Gross margins have compressed significantly from 15.5% in 2024Q3 to 9.9% in 2026Q3, indicating persistent challenges in maintaining pricing power within the competitive AI server market.
| Metric | TTM | Jun'25 | Jun'24 | Jun'23 | Jun'22 | Jun'21 | Jun'20 | Jun'19 | Jun'18 | Jun'17 | Jun'16 | Jun'15 | Jun'14 | Jun'13 | Jun'12 | Jun'11 | Jun'10 | Jun'09 | Jun'08 | Jun'07 | Jun'06 | Jun'05 |
|---|
| Sales/Revenue | 33.7B | 21.97B | 14.99B | 7.12B | 5.2B | 3.56B | 3.34B | 3.5B | 3.36B | 2.48B | 2.23B | 1.99B | 1.47B | 1.16B | 1.01B | 942.58M | 721.44M | 505.61M | 540.5M | 420.39M | 302.54M | 211.76M |
| Revenue Growth % | 56.24% | 46.59% | 110.42% | 37.09% | 46.06% | 6.53% | -4.6% | 4.16% | 35.23% | 11.68% | 11.75% | 35.71% | 26.2% | 14.67% | 7.56% | 30.65% | 42.69% | -6.46% | 28.57% | 38.95% | 42.87% | - |
| Cost of Goods Sold | 30.87B | 19.54B | 12.93B | 5.84B | 4.4B | 3.02B | 2.81B | 3B | 2.93B | 2.13B | 1.89B | 1.67B | 1.24B | 1B | 848.46M | 791.48M | 606.45M | 416.9M | 436.95M | 345.38M | 242.24M | 178.29M |
| COGS % of Revenue | - | 88.94% | 86.25% | 81.99% | 84.6% | 84.97% | 84.24% | 85.84% | 87.2% | 85.92% | 85.15% | 83.92% | 84.63% | 86.23% | 83.68% | 83.97% | 84.06% | 82.45% | 80.84% | 82.16% | 80.07% | 84.19% |
| Gross Profit | 2.83B | 2.43B | 2.06B | 1.28B | 800M | 534.54M | 526.21M | 495.52M | 429.99M | 349.96M | 330.5M | 320.23M | 225.54M | 160.05M | 165.42M | 151.1M | 114.99M | 88.71M | 103.55M | 75.01M | 60.31M | 33.47M |
| Gross Margin % | 8.39% | 11.06% | 13.75% | 18.01% | 15.4% | 15.03% | 15.76% | 14.16% | 12.8% | 14.08% | 14.85% | 16.08% | 15.37% | 13.77% | 16.32% | 16.03% | 15.94% | 17.55% | 19.16% | 17.84% | 19.93% | 15.81% |
| Gross Profit Growth % | - | 17.88% | 60.67% | 60.38% | 49.66% | 1.58% | 6.19% | 15.24% | 22.87% | 5.89% | 3.21% | 41.98% | 40.92% | -3.24% | 9.47% | 31.4% | 29.63% | -14.33% | 38.05% | 24.38% | 80.18% | - |
| Operating Expenses | 1.32B | 1.18B | 850.64M | 521.87M | 462.83M | 410.59M | 440.56M | 398.29M | 335.28M | 255.08M | 223.01M | 173.49M | 145.29M | 132.9M | 119.4M | 92.41M | 73.16M | 65.46M | 63.28M | 45.22M | 32.58M | 21.71M |
| OpEx % of Revenue | - | 5.36% | 5.67% | 7.33% | 8.91% | 11.54% | 13.19% | 11.38% | 9.98% | 10.27% | 10.02% | 8.71% | 9.9% | 11.43% | 11.78% | 9.8% | 10.14% | 12.95% | 11.71% | 10.76% | 10.77% | 10.25% |
| Selling, General & Admin | 564.95M | 540.38M | 387.09M | 214.61M | 190.56M | 186.22M | 219.08M | 218.38M | 170.18M | 111.09M | 98.79M | 73.23M | 61.03M | 57.69M | 55.18M | 44.3M | 35.78M | 30.94M | 32.74M | 24.05M | 16.19M | 11.1M |
| SG&A % of Revenue | - | 2.46% | 2.58% | 3.01% | 3.67% | 5.23% | 6.56% | 6.24% | 5.06% | 4.47% | 4.44% | 3.68% | 4.16% | 4.96% | 5.44% | 4.7% | 4.96% | 6.12% | 6.06% | 5.72% | 5.35% | 5.24% |
| Research & Development | 752.96M | 636.55M | 463.55M | 307.26M | 272.27M | 224.37M | 221.48M | 179.91M | 165.1M | 143.99M | 124.22M | 100.26M | 84.26M | 75.21M | 64.22M | 48.11M | 37.38M | 34.51M | 30.54M | 21.17M | 15.81M | 10.61M |
| R&D % of Revenue | - | 2.9% | 3.09% | 4.31% | 5.24% | 6.31% | 6.63% | 5.14% | 4.91% | 5.79% | 5.58% | 5.04% | 5.74% | 6.47% | 6.33% | 5.1% | 5.18% | 6.83% | 5.65% | 5.04% | 5.23% | 5.01% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -575K | 0 |
| Operating Income | 1.51B | 1.25B | 1.21B | 761.14M | 337.17M | 123.95M | 85.65M | 97.23M | 94.71M | 94.88M | 107.49M | 146.75M | 80.26M | 27.16M | 46.01M | 58.69M | 41.83M | 23.25M | 40.27M | 29.79M | 27.72M | 11.76M |
| Operating Margin % | 4.48% | 5.7% | 8.08% | 10.69% | 6.49% | 3.48% | 2.56% | 2.78% | 2.82% | 3.82% | 4.83% | 7.37% | 5.47% | 2.34% | 4.54% | 6.23% | 5.8% | 4.6% | 7.45% | 7.08% | 9.16% | 5.55% |
| Operating Income Growth % | - | 3.49% | 59.07% | 125.75% | 172.03% | 44.71% | -11.91% | 2.66% | -0.17% | -11.74% | -26.75% | 82.84% | 195.53% | -40.98% | -21.6% | 40.3% | 79.91% | -42.26% | 35.21% | 7.44% | 135.7% | - |
| EBITDA | 1.53B | 1.31B | 1.25B | 796.05M | 369.64M | 152.13M | 114.13M | 121.44M | 116.56M | 111.23M | 120.77M | 154.88M | 86.62M | 34.99M | 53.09M | 64.15M | 46.45M | 26.91M | 42.94M | 31.43M | 28.94M | 12.68M |
| EBITDA Margin % | 4.54% | 5.97% | 8.35% | 11.18% | 7.11% | 4.28% | 3.42% | 3.47% | 3.47% | 4.48% | 5.43% | 7.78% | 5.9% | 3.01% | 5.24% | 6.81% | 6.44% | 5.32% | 7.94% | 7.48% | 9.56% | 5.99% |
| EBITDA Growth % | 12.21% | 4.76% | 57.25% | 115.36% | 142.97% | 33.3% | -6.02% | 4.18% | 4.79% | -7.9% | -22.02% | 78.8% | 147.54% | -34.08% | -17.24% | 38.09% | 72.65% | -37.33% | 36.63% | 8.6% | 128.14% | - |
| D&A (Non-Cash Add-back) | 18.64M | 58.34M | 40.98M | 34.9M | 32.47M | 28.18M | 28.47M | 24.2M | 21.85M | 16.36M | 13.28M | 8.13M | 6.36M | 7.83M | 7.07M | 5.45M | 4.62M | 3.65M | 2.66M | 1.64M | 1.21M | 922K |
| EBIT | 1B | 1.27B | 1.23B | 764.79M | 343.25M | 121.11M | 87.06M | 96.21M | 93.94M | 93.59M | 109M | 146.86M | 80.35M | 27.21M | 46.07M | 58.76M | 40.85M | 23.73M | 41.83M | 30.67M | 27.88M | 11.6M |
| Net Interest Income | -21.53M | -59.57M | -19.35M | -10.49M | -6.41M | -2.48M | -2.24M | -6.69M | -5.73M | -2.3M | -1.59M | -850K | -665K | -562K | -663K | -620K | -280K | -454K | 533K | -567K | -1M | -750K |
| Interest Income | 147.84M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 171K | 115K | 92K | 48K | 54K | 66K | 98K | 476K | 0 | 765K | 0 | 0 |
| Interest Expense | -92.49M | 59.57M | 19.35M | 10.49M | 6.41M | 2.48M | 2.24M | 6.69M | 5.73M | 2.3M | 1.59M | 965K | 757K | 610K | 717K | 686K | 383K | 930K | 1.02M | 1.33M | 1.26M | 867K |
| Other Income/Expense | 23.38M | -47.29M | 5.19M | -10.48M | 872K | -5.15M | 1.58M | -10.43M | -10.11M | -3.59M | -87K | -850K | -665K | -562K | -663K | -620K | -1.37M | -454K | 533K | -447K | -1.1M | -1.03M |
| Pretax Income | 1.53B | 1.21B | 1.22B | 750.66M | 338.04M | 118.8M | 87.23M | 86.8M | 84.61M | 91.29M | 107.4M | 145.9M | 79.59M | 26.6M | 45.35M | 58.07M | 40.47M | 22.8M | 40.8M | 29.34M | 26.62M | 10.73M |
| Pretax Margin % | 4.55% | 5.49% | 8.11% | 10.54% | 6.51% | 3.34% | 2.61% | 2.48% | 2.52% | 3.67% | 4.83% | 7.33% | 5.42% | 2.29% | 4.47% | 6.16% | 5.61% | 4.51% | 7.55% | 6.98% | 8.8% | 5.07% |
| Income Tax | -246.89M | 156.85M | 63.29M | 110.67M | 52.88M | 6.94M | 2.92M | 14.88M | 38.44M | 24.43M | 35.32M | 44.03M | 25.44M | 5.32M | 15.5M | 17.86M | 13.55M | 6.69M | 15.38M | 10M | 9.68M | 3.64M |
| Effective Tax Rate % | -16.09% | 13.01% | 5.21% | 14.74% | 15.64% | 5.84% | 3.35% | 17.15% | 45.44% | 26.77% | 32.89% | 30.18% | 31.96% | 19.99% | 34.17% | 30.75% | 33.49% | 29.35% | 37.7% | 34.08% | 36.34% | 33.92% |
| Net Income | 1.78B | 1.05B | 1.15B | 640M | 285.16M | 111.86M | 84.31M | 71.92M | 46.16M | 66.85M | 72.08M | 101.86M | 54.12M | 21.17M | 29.57M | 39.57M | 26.91M | 16.11M | 25.42M | 19.34M | 16.95M | 7.09M |
| Net Margin % | 5.29% | 4.77% | 7.69% | 8.98% | 5.49% | 3.14% | 2.52% | 2.05% | 1.37% | 2.69% | 3.24% | 5.12% | 3.69% | 1.82% | 2.92% | 4.2% | 3.73% | 3.19% | 4.7% | 4.6% | 5.6% | 3.35% |
| Net Income Growth % | 54.75% | -9.01% | 80.1% | 124.43% | 154.92% | 32.69% | 17.23% | 55.78% | -30.95% | -7.25% | -29.24% | 88.21% | 155.61% | -28.4% | -25.26% | 47.01% | 67.1% | -36.63% | 31.44% | 14.11% | 139.03% | - |
| Net Income (Continuing) | 764M | 1.05B | 1.15B | 640M | 285.16M | 111.86M | 84.31M | 71.92M | 46.16M | 66.85M | 72.08M | 101.86M | 54.16M | 21.28M | 29.85M | 40.21M | 26.91M | 16.11M | 25.42M | 19.34M | 16.95M | 7.09M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 161K | 178K | 164K | 165K | 172K | 173K | 167K | 161K | 157K | 170K | 184K | 164K | 175K | 181K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 2.64 | 1.68 | 1.68 | 2.01 | 1.14 | 0.53 | 0.16 | 0.14 | 0.09 | 0.13 | 0.14 | 0.20 | 0.12 | 0.05 | 0.07 | 0.09 | 0.07 | 0.04 | 0.07 | 0.06 | 0.05 | 0.02 |
| EPS Growth % | 40.74% | 0% | -16.42% | 76.32% | 115.09% | 231.25% | 14.29% | 57.3% | -31.54% | -7.14% | -30% | 66.67% | 150% | -28.36% | -27.96% | 43.08% | 58.54% | -36.92% | 14.04% | 7.55% | 120.83% | - |
| EPS (Basic) | - | 1.77 | 1.77 | 2.17 | 1.21 | 0.55 | 0.17 | 0.14 | 0.09 | 0.14 | 0.15 | 0.22 | 0.12 | 0.05 | 0.07 | 0.10 | 0.07 | 0.05 | 0.08 | 0.08 | 0.08 | 0.03 |
| Diluted Shares Outstanding | 673.6M | 628.4M | 628.4M | 602.15M | 559.7M | 536.15M | 528.38M | 517.16M | 521.51M | 516.79M | 518.36M | 500.94M | 465.12M | 439.07M | 441.52M | 423.96M | 407.35M | 391.56M | 388.43M | 339.46M | 318.47M | 294.42M |
| Basic Shares Outstanding | 597.93M | 593.66M | 593.66M | 555.88M | 529.25M | 514.78M | 509.87M | 499.17M | 493.45M | 483.83M | 479.17M | 464.34M | 435.99M | 419.92M | 408.9M | 381.32M | 358.84M | 342.18M | 313.55M | 241.53M | 220.11M | 219.15M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Accounting and Governance Instability
As reported in recent financial filings, SMCI experienced a dramatic revenue swing, with growth accelerating to 122.7% in 2026Q3 following a 15.5% contraction in 2026Q1, highlighting the extreme sensitivity of the company's top-line performance to the timing of large-scale, lumpy data center hardware deployments.
The erratic revenue trajectory suggests that the company's business model is highly dependent on the timing of specific hyperscale project completions rather than steady-state demand. Investors should monitor whether this volatility reflects genuine market demand shifts or potential issues with revenue recognition timing and backlog conversion efficiency.
Based on the provided income statement data, gross margins have deteriorated from a peak of 15.5% in 2024Q3 to 9.9% in 2026Q3, indicating that the company is struggling to maintain pricing power amidst intense competition for high-performance AI server market share.
The consistent decline in gross margins suggests that the company's role as a high-value integrator is being commoditized by competitive bidding pressures. This trend warrants further investigation into whether the company can successfully pivot toward higher-margin proprietary cooling solutions to offset the erosion of its core hardware profitability.
According to the latest quarterly figures, operating income scaling has failed to keep pace with revenue expansion, as evidenced by an operating margin of 6.1% in 2026Q3, which remains significantly below the 10.1% margin achieved in 2024Q2 despite substantially higher top-line volume.
The inability to achieve meaningful operating leverage during periods of rapid revenue growth suggests that the company's cost structure is becoming increasingly bloated or inefficient. This may indicate that the overhead required to support complex, custom-engineered hardware deployments is rising faster than the incremental gross profit generated.
As indicated by the income statement, net income has shown extreme fluctuations, such as the $1.0B reported in 2026Q3 compared to $168.3M in 2026Q1, while stock-based compensation reached $216.4M in the most recent quarter, raising questions about the underlying sustainability of reported earnings.
The significant variance in net income, coupled with rising stock-based compensation, suggests that reported EPS may not accurately reflect the company's core operational performance. Investors should monitor these non-operating items and potential accounting adjustments, as they complicate the assessment of true profitability and shareholder value creation.
Based on recent corporate developments, the resignation of the independent auditor and ongoing regulatory scrutiny suggest that the company's reported financial figures may be subject to significant revision, creating a high-risk environment that traditional fundamental analysis may fail to fully capture or mitigate.
The combination of governance instability and thin operating margins presents a compelling case for caution, as the company's ability to access capital markets could be impaired by these unresolved issues. Market participants should consider the possibility that the current valuation ignores the potential for material restatements or long-term operational disruption.
Quick answers to the most common questions about buying SMCI stock.
For fiscal year 2025, Super Micro Computer, Inc. (SMCI) reported total revenue of $21.97B. This represents a 10275.8% increase compared to $211.8M in 2005.
Super Micro Computer, Inc. (SMCI) is profitable, generating $1.05B in net income for the fiscal year ending 2025 with a net profit margin of 4.8%.
Super Micro Computer, Inc. (SMCI) reported an operating income of $1.25B, resulting in an operating profit margin of 5.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Super Micro Computer, Inc. (SMCI) generated $2.43B in gross profit for the year, representing a gross profit margin of 11.1%. This demonstrates the company's core pricing power and production efficiency.