Super Micro Computer manufactures high-performance server products based on open standard components (including Intel, AMD, and NVIDIA processors). Its nearly 7,000 offerings include motherboards and serverboards, blade servers, rackmounts, GPU systems, chassis, and Ethernet switches and network adaptors. The company also sells a host of subsystems and accessories. Super Micro markets its products -- primarily through distributors and resellers such as Ingram Micro and Arrow Electronics -- to customers in some 100 countries; about 40% of its sales are generated outside the US.
The company generates nearly 60% of its sales from the US, with Europe and Asia contributing 19% and 17%, respectively. All of these regions saw solid year-over-year growth in fiscal 2015 (ended June). Super Micro has operations in The Netherlands, China, Japan, and Taiwan that support its international customers.
Sales and Marketing
The company sells primarily through distributors, resellers, and systems integrators (about 55% of sales), but it also markets to OEMs and directly to end users. Leading distributors and resellers include Ingram Micro, Avnet, MA Labs, Tech Data, and ASI. About 10% of sales went to SoftLayer, a unit of IBM, in 2015.
Super Micro financial performance had some super macro aspects to it in 2015. Revenue jumped 36% higher and profit leaped 88% higher.
Revenue came in just shy of $2 billion at $1.99 billion in 2015, up from about $1.5 billion in 2014 Increased sales came from products optimized for the OEM, data center, cloud computing, and enterprise verticals. Improved sales of server systems came from higher prices combined with higher volume.
Net income surged to about $102 million with the higher revenue, overpowering increases in sales and marketing and research and development expenses.
The company reported negative cash flow of $44 million in 2015 due to high inventory and accounts receivable, which were blamed on higher sales. Super Micro had cash flow from operations of $6.5 million in 2014.
Key to Super Micro's strategy is the expansion of its product portfolio as technology evolves. The company works closely with AMD, Intel, and others to make sure its offerings are compatible with industry standards. In addition, it puts a special focus on energy efficient products, such as its SuperBlade line of blade server products. The company increased R&D spending in 2015 to $100 million from $84 million in 2014.
The company also wants to further expand into Asia and Europe. It has opened a Science and Technology Park in Taiwan to increase capacity and better serves its customers in the Asia-Pacific region.