Negative $434 million.

Negative $434 million. That's Supermicro's operating cash flow in a quarter where it booked $1.594B of net income, and it's the number I'd watch over the headline revenue.

• Q1 FY2027 net sales came in at $19.946B versus $5.018B a year earlier, roughly 4x. GAAP gross margin was 12.7%, down from 17.5% last quarter but up from 9.3% a year ago.
• Receivables absorbed $3.56B of cash and inventory another $2.477B. A $3.054B jump in deferred revenue offset part of it, but not enough to keep operations cash positive.
• Cash sits at $6.897B against $8.6B of bank debt and convertible notes. I wouldn't call that a liquidity crisis, but it leaves less cushion than the profit line suggests.
• Guidance is for $19.5B to $21.5B in Q2 and $72B to $82B for FY2027. Growth at that pace usually keeps eating working capital. $SMCI closed at $31.39 on November 3 and traded at $33.96 after hours, up 8.19%.

The market is paying for the guide, and fair enough. My read is that Q2 receivables and cash conversion will tell us whether this growth turns into cash, and I could be wrong if deferred revenue keeps scaling with sales.

Sources:
https://www.wsj.com/business/earnings/super-micro-computer-revenue-surges-on-ai-infrastructure-demand-32e5542c
https://www.fool.com/investing/2026/11/03/supermicro-s-sales-quadruple-as-cash-drains-rapid-earnings-reaction/

Not financial advice. For informational and educational purposes only.