Super Micro Computer (SMCI) 8 Aug 232023 Q4 Earnings call transcript

Thank you for standing by. My name is Ana, and I will be your conference operator today. At this time, I would like to welcome everyone to the Super Micro Computer Fiscal Fourth Quarter 2023 results conference. With us today, Charles Liang, Founder, President and Chief Executive Officer; David Weigand, CFO and Michael Staiger, Vice President of Corporate Development.

All lines have been placed on mute to prevent any background noise. there a remarks session. speakers' the will question-and-answer be After [Operator you. Instructions] thank

conference. may you Staiger, begin Michael your

Good at regular you and and and me Chief results which afternoon Executive thank June Chief Financial the today for have and discuss call ended Founder, the of copy financial are to a Officer, Charles release fourth Chairman XXXX. on David quarter website. Officer. XX, from full Liang, year, for should fiscal With attending the and of Weigand, the that company the is available distributed was received trading By now, close news company's you Supermicro's

of As Presentations presentation a available the to the company during section under call, in that company's Events the will the refer tab. website & is today's to participants a Relations reminder, Investor

commentary also have management's We published our website. on scripted

you’ll some to expenses, revenue, our forward-looking including without information Please limitation expectations. consist expenses, guidance note fiscal income today the for full operating fiscal of materially XXXX regarding cause of hear and year that future will the that number future quarter our risk capital margin, first the allocation, other statements, could Supermicro's results including are during from those of discussion taxes, factors XXXX. and gross and of There year outlook, a differ business

filings. our SEC afternoon, earlier can recent You other press the XX-K XXXX, learn more about our most this and for in we issued these release risks filing fiscal

Supermicro's All of these documents the page available are website. Relations on Investor of

no today's business Most non-GAAP results of presentation obligation will forward-looking outlook. to assume to financial statements. We refer and any update

our the non-GAAP refer our earlier today. of please explanation to an published accompanying to presentation or release measures, press For financial

of and information non-GAAP reconciliation press today's of session prepared contained will the a analysts we end presentation. Q&A GAAP ask for attached supplemental addition, in is have to At today's results the sell-side questions. today's a remarks, In to in to release

the over to turn call Charles. now I'll

a announce pleased year-over-year $X.XX result everyone. new good a of Today, and to Michael, I billion afternoon, you, annual rate. record Thank XX% am revenue, fiscal growth

first year-over-year $X.XX quarter, our have growth landmark billion XX% is quarter-on-quarter. achieved XX% which We also and

to continuing beyond performing are ranges. our and results and We bottom-line both previously well exceed guided top

It’s secret AI plug-and-play for rack-scale, Delta model-optimized for NVIDIA in the growth demand the that has no our Next leading solution. been platforms large by especially our driven language strong HGX-based

Our engineering capability distinguishing deliver customers, first-to-market competition solutions us and our optimized, enabled empowering from the us take to products AI to us share. to market and

our much to to and logistics to I teams’ sooner and partners time advantage our am maintain competition. our market key than of solution total our also proud execution production deliver

validation AI of Our X,XXX in quickly investment state-of-the-art in of racks-per-month Silicon Valley racks and delivering factors major air-cooled and high-performance liquid-cooled one options. both production with facility the is

to some design non-GAAP new over XX% our year-on-year, backorders, Again, billion. XXXX $X.X fiscal go and range XXXX key per revenue year net earnings of enter with our financial wins more above FYXX mid-point record-high Fiscal the highlights: ago, range compared $XX.XX. Let’s and end XX% range to $X.X billion, $X.X up our quarter-on-quarter, Fiscal of grew guidance to to of $XX.XX $X.XX billion. billion year-over-year net guidance $XX.XX, our $X.XX revised exceeding of XX% year XXX% new share $X.XX many We year totaled totaled above QX revenue customers. billion, up a up guidance higher year-on-year

rackscale towards high range guidance and year-over-year non-GAAP share customer the a compared end earnings our of operating preference strong of Solutions. to demonstrating XX% grew IT continued ago, $X.XX our above it was leverage per and to $X.XX, $X.XX well Total QX Fiscal $X.XX of year

XX foundation. we have For been and building diligently our years, company strength

in shipping quarter. volume and than partners winning we products manufacturer, scale our been As U.S. a for -based the designer only our AI to platform have more

at stage CEO NVIDIA honored months AI GPU I me ago, our this Computex new to optimized to Jensen era. highlight have my friend, of close Huang, was solutions on Couple generation join for

innovators. generative and for not large X-GPU just have HXXX but become solutions the OVX of Supporting systems total PCIe the industry. Redstone-Next, deploying are benchmarks rack-scale to complete systems, We Delta-Next, the HGX excellence LXXSGPUs; Delta-Next, and HXXX just-announced AI our GPUs,

getting Intel’s well PVC, We good Gaudi are traction also and accelerator MI-XXX on solutions. AMD’s X as as

Grace-Hopper leadership and XXX, intelligence upcoming The best the at demand Computex, to Grace, platforms for CX and solutions, bringing building solutions that MGX on perfectly application-optimized with extend we acceleration block our flexibility building artificial have and market. infrastructure plan addressed is to architecture, broadest the block our GPU Superchip. due with by CGX this the announced modular on server We we

Supermicro, is GPUs, computing for of CPUs, be customers of a The flexible and many open, be MGX have shared designed AI will we and they in vision platforms already volume with We multiple these DPUs. speak, as MGX generations and platform to proof between and new NVIDIA engaged soon future production.

AI With to momentum all across TAM X large from growth this customer nearly general enterprise AI expanding Tier continue of based the half our on Tier I major innovators, quarter super to and this cloud, designs, CSPs, AI-related market. expect DCs, our types X revenues

and the As increase, applications performance to becoming that bottleneck to is memory system necessary sets the a massive feed of storage entire without performance also the slows GPU, technologies enhanced data CPU, DPU down.

industry-leading Petascale U.X storage storage platforms. traditional with top-loaded and Gen X storage EX.S and NVMe, servers our based performance and scale-out capacity. Together, PCIe new offer Supermicro's All-Flash EX.S

needs the We cost. a are performance, AI, one-stop and solution in fulfilling compute, time-to-online, customers’ best shopping optimization with total experience, and with storage

expanding for has demand become Having consumption of and of one power other liquid technologies With free-air efficiency, differentiators CSP, and and verticals. is success. even power of expertise key cooling risen or DC, accelerated our have new and high storage, these rack and dramatically. XXKW compute-intensive computing thermal the required rapidly challenges XXXKW solution

a to cooling in We have the variety challenges. investments datacenters adoption thermal made across major direct of liquid to drive technologies address of

Similarly, soon. our and computing with provide to good complexity we many to to that liquid deploy mission. be AI. end density integration computing cooling interested complex, is datacenters immersion fashion liquid unprecedented that requirement making timely with more along to and partners the will addition reality The the demand reducing heavy solution our impact customers. TCO, to option datacenter of is The In in increasing happy and green reduces aligning dramatically, progress, are is burdens skills, with design getting infrastructure especially a for the environmental

is Supermicro scale. Global streamlines the Total datacenter validation, integration. and the off IT software value peace also design, Solutions switching, saves management of of them complications our from It firmware by Service of approach sourcing, in and tiers. mind XX/X topped Customers’ network

been recently our footprint Given our continuing evaluate the announced we infrastructure current beyond to have expansion. demand, Malaysia

another Silicon aiming are our increase to capacity year. Valley HQ X,XXX new in key rackper-month support We partners. fiscal our have further close demand to recently domestic and from To further added current building this

build planning structure builds another least while $XX billion in facility on North Malaysia new manufacturing will campus serving the CY'XX. U.S. revenue coming also revenue are potential At facility a moment, America. our in increase this in headquarter and total We our to reduced the at cost further support can scale Taiwan by

range supply in our is billion our infrastructure great to shortages, $X.X our the Supermicro and closing, to the the $X.X key revenue In components billion September AI deliver with in current to Due continue ability readiness, for a timely of we forecast leading manner. in a products position quarter. growth our portfolio, to momentum

depending to see year billion $XX.X supply. availability more backlog, we XXXX However, billion given between to $X.X the fiscal revenue deliver with room of on high record

as role and rack-scale Our Solutions just begun. of the only AI Total has IT leader

foundation plainly, deliver We optimized our services. software away. and value-added AI billion to large to demand say is our years applications are target annual it other just the along growing couple ready AI model To now a and With markets, strongly. fully emerging and are existing expect to and of I booming, and language infrastructures ready, our with capacity LLM be revenue $XX

Supermicro passing Before David employees to to to your call our our thank Chief for I shareholders partners, Weigand, continued our and support. Financial to say you the Officer, want customers,

Thank you, David.

Thank Fiscal billion updated guidance high up range at revenues $X.X range quarter Charles. were up quarter-over-quarter. end QX billion and of exceeded of XX% year-over-year $X.XX of $X.X you, the to revenues to recently initial the XX% and $X.XX $X.XX billion, fourth billion. were

of Fiscal XXXX, $X.XX revenues we FY'XX XX% billion, reported billion. growth revenues $X.XX over For of representing

drive Next are year positioned of 'XX continue record we well with XXXX and levels a with generation backlog, to Exiting an profitability. orders. wins year and fiscal CPU and growth fiscal for AI record design revenue outlook platforms continued for

by driven growth markets. diversified enterprise AI upgrades, and datacenters, expect emerging CPU build-outs, and IOT top-tier We CSPs, telco edge

also against platforms. a for targeting as that Software key may opportunities are AI continue backlog supply Storage, constrained our advanced to record such bottlenecks new markets by & shipments We components be We new Services. for server Switches, chain our in note adjacent

and QX our for 'XX. of were driven did which We XX% by had any two high-growth solutions have XX% results customers rack-scale fiscal AI/GPU XX% for QX and total revenues. not year customers our represented

and in last cloud million revenues During Enterprise we datacenter large and QX, ramped up $XXX QX representing XX% momentum XX% CSP, quarter-over-quarter last achieved XX% was XX% of programs. appliance XX% gained year-over-year quarter. the in This and The enterprise quarter, vertical, revenues, versus several new representing up and customers. XX% XX% and billion OEM XX% of datacenter, we up up vertical from quarter-over-quarter $X.XX we OEM as and key appliance Channel revenues year-over-year as recorded versus existing

X% achieved X% XG, revenues, million versus Our revenues segment Edge, emerging in representing $XX QX IoT Telco, of quarter. last

systems The XX% and increased and Channel total of has revenues. revenues complete XX% grew revenues. and of total segment The IOT IT XG and and year datacenter OEM Telco to fiscal the Enterprise For The of last of large X% total Edge XXX% the segment mix XX% Total two rack-scale represent XXXX, revenues. years. appliance represented AI/ML and represented Solutions emerging over XX% decreased grew Organic

X%. the Subsystems Solutions. QX and IT quarter-over-quarter driven our increase and and Systems and comprised to rack-scale ASPs value XX% revenue year-over-year Accessories Total continued basis Server by Storage represented a on complexity of of and

XX%. of Asia X%. a and By geography, U.S. basis, Rest of XX%, QX XX% represented On increased XX%, World U.S. year-over-year revenues Europe revenues,

quarter-over-quarter revenues and and decreased World a Asia XX%. XX%, Europe increased World U.S. Rest basis, X%, increased XX%. XX%, increased decreased of increased Asia increased of XXX%, On X%, Europe Rest and

down gross XX.X%, in strategic we was from share. and quarter-over-quarter winning as The market XX.X% designs margin focused QX on new QX non-GAAP

year 'XX, mix product/customer the driven fiscal an higher XX.X% efficiencies. For 'XX of fiscal was margin rack-scale year versus by increased XX.X% and non-GAAP manufacturing gross for

year-over-year XX% $XXX XX% and a headcount year-over-year a quarter-over-quarter to GAAP XX% Turning and $XXX expenses. by expenses, on operating by and expenses driven million. Opex related increased million operating non-GAAP to basis, increased to basis XX% quarter-over-quarter On QX

to quarter XX% operating significantly in non-GAAP leverage revenues increases outpaced operating driven operating higher versus that increased X.X% last expenses. Our for margin QX to by due

year leverage operating from 'XX, and For operating higher in achieved fiscal XX.X% fiscal and margin 'XX gross controls. X.X% due we versus margins revenues higher non-GAAP a of year expense to

$X.X million primarily of for interest Other consisting Expense foreign-exchange $X.X net of QX expense a Income $X.X & gain offset in million. expense of an approximately was million by

we on increased short-term interest Our with lines expense sequentially requirements interest for as our borrowings. short-term credit rates higher working utilized along capital our

million rate tax tax was The on rate QX $XX.X in for was a 'XX. The for year QX non-GAAP GAAP tax The non-GAAP year was a was 'XX the XX.X% tax fiscal versus basis was million 'XX fiscal GAAP and and versus provision in on $XX.X tax for rate year XX.X% XX.X% non-GAAP XX.X% rate basis. fiscal XX.X% XX.X%. GAAP and the

and recently range EPS We of in of which and $X.XX. to exceeded non-GAAP original increase to leverage. QX $X.XX end revenues guidance the $X.XX combination range diluted $X.XX was $X.XX a EPS QX to higher of due of the of delivered strong The the operating high updated

For non-GAAP FY'XX non-GAAP to $X.XX fiscal diluted of versus reported XXX% EPS we higher XXXX the of and year-over-year fiscal full of the up guidance diluted $XX.XX than EPS $XX.XX, XXXX,

$XX.XX.

quarter supply QX flow inventory $XXX in of operations payable accounts used higher generated loaded due constraints. higher flow operations QX receivable, by Cash to million to from in was cash by the shipments lower $X accounts backend compared to for offset in and million due

million was of resulting flow $XXX CapEx in million cash for cash negative positive flow $XX QX last free of versus free million $X quarter.

of $XX from in of For million $XXX cash fiscal of had operations cash flow million, resulting free free CapEx $XXX we million. 'XX, year flow

authorized the January buyback have which XX, expires $XX on We program under remaining million XXXX.

higher of $XXX balance we and ramped wins. cash cash credit last million, closing $XXX bank utilized production while of debt bank of support million AI/GPU of lines design position position we million The million was in our to position as a down as up $XXX $XXX resulting cash accounts receivable new quarter from sheet net revenues was net

capital was days in of working cycle XX a our Outstanding and last to Turning Payables to XX conversion Sales inventory to of improved conversion balance the days down XX XX improvement in days days. the XX, XX XXX quarter, sheet came Faster cash metrics to the days. quarter versus to QX. of versus prior days Days the decrease XX down cycle. while Inventory days XXX Days turns contributed compared Days was quarter-over-quarter QX representing by days to cash Outstanding

enthusiastic Now and IOT a we applications. outlook, the storage, Telco computing, datacenter/emerging model, enterprise/channel, core span covering telco about turning to our business and AI, XG remain wide edge CSP, wins of Design diversified customers. AI across and OEM range large

observing leading continuing AI constraints are situation global for and the macro-economic carefully We platforms. supply-chain especially

For net the of $X.XX. to non-GAAP billion, first $X.X XX, per of income of September in per sales of the diluted expect fiscal ending GAAP $X.XX net and we quarter diluted $X.XX XXXX, range $X.XX $X.X share billion share to XXXX to income net

margins gross similar expect to to We QX levels. be

and great $XXX The included that approximately outlook excluded operating due $X includes XXXX to GAAP expenses. other sales and compensation fully to net other our include of approximately non-GAAP operating EPS GAAP are million year non-GAAP diluted stock-based million to of R&D for and common operating per in and expenses, are $XX effects net in stock-based engineering expected higher expected and million from expenses increase of expenses be in share. which and expected compensation GAAP personnel not continued tax in investments adding expenses $XX teams. million, costs are income to are QX diluted fiscal non-GAAP

share other projections share GAAP income million shares XX.X%, to XX assume net of interest for and of and a common tax and XX.X%, income diluted approximately be We a GAAP non-GAAP including of non-GAAP. for diluted expect rate expense, net million. rate expense, XX The per million non-GAAP a of $X.X company’s fully a for tax expense GAAP and count

for We to in $XX of CapEx quarter of $XX the the million. range expect fiscal million XXXX first to be

the XXXX fiscal ending are XXXX. fiscal XXXX, year guidance first ends XXXX. -- the giving sorry, June year XX, XX, Which For we June I'm

the We are billion $X.X giving guidance billion. range to $XX.X in for revenues

now we’re Michael, Okay, ready for Q&A.

Operator?

Instructions]. [Operator

the we open. Nehal is of Sir, from first line line comes have question, Northland Markets. from Capital the Now Choski Your

congratulations And quarter on 'XX Definitely you. revenue fiscal into. $X.X amazing of dig Thank billion. guidance want year an to and amazing

he the a in exposure driving differentiation systems you June is think statement exposure do fast First you increase makes for a in that have That's off, Charlie, I Micro, wielding with you think the strong XX% AI leader AI quarter. sustainable AI guys that that revenue very that's What indeed in said revenue incredibly AI Super incredible systems. are rack-scale systems?

our for you kind AI develop thank ago, focus including years [ph]. a our could our MTX we Yes, work question. with company of we Yeah, very your And as AI is platform, chip and been lots closely. major has few since of

you coming as Now MTX, CXand CGX. support know, a to

as they solutions AI our our cost cloud been they've easier. scale online. scale with energy make time even deploy customers So solution or rack full scale, for much scale, rehab, And customer solution that to for also

the near to product than our of our in revenue. grow XX% I future to continuing be more So maybe AI will believe line continue

Hosseini of Group. International comes from from Next Susquehanna line Mehdi question

Your open. line is

net. my of helpful taking could get difficulty] would ASP an if unless of content $XX question. have to it would give I of $XX And other capture kind us would increased insight perhaps [technical to you ways very revenue. for increased your explaining And billion on any thanks color think Yes, billion that you Charles, be

And get new continue total we rack customer lots or including to our partner our scale, continue continue We scale, [Indiscernible]. to with of gain cloud customer like new solution, solution. to

very and fast So we order. a very see growing strong demand

be should kind year. a this target So term short $XX of billion

also better something better about? cooling offers shagging? technology your emerging that argue Is to there cost cooling competitors compared for for the Last with some of cooling? talking is And question, for also innovative that marketing, performance, argue are your they your competitors are

service, design engineering market. together in Yeah, indeed, management. software, simply with performance, can team strong not is our time better And our just also Everyone better to system than and dedicated. others, systems, but quality, system earlier

total a solution it's service. So and

we will So continue share. we market to pretty that confident gain feel

look maybe second is the are Do of they as How have becoming a of pipeline into you calendar your than half Okay, XX% revenue. pipeline on, because you more move your you're gives already you that qualify or the plus business of AI you confidence, to mix still that and hit going win hit revenue XX% and have to that the target. go as to year?

strong. is Indeed, I that very ability very believe our momentum, is And pipeline is its clear.

So with we another especially confident are chemical too. very customer

next of question line from Tanwanteng. Your comes from the Jon

is line open. Your

quarter the for my really supply for My talk one, your chain, at taking midpoint? into suppliers. good Thank a first growth key about supply Hi, parts, confidence confidence you able Maybe maybe strong your on again. your congrats is from to outlook. just that you maybe the afternoon. allocations just and being I wanted Can ability XX% outlook about in dig questions get guidance in talk various to to

within exist? What Or your can protect how backlog? you identify there's double do that do is they you then against And yourself if And ordering? if order how triple book or and your assurance?

it's a complicated Yeah, question.

a have max and We line product [indiscernible] including error for for product very solutions good for for XXs. many max redstone grace other delta

So the with strong solution chain work really every very is day. vendor we closely our supply and

XXX% consistently that will hopefully sale. it's improve, our so And but not control be of situation

but our So by sales. good XXX% it's although have we a controlled partnership

So good all we partnership, vendor, a have customer. which though which

situation So we will work together the believe very be improve continue I closely, And to

order the On side

will Your for next ready the next question, question. I

ever you John, up did follow question?

double against and site, double triple? order protection In

growth. Every the I been Yeah, strongly. order month see tech and continued had see mean, older the other side? growing I

Also, well. double John, triple orders protects of we and That booking. against NCNR have a as lot

Your from your Baruah is line Loop comes Ananda Capital, from next question open.

about congrats Yeah, you and guys adding customers, unprecedented really, about some strong. gaining center have think could. gen have really Charles, demand in on and for Yeah. And a couple I And including server talked you and share, for forecasts, taking calendar XXXX of I ongoing prepared seeing you're data talking strong you've customers, the top Good the the talked actually I the momentum. are mentioned remarks questions. these guys. about also results tier new if the afternoon, et thanks AI cetera. you're

to you guess is there? be Thanks. than to teach have be the I things able the were would see the what up. puts guidance, you quick to some the the be And and would do need to you so 'XX fiscal what's maybe a opportunity XXXX stronger And, of is, guess, I the And if guidance. first follow question exceed then takes would think what even I occur? do

Yeah, thank just generative chain. you. partnership to we OEM. of and cannot because AI have with good this some at And system. partnership. supply And Very time gain need continue XX we good question. small Again, for sure, they we XX more We moment, times ship a innovator, very

And at time, engage centers. large the we CSP, also same in large to continue with data

from customer continue read we political. gain more So I say, who given to all

So three our yes, supply major hard chain, focus now. our been party that's which supplier, to regime, our sales. our work out in And customer have

continue improve immersive liquid DRC, included cooling solution. Although solution direct total and to our liquid datacenter in we

on I the track, are our improve revenue. So right grow we we chain so mean, yes can that expecting supply can

helpful. really That's

'XX can hear procure you to issue, more, way I'm I supply get Charles, you that the And more supply have the exceed Did understood provide guess, is the so if to really to if ability range actually say that chain, is that visibility, can say, if the gains, you would accurately, accurately? just is I a asking. chain supply so, that such fiscal chain to that that you it this you what have use if can, from make -- I sure you order share

a our absolutely. customer hey, solution. we say, mean, we our and continue have business to Yeah, vendor, to I prove

where So wherever with we went us, you okay that's went.

just way then the any what it. let up I like, you one. could company of in not if getting of outlook a to and guidance, positioning you Is that around is, guys constrained demand were how look obviously, guidance got for constrained? And might provide ask for your quick sort you us I follow structural you me are, gave guess sense what there like were content context So the just if a like not constraints? really not to there the of a us context

can. I Yeah,

our And We support our customer. partner have have we good time vendor And best very well. a very same to as product. us we, vendor. we know a good we doing at pushed And their the

work just we continue to together. to So have

have one, quick it. I appreciate I Charles, more one

for Sounds the like quarter solid attractive the gross guidance is pretty most September margin guide. a

kind right 'XX, should fiscal me. the for range of about margin it For we or that? Thanks. XX% to same And assume that way that's what's think gross

Sure, David. is Ananda, this

margins. give will hold And that's So the now. we're to guidance right all targeting our that

Your line the next Wells question [Indiscernible] from comes Fargo. Adam from of

Your line open. is

tonight. the taking questions. on for results thanks And congrats the also Yeah,

I or I So heard want make the I that Yeah, first want the revenue just I of and as all, XX% quarter? your from clarify, rack to to the was of last scale number. sure AI solutions XX%

Charles, Adam. his I in Yeah, script XX% said clarified and approximately XX%.

around capacity the number so have Okay, demand these or that non investments the spend AI strong. benefiting supply AI away or is that one has is that, a And satisfy lot looking say traditional how AI you take either several dynamics. from backlog slowdown so But over reallocating non-AI side? given basically, the the get question side are to that outside like of the quarters, you're out from? seen asked you and you're on of I sounds the a trended clearly more the guess being if business, questions of obviously, I carrying good spending next the pretty it I I about, Or isn't compute that

to we and as of like of And may now keep manufacturing, we try North another a blend. been not Fed. directions why in growing telco, Understand many involve campus. we storage, are has we IoT And bit that's have declining, well. we Yeah, America Malaysia. and grow are declining, And Taiwan that above kind industry AI server kind

growing on we capacity, AI. of business can So grow that's all traditional focus increase instead that, that center to omni as so well, our data

Okay.

the your so demand limiting be because supply, mean, -- on side, fair? you're So AI limited you're you're of the traditional that just Is on to seeing. I compute that clear,

impacted, exactly as from a Indeed, bit not traditional server, bland business, exactly. Not demand and the side. but traditional datacenter

we So into but to declining similar as face not experience well, ---

Yep.

Okay. thinking mentioned I think also AI was little bit MIXXX I just the final is think opportunity? coming and to question think it alluded see opportunity. prepared about around your the then for you positioning And comments a And the you me this chip do that your out Intel, Ivy I the AMD. playing from market to then for you How vendor another

Does the the side that, seeing it that kind opportunities into you're versus guys newer are seeing to with help landscape maybe opportunity point? or man diversified more is we NVIDIA Just satisfy the market? as curious at expand solutions you those competitive much indicators other be to what on going this how this 'XX seen you AI coming for here move of you've

retail our up [ph] really And show AMD, from in supply. a solutions, other Yeah, [Indiscernible] have for because we from solution and waiting box solution people again. solution NVIDIA are Intel, more ready for

that's So have. we advantage the

we just available be So to solution waiting production. in for their

you much. very Thank

Thanks.

Your next Tanwanteng. Jon the of from comes question line from

open. Your line is

I as you Hi, Are follow forward? of to you you up. using working capital demand? generate was cash the flow in OpEx could as positive you you thanks about sort this talk Dave, environment. to cash wondering Can fulfill the your try needs for if be going going

market, more really, up we more we And We had deliver ends supply especially that --- John. constrained has think the moderating constrained see the if we supply this could But it in cash working supply. business capital. flows, the we're Yeah, where good so historically. the generating as

our so business we grew a and quite And quarter our last ARR. grew bit

working working a we that capital, of concerns about capital. no have So but lot utilized

give more come guys great. the on expansion, various could when and Okay, exactly And detail facilities you those capacity what add? then they bit and little then a online,

have XX will as we've in Charles with also add And we expected our capacity. also to Americas. XX online Social additional around another that's double in is And we site in which in come mentioned, XX, Valley eventually And to building --- have Malaysia, Jose, our in another online added, coming the months. campus. our to capacity site intentions here San to going in Sure, that

question, Got increase it? a percentage And detailed are of right sales now then last expect you basin? Do cooling more me. what that Maybe percentage go your forward? one, to liquid AI as you for

very is new questions. This

depends same So getting solution DLC, a cooling the go ready customer time, demand. all And to emotions very on we ready. the also at big have good it's And now. solution liquid direct

So we At depends for all still [indiscernible] three have as solution this and majority, demand. on a sure know. customer's you moment,

Okay, great. Thanks. Charles.

Thanks.

the from Northland question Capital Nehal Choski of from next Your Markets. line

is line open. Your

thank up question. you for the Yeah, follow

recognized center rest server to revenue? is Xx their does OEMs gets Especially guided was systems? recognized revenue NVIDIA GPU Micro to July So mean between lag quarter a from up in data there that revenue What what trying when when QonQ. a that of terms Super for is I'm drive that's video and revenue

capacity we every day to for And that's more. why asking talk believe growing. are We their them

from mostly we gather hopefully And support more capacity can that their quickly. grows them. So hopefully

So that's all say now. can I

Okay.

Okay.

during guess You and is on, your a what share -- QonQ? that I they're not what the have up June market quarter was AI-related

going not --- go market a into have for the June share to don't quarter. offer we're We

we at mentioned. some assumptions we of You by can GPUs have make looking others. as the sell different results Charles But,

So, is there direct a correlation.

Yeah, basically we we backorder. have still strong full capacity. a order not have And

waiting for That's chip. are AI We our more situation.

remaining distributing three how we the million quarters think across And understood. should the here? about X Yep, final

the of quarter-by-quarter these natural new announce robust this of year and because the by a to platforms, popularity tempered guidance. But be constraints going not we're supply has to We're expecting our

a CG-X much company a other already ready than that as Yeah, alternates basically sure. is well. in And wait we're capacity pretty NVIDIA is is the our there. have solution And for residental more we mix besides really over happy to in next our

So less can more ship much we situation. and believe not we

quarter. I So continue quarter to quarter after four in next will grow believe

much, very you Thank

million I sure supply a for easily. even condition, $XX.X can believe And surpass we

you, for will question time Thank this conclude everyone at time. call. for conference joining And this today's

disconnect. may everyone. now You you, Thank