Supermicro’s Stock Rebounds After Earnings Drop

‘This quarter, our revenue exceeded the upper end of our original guidance which marks the beginning of our business reacceleration,’ says Supermicro CEO and chairman Charles Liang after reporting its second quarter earnings.

Supermicro’s stock plummeted 14 percent Friday morning following the company’s second fiscal quarter earnings results but shares quickly climbed back up. The San Jose, Calif.-based server and storage specialist reported total revenue of $871 million for its second quarter, down nearly 7 percent year over year.

Supermicro, which relisted on the Nasdaq Global Market in January, saw its stock drop from $29.56 per share on Thursday to $25.40 per share Friday morning. However, the company’s stock rebounded by later in the morning and now stands at $28.28 per share as of 11: 30 a.m.

Supermicro CEO and chairman Charles Liang (pictured) was bullish about his company’s second quarter earnings -- which saw gross profit hit $138 million, up 7 percent year over year – as well as Supermicro’s sales grow projections in 2020.

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“This quarter, our revenue exceeded the upper end of our original guidance which marks the beginning of our business reacceleration,” said Liang in a statement Thursday night. “We are very excited by our product solutions targeting artificial intelligence, 5G [and] edge, and the evolving needs of the enterprise, which offer our company a substantial growth opportunity in a $100 billion market.”

Supermicro’s longtime leader and founder said his company’s engineering team and product innovation roadmap in servers and storage will pave the way for growth this year.

The company spent a total of $105 million on R&D during the second half of 2019, up from $89 million compared to the same six months of 2018.

“We are the only server and storage solution provider with more than half of our engineering, product development and final assembly based in the USA. Our engineering and R&D strengths allow us to quickly deliver the most advanced technology with the broadest range of server and storage products in our industry,” said Liang. “Over the last couple of years, Supermicro has been continuing our mission of becoming a strong global leader of server and storage solutions, especially the greenest and best TCO IT solutions.”

On the innovation front, Supermicro recently launched new servers targeting the 5G and edge computing market including the E403-9P-FN2T which is purpose built for demanding environments and includes three PCI-E slots for GPU and FPGA accelerator cards, as well as the 1U 1019P-FHN2T for micro data centers. The company touts itself as having the industry’s broadest section of GPU servers optimized for AI and high-performance computing (HPC) workloads.

Supermicro specializes in power-efficient open hardware server platforms that extend data center remote management to edge computing platforms, while also having expertise with virtualization and containers, including software such as Kubernetes and VMware.

For the company’s current third fiscal quarter, ending March 31, Supermicro expects revenues between $770 million to $830 million.