Super Micro, a major player in the server manufacturing sector, reported unaudited quarterly financials on Tuesday, missing revenue expectations and issuing a weaker-than-anticipated forecast.
Super Micro faces the risk of delisting from Nasdaq if its annual report is not filed by mid-November.
Stocks of the company fell 17% during extended trading. This raised concerns over its transparency and governance.
Super Micro was criticized by an activist shareholder in recent months for allegedly engaging in financial irregularities, and possibly violating export controls when it shipped sensitive technology to sanctions nations.
Investors and analysts are uneasy about the lack of audited results, despite the assurances from the company that there was no fraud found by a special committee.
Nvidia shortages impact revenue
Super Micro’s revenue for the third quarter ended September 30 was between $5.9 and $6 billion, which is lower than the $6.45 trillion that experts expected.
This was mainly due to the demand for AI-optimised Nvidia-processor-equipped servers.
Nvidia’s Blackwell GPU has been delayed in distribution, while Super Micro CEO Charles Liang announced that the company is still struggling to secure enough chip supply for demand.
Market sentiment continues to be affected by Q4’s forecast that falls short of expectations
Super Micro’s revenue forecast for the December quarter is $5.5 to $6.1 Billion, which falls short of the $6.86 Billion market expectation.
The adjusted EPS is expected to be between 56 cents and 65, which is significantly lower than the consensus estimate of 83 cents.
Investors are concerned about the growth trajectory of this company, and its value continues to be affected by uncertainties surrounding financial oversight.
Super Micro’s board of directors established a special investigation committee to investigate the financial oversight practices. The resignation last week by EY, as Super Micro’s auditor, signaled potential governance concerns.
The committee, after a review lasting three months concluded that there were no signs of fraud. However, it recommended several governance improvements.
The report will be completed within a few days and could provide insight into what the company plans to do next to restore investor trust.
Super Micro’s CEO Charles Liang said that the company is working urgently to fix its late reporting in order to maintain its Nasdaq listings.
The company has been actively searching for a new auditor to help resolve compliance problems.
Super Micro shares, which peaked at $118.81 per share in March after its inclusion into the S&P 500 index, have since fallen by almost 80%. This has erased over $55 billion of market capitalization.
Recent developments show Super Micro’s struggles to maintain rapid growth while maintaining effective compliance with regulatory requirements and transparent governance.
Updates may alter the post Super Micro Stock Plunges 17% On Weak Guidance, Delayed Results
