Super Micro Computer, Inc. Q1 FY2025 earnings call

• Special Committee found no evidence of fraud or misconduct on the part of management or the Board of Directors, recommending remedial measures for internal governance. • Preliminary Q1 net revenue $5.9B-$6B, up 181% y-o-y; non-GAAP earnings $0.75-$0.76/share, +122% y-o-y. • Deployed world’s largest DLC AI supercluster with 100,000 NVIDIA GPUs. • Datacenter Building Block Solutions (DCBBS) reduce datacenter time-to-deployment. • New Malaysia campus nearing completion; Silicon Valley facility expanded for DLC production. • New product developments: NVIDIA GB200, AMD MI300, Intel Gaudi 3 solutions ready.

The preliminary fiscal Q1 net revenue was in the range of $5.9 billion to $6 billion, up 181% year-on-year. AI contributed over 70% of revenues across enterprise and cloud service provider markets. The preliminary non-GAAP gross margin is approximately 13.3% and non-GAAP operating margin is approximately 9.9%.

• Unaudited Q1 FY'25 revenues $5.9B-$6B (vs prior guidance $6B-$7B), up 181% y-o-y. • Q2 FY'25 net sales $5.5B-$6.1B. • GAAP and non-GAAP margins guided conservatively, but target margins still in sight. • Working on appointing new independent auditor for FY'24 audit.

• Ongoing challenges with auditor resignation and delay in 10-K filing. • Competition and dependence on new chip (Blackwell) availability as potential risks.

Q: Michael Ng asked about revenue being below guidance and market share impact, and full-year guidance.

A: Charles Liang said major reason was Blackwell chip timing; capacity growing, liquid cooling solution ready.

Q: Samik Chatterjee asked about gross margin and management changes.

A: Charles Liang said Blackwell tech push optimistic, Datacenter Building Block Solutions helps; management team growing.

Q: Aaron Rakers asked about revenue delta and inventory.

A: Charles Liang said major impact from Blackwell chip availability; inventory $5B, will continue to grow.

Q: Ananda Baruah asked about margin improvement and working capital.

A: David Weigand said guiding conservatively but target margins in sight; working capital situation strong.

Q: George Wang asked about Blackwell revenue timing and margin.

A: Charles Liang said working closely with NVIDIA, confident in unique solutions; competition strong but positioned well.

Q: Nehal Chokshi asked about 10% customer exposures and chairman/CEO role separation.

A: David Weigand said won't release 10% customer data; Charles Liang said considering chairman/CEO role separation for shareholder benefit.

Q: Vijay Rakesh asked about liquid cooling rack shipments.

A: Charles Liang said liquid cooling growing, but chip availability impacts; David Weigand said shipping slightly below last quarter.

Q: Jon Tanwanteng asked about Blackwell revenue in guidance and NVIDIA allocations.

A: Charles Liang said strong relationship with NVIDIA, no negative allocations; solution strong.

Q: Mehdi Hosseini asked about cash flow and capacity.

A: David Weigand and Charles Liang said cash flow impacted by inventory growth; capacity growing but utilization low due to chip availability.

Q: Quinn Bolton asked about backlog for Blackwell and credit agreements.

A: Charles Liang said backlog building with remote POC; David Weigand said will file extensions with banks as needed.