01—Abstract
Summary
Summary of the 10-K filed August 31, 2026. Cited figures are marked; the original filing is the authoritative source.
Super Micro Computer, Inc. (Nasdaq: SMCI) reported net sales of $39.06 billiona for fiscal year 2026 (ended June 30, 2026), up from $21.97 billion in fiscal 2025, with net income of $2.23 billion versus $1.05 billion.
Gross margin declined to 10.8% from 11.1%, which management attributed to competitive pricing to gain share, product and customer mix, and higher manufacturing-related expenses. Income from operations rose to $2.77 billionb, and diluted EPS was $3.26 compared with $1.68. Growth was driven primarily by shipments of GPU servers and rack-scale solutions (GB200 and GB300 systems) for customer data center deployments, including large design wins from a few customers.
One customer accounted for 28.1% of fiscal 2026 net sales. Balance sheet and liquidity changed substantially. Total assets rose to $29.95 billionc from $14.02 billion, with inventories of $12.90 billion and accounts receivable of $6.13 billion.
Operating cash flow was negative $6.81 billiond, driven by inventory and receivable build-up, while financing provided $9.48 billion, including $5.64 billion of equity offering proceeds in June 2026 and a 7.00% Series A Mandatory Convertible Preferred Stock issuance. Total indebtedness was approximately $8.7 billion, and the company stated that current resources should be sufficient for the next 12 months. The filing discloses significant governance and legal risk.
Management concluded that internal control over financial reporting was not effective as of June 30, 2026, due to one remaining material weakness in information technology general controls, and BDO USA, P.C. issued an adverse opinion on internal control. The company disclosed an indictment of three former associates (including former SVP and director Yih-Shyan (Wally) Liaw) on export control charges, which states the company is not named as a defendant, and multiple ongoing SEC, DOJ, and BIS inquiries in which the company is cooperating. Securities class actions and derivative suits are pending.
02—Key points
Key Highlights
- Net sales of $39.06 billion in fiscal 2026, up from $21.97 billion, with the filing attributing growth to fulfillment of customer data center deployments including large design wins from a few customers
- Gross margin of 10.8% versus 11.1% in fiscal 2025; income from operations of $2.77 billion versus $1.25 billion
- Net income of $2.23 billion, or $3.26 diluted EPS, versus $1.05 billion, or $1.68 diluted EPS, in fiscal 2025
- Operating cash flow was negative $6.81 billion, reflecting inventory growth to $12.90 billion and receivables growth to $6.13 billion; financing inflows of $9.48 billion funded the shortfall
- Equity raised in June 2026 included a $1.22 billion net common stock offering (plus $183.4 million from option exercise) and $3.68 billion net from 7.00% Series A Mandatory Convertible Preferred Stock (plus $551.6 million from option exercise)
- Management concluded internal control over financial reporting was not effective as of June 30, 2026, citing one remaining material weakness in IT general controls; the auditor issued an adverse opinion on internal control
- Ongoing government investigations (DOJ, SEC, BIS) and securities class actions; the company states it is not a named defendant in the March 2026 export-control indictment and has not been informed it is a target
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2026, Super Micro Computer kept $0.06.
- Revenue$39.06B100.0%
- Cost of revenue−$34.84B89.2%
- Gross profit$4.23B10.8%
- Operating costs−$1.46B3.7%
- Operating income$2.77B7.1%
- Interest, other & tax−$540.0M1.4%
- Net income$2.23B5.7%
Where FY2026 revenue went
$39.06B- Cost of revenue: $34.84B, 89% of revenue
- Net income: $2.23B, 5.7% of revenue
- R&D: $771.2M, 2.0% of revenue
- Other operating costs: $685.5M, 1.8% of revenue
- Interest, other & tax: $540.0M, 1.4% of revenue
Kept 5.7% as net incomeNet income $2.23B · 5.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2026filed August 31, 2026Financial Statements
FY2026 against FY2025
| Line item | FY2026FY2025 | Change |
|---|---|---|
| Revenue | $39.06B$21.97B | +77.8% |
| Cost of Revenue | $34.84B$19.54B | +78.3% |
| Gross Profit | $4.23B$2.43B | +74.0% |
| R&D Expenses | $771.23M$636.55M | +21.2% |
| Operating Expenses | $1.46B$1.18B | +23.8% |
| Operating Income | $2.77B$1.25B | +121.1% |
| Net Income | $2.23B$1.05B | +112.7% |
| EPS (Basic) | $3.65$1.77 | +106.2% |
| EPS (Diluted) | $3.26$1.68 | +94.0% |
| Shares Outstanding (Basic) | 601.81M593.66M | +1.4% |
| Shares Outstanding (Diluted) | 697.35M628.40M | +11.0% |
05—Questions
Frequently Asked Questions
What drove the revenue increase in fiscal 2026?
The filing states net sales rose 77.8% to $39.06 billion, primarily from fulfillment and shipment of orders supporting customers' data center deployments, including large design wins from a few customers. Server and storage systems revenue increased $17.09 billion, with GPU and super rack products up $15.26 billion, mainly GB200 and GB300 systems. Services and software revenue grew to $538.3 million from $330.5 million.
Why did gross margin decline, and what are the tariff and inventory effects?
Gross margin decreased to 10.8% from 11.1%, which management attributed to a strategy of competitive pricing to gain market share, a change in product and customer mix, and higher manufacturing-related expenses. Tariff expense in cost of sales rose $237.7 million, a 228.3% increase, and inventory write-down adjustments were $188.1 million versus $232.0 million in the prior year.
Why was operating cash flow negative, and how is the company funding growth?
Net cash used in operating activities was $6.81 billion, mainly due to an $8.88 billion increase in inventories and a $3.92 billion increase in accounts receivable, partly offset by a $1.88 billion increase in deferred revenue. Financing provided $9.48 billion, including $3.95 billion of net borrowings under lines of credit and term loans, $5.64 billion from equity offerings, and proceeds from the 7.00% Mandatory Convertible Preferred Stock. The company's total indebtedness was about $8.7 billion at June 30, 2026.
What are the main material weakness and legal risks disclosed?
The company concluded internal control over financial reporting was not effective due to an unremediated IT general controls material weakness, and BDO USA issued an adverse opinion on internal control. The filing also describes an indictment of three former associates unsealed March 19, 2026, that alleges export control violations; the company states it is not named as a defendant and is cooperating with multiple SEC, DOJ, and BIS inquiries. Multiple securities class actions and derivative lawsuits remain pending, and the company says it cannot estimate possible losses at this stage.
What is the company's dividend policy?
The company has never declared or paid cash dividends on its common stock and does not expect to in the foreseeable future. The only expected cash distribution is the 7.00% dividend on its Series A Mandatory Convertible Preferred Stock, which is payable quarterly, at the company's election, if declared by the Board.
06—Continue