Hardware manufacturer and Fortune 500 tech firm Super Micro Computer has issued a disappointing update on its third quarter financial results. The tech giant reported on Tuesday that it expects a revenue shortfall of anywhere from $400 million to $1.4 billion and that its gross profit margins declined by 220 basis points compared to the previous quarter.

Time is money. And in Super Micro Computer’s case, customers need more time to make decisions about which tech platforms or server configurations to purchase. The lag in customer procurement pushed some expected sales from the third quarter into the fourth, Super Micro announced on Tuesday, sending its stock spiraling 3% during the day and more than 15% in after-hours trading.

The company slashed its prior sales guidance from $5 billion to $6 billion down to an expected range of $4.5 billion to $4.6 billion. Earnings per share are also coming in well below previous guidance at 16 to 17 cents a share versus prior guidance of 36 to 53 cents per share. Super Micro’s profit margin tumbled 220 basis points, or 2.2 percentage points, the company told investors.

“During Q3 some delayed customer platform decisions moved sales into Q4,” the company said in a statement. “The GAAP and Non-GAAP gross margin for Q3 was 220 basis points lower than Q2 primarily due to higher inventory reserves resulting from older generation products and expedite costs to enable time-to-market for new products.”

The news comes as investors await more meaningful data on the impact that tariffs might have on AI companies and data centers. President Trump clarified in an April 11 executive order that semiconductors are exempted from the new tariffs but looming uncertainty and unpredictability has spooked investors generally. Super Micro will hold an earnings call with investors to review third quarter results next week.

The tech firm has been battling to restore its credibility with investors following a tumultuous 2024 in which the company was hit with a critical short seller report, had its auditor quit, and then delayed issuing audited financial filings and was threatened with being delisted from Nasdaq. The exchange had previously suspended Super Micro in 2018 after an SEC investigation.

Super Micro has since hired BDO as its new auditor and announced the results of an independent board-led investigation. The company said it would replace current CFO Dave Weigand for a finance chief “with extensive experience working as a senior finance professional at a large public company.”

The company also announced it would hire a general counsel, expand its legal department and evaluate training programs around “sales and revenue recognition policies and practices, including the role of accounting personnel in the sales transaction process.”

Meanwhile, Weigand got a 5% raise to his base salary in fiscal year 2024, which ended June 30, 2024, Super Micro told investors in its proxy statement. The recommendation came from CEO, founder, and chairman Charles Liang and was based in part on analysis showing Weigand was being paid well below market for his role, the company said. Weigan’s base salary is now $547,000 and his bonus clocked in at $191,000. Liang also recommended Weigand get a performance award valued at $550,000, paid in a mix of cash and performance shares. The soon-to-depart CFO’s total compensation for 2024 was valued at $9.6 million and included an option grant valued at $5.2 million.

Liang’s compensation, which includes $1 salary and no bonus, was valued at $28 million.

The Super Micro board saw some directors attend dozens of what the company called “excess meetings,” likely to make decisions about the auditor’s departure and oversee the independent investigation. According to the proxy statement, two directors attended 20 such excess meetings; the board pays directors $2,000 per meeting for each meeting in addition to a regular board meeting up to 10 additional meetings.

Super Micro did not immediately respond to a request for comment.

Super Micro stock plunges after surprise customer delays cost up to $1.4 billion in sales