On Tuesday, Super Micro Computer (NASDAQ:SMCI) received an update from Mizuho (NYSE:MFG) regarding its ongoing compliance efforts and potential NASDAQ approval. The firm has suspended its rating on SMCI as the company faces its second potential delisting from the NASDAQ stock market.
Super Micro Computer has engaged BDO USA, a top ten global accounting firm, to take over as its lead auditor. The company aims to file its 10-K for June 2024 and 10-Q for September 2024, with the expectation that NASDAQ will approve its compliance plan within 2-5 weeks.
The next steps for Super Micro Computer include the possibility of NASDAQ approving the company's plan with or without a hearing. Mizuho believes that NASDAQ's decision on whether to allow SMCI to continue listing could come soon, following the company's announcement of BDO USA as its new independent auditor. The accounting firm, which was ranked fifth globally by revenue after the Big Four, reported annual revenue of $14 billion in fiscal year 2023.
Super Micro Computer's 10-K filing for June 2024 and 10-Q for September 2024 are crucial documents that the company plans to submit as part of its effort to maintain its NASDAQ listing. The deadline for the 10-K filing remains set for February 2025, a timeline that Mizuho has previously noted.
The engagement of BDO USA by Super Micro Computer is a significant move, as the company works to address the issues that have put its NASDAQ listing at risk. BDO USA's position as a leading global accounting firm could provide the necessary support for Super Micro Computer to meet NASDAQ's compliance requirements.
In summary, Super Micro Computer is actively working to avoid a second delisting from the NASDAQ market. With the help of BDO USA, the company is focused on filing its financial reports in a timely manner and securing NASDAQ's approval for its compliance plan. Mizuho has reiterated its suspended rating on the stock as the situation develops.
In other recent news, Nasdaq reported a robust Q3 performance, marking its fourth consecutive quarter of double-digit growth. The company highlighted a 10% increase in both net revenues and solutions revenue, while the total annualized recurring revenue (ARR) reached $2.7 billion, an 8% rise from the previous year. This growth was partly driven by the successful integration of AxiomSL and Calypso, which contributed to Nasdaq achieving over 80% of its net expense synergies target.
Despite a 5% increase in operating expenses, the operating margin improved to 54%. The company anticipates a boost in trading activity and Initial Public Offerings (IPOs) in 2025 due to a stable macroeconomic environment. Nasdaq also aims to exceed $100 million in cross-sells by the end of 2027.
However, bearish highlights include the projection of regulatory technology growth to be at the low end of expectations and Capital Markets Technology growth expected to be lower than forecasted due to a timing shift in a Calypso renewal. On a bullish note, Market Services achieved a record third quarter with a 13% revenue increase, and Index revenue surged 26%, driven by significant organic inflows.
InvestingPro Insights
As Super Micro Computer (SMCI) works to maintain its NASDAQ listing, it's worth noting some key insights about the NASDAQ stock exchange itself. According to InvestingPro data, Nasdaq Inc. (NDAQ) has shown strong financial performance, with a market capitalization of $45.6 billion and a revenue of $7.017 billion over the last twelve months as of Q3 2024. The company's revenue growth stands at 16.97% for the same period, indicating robust business expansion.
InvestingPro Tips highlight that Nasdaq has raised its dividend for 13 consecutive years, demonstrating a commitment to shareholder returns. This could be seen as a sign of financial stability, which is crucial for maintaining the integrity of the exchange where companies like SMCI are listed.
Additionally, Nasdaq is trading near its 52-week high, with a significant price uptick over the last six months. This performance may reflect investor confidence in the exchange's ability to manage listing compliance issues effectively, such as the one SMCI is currently facing.
For investors interested in more comprehensive analysis, InvestingPro offers 12 additional tips for Nasdaq Inc., providing a deeper understanding of the stock exchange's financial health and market position.
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