The Zhitong Finance App learned that Ultra Micro Computer (SMCI.US) announced financial results for the first quarter of the 2027 fiscal year on Tuesday. Driven by the demand for artificial intelligence data center infrastructure, the company's quarterly revenue reached a record high, increasing nearly 3 times year over year, and net profit increasing more than 8 times year over year. However, the company's operating cash flow was still negative, and gross margin declined significantly compared to the previous quarter.
Financial reports show that in the first fiscal quarter ending September 30, 2026, ultra-microcomputer revenue reached 19.046 billion US dollars, an increase of about 298% over the same period last year of 5,018 billion US dollars, and an increase of about 80% over the previous quarter's 11.1 billion US dollars.
According to US GAAP calculations, the company's net profit for the first fiscal quarter was US$1,594 million, up about 847% from US$168 million in the same period last year; diluted earnings per share were US$1.75, compared to US$0.26 in the same period last year.
In non-GAAP terms, the company's adjusted diluted earnings per share were $1.81, up from $0.35 in the same period last year, and increased by about 417% year over year.
In terms of profitability, ultra-microcomputer's GAAP gross margin for the first fiscal quarter was 12.7%, up from 9.3% in the same period last year, but down 4.8 percentage points from 17.5% in the previous quarter. Non-GAAP gross margin was 12.8% compared to 9.5% in the same period last year.
The company's operating profit for the first fiscal quarter reached US$2,064 million, a significant increase from US$182 million in the same period last year. Adjusted EBITDA was US$2,227 million, compared to US$335 million in the same period last year. The adjusted EBITDA margin increased from 6.7% to 11.2%.
AI data center business drives record revenue
Liang Jianhou, founder, president and CEO of Ultramicrocomputer, said that the company's transformation to an overall solution provider for artificial intelligence and IT data centers continued to accelerate, driving a record revenue of 19.9 billion US dollars in the first quarter of fiscal year 2027.
Liang Jianhou pointed out that the company's modular data center solutions are creating greater value for customers. The scope of application covers gigawatt-scale large-scale data centers and single-container-scale data center deployments. At the same time, the company continues to expand software, proactive services, and network solutions to help improve profitability and create long-term shareholder value.
He also said that by strengthening corporate partnerships and expanding global production capacity, ultra-micro computers are working to help customers deploy AI infrastructure faster, improve system operation stability, and reduce costs.
However, despite a sharp increase in quarterly revenue, the company's gross margin fell significantly from the previous quarter. Ultramicrocomputer pointed out in its financial risk disclosure that as companies seek more and more large-scale customers and large-scale sales projects, customer concentration may increase, sales costs may increase, and profit margins may also be under pressure.
Operating cash flow remains negative accounts receivable and inventory increases
It is worth noting that the cash flow from ultra-microcomputer's operating activities in the first fiscal quarter has not been corrected. According to financial reports, the company's net cash outflow from operating activities in the first fiscal quarter was US$434 million, although this was an improvement over the net outflow of US$918 million in the same period last year, in contrast to the sharp increase in book profit.
According to the cash flow statement, accounts receivable increased by about US$3,560 billion and inventories increased by about US$2,477 billion in the first fiscal quarter, putting pressure on operating cash flow. At the same time, this impact was partially offset by an increase in deferred revenue of approximately $3.54 billion.
By the end of September, the company's accounts receivable reached US$9.685 billion, up from US$6.125 billion at the end of June; inventory rose to US$15.54 billion, up from US$12.896 billion at the end of the previous quarter.
The company's total capital expenditure and investment for the first fiscal quarter was approximately US$47 million. By the end of September, cash and cash equivalents were approximately US$6.9 billion, and bank debt and convertible notes totaled approximately US$8.6 billion.
Q2 revenue is expected to reach a maximum of US$21.5 billion, and the annual revenue guidance is to reach a maximum of US$82 billion
Looking ahead to the second quarter of fiscal year 2027, ultra-microcomputer's revenue is expected to be between 19.5 billion and 21.5 billion US dollars, with a median value of 20.5 billion US dollars, a further increase of about 3% over the first fiscal quarter. The company expects GAAP diluted earnings per share of $1.59 to $1.83 and non-GAAP diluted earnings per share of $1.66 to $1.90 per share for the second fiscal quarter.
For the entire 2027 fiscal year, ultra-microcomputers expect revenue to be between $72 billion and $82 billion, with a median value of $77 billion.
Overall, ultra-microcomputer's latest financial report shows that demand for artificial intelligence data center infrastructure is driving the company's revenue and profits to expand rapidly. However, the month-on-month decline in quarterly gross margin, the increase in accounts receivable and inventory size, and continued negative operating cash flow are still financial indicators that investors need to pay attention to.