Super Micro Computer Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Super Micro Computer SMCI came out with second-quarter fiscal 2026 earnings of 69 cents per share, which beat the Zacks Consensus Estimate by 40.8%. The bottom line increased 16.9% year over year.

SMCI’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same on one occasion, with the average surprise being 5.8%.

Super Micro Computer posted revenues of $12.68 billion for the second quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 21.42%. The top line jumped 122.8% year over year.

SMCI’s Quarter in Detail

Coming to SMCI’s customer verticals, revenues from OEM Appliance and Large Data Center (approximately 84% of total revenues) were $10.7 billion, up 151% year over year and 210% sequentially, driven by strong hyperscale AI deployments. Revenues from the Enterprise/Channel segment (around 16% of total revenues) totaled $2 billion, reflecting a 42% year-over-year increase and a 29% sequential rise.

Super Micro Computer, Inc. Price, Consensus and EPS Surprise

Super Micro Computer, Inc. price-consensus-eps-surprise-chart | Super Micro Computer, Inc. Quote

By geography, the United States accounted for 86% of total sales, which increased 184% year over year and 496% sequentially, supported by large-scale AI infrastructure rollouts. Asia represented 9% of revenues, up 53% year over year but down 49% sequentially. Europe contributed 3%, down 63% year over year, while the Rest of the World represented 2%, up 77% from the prior-year quarter.

SMCI’s non-GAAP gross margin was 6.4% compared with 11.9% a year ago. The decline was due to an unfavorable customer and product mix, higher freight and expedite costs, and large-scale shipments of new AI platforms. Non-GAAP operating expenses were $241 million, representing 1.9% of revenues, up 6.5% year over year.

Operating expenses remained elevated due to continued investments in next-generation AI systems, Datacenter Building Block Solutions, and the expansion of production capacity across the United States, Taiwan, Malaysia, Europe, and other regions.

SMCI’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, total cash and cash equivalents were $4.1 billion compared with $4.2 billion at the end of the prior quarter. SMCI’s total bank debt and convertible notes were $4.9 billion.

The company reported an operating cash outflow of $24 million during the quarter and a negative free cash flow of $45 million.

SMCI’s Guidance for Q3

For third-quarter fiscal 2026, SMCI expects net sales to be $12.3 billion. The Zacks Consensus Estimate is pegged at $10.28 billion, indicating year-over-year growth of 123.4%.

SMCI expects non-GAAP diluted EPS to be 60 cents. The Zacks Consensus Estimate is pegged at 61 cents, indicating year-over-year growth of 96.8%.

For fiscal 2026, SMCI raised its revenue outlook to $40 billion. The Zacks Consensus Estimate is pegged at $36.55 billion, indicating year-over-year growth of 66.35%.

SMCI’s Zacks Rank & Stocks to Consider

Currently, SMCI carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Amkor Technology AMKR, Arista Networks ADI and Advanced Energy AEIS. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amkor Technology shares have surged 103.2% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.

Shares of Arista Networks have gained 27.6% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12.

Shares of Advanced Energy have gained 85.4% in the trailing six-month period. Advanced Energy is slated to report third-quarter 2025 results on Feb. 10.

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This article originally published on Zacks Investment Research (zacks.com).

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