fully engaged in completing the auditor process."
"In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2024," BDO said in the filing.
Liang reminded analysts that the special committee found no evidence to support the former auditor's reasons for resignation.
"However, over the past two quarters, we have added senior leaders in corporate communication, operations, finance, legal and compliance departments," he said.
"We will continue to add more top experienced leaders to build a stronger corporate foundation for our rapidly growing and expanding global business, including the CFO, [chief compliance officer], and other positions."
"As you know when a company quickly grows [four times] business in three years like Super Micro, adding more senior leaders is also a natural requirement," he added.
Liang predicted fiscal 2026 revenue of $40 billion, higher than analysts' forecast for $29.2 billion. During a question-and-answer period he called the forecast was "a relatively conservative estimation."
"In the last few years, our growth has been very strong, except for our 10-K interrupt, right?" he said. "So, in that four months, five months, we suffered a 10K impact, so our growth little bit slowed down. But we will fix 10-K filing very soon and cash flow won't be a problem anymore. So, the quarter is strong. Capacity here, the customer is ready."
Goldman Sachs saw fit to boost its price target on Super Micro to $36 from $32 while keeping a neutral rating on the shares.
The company's Q2 EPS preannouncement was on the low end of guidance, reflecting a revenue and gross-margin miss, driven primarily by the transition to Nvidia Blackwell platforms from the AI-chip giant's Hopper platforms, the investment firm said.
However, Goldman added, Super Micro has raised $700 million in new financing.
The company expects to continue raising capital to support working-capital requirements of its fiscal 2026 $40 billion revenue target and believes it has sufficient production capacity across its global footprint to support its revenue outlook once components become available, Goldman Sachs said.
