SAN JOSE, Calif. - Super Micro Computer, Inc. (NASDAQ:SMCI), a $19.1 billion market cap provider of IT solutions for AI, Cloud, Storage, and 5G/Edge, today announced the results of an internal investigation by a Special Committee of the Board of Directors. According to InvestingPro data, the company has demonstrated remarkable growth with revenue surging 109.8% over the last twelve months. The investigation, which was launched in response to concerns raised by the company’s former accounting firm Ernst & Young LLP (EY), found no evidence of misconduct by management or the Board, and confirmed the independence of the Audit Committee.
The Special Committee, led by independent Board member Susie Giordano and assisted by outside counsel Cooley LLP and forensic accounting firm Secretariat Advisors, LLC, conducted a three-month review involving over 9,000 hours of legal work and 2,500 hours of forensic accounting. The investigation included the analysis of approximately 4.1 terabytes of data from over 9 million documents and 68 witness interviews.
Key findings from the Special Committee revealed that the integrity of Supermicro’s management and Audit Committee was not in question, and that the company's financial statements are materially accurate. The Audit Committee was found to have maintained appropriate independence and oversight over financial reporting. The investigation also assessed the company’s decision to rehire certain former employees, concluding that while there were some lapses in process, there was no evidence of bad faith or improper motives.
In response to the findings, the Board has adopted all recommendations from the Special Committee, which include the appointment of a new Chief Financial Officer (CFO), a Chief Accounting Officer, and a Chief Compliance Officer, along with the expansion of the legal department. Kenneth Cheung has been appointed as Chief Accounting Officer, and the search for a new CFO and General Counsel is underway.
The company has assured that there will be no restatements of its financials for the fiscal year ended June 30, 2024, or for prior fiscal years. Additionally, the company expects to complete its overdue filings with Nasdaq within the granted discretionary period. Despite recent stock volatility, with shares down 15% over the past week, InvestingPro analysis shows strong fundamentals with a healthy current ratio of 3.77 and a moderate P/E ratio of 15.Want deeper insights? InvestingPro subscribers have access to 17 additional ProTips and comprehensive financial analysis for SMCI, including detailed valuation metrics and growth forecasts.
This announcement is based on a press release statement and comes after a review prompted by EY's resignation and concerns about governance and internal control over financial reporting. Supermicro emphasizes its commitment to maintaining robust financial controls and compliance processes as it continues to grow and lead in its sector.
In other recent news, Super Micro Computer, Inc. has seen several significant developments. The company recently announced the termination of its financial agreements with Cathay Bank and Bank of America N.A., after fully prepaying its obligations. The reasons behind this decision remain undisclosed.
Additionally, Super Micro has reported a considerable surge in its Q1 FY'25 revenue, with estimates ranging between $5.9 billion to $6 billion, marking a 181% increase year-over-year, primarily driven by robust demand for AI solutions. The company also expects Q2 FY'25 net sales to range from $5.5 billion to $6.1 billion.
In an effort to address compliance issues, Super Micro has appointed BDO USA as its new auditor and submitted a compliance plan to Nasdaq. The company has also introduced its latest SuperCluster, an AI data center solution featuring NVIDIA (NASDAQ:NVDA)'s Blackwell platform, expected to enhance the GPU compute density of its existing systems. These are the key recent developments for Super Micro.
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