It rises after third-quarter earnings growth and a $60 billion backlog update

TLDR

• SMCI stock jumps 16.86% after hours of strong third-quarter update.

• Super Micro earns $483 million in Q3 with higher margins.

• $60 billion backlog bolsters future revenue outlook.

• Q4 gross margin expectations rise sharply to 15%-17%.

• Demand for AI infrastructure is supporting Super Micro’s growth momentum.

Shares of Super Micro Computer, Inc. have ended… (SMCI) regular session at $25.50, up 7.01%. After that, the stock jumped another 16.86% to $29.80 during after-hours trading. Meanwhile, the rise came on the heels of stronger profitability, expanding margins, and a record order backlog that exceeded $60 billion.

Super Micro Computer Company, SMCI

Q3 earnings show stronger profitability despite sequential revenue declines

Super micro It reported unaudited revenue for the third quarter of fiscal year 2026 of $10.2 billion. However, revenue fell from $12.7 billion in the previous quarter. Revenue doubled from the $4.6 billion reported during the same quarter last year.

Gross margin was 9.9% during the quarter. The figure improved from 6.3% in the previous quarter and slightly exceeded the 9.6% recorded in the previous year. Non-GAAP gross margin also increased to 10.1% from 9.7% during the corresponding period.

Net income rose to $483 million from $401 million in the previous quarter. Additionally, quarterly earnings rose sharply from the $109 million reported a year ago. Diluted EPS came to $0.72, while non-GAAP diluted EPS rose to $0.84 from $0.31 last year.

The backlog supports the outlook for stronger business in the fourth quarter

Super Micro also issued a preliminary update for the fourth quarter of fiscal 2026. Revenues are expected to be close to the lower end of previous guidance between $11.0 billion and $12.5 billion. However, expected gross margins improved significantly above previous expectations.

The company estimated GAAP and non-GAAP gross margins of 15% to 17%. Previously, management was guiding gross margins between 8.2% and 8.4%. Furthermore, the improvement reflects a more favorable customer mix and stronger demand for products across its business.

Super micro He also announced that the backlog had reached a record high by the end of the fiscal year. Total new orders exceeded $60 billion during the fourth quarter alone. Furthermore, the Company expects to deliver these orders across future reporting periods.

Expanding AI infrastructure strengthens Super Micro’s position in the long term

The company has continued to expand its position as a provider of complete data center infrastructure solutions. Furthermore, it added new manufacturing facilities in Silicon Valley during this period. The expansion increases the production capacity of AI and enterprise computing systems.

“Supermicro’s transformation into a data center infrastructure provider is accelerating,” said CEO Charles Liang. “Our profit margin recovery and the rapid growth of our DCBBS business show that our business remains strong,” he added. Liang also stated, “With the addition of our new US manufacturing facilities in Silicon Valley, we are exceptionally well-positioned to meet the tremendous demand across various AI and enterprise sectors.”

The company ended March with $1.3 billion in cash and cash equivalents. Meanwhile, bank debt and convertible bonds totaled $8.8 billion. Cash used in operations was $6.6 billion during the quarter, while capital expenditures and investments totaled $97 million.

Super micro It remains one of the largest suppliers of AI server systems and data center infrastructure. Demand for AI computing has increased rapidly following large enterprise investments in generative AI. As a result, higher margins and record orders boosted market confidence despite sequentially weak revenues during the quarter.