Supermicro Reports Third Quarter 2015 Financial Results 

Super Micro Computer, Inc., a leader in application optimized, high performance server solutions, today announced third quarter of fiscal 2015 financial results for the quarter ended March 31, 2015.

Fiscal 3rd Quarter Highlights

• Quarterly net sales of $471.2 million, down 6.3% from the second quarter of fiscal year 2015 and up 26.1% from the same quarter of last year.
• GAAP net income of $23.1 million, down 26.2% from the second quarter of fiscal year 2015 and up 39.1% from the same quarter of last year.
• GAAP gross margin of 16.3%, down from 16.8% in the second quarter of fiscal year 2015 and up from 15.3% in the same quarter of last year.
• Server solutions accounted for 64.1% of net sales compared with 60.1% in the second quarter of fiscal year 2015 and 50.1% in the same quarter of last year.

Net sales for the third quarter ended March 31, 2015 totaled $471.2 million, down 6.3% from $503.0 million in the second quarter of fiscal year 2015. One customer accounted for more than 10% of net sales during the quarter ended March 31, 2015.

GAAP net income for the third quarter of fiscal year 2015 was $23.1 million or $0.44 per diluted share, an increase of 39.1% from the net income of $16.6 million, or $0.35 per diluted share in the same period a year ago. Included in net income for the quarter is $3.6 million of stock-based compensation expense (pre-tax). Excluding this item and the related tax effect, non-GAAP net income for the third quarter was $24.9 million, or $0.47 per diluted share, compared to non-GAAP net income of $17.8 million, or $0.37 per diluted share, in the same quarter of the prior year. On a sequential basis, non-GAAP net income decreased from the second quarter of fiscal year 2015 by $8.6 million or $0.18 per diluted share.

GAAP gross margin for the third quarter was 16.3% compared to 15.3% in the same period a year ago. Non-GAAP gross margin for the third quarter was 16.3% compared to 15.4% in the same period a year ago. GAAP gross margin and Non-GAAP gross margin for the second quarter of fiscal year 2015 were both 16.8%.

The Company's cash and cash equivalents and short and long term investments at March 31, 2015 were $112.0 million compared to $99.6 million at June 30, 2014. Free cash flow for the nine months ended March 31, 2015 was $(15.6) million, primarily due to the development and construction of improvements on the Company's property, which is still in progress, offset in part by an increase in the Company's cash provided by operating activities.

Business Outlook & Management Commentary

The Company expects net sales of $510 million to $560 million for the fourth quarter of fiscal year 2015 ending June 30, 2015. The Company expects non-GAAP earnings per diluted share of approximately $0.53 to $0.62 for the fourth quarter.

"Supermicro again delivered industry leading growth in the third quarter with 26.1% year over year growth in a seasonally affected quarter. We continued our strong pace of growth in our server and storage solutions business contributing 64.1% of total revenue and with 53.9% of revenues coming from the OEM and Direct customers. Storage, GPU/Xeon Phi, and our Twin family solutions continue to grow strongly year over year," said Charles Liang, Chairman and CEO. “As we approach the final quarter of this fiscal year we are excited about our opportunities to improve our strong growth trend. Our offerings for Storage, HPC, Enterprise, Datacenter, Cloud and Service are well positioned with the latest technologies to enable Supermicro to win market share."

It is currently expected that the outlook will not be updated until the Company’s next quarterly earnings announcement, notwithstanding subsequent developments. However, the Company may update the outlook or any portion thereof at any time. Such updates will take place only by way of a news release or other broadly disseminated disclosure available to all interested parties in accordance with Regulation FD.