Super microcomputer (SMCI -21.23%) The stock came under renewed pressure on Wednesday following the release of the company’s preliminary earnings. The server specialist’s share price was down 22.8% as of 2:00 p.m. ET and had fallen as much as 27.1% earlier in the session.

After the market closed on Tuesday, Supermicro reported unaudited preliminary results for the first quarter of fiscal 2025, which ended Sept. 30. The technology specialist also provided an update on an internal review that is underway following the recent resignation of Ernst & Young (EY) as its financial auditor.

Supermicro’s preliminary results raise questions

For the first quarter, Supermicro now expects sales of between 6 and 7 billion US dollars. A range of $7 billion to $8 billion had previously been forecast. This is a significant downward revision and could appear even more worrisome to investors due to concerns about the company’s accounting practices.

On the other hand, management expects to achieve a non-GAAP (adjusted) gross margin of 13.3% – better than generally expected. Meanwhile, management expects adjusted earnings for the quarter to be between $0.75 and $0.76 per share – fairly close to the midpoint of its forecast for adjusted earnings of between $0.67 and $0.83 -dollars per share. But the gross margin forecast and preliminary profit margin were relatively small bright spots in an otherwise worrisome update for investors.

In its preliminary first quarter release, Supermicro also said it could not provide a specific timeline for filing its delayed fiscal 2024 10-K with the Securities and Exchange Commission (SEC). That could make it harder for investors to trust the company and could create other problems for the stock.

What’s next for Super Micro Computer stock?

For the second quarter, Supermicro expects sales of between $5.5 and $6.1 billion. At the midpoint, this would indicate a significant sequential quarterly decline compared to forecast fiscal first quarter sales. Adjusted earnings per share are expected to be between $0.56 and $0.65.

Since there is no clear indication as to when the company’s 10-K report for its most recent fiscal year will be filed with the SEC, Supermicro is at risk of being delisted from the Nasdaq stock exchange. In this case, the stock could continue to be traded on over-the-counter (OTC) markets. However, the share price and trading liquidity could collapse.