Super Micro Computer, Inc. Q2 FY2025 earnings call

• Financial filings: Confident fiscal year 2024 Form 10-K and first two quarters of fiscal year 2025 Form 10-Q will be filed by February 25th, 2025. Added senior leaders in various departments. - Technology progress: NVIDIA Blackwell products shipping, including air-cooled 10U and liquid-cooled 4U systems. Expanding DLC datacenter infrastructure solutions. Datacenter Building Block Solutions consolidates servers, racks, etc., for end-to-end solutions. - Production: New Malaysia campus to ship products, Taiwan and European production capacity growing, U.S. campuses with 20 megawatts of power enabling over 1,500 DLC GPU racks per month. - Capital raising: Private placement of $700 million in 2.25% convertible senior notes due 2028 and amended existing convertible notes.

Supermicro's preliminary fiscal Q2 net revenue is projected to range between $5.6 billion and $5.7 billion, marking a 54% year-on-year increase at the midpoint. AI-related platforms contributed over 70% of revenue for Q2. Non-GAAP earnings per share were in the range of $0.58 to $0.60 per share, representing approximately a 5% year-on-year growth. Non-GAAP gross margin was approximately 11.9%, and non-GAAP operating margin was approximately 7.9%.

• Fiscal year 2025 revenue guidance updated to $23.5 billion to $25 billion from prior range of $26 billion to $30 billion. - Potential $40 billion revenue for fiscal year 2026. - Q3 fiscal 2025 net sales expected to be in the range of $5 billion to $6 billion. GAAP and non-GAAP gross margin expected to be approximately 12%. GAAP net income per diluted share projected $0.36 to $0.53, non-GAAP $0.46 to $0.62.

• Actual results may differ materially from forecasted results. - 10-K delay disruption impacted margin. - Supply chain constraints could affect growth. - Competition in the AI server market may pressure margins.

Q: Michael Ng asked about the $40 billion fiscal 2026 revenue outlook and mix of Blackwell and Hopper servers.

A: Charles Liang stated product line growth, production capacity utilization, and new orders; Blackwell and Hopper products are ready with volume backlog and new orders coming.

Q: Ananda Baruah inquired about gross margins and REV guide.

A: Charles Liang and David Weigand discussed Blackwell's impact on margins, past H100 success, and revenue expectations based on technology and market growth.

Q: Samik Chatterjee asked about revenue target confidence and customer engagements.

A: Charles Liang mentioned strong historical growth, fixing 10-K issues, and strong customer commitments supporting the $40 billion target.

Q: Ruplu Bhattachary questioned industry margin pressure and Datacenter Building Block Solutions.

A: Charles Liang and David Weigand talked about DLC's competitive advantage, Datacenter Building Block Solutions' value, and impact of new AI models on business.

Q: Nehal Chokshi asked about backlog and Datacenter Building Block architecture.

A: Charles Liang discussed backlog following chip cycles and Datacenter Building Block Solutions as one-stop shop for data center needs.

Q: Jon Tanwanteng asked about revenue guidance reduction factors.

A: David Weigand cited technology delay, 10-K distraction, and customer mix as factors.

Q: Aaron Rakers inquired about GB200 NVL72 gating factor and utilization impact on margin.

A: Charles Liang and David Weigand mentioned NVIDIA support as gating factor and utilization potentially impacting margin by 20-30 points.

Q: Quinn Bolton asked about GB200 NVL72 supply and shift to inferencing.

A: Charles Liang said waiting for NVIDIA allocation and shift to inferencing is positive for business.

Q: George Wang asked about sovereign AI pipeline.

A: Charles Liang noted increasing sovereign AI demand worldwide.