Earnings Call Insights: Super Micro Computer (SMCI) Q2 2026
Management View
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Charles Liang, Founder, Chairman, President & CEO, emphasized that “Super Micro delivered a strong fiscal Q2 as AI infrastructure demand continues to accelerate across every major customer segment.” Liang highlighted record revenue of $12.68 billion for the quarter, driven by AI solutions and the growing adoption of the Data Center Building Block Solution (DCBBS). Liang noted that “DCBBS will significantly help us gain market share in large, medium and small AI infrastructure deployments” and expects DCBBS profit contribution to grow to double digits by the end of calendar 2026. He outlined ongoing product expansion, including upcoming NVIDIA Vera Rubin and AMD Helios solutions, and stressed DCBBS as a focal point for the company’s fourth phase of product evolution.
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Liang detailed operational strategies to enhance profitability amid near-term margin pressures, stating, “We are also sharpening our focus on traditional enterprise, cloud and edge IoT customers to further diversify revenue with higher margin.” He identified modularized subsystems, increased automation, and global manufacturing footprint expansion as key drivers for long-term margin improvement.
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David Weigand, Senior VP, CFO, reported, “We achieved record Q2 fiscal year ’26 revenue of $12.7 billion, up 123% year-over-year and up 153% quarter-over-quarter compared to our guidance of $10 billion to $11 billion.” He added, “AI GPU platforms, which represent over 90% of Q2 revenue, continue to be the key growth driver.” Weigand also noted a shift in revenue mix, with OEM appliance and large data center segment revenue now representing 84% of Q2 revenue.
Outlook
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The company guided for Q3 net sales of at least $12.3 billion and full-year 2026 revenue of at least $40 billion. Liang stated, “I’m confident to guide at least $12.3 billion for Q3 and up our full year revenue guidance back to at least $40 billion.”
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Weigand indicated, “We expect gross margins to be up 30 basis points relative to Q2 FY ’26 levels.” GAAP diluted net income per share for Q3 is projected at least $0.52, and non-GAAP diluted net income per share at least $0.60.
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The company expects capital expenditures for Q3 in the range of $70 million to $90 million.
Financial Results
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Q2 revenue reached $12.7 billion, with approximately $1.5 billion attributed to delayed Q1 shipments. Non-GAAP gross margin for Q2 was 6.4% versus 9.5% in Q1. Non-GAAP operating expenses were $241 million, making up 1.9% of revenue. Q2 GAAP EPS was $0.60, and non-GAAP diluted EPS was $0.69.
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Order strength remained robust from global large data center and enterprise customers, with one large data center customer representing approximately 63% of total revenue. U.S. revenue accounted for 86% of Q2 revenue, up 184% year-over-year.
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Operating cash flow used in Q2 was $24 million, a significant improvement from $918 million in the prior quarter. Inventory rose to $10.6 billion, up from $5.7 billion in Q1, in preparation for continued shipment strength.
Q&A
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Ananda Baruah, Loop Capital: Asked about margin trajectory and operational leverage. Liang responded, “The customer mix, we are improving quarter after quarter…that will improve our profitability.” He added that as products mature, expedite costs will be reduced, and “DCBBS also increasing for our — for our gross margin.”
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Unknown Analyst, JPMorgan: Inquired about the conservatism in full-year guidance. Liang indicated, “I believe we say minimum $40 billion is a relatively conservative number…our business indeed will continue to grow.”
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Asiya Merchant, Citi: Asked about supply constraints and DCBBS ramp. Liang stated, “If the shortage situation improve quickly, for sure, our…revenue will be more than that.”
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Katherine Murphy, Goldman Sachs: Asked about DCBBS investments and margin profile. Liang explained, “Gross margin — net margin are much higher for DCBBS because it’s so unique…the margin is much better, for sure, more than 20%.”
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Ruplu Bhattacharya, BofA: Sought clarification on cost impacts and customer mix. Weigand replied, “Costs were up in each of those areas,” but did not provide specific breakout figures. Liang confirmed component shortages are due to high demand.
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Quinn Bolton, Needham: Asked about customer concentration. Liang noted increasing diversification and fast growth, while acknowledging that customer schedules can shift.
Sentiment Analysis
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Analysts raised concerns about margin pressures, customer concentration, and supply constraints, with a slightly negative to neutral tone. Questions focused on sustainability of growth, margin improvement, and the impact of DCBBS.
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Management maintained a confident and slightly optimistic tone, frequently emphasizing improvement and growth. Liang used phrases such as “I’m confident” and “very happy to see more and more customers like DCBBS.” During Q&A, management reiterated focus on operational efficiency, margin improvement, and customer diversification.
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Compared to the previous quarter, analysts showed increased focus on gross margin trajectory and customer mix, while management’s confidence appeared bolstered by strong top-line growth and DCBBS momentum.
Quarter-over-Quarter Comparison
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Revenue guidance increased from at least $36 billion to at least $40 billion for the full year. Q2 revenue of $12.7 billion substantially outpaced the prior quarter’s $5 billion.
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Non-GAAP gross margin declined from 9.5% in Q1 to 6.4% in Q2, pressured by customer mix and expedite costs. Operating expenses rose in dollar terms but fell as a percentage of revenue.
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Management’s tone shifted from cautious optimism in Q1 to increased confidence in Q2, particularly regarding large-scale AI deployments and DCBBS adoption. Analysts’ focus shifted from backlog and capacity to margin sustainability and customer diversification.
Risks and Concerns
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Management cited ongoing component shortages, volatile pricing, tariffs, and supply chain disruptions as challenges impacting gross margins and revenue growth.
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The company acknowledged that large customer concentration poses risk but is being addressed by efforts to diversify the customer base and expand DCBBS offerings.
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Analysts expressed concerns regarding the sustainability of margin improvement and the potential impact of further supply constraints or customer order shifts.
Final Takeaway
Super Micro Computer delivered record Q2 results and raised its full-year revenue guidance to at least $40 billion, supported by rapid AI infrastructure growth and strong momentum in DCBBS adoption. Management emphasized ongoing investments in product innovation, global manufacturing, and margin improvement strategies, while addressing near-term challenges from supply constraints and customer concentration. The company expects margin expansion in upcoming quarters, driven by a maturing customer mix and increasing DCBBS contributions, and remains confident in its ability to capture new business and support higher growth into the second half of fiscal 2026.