Super Micro Q1 FY2027: revenue of $19.9B, nearly four times a year ago, but operating cash flow was −$434M

Super Micro Computer builds servers, storage and full rack-scale systems for data centers, and the October 20 update attributed this quarter’s higher sales to “increased demand for AI platforms.” It works at thin gross margins and large volumes, and its balance sheet carries large receivables and inventory, so its cash flow can diverge sharply from its profit.

That divergence is the story of fiscal Q1 2027. Supermicro had already told investors on October 20 that sales would come in far above guidance; the final figure was higher still. Net income rose to $1.6 billion. And operating cash flow swung to −$434 million from +$747 million in Q4, as receivables rose by $3.56 billion and inventory by $2.48 billion in the quarter.

Super Micro Q1 FY2027 results at a glance

$ millions, except per share	Q1 FY27	Q4 FY26	Q1 FY26
Net sales	19,946	11,120	5,018
Gross margin	12.7%	17.5%	9.3%
Income from operations	2,064	1,488	182
Net income	1,594	1,178	168
Diluted EPS	$1.75	$1.62	$0.26
Non-GAAP diluted EPS	$1.81	$1.70	$0.35
Operating cash flow	(434)	747	(918)

Q4 FY2026 figures come from the Q4 release, which also reported operating cash flow of −$6,810 million for fiscal 2026 as a whole. Fiscal Q1 is the quarter to September 30.

How did Q1 compare with Supermicro’s guidance?

In its Q4 release (Form 8-K, August 11), Supermicro guided Q1 net sales to $14.5 billion to $15.5 billion, GAAP diluted EPS to $0.89 to $0.98 and non-GAAP diluted EPS to $1.01 to $1.10; the October 20 preliminary update adds that gross margin had been guided to 10.4% to 10.8%. That update raised the estimates to $18.5 billion to $19.5 billion of sales and a 12.0% to 12.5% gross margin, “primarily due to increased demand for AI platforms.” The final results, filed on November 3, came in above both: net sales of $19.9 billion, about $0.45 billion above the top of the preliminary range and about $4.4 billion above the top of the original guidance (our arithmetic), and a 12.7% gross margin. GAAP diluted EPS of $1.75 and non-GAAP $1.81 were well above the August EPS ranges.

The release describes these results as preliminary and unaudited, because the company’s financial closing procedures for the quarter were not complete when it was issued.

Margin fell from Q4 but profit still rose 35%

Gross margin of 12.7% was well below the 17.5% of Q4 FY2026 but above the 9.3% of a year earlier. The release does not explain the sequential decline; the October 20 update attributed Q1’s margin to “customer and product mix.” Operating expenses rose about 67% from a year earlier, to $477 million from $285 million (our arithmetic), far less than sales, so income from operations reached $2,064 million, an operating margin of about 10.4% against 3.6% a year earlier (our arithmetic).

Net income rose to $1,594 million from $1,178 million in Q4, about 35% (our arithmetic), and from $168 million a year earlier; income from operations rose from $1,488 million in Q4. Interest expense was $83 million, against $25 million a year earlier. Diluted EPS was $1.75, on 749 million diluted shares against 663 million a year earlier; it is not simply net income divided by shares, because the release’s EPS reconciliation allocates part of earnings to participating securities.

Why operating cash flow was −$434M

Selected cash-flow lines, $ millions	Q1 FY27
Net income	1,594
Accounts receivable	(3,560)
Inventories	(2,477)
Deferred revenue	3,054
Accounts payable and accrued liabilities	919
Net cash used in operating activities	(434)

Selected lines only; depreciation, stock compensation, prepaid expenses, taxes and other items make up the rest. The payables row is accounts payable ($474 million) plus accrued liabilities ($446 million), our arithmetic.

Receivables rose by $3.56 billion and inventory by $2.48 billion, about $6.0 billion of cash tied up between them (our arithmetic). Customers paid $3.05 billion in advance, reflected in deferred revenue, which roughly halved that drain. Total deferred revenue, current and non-current, was about $5.7 billion at September 30 against about $2.6 billion at June 30 (our arithmetic). Receivables stood at $9.7 billion and inventory at $15.1 billion.

With $42 million of purchases of property, plant and equipment, free cash flow was about −$476 million (our arithmetic; the release does not report free cash flow). Cash fell to $6.9 billion from $7.5 billion at June 30. Bank debt and convertible notes totaled $8.6 billion. Supermicro also paid $64 million of dividends on its mandatory convertible preferred stock and declared another $0.875 per depositary share, payable December 1.

What to watch in Q2 FY2027

• The outlook. Net sales of $19.5 billion to $21.5 billion, GAAP diluted EPS of $1.59 to $1.83 and non-GAAP $1.66 to $1.90. For the full fiscal year, $72 billion to $82 billion.
• Cash conversion. Whether receivables are collected and inventory ships, and whether Q2 operating cash flow turns positive.
• Gross margin. It moved from 9.3% to 17.5% to 12.7% across the three quarters shown. The release ties none of these moves to specific customers.
• Deferred revenue. $3.05 billion of new prepayments in one quarter. How much of it converts to Q2 sales.
• Final numbers. The release calls its results preliminary; the Form 10-Q, filed November 6, is the final record.

Quick answers

What was Super Micro’s revenue in Q1 FY2027?

Net sales were $19.9 billion for the quarter ended September 30, 2026, against $5.0 billion a year earlier and $11.1 billion in Q4 FY2026, above both the original $14.5 billion to $15.5 billion guidance and the $18.5 billion to $19.5 billion preliminary range.

Why was Super Micro’s operating cash flow negative?

Receivables rose by $3.56 billion and inventory by $2.48 billion during the quarter. Those working-capital outflows of about $6.0 billion exceeded net income and the inflows from $3.05 billion of new deferred revenue and higher payables, leaving operating cash flow at −$434 million, against +$747 million in Q4.

What is Super Micro’s guidance for fiscal 2027?

Supermicro expects fiscal 2027 net sales of $72 billion to $82 billion, and Q2 net sales of $19.5 billion to $21.5 billion with GAAP diluted EPS of $1.59 to $1.83.

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Sources and method. Every Q1 figure (highlights, balance sheet, statement of operations, cash flows, non-GAAP measures and the outlook) comes from Exhibit 99.1 to the Form 8-K filed 2026-11-03 (accession 0001375365-26-000026) for the quarter ended 2026-09-30, read directly from SEC EDGAR and linked above; the same 8-K reports the preferred dividend under Item 8.01. The filing was accepted at 4:31 pm ET on November 3, after the US market closed; the release scheduled its webcast for 5:00 p.m. ET. The original Q1 sales and EPS guidance and the Q4 FY2026 net sales, operating income, net income and fiscal-2026 operating cash flow come from the Q4 release (Form 8-K, Exhibit 99.1, filed 2026-08-11, accession 0001375365-26-000021); the original gross-margin guidance and the preliminary ranges come from the Form 8-K filed 2026-10-20 (accession 0001375365-26-000025). The Q1 figures are described by the company as preliminary and unaudited; the Form 10-Q filed 2026-11-06 (accession 0001375365-26-000027) is the final record.

No consensus estimate is included, so this piece makes no claim that the quarter beat or missed expectations; the only comparisons are with Supermicro’s own guidance and with prior periods. This piece makes no claim about the share-price reaction.

Our arithmetic, labelled as such: net sales about $0.45 billion above the top of the preliminary range and about $4.4 billion above the top of the original guidance; operating expenses up about 67%; operating margins of about 10.4% and 3.6%; net income up about 35% from Q4; net sales nearly four times the year-ago figure (3.98 times); the roughly $6.0 billion absorbed by receivables and inventory; the $919 million of payables and accrued liabilities; total deferred revenue of about $5.7 billion and $2.6 billion; and free cash flow of about −$476 million. These are approximations built on the disclosed figures, not reported numbers. The interpretation (that the quarter’s profit was absorbed by working capital rather than converted to cash) is our analysis, not a company statement, and is not a forecast.

Related: Super Micro Q4 FY2026, the prior quarter; Dell Q2 FY2027, another AI server maker; and AMD Q3 2026, a supplier of the accelerators these servers run on.