Super Micro Computer (SMCI) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 FY26 revenue of $12.7 billion, up 123% year-over-year and 153% quarter-over-quarter, driven by strong AI infrastructure and datacenter demand, including large-scale deployments and fulfillment of delayed orders.

• AI GPU platforms and Data Center Building Block Solutions (DCBBS) accounted for over 90% of Q2 revenue, with rapid expansion in product lines and global manufacturing footprint.

• Customer and product mix shifted toward large model builders and enterprise deployments, impacting gross margin but supporting rapid revenue growth.

• Net income rose to $401 million, with diluted EPS of $0.60 and non-GAAP EPS of $0.69.

• Expanded global manufacturing and established a Federal Business Unit to target government and public sector markets.

Financial highlights

• Q2 revenue reached $12.7 billion, exceeding guidance, with $1.5 billion from delayed Q1 shipments.

• Non-GAAP gross margin was 6.4%, down from 9.5% in Q1 and 11.8% in Q2'25, due to customer mix, pricing, and higher costs.

• Non-GAAP operating margin was 4.5%; adjusted EBITDA for Q2 was $628.6 million, 5.0% of net sales.

• Cash flow used in operations was $24 million, with closing inventory at $10.6 billion, up from $5.7 billion in Q1.

• Total cash and cash equivalents stood at $4.1 billion, with total bank debt and convertible notes at $4.9 billion.

Outlook and guidance

• Q3 FY26 net sales expected to be at least $12.3 billion; full-year FY26 revenue guidance raised to at least $40 billion.

• Q3 GAAP diluted EPS expected to be at least $0.52; non-GAAP diluted EPS at least $0.60.

• Gross margin expected to improve by 30 basis points in Q3.

• Capital expenditures for Q3 projected at $70–$90 million; full-year CapEx expected at $200–$220 million.

• Guidance assumes a tax rate of approximately 19.6% (GAAP) and 20.2% (non-GAAP).