Thank you for standing by. My name is Cameron and I will be your conference operator today. At this time I would like to welcome everyone to the Super Micro Computer, Inc. SMCI (US) fourth quarter fiscal year 25 business update call. With us today are Charles Liang, Founder, President and Chief Executive Officer David Wiegand, CFO and Michael Steger, Senior Vice President of Corporate Development. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question, please press star one. Thank you.

Good afternoon and thank you for attending Supermicros call to discuss financial results for the fourth quarter and full year fiscal 2025, which ended June 30, 2025. With me today are Charles Liang, founder, chairman and Chief Executive Officer and David Wiegand, Chief Financial Officer. By now you should have received a copy of the press release from the company that was distributed at the close of regular trading and is available on the Company’s website. As a reminder, during today’s call, the Company will refer to a presentation as available to participants in the Investor Relations section of the Company’s website under Events and Presentations tab. We have also published management’s scripted commentary on our website. Please note that some of the information you’ll hear during our discussion today will consist of forward looking statements including without limitation, those regarding revenue, gross margin, operating expenses, other income and expenses, taxes, capital allocation and future business outlook, including guidance for the first quarter of fiscal 2026 and the full fiscal year 2026. These statements and other comments are based on management’s current expectations and assumptions involve material risks and uncertainties that could cause actual results or events to materially different from those anticipated and you should not place undue reliance on forward looking statements. You can learn more about these risks and uncertainties in the press release we issued earlier this afternoon, Our most recent 10k for fiscal 2024 and other SEC filings. All these documents are available on the Investor Relations page of Supermicro’s website. We assume no obligation to update any forward looking statements. Most of today’s presentation refer to non GAAP Financial Results and Business Outlook. For an explanation of our non GAAP financial measures, please refer to the accompanying presentation or to our press release published earlier today. The non GAAP measures are presented as we believe that they provide investors with a means of evaluating and understanding how companies management evaluates operating performance. These non GAAP measures should not be considered in isolation from as substitutes for or superior to financial measures prepared in accordance with US gaap. In addition, a reconciliation of GAAP to non GAAP is contained in today’s press release and in the supplemental information attached to today’s presentation. At the end of today’s prepared remarks, we’ll have a Q and A session for sell side analysts. Our first quarter fiscal 2026 quiet period begins the close of business Friday, September 12, 2025 and with that I will now turn it over to Charles thank you Michael.

I will be covering our performance for fiscal 2025 and providing insights into our strategic direction for fiscal 2026. Our fiscal 2025 results represent 47% year on year revenue growth at $22 billion. This growth reflects continued strong demand for our AI and green computing solutions. Despite six months cash flow impact from the delayed filing of Our fiscal year 24.10k and delayed revenue recognition from a major new large partner. Non GAAP earnings per share were $0.41 down year over year from 50% last year, primarily due to the tariff impact, although we have taken measures to reduce the impact and we will see their results soon. Allow me to go a little deeper at June revenue shortfall in what was otherwise a stronger quarter. The shortfall stemmed from two key factors a capital constraint that limited our ability to rapidly scale production and specification changes from a major new customer that today Revenue recognition because of new ad because of some new AD features. The capital constraint was no longer an issue after we filed the fiscal year 24 10k and large customer orders are now set for recognition in September and December quarters following close collaboration to align with the customers update feature requirements. Despite these circumstances, we remain focused on our strategic priorities, optimizing our solutions and capturing market share. Notably, the number of large scale plug and play ROAC customers grew from 2 in fiscal year 24 to 4 in fiscal year 25, signaling strong momentum and continuing growth potential across our customer base. We are also on track to add a few more in fiscal year 26. We continue our leadership in AI platforms and infrastructure with a comprehensive portfolio optimized for latest GPU technologies including Nvidia B 300 and GP 300 platforms and AMD’s Mi350 and Mi355X GPUs. Our x14 and h14 GPU systems deliver breakthrough performance supporting large scale AI training and invention workloads and enterprise computing demands with exceptional efficiency. Notably, we were able to deliver our B200 systems with an industry leading time to market to our customers. We are confident our B300 and GB300 solutions will deliver a similar if not even better time to market and time to online advantages for customers helping them accelerate their AI deeper image faster than others. To further simplify our customers AI data center infrastructure deployment and time to online, we officially introduced our data center building block solution DCBBs to the market last quarter. With our DCBBs customers can harness our proven system building block advantage to adapt quickly to evolving market demands especially in response to increasing complex AI product cycles. Our modular architecture enable faster customization, streamlines production and reduce time to delivery and time to online while also optimizing quality, efficiency and ease of maintenance. In most cases, customers who use our D.C. bBs can finish building a liquid core AI data center in just 18 months instead of two to three years. When converting an existing data center or warehouse to a high density direct liquid cooling data center customer can complete the transformation in only three to six months instead of 12 or even 18 months. We have just begun deploying large scale total solutions with our DCPS to a few key customers. Key components of DC BBs include DLC solutions, the L2A sidecar, I mean liquid to air cooling CDU especially in those CDU, indirect CDU as well and trio door, powershell battery backup BPU, water or dry tower solutions and more are coming. Our atomic second generation direct liquid cooling DLRC2 system reduce power and water consumption by up to 40% while operating at a near library quite level around 50 decimal. This enable superior performance which reduce total cost of ownership and total cost to the environment TCE for modern Data Centers Several DC BPS components are now shipping or entering production very soon supporting a growing demand for high performance energy efficient data center infrastructure. Equally important, DCBBs meets the growing demand for a comprehensive one stop shop solution including software defined infrastructure, system management, AI workload optimization, networking, deployment and all different level of services. IT allows cloud service provider to reduce both capex and OPEX capital expense and operating expense. Indeed it delivers also great value to both AI focused and traditional IT data centers by seamlessly integrated DC BPS capability. With our system and RAC solution we are not only enhancing customers value but also improving our profit margins. This shift toward higher margin and revenue stream is central to our long term strategy. We also start to strategically focus on enterprise, IoT and telco markets and initiative we believe will improve both growth and net margin over time. In last two quarters we made a significant investment to optimize our solutions for enterprise customers introducing advanced server and storage systems tailored for hybrid cloud AI application and edge computing workloads. This enterprise focused strategy will continue for many years to come. Supermango has also launched an enhanced enterprise service program delivering comprehensive 24. 7 global support for high density, high performance driven data center deployment based on optimized rack scale architecture. Our IoT portfolio including embedded system and edge servers is gaining momentum across industry like manufacturing, healthcare, telco, Smart city and AI edge applications. Additionally, we have announced strategic partnership to accelerate innovation in AI and RH and telecom solutions. By expanding into this higher margin segment, we are diversifying our revenue streams and driven long term sustainable profitability that will benefit our shareholders. Our global footprint allow us to efficiently deplete optimized solution worldwide with minimal tariff impact especially after September quarter. With large and versatile manufacturing campus across the us, Taiwan, Malaysia and the Netherlands, we can deliver a comprehensive system, RAC and data and data center label building block and total solution to our customer directly and quickly. This robust global presence enable us to respond to dynamic regional demands, support cost sensitive customers seeking greater value, mitigate tariff exposure and maintain a reliance global supply chain that’s both agile and responsive. Looking ahead to Q1 fiscal year 26, I anticipate revenue between 6 billion and 7 billion driven by continuing momentum across our AI rack, plug and play DC PPS software and service business which we are delivering exceptional customer value and strengthen our profitability. I’m especially excited about our DC BBs for our full fiscal year 2026 I expect at least $33 billion total revenue supported by our expanding large and enterprise customer base, upcoming product innovation and robust DC EPS total solution. In closing, I want to thank our employees for their dedication, our customers for their trust and our investors for their continuous support. We are excited about the opportunity ahead and looking forward to updating you on our progress in the next quarter.

David please thank you Charles Q4 Fiscal year 25 revenues were 5.8 billion, up 8% year over year and up 25% quarter over quarter compared to our guidance of 5.6 to 6.4 billion. Growth was led by demand for next generation air cooled and liquid cooled GPU AI platforms which represented over 70% of Q4 revenues across both enterprise and cloud service provider markets. For the full year fiscal year 25 we reported revenues of 22 billion representing 47% growth over fiscal year 24. Revenues of 15 billion during Q4 we recorded 2.1 billion in the enterprise channel segment representing 36% of revenues versus 42% in the last quarter, up 7% year over year and up 6% quarter over quarter. The OEM appliance and large data center Segment revenues were 3.7 billion representing 63% of Q4 revenues versus 57% in the last quarter, up 2% year over year and up 40% quarter over quarter. Emerging 5G Telco Edge IoT segment revenues were 1% of Q4 revenues for fiscal year 25. Enterprise channel revenues grew 38% to represent 39% of total revenues. The OEM appliance and large data center segment grew 50% and represented 60% total revenues. The 5G telco edge IoT segment represented 1% of total revenues for fiscal year 25. We had four 10% plus large data center customers versus one in fiscal year 24. Server and storage systems comprised 98% of Q4 revenue and subsystems and accessories represented 2%. By geography, the US represented 38% of Q4 revenues, Asia 42%, Europe 15% and the rest of the world 5%. On a year over year basis, US revenues decreased 33%, Asia increased 91%, Europe increased 66% and rest of world decreased 3%. On a quarter over quarter basis US revenues decreased 21%, Asia increased 78%, Europe increased 100 and 96% and the rest of the world increased 53%. The Q4 non GAAP gross margin was 9.6% versus 9.7% in Q3 due to product customer mix. For fiscal year 25. The non GAAP gross margin was 11.2% versus 13.9% for fiscal year 24. Our long term goal is to gradually improve gross margins through providing complete data center building block solutions and focusing on the enterprise IoT and telco markets. We also expect to benefit from economies of scale from higher revenues, cost effective global facilities including the new Malaysia manufacturing plant and customer diversification. Q4 operating expenses on a GAAP basis increased by 8% quarter over quarter and 23% year over year to 316 million driven by higher compensation expenses and headcount. On a non GAAP basis, operating expenses increased 11% quarter over quarter and and 29% year over year to 239 million. The Q4 non GAAP operating margin was 5.3% versus 5% in Q3. Other income and expense for Q4 was a net expense of 5.7 million consisting of 28.4 million in interest income offset by 22.3 million in interest expense and FX and other losses of 11.8 million. The tax provision for Q4 was 19 million on a GAAP basis and 37 million on a non-GAAP basis. The GAAP tax rate for Q4 was 9% and the non GAAP tax rate was 12%, the GAAP tax rate was 13% for fiscal year 25 versus 5% in fiscal year 24 and the non GAAP tax rate Was 15% in fiscal year 25 versus 11% in fiscal year 24. The Q4 GAAP diluted EPS was $0.31 compared to guidance of $0.30 to $0.40 and non GAAP diluted EPS of 41% versus guidance of $0.40 to $0.50 due to lower gross margins and higher operating expenses in the quarter. For fiscal year 25, we reported GAAP diluted earnings per share of $1.68 versus $1.92 for fiscal year 24 and non GAAP diluted EPS of $2.06 versus $2.12 in fiscal year 24. The GAAP fully diluted share count increased quarter over quarter from 622 million to 625 million in Q4 and the non GAAP share count increased sequentially from 636 million to 638 million shares. Q4 cash flow generated from operations was 864 million compared to 627 million in the previous quarter. For fiscal year 25, cash generated from operations was 1.7 billion versus cash consumed by operations of 2.5 billion in fiscal year 24. Q4 closing inventory was 4.7 billion versus 3.9 billion in Q3. Capex and investments for Q4 was 79 million resulting in positive free cash flow of 841 million for the quarter. Capex and investments for fiscal year 25 were 183 million versus 194 million in fiscal year 24. During the quarter we completed a convertible bond offering raising $2.3 billion in gross proceeds before operating expenses and the costs associated with the simultaneous covered call spread and stock buyback. The Q4 closing balance sheet cash position was 5.2 billion while bank and convertible note debt was 4.8 billion, resulting in a net cash position of 412 million versus a net cash position of 44 million last quarter. Additionally, in July we executed a $1.8 billion facility which allows for the non recourse sale of certain qualified accounts receivables to strengthen our working capital on a discretionary basis. Turning to the balance sheet and working capital metrics, compared to Last quarter, the Q4 cash conversion cycle was 98 days versus 124 days in Q3. Days of inventory decreased by 6 days to 75 days compared to the prior quarter of 81 days days sales outstanding were 40 days compared to 56 days in Q3 days payables outstanding increased by 4 days to 17 days versus 13 days in Q3. Now turning to the outlook for Q1 fiscal year 26, we expect net sales in the range of 6 billion to 7 billion, GAAP diluted net income per share of $0.30 to $0.42 and non GAAP diluted net income per share Of $0.40 to $0.52. We expect gross margins to be similar to Q4 fiscal year 25 levels. GAAP operating expenses are expected to be approximately 329 million and to include 82 million in stock based compensation expenses that are not included in non GAAP operating expenses. The outlook for Q1 of fiscal year 2026 fully diluted GAAP earnings per share includes approximately 69 million in expected stock based compensation expenses net of tax effects of 20 million which are excluded from non GAAP diluted net income per common share. We expect other income and expenses, including interest expense, to be a net expense of approximately 24 million. The company’s projections for Q1 fiscal year 26 GAAP and non GAAP diluted net income per common share assume a GAAP tax rate of 13%, a non GAAP tax rate of 15.5% and a fully diluted share count of 631 million for GAAP and 644 million shares for non GAAP. We expect CapEx for Q1 to be in the range of 60 to 80 million and for fiscal year 26 we expect net sales of at least 33 billion. Michael, we’re ready for Q and A.

Thank you. We will now begin the Q and A session. If you would like to ask a question, please press Star followed by one on your telephone keypad. If you’d like to remove your question, press Star followed by two again to ask a question, press star one. And as a reminder, if you were using a speakerphone, please remember to pick up your handset before asking a question and we will pause here briefly as questions are registered. The first question is from the line of Simon M. Leopold with Raymond James. You may proceed.

Thanks for taking the question. I wanted to get a better understanding of some of the bottlenecks or gating factors for sales. And what I’m looking at is we’ve got full year revenue outlook of 33 billion, so that’s better than 8 billion a quarter and we’re looking at September being roughly 6 to 7 billion. So I would have thought that availability of Blackwell’s GB200s could have given you maybe some more upside to September and a more linear outlook for the year, but this would suggest more of a back end load. So if you could help us understand. How you’re thinking about the cadence through that fiscal year and what are the bottlenecks or what are the restraints in terms of the September quarter and availability of the chips. Thank you.

Yeah, basically our business will continue to grow last year because of 10K. Today we have some constraints. So we grew 47% this year. We should be able to grow better than that. And you mentioned about bottleneck. Yes, some chip availability, some resource availability from vendor like Nvidia last year we had to wait and see. Basically we believe their availability will be much better than last two quarter and that’s why we estimate minimum $33 billion. And by the way, our new introduction, DCBBs that help customers to build a data center quicker, especially make their cloud ready for time to online much quicker. So that’s another factor we believe this year, I mean 2026 we should be able to grow better than last year.

Yeah, very good question. Yes, we can grow much quicker if we don’t care about gross margin and net margin. And that’s why we introduced DCBBs Data center building block solution. That’s a total solution to support a customer to build a data center quicker, better and also save money more reliable. And we provide all the infrastructure need including on site deployment, networking, cabling, all different kind of service. So we believe we can grow revenue, market share and profitability, especially our data center end to end software solution. So DC PPS plus all our software need, customer need including service. So we for sure Able to provide better value to customer not just price work.

Yeah guys, thanks for taking the question two if I could. The first one is maybe a little bit more of a clarification. You in the first six months of the calendar year you guys saw as did the industry elongated customer purchase cycles. You know first from the HGX from the HCX GB decision making situation in the March quarter, then the B200, B300 sort of decision making situation in the June quarter. Now Charles, it sounds like to one of the first questions, I think it was to Simon’s question you may have suggested sounds like you were suggesting there may then currently be some B300, you know, sort of elongated decision-making as well. So just to clarify, are you still still going through, are we still not yet to normalize customer decision making cycles? Because if that’s the case, I think it’s useful for us to understand that as distinct from what the organic demand backdrop may be as we go through, as we go through the year here. And anyway I have a follow up after that. Thanks.

Yeah as you know Nvidia have so many products, so many better products, new product and we are very happy to provide all the new technology new product and make them available for the market as soon as possible. Like you just mentioned B300, GB300 we work with our partner very closely and make sure once Nvidia able to ship it in volume we can service customer quicker. And with DCBBs we exactly optimize for customers data center including the large data center and middle size data center or even small size data center. So we are very happy to support a lot of middle size and small size AI infrastructure as well. That’s part of Super Micro Computer’s advantage. We provide a total solution and make a customer’s job much easier to build their AI factory AI infrastructure quicker and better.

Hi, thanks for taking my question. I have two but maybe for the first one you talked about the data center building block solutions and that it’s still maybe a bit early for you to forecast gross margins on that front. But anything that you can help us in terms of what does a typical sales cycle or what are you expecting for a sales cycle on that front look like? Have any of your larger data center customers shown interest in data center building block solutions? I guess the question more is when should we start to see or what should we expect in terms of material revenues in relation to when that does come into the P and L? What would be the earliest if you were sort of going and talking to your customers about these solutions now, what should be our expectation on this front? And a follow up.

Thank you. Yeah, thank you. Yeah. We officially announced our data center building product solution last quarter and now we have some product fully ready to ship. For example the AI Computing Power Rack DCBBs that has been available for four years from Super Micro Computer and kind of like cpu, right? Indoor indirect CPU and kind of like a sidecar LR to a right. From liquid to architecture transformation kind of for those customers who like to go for liquid cooling but do not have a liquid cooling data center infrastructure ready, we support them sidecar and the product is ready to ship now. Like a PowerShell, right? Kind of when GP200GB3 anti go for rack scale, I mean use PowerShell we have a product ready now and battery backup unit we have a product about ready now as well and kind of like a water tower for liquid cooling or dry tower. We are shipping now and kind of like on site deployment and networking including the tabling kind of service. We have most of those components getting ready now and we started shipping in September quarter and then we are doing pump in a much higher volume in December and then for sure we’ll continue to grow in next year March quarter and June quarter. So this data center building block solution eventually will help customer to build their AI factory infrastructure much quicker and much energy efficient and also safe money as well. So we are very excited for our TCPPS solution.

Got it, got it. And for my follow up you mentioned the investments that you’re making on the enterprise opportunity or edge opportunity as well. I mean assuming some of those are better margin opportunities including the data center building block solutions related to your business currently on the sort of where you’re around this 9, 10% gross margin right now, do you see an opportunity still to get back to the long term targets that you had on the Gross margin of 14 to 17 or are these new opportunities necessarily big enough and at a margin high enough to get you back to that 14 to 17 run rate? Or do you think the expectations of investors should be at a maybe a more modest level in terms of what the long term gross margin range of the company would be in the future?

Yeah, very big question and very good question also. I mean yes, enterprise and IoT as you know have a much higher margin and DCBBs service software which you have a better margin. So we are growing in both directions. One is growing revenue and support a large scale data center at the same time growing enterprise data center Total Solutions software service. So I mean long term I believe 15%, 16% still our target and take how long it depends on combination. So I believe yes, the direction is still there. I mean we like to get back to our traditional 16%, even 17% profit margin. Maybe you can add something.

Hey, good afternoon. Thank you for the questions. I just have two. First on the greater than 10% customers for fiscal 25, I was wondering if you could just let us know what the revenue exposures were for those customers. I can appreciate we’ll eventually get it in the 10k but any early color would be helpful. And then second, thank you for all the guidance on 2026. I was wondering if you could just talk about how we should think about gross margins for the full year. Is the first quarter gross margins that you spoke to a good indication about how we should think about the full year? Thank you very much.

Okay, Michael, so the four customers which we’ll refer to as A, B, C and D. You know, not in that particular order but 11% with three 11% and a 21%. And you know as to your second question, you know we, we’re not going to forecast annual guides but you know I want to revert back to our earlier comments that we’re doing everything that we can especially we’re very optimistic about these data center building block solutions. And you know we have, we’re very quick to market. We think those two combinations, D.C. bBS and our fast time to market is our, is our best chances for margin improvement.

AI factory where it’s meant to drive a better margin profile for that gen AI factory it is supported or even scale of data center that doesn’t matter generative AI or agentic AI or application. Right. Invention. So it’s a solution that we are defined pre test, pre validate so when we ship to customer, a customer can put it together easily. It’s kind of like a a LEGO set. Right. So kind of it’s validated in advance when customers receive easy to deeper easy and easy for quickly go for online. So basically it’s the latter of the situations I have proposed. Yeah. Kind of including computing power, the rack, the deep cooling, even the towel, the water towel, dry towel, the battery system, the power module. Right. So we have everything pre built and validated in advance. Yeah.

Hey guys, this is Shady Mitwali on for Quinn. Thanks for letting me ask the question. My first question is on the recent export licenses for Nvidia and amd. Just curious to see how Super Micro. Is positioned to potentially support these deployments. And does the God embed any of these potential shipments? Are you referring to H20? Yes, H20, I believe that. And are you referring to the H20? Yeah, yeah, we’re not, we’re not anticipating selling those, those, those products at, at any quantities. Yeah, not at least the nine high volume for us. Yeah. Got it. And then my. I have a follow up which is a clarificate clarification question from I think Northland. But did you say that the data center building block solutions will be around 20 to 30% of total revenue in the September quarter? No, I mean that will be further away, maybe next year summer. So it will ramp up gradually, not immediately. Got it. Thank you.

Hi, good afternoon and thank you for taking my questions. First one just on the data center building block solutions. I was just wondering what the gross margin profile looks like there compared to the corporate average and what an incremental dollar of sales in that in that kind of solution adds to your gross profit. You know. Very good question. Data center building block solution. I believe we are the first one. So we the first company to introduce data center total solution with building block feature. So the Prof. Imagine the value to customer for sure both are good. Much better than commodity product. When you had to compete with many companies that’s the pressure for profit margin.

But data center building block solution instead we have much less competition. Okay, great. Thank you. That’s helpful. And then just on the B300 launch, do you expect expect to see yourself distancing yourself from competitors both pricing wise and allocation wise when that is that reaches volume or is there any reason to believe that you may see more of what you’ve seen in the B100 and B200 time frames? We work with our vendor very closely. Right. And so I believe our position will be second to none. So for sure will be a good chance once it’s available from our vendor. We are very happy to promote quickly. Okay, great. Thank you. Thank you.

Yeah, we start to ship assumption about now. Kind of like for example the Duke to Air sidecar we are shipping now and CDU we have been shipping for a while including in indoor CDU we are shipping now and BPU we will start shipping powershell we are ready to ship this quarter and so lots of parts we have been shipping for a few months or ready to ship in volume and some other will be ready in next few months or few quarter. So eventually it will be really big product line. The goal is to support all the major components for customer to build their data center, their AI factory. So kind of to offer one stop shop. One stop shop not just to save customer time but to make sure when customer put those components together it work and optimize for both efficiency, quality and cost.