---
title: "Super Micro (SMCI) margins jumped in the June quarter. What to know before Nov. 3 earnings"
canonical_url: https://www.stockexpertai.com/journal/2026-10-29/super-micro-smci-margins-jumped-in-the-june-quarter-what-to-know-before-nov-3-463213a08cbf
last_updated: 2026-10-29T10:15:49.073Z
section: "AI Signals"
author: "Stock Expert AI Research"
publisher: Stock Expert AI
tickers: SMCI
content_type: journal-article
---

# Super Micro (SMCI) margins jumped in the June quarter. What to know before Nov. 3 earnings

_Super Micro reported a much wider gross margin in the quarter ended June 30, 2026, though revenue came in below estimates, and its next report is due Nov. 3, 2026._

![Data cover: Super Micro (SMCI) margins jumped in the June quarter. What to know before Nov. 3 earnings](/public-objects/streetnews/2026-10-29/AI_SIGNALS-cover-7688e6d6.jpg)
Stock Expert AI data cover: figures from Financial Modeling Prep; background is an illustrative public-domain photo, credited on the image.

Super Micro Computer (NASDAQ: SMCI) reported in August that its gross margin rose to 17.5% in the quarter ended June 30, 2026, well above the 9.5% it earned in the year-ago quarter. Earnings per share beat analyst estimates even though revenue fell short. With its next report due Nov. 3, 2026, the question for investors is whether that margin improvement holds. *Figures are current as of Oct. 28-29, 2026 and cover the fiscal fourth quarter ended June 30, 2026, unless stated otherwise.*

## Key facts

- **Reported Aug. 11, 2026:** earnings per share (EPS, profit divided by shares) were 1.7 versus an analyst estimate of 0.923, a beat of +$0.78 or 84.2%.
- **Revenue for the quarter ended June 30, 2026:** $11.12B versus an estimate of $11.60B, a miss of $479.6M or 4.1%. That was 93.2% higher than the year-ago quarter.
- **Net income for the quarter ended June 30, 2026:** $1.18B versus $195.2M a year earlier, up 503.7%. Diluted EPS was 1.68 versus 0.31.
- **Share price on Oct. 28, 2026:** $35.81, up 2.05% on the day. The 52-week range is $19.48 to $54.08.
- **Next earnings, Nov. 3, 2026:** analysts expect EPS of 1.2 and revenue of $16.02B.
- **Stock Expert AI MoonshotScore V2:** 37.9, rated Weak.

| Metric | Latest (quarter ended June 30, 2026) | Year-ago (quarter ended June 30, 2025) |
|---|---|---|
| Revenue | $11.12B | $5.76B |
| Operating income | $1.49B | $228.4M |
| Net income | $1.18B | $195.2M |
| Diluted EPS | 1.68 | 0.31 |
| EPS vs. estimate | 1.7 vs. 0.923 | n/a |
| Revenue vs. estimate | $11.12B vs. $11.60B | n/a |

## What happened

Super Micro builds servers, the computers that run data centers and artificial intelligence (AI) workloads. In the quarter ended June 30, 2026, it sold more than in the year-ago quarter and kept far more of each dollar as profit.

The margin change is the main story. Gross margin is the share of revenue left after the direct cost of making the products. Operating margin is the share left after running costs such as research and sales staff. Here is how both moved over the last several quarters:

| Quarter ended | Revenue | Gross margin | Operating margin | Net income |
|---|---|---|---|---|
| June 30, 2025 | $5.76B | 9.5% | 4.0% | $195.2M |
| Sept. 30, 2025 | $5.02B | 9.3% | 3.6% | $168.3M |
| Dec. 31, 2025 | $12.68B | 6.3% | 3.7% | $400.6M |
| March 31, 2026 | $10.24B | 9.9% | 6.1% | $483.4M |
| June 30, 2026 | $11.12B | 17.5% | 13.4% | $1.18B |

The table shows that revenue was already high in the December and March quarters, but margins stayed thin. Gross margin was 6.3% in the December 2025 quarter. The jump to 17.5% and 13.4% in the June 2026 quarter is the change that lifted profit. Our data does not include a call transcript, so we cannot say what management credited for the improvement. Investors should read the company's filings and call remarks for that explanation before drawing conclusions.

The segment and geography data need care. Our data lists Server And Storage Systems revenue at $169.8M and Subsystems and accessories revenue at $139.9M for the June 2026 quarter, versus $5.62B and $139.1M a year earlier. Those figures do not fit with total revenue of $11.12B, so they probably reflect how the data provider labels the company's reporting rather than a real collapse in server sales. The geography split has the same problem: the United States contributed $7.89B and an "Other" region $1.15B, and together they do not match total revenue of $11.12B either. We would treat both the segment split and the geography split as unreliable until the company's filing is checked directly.

## Why it matters for investors

**Cash flow lagged earnings for most of the year.** Free cash flow is the cash left after operating costs and equipment spending. Super Micro's was an outflow of $949.8M in the quarter ended Sept. 30, 2025, an outflow of $45.1M in the December quarter, and an outflow of $6.70B in the March 2026 quarter. Operating cash flow in the March quarter was an outflow of $6.62B. Free cash flow turned positive at $718.7M in the June 2026 quarter, with operating cash flow of $747.0M. One possible reason, which our data cannot confirm, is that fast-growing hardware makers often pay for parts and inventory before customers pay them. One positive quarter does not yet show the pattern has reversed.

**The balance sheet looks adequate.** As of June 30, 2026, the company held $7.52B in cash and short-term investments against $6.68B in total debt, so cash exceeded debt. Shareholders' equity was $14.48B and debt-to-equity was 0.46. It paid no dividend and made no buybacks in the last four quarters, though it repurchased $200.0M of stock in the quarter ended June 30, 2025.

**The stock is cheap on earnings, which may reflect doubt about durability.** Over the trailing 12 months, Super Micro trades at a price-to-earnings (P/E) ratio of 9.81, price-to-sales of 0.60 and EV/EBITDA of 7.38. P/E compares share price to a year of profit; EV/EBITDA compares the company's total value, including debt, to operating profit. Its trailing net margin is 5.7%. Peers look different:

| Company | Market cap | P/E | Net margin |
|---|---|---|---|
| Super Micro (SMCI) | $23.53B | 9.81 | 5.7% |
| Dell Technologies (DELL) | $313.91B | 28.23 | 7.5% |
| Hewlett Packard Enterprise (HPE) | $80.13B | 30.03 | 6.6% |
| Lenovo (LNVGF) | $39.20B | 42.50 | 0.9% |

Super Micro's multiple is far lower than each peer's, while its trailing net margin sits between Lenovo's and the other two. Because trailing figures blend weak quarters with the strong June quarter, the direction matters: if June-quarter margins hold, trailing earnings understate the company's profit power; if they fade, the low multiple may be justified.

**Analysts are split.** Of 28 ratings, 10 are Buy, 16 are Hold and 2 are Sell, for a consensus of Hold. Price targets average $42.33 with a median of $42.00, a high of $48.00 and a low of $36.00. The recent price of $35.81 is just under the low end of that range. Recent rating actions were reiterations: Rosenblatt kept a Buy on Oct. 16 and Oct. 21, 2026, while Citigroup (Oct. 8) and Mizuho (Oct. 6) kept Neutral ratings.

**Our MoonshotScore is Weak overall.** The score of 37.9 is built from five pillars measured against the sector: growth 93, momentum 71, valuation 72, safety 48 and quality 41. In plain terms, growth is the standout and valuation and momentum are decent, while quality and safety are the weak areas. That matches the story above: strong sales growth, but uneven margins and cash flow.

## What could go wrong

- **Margins may not hold.** Gross margin was below 10% in four of the last five quarters. If the June 2026 level was a one-time result, profit could fall sharply even on high revenue.
- **Revenue missed estimates.** The EPS beat came with sales below expectations.
- **Mixed financial-health scores.** The Piotroski score, a 0-to-9 check of profit, leverage and efficiency, is a weak 3. The Altman Z-score, which gauges bankruptcy risk, is 3.62, which points to low distress risk on that measure. Price-to-free-cash-flow is negative over the trailing 12 months because of the earlier cash outflows. A discounted cash flow model from our data provider shows a negative value per share (-399.25 USD). We treat it as not meaningful given how swingy the cash flows have been.
- **Insider selling.** Among the 30 most recent insider filings, those dated in the last 90 days show 8 sales and 0 open-market purchases. Our data notes that older filings in that window may be missing.

## What to watch next

1. **Nov. 3, 2026 results.** Analysts expect EPS of 1.2 and revenue of $16.02B. The year-ago comparison is the quarter ended Sept. 30, 2025, when revenue was $5.02B and net income was $168.3M. We assume the report covers the quarter ended Sept. 30, 2026.
2. **Gross margin.** Whether it stays near the June 2026 level of 17.5% matters more than the revenue figure.
3. **Cash flow.** A second positive free cash flow quarter would show working capital is easing.
4. **Guidance.** Management's outlook, and the explanation for the margin change, will frame the next several quarters. Consensus from 6 analysts for two later periods: for the period ending Sept. 30, 2028, revenue of $24.25B (analyst range $22.58B to $27.62B) and EPS of 1.71; for the period ending Dec. 30, 2028, revenue of $25.25B (range $23.51B to $28.75B) and EPS of 1.81.

## Frequently asked questions

## Q: Did Super Micro beat earnings expectations in its latest quarter?

Super Micro beat on profit and missed on revenue for the quarter ended June 30, 2026. EPS was 1.7 against an estimate of 0.923, while revenue of $11.12B was below the $11.60B estimate. It reported on Aug. 11, 2026.

## Q: When does Super Micro report earnings next, and what do analysts expect?

Super Micro's next earnings date is Nov. 3, 2026. Analysts expect EPS of 1.2 and revenue of $16.02B, according to the estimates in our data.

## Q: Is Super Micro stock cheap compared with Dell and HPE?

On trailing earnings, Super Micro is priced lower than its peers. Its P/E is 9.81, versus 28.23 for Dell and 30.03 for HPE. Its trailing net margin is 5.7%, versus 7.5% for Dell and 6.6% for HPE. A lower multiple can reflect doubts about whether recent margin gains will last. This is information, not a recommendation.

*Sources: Stock Expert AI market data (FMP-based financials, estimates, ratings and the MoonshotScore) as of Oct. 28-29, 2026. Third-party news headlines were used only for context, not for figures.*


*This is educational content, not investment advice. Past performance does not guarantee future results.*

## Related Tickers
- [SMCI](https://www.stockexpertai.com/stock/smci)

## Sources
- [Stock Expert AI SMCI page: quote, financials and MoonshotScore](https://www.stockexpertai.com/stock/smci)
- [zacks.com: Super Micro Computer (SMCI) Rises Higher Than Market: Key Facts](https://www.zacks.com/stock/news/3017744/super-micro-computer-smci-rises-higher-than-market-key-facts?cid=CS-STOCKNEWSAPI-FT-fundamental_analysis|yseop_template_6-3017744)
- [fool.com: 2 Popular AI Stocks to Sell Before They Drop 57% and 60%, According to Wall Street Analysts](https://www.fool.com/investing/2026/10/28/2-popular-ai-stocks-sell-before-drop-60-wall-street/)
- [zacks.com: Can SMCI's DCBBS and DLC Improve its Financial Outlook in 2026?](https://www.zacks.com/stock/news/3016183/can-smci-s-dcbbs-and-dlc-improve-its-financial-outlook-in-2026?cid=CS-STOCKNEWSAPI-FT-analyst_blog|quick_take-3016183)
- [zacks.com: Super Micro Computer (SMCI) Earnings Expected to Grow: Should You Buy?](https://www.zacks.com/stock/news/3015996/super-micro-computer-smci-earnings-expected-to-grow-should-you-buy?cid=CS-STOCKNEWSAPI-FT-fundamental_analysis|yseop_template_9-3015996)

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_Written by Stock Expert AI's research desk with AI assistance. Figures come from FMP data and the official sources cited in the article. Educational research, not financial advice._