Super Micro Computer Cuts Guidance Amid Internal Probe

Super Micro Computer cut its guidance for the fiscal first and second quarter, stating that an internal probe found no evidence of fraud.

Shares of Super Micro Computer Inc (NASDAQ:SMCI) fell over 17% in aftermarket trading, adding to recent challenges.

Fiscal Q1 Expectations

• Adjusted EPS: $0.75 to $0.76 (previously $0.67 to $0.83)
• Revenue: $5.9B to $6.0B (previously $6.0B to $7.0B); missed Wall Street's $6.5B estimate.

Fiscal Q2 Expectations

• Net Sales: $5.5B to $6.1B
• Non-GAAP Net Income: $0.56 to $0.65 per diluted share (compared to the consensus of $6.9B and $0.83).

The investigation by Independent Counsel concluded that the Audit Committee acted independently with no evidence of fraud from management or directors. However, last week, Ernst & Young resigned as the company's auditor due to concerns regarding governance, transparency, and internal controls. Previously, Hindenburg Research raised allegations of corporate misconduct, including issues such as channel stuffing and questionable transactions.

Analysts from Vital Knowledge noted a negative preliminary report due to missed sales, weak guidance, and lack of formal SEC filings. The company's forecast for a non-GAAP gross margin of about 13.3% may slightly alleviate margin concerns for investors, who might find some reassurance in the gross margin upside and cash increase amid recent challenges.