Revenue during the quarter went up marginally by 2.03 percent to $651.95 million from $638.96 million in the previous year period. Gross margin for the quarter contracted 232 basis points over the previous year period to 14.32 percent. Total expenses were 95.13 percent of quarterly revenues, up from 92.31 percent for the same period last year. That has resulted in a contraction of 282 basis points in operating margin to 4.87 percent.

Operating income for the quarter was $31.76 million, compared with $49.13 million in the previous year period.

However, the adjusted operating income for the quarter stood at $36.47 million compared to $53.13 million in the prior year period. At the same time, adjusted operating margin contracted 272 basis points in the quarter to 5.59 percent from 8.32 percent in the last year period.

"We are pleased to report record second quarter revenues of $652.0 million that exceeded our guidance and outpaced a strong compare with last year. Contributing to this strong growth was our Twin family product line including our FatTwin, Storage, HPC, MicroBlade, and strong growth from enterprise cloud and Asia Pacific, particularly China. Component shortages and pricing, product and geographic mix adversely impacted gross margins while improved leverage allowed us to deliver stronger operating margins from last quarter," said Charles Liang, chairman and chief executive officer. "We expect to continue the growth of last quarter and be reflected in the year-over-year revenue growth in the March quarter based on an increasing number of sizable customer engagements demanding the performance and advantages of our leading product lines. In addition, we are well positioned to benefit from technology transitions in 2017 and have upgraded our product lines to optimize these new technologies."

For the third-quarter 2017, Super Micro Computer, Inc. expects revenue to be in the range of $570 million to $630 million. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.34 to $0.42.

The company has spent $17.66 million cash to meet investing activities during the first six months as against cash outgo of $15.64 million in the last year period.

Cash flow from financing activities was $20.85 million for the first six months, up 534.45 percent or $17.56 million, when compared with the last year period.

Cash and cash equivalents stood at $128.75 million as on Dec. 31, 2016, down 24.22 percent or $41.14 million from $169.89 million on Dec. 31, 2015.

Working capital increases
Super Micro Computer, Inc. has recorded an increase in the working capital over the last year. It stood at $604.05 million as at Dec. 31, 2016, up 16.25 percent or $84.45 million from $519.60 million on Dec. 31, 2015. Current ratio was at 2.18 as on Dec. 31, 2016, up from 2.08 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 46 days for the quarter from 75 days for the last year period. Days sales outstanding went up to 47 days for the quarter compared with 44 days for the same period last year.

Days inventory outstanding has decreased to 49 days for the quarter compared with 82 days for the previous year period. At the same time, days payable outstanding was almost stable at 50 days for the quarter, when compared with the previous year period.