Supermicro surprised the market. Margins significantly above expectations and a record backlog of over $60 billion
Super Micro Computer (NASDAQ: $SMCI) released a preliminary update of its results for the fourth quarter of fiscal year 2026. Although revenue is likely to end up at the lower end of the original guidance, investors were particularly pleased by the much higher gross margin and record volume of new orders.
Revenue to be at the lower end of the guidance
Supermicro expects revenue for the fourth quarter to reach approximately $11 billion, near the lower end of the previously announced range of $11 billion to $12.5 billion.
At first glance, this may seem like a slight disappointment. However, much more important is the fact that the company significantly exceeded profitability expectations.
Huge surprise: Gross margin nearly double
The biggest positive news of the entire update is the gross margin.
Supermicro now expects a gross margin between 15% and 17%, while the original guidance was only 8.2% to 8.4%!!!
This means a margin almost double what the company expected just a few weeks ago.
According to management, this is primarily due to a more favorable customer and product mix. In other words, the company sold a higher proportion of servers and AI systems with higher profitability.
Margin growth is one of the most important indicators, as it suggests that Supermicro can grow not only through the volume of hardware sold but is able to earn increasingly more on its products.
Record backlog of over $60 billion
Another very strong piece of news is the record volume of orders.
The company announced that during the fourth fiscal quarter it received new orders worth over $60 billion.
These orders created the highest backlog in the company's history and will be gradually delivered over the coming quarters.
Such a high backlog provides the company with very good visibility into future revenues and confirms that demand for AI servers remains exceptionally strong.
However, it should be noted that some of the orders may not represent firmly binding contracts and could be modified, postponed, or canceled in the future.
Results are still only preliminary
The company also cautioned that the published figures are only preliminary and unaudited. Final results may be adjusted after the completion of the financial statements.
Supermicro will present the full fourth quarter fiscal year 2026 results on August 11, when a conference call with investors will also take place.
What can investors take away from this?
Although revenue is unlikely to reach the upper end of the original guidance, the significant margin improvement and record backlog show that demand for AI infrastructure remains very strong.
Higher profitability may be more important for long-term investors than revenue itself. If the company manages to maintain similar margins in future quarters, it could mean a significant improvement in future earnings and cash flow.
The market will now pay great attention to the August results, which will show whether this positive trend can be confirmed in the final numbers.
