Super Micro Computer (SMCI) 6 Aug 242024 Q4 Earnings call transcript

Thank you for standing by. My name is Harry, and I will be your conference operator today. At this time, I would like to welcome everyone to the Super Micro Computer Inc. SMCI U.S. Q4 2024 Earnings Call. Liang, and and of Michael Charles David Executive Corporate today, CFO; Weigand, Staiger, us Founder, Chief President Officer; Development. With Vice President . Instructions] [Operator

a Good remarks, Chairman June Financial end XX, session call analysts. With Super Weigand, Q&A me for afternoon, Chief Charles for Officer. we'll Executive XXXX. fourth discuss of Liang, Officer; are Founder, David the ended financial the results Chief sell-side today's and Micro's which quarter, have today you and prepared thank At for to attending and

our press the financial assumptions downloaded statements make Our that and of be website close market and and outlook and product that its being release strategy, and call simultaneously offerings slides and our and can industry this webcast we at our we forward-looking on no operations, ir.supermicro.com. to of our accompany was facts issued this . The economic as webcast. These technology after Any is include on where update current is new them. regarding trends. posted statements obligation today, undertake based advantages, are competitive

most of and Our you performance. some business actual those materially from indication results should annual refer to our SEC, discussion the on recent A differ our is uncertainties report risks public filings not related be in Form results to of we XX-K. as contained an forecasted the and of considered filings, the and results may reported future our including with

and and measures than cash other financial investments. During non-GAAP this revenue call, associated growth metrics are rates all and

available on Super An for the property being release IR Micro. and and and the of website provided are GAAP Micro be Super being press Investor most website on webcast archive recorded slides. broadcast earnings the Relations is to Reconciliations comparable the will purposes. our measures directly This is of playback the call live is in

will that, XXXX. September XXXX close Our turn Charles. of the Friday, with first quiet quarter to And business, it I period XX, over at begins

you, year-over-year quarterly announce pleased Today, another billion, X.XX XXX% Michael. growth. I'm record Thank to result of

year-over-year growth rate. full achieved exceeded XXXX, billion of QX For in in revenue we $XX.XX the fiscal have XXXX. To fiscal this our perspective, year put revenue, revenue XXX%

and is especially infrastructure AI, driven with and by generative training Our in our inferencing. technology robust product AI leadership growth market,

We have a been world. larger of super cluster the secure the AI deploying scaling ASP some share quickly opportunities, to largest AI in of

deployment to Leveraging customers helping latest our the we technology, their system online and blocks, cooling DLC best play optimize building achieve lowest plug solutions our rack-scale and TCO solutions. time build and liquid TTO, time to with the and TTD, with AI

are key Here some quarterly highlights.

is year-on-year XX% XXX% Super Fiscal of $X.XX backlog. XXX $X.XX could per included pleased above First, with totaled quarter. QX was NASDAQ year, last revenue DLC which not Fiscal if or non-GAAP liquid cooling more ship in last share for record $X.XX Micro component shortage. net We a Index growth. the billion, way strong be to year-on-year QX high up earnings

expedited is Our expected the quarter. cost and mix in Datacenter June of than higher hyperscale we operating X.X%, and to DLC due is components of which business margin QX cooling our liquid lower what September

our center our traditional less will later -- and more Some relative powering this instrumental We datacenters EPS and believe of will factories cooling profitability. be in DLC world environmental key liquid the our the is will year our liquid for TCO, is lowered Supermicro around latest increasing DLC data air-cooled improves for dominating be June total $XXX opting delayed July, into availability in which million relatively more recognized which largest be to dramatically cooling AI today. taxing. solution, our Malaysia facility new of solution our position revenue component shipped shortage in and quarter. about calendar September and The

can that proved chips. the solutions shared advantages with At traditional data higher "Green Since have COMPUTEX Taipei, lowers This to power new delivering Computing significantly big and upcoming I free offer DLC reliable on that then, and AI uptime, better with support deploying we performance have be also air-cooled means cooling the with a We the DLC to operational liquid multiple par center X,XXX DLC cost is been racks customers. over highly cost. of bonus".

and to and a be is most AI cooling centers Our factory to increasing goal reducing liquid that data on OpEx. solution quickly efficiency for make performance mainstream while focus DLC

from believe. months, We coming to XX% XX% center DLC the of most Micro the global to targeting deployments with XX we new data are in next Super deployments use solutions

and We reasons. are years major customers cooling data DLC in liquid to to center help coming air-cooled X for transforming happy adopting existing their the

helps it customers XX%. to save First, up cost energy

will Mother performance. only carbon will Second, one footprint center more our it because time pull reduces for customers' less fourth, helps to datacenter computing to in and times it And Earth. data lead precisely their And online electrical power boost third, requirement. it be reduce or of

As an our new customers' our experience time-to-market leveraging help rack-scale and advantage technologies. performance-optimized and solutions, our building and #X play By solution priority. our end-to-end infrastructure is plug we achieve customers with IT block best company, system the

a center we further this for shortage and example. takes data AI-ready challenges. of worldwide X inefficiency long Building are AI deployment entire Now data new large-scale years, time, are with infrastructure, expanding center the cooling facing to solution averaging traditionally rapid center these data power

Solutions, from Our reduce upcoming to DCBBS, customers' years. data years Supermicro Datacenter X X.X about center X time new build Building will Block

months. offering Center just or optimized, facilities This Data data even BBS X an significantly in transformation, server, to smaller data can management For cost-effective enable networking center maintenance. center will liquid facility water compute, with in center's full-on than cooling AI or new cost less older online time X software, tower, data rack, and storage, service of deployment end-to-end DLC, and cabling, integration TTO, year on-site improves

later We will year. this it calendar start offering

cost this November. in and volume expect quickly economics which With production up our boost Building we start solution U.S., value of structure. adding our monthly its our Block cooling fiscal headquarters we production/POC DataCenter DLC to Playing and are ramp liquid scale, providing provisioning further geographic campus and significant role In Malaysia near advantages, a new buildings capacity shipping realizing will this new the will rack as year. and our capacity our Silicon Valley it improve well, additional

expand Micro infrastructure few on Moreover, to manufacturing other chain track to locations, of global and strength one build we companies. supply a design, Super quality, are leveraging largest product the deployment, our positioning in IT as

backorders, In winning with liquid large Solutions cooling summary, Datacenter volume we more record entering and Building fiscal high are capacity, products, new customers. DLC Block XXXX

economics advantage profitability, for well they While scale. us our success a and by of short-term necessary investment future providing position long-term sustainable impact competitive

in to the This revenue September and Again, revenue the between margin quarter $X between to return to Solutions Datacenter year. anticipate that $X range ease me ship the forecast billion start confidence billion we pressure fiscal short-term to end Building of billion. DLC gives volume $XX and to later will cooling before and when this $XX Block billion fiscal XXXX year XXXX, normal especially liquid high our

XX-for-X would to split or Micro forward I make stock like ownership stock Lastly, common Micro's Super announce Super more of accessible.

October trading market XXXX. on open a on X, are We basis commencing split-adjusted at targeting

to your on the support. continued AI David to I an our to call you able and bring to the want David? to employees customers, at we thank say were passing Micro Super incredible partners, CFO, scale shareholders to year for world where our Weigand, Before our

the we in fiscal on initiatives. strategic Charles. the Thank and progress year, pleased robust had I'm growth made We our you, with

target operating have at and XX% the exceeded fiscal year X% For than reported X% operating fiscal and leverage 'XX EPS leverage. per revenues growth 'XX diluted grew in EPS fiscal between grew 'XX to . Between year year range and representing a to more 'XX, over in year revenues rate year significant annual range of or while at year over of expenses only Non-GAAP fiscal revenue of operating 'XX from above XX% growth operating margins XX%. $XX.XX fiscal to 'XX XX% non-GAAP revenues fiscal 'XX $XX.X and 'XX X.X% gross Fiscal XX% Between margins fiscal diluted year we due $XX.XX. 'XX to year compound with achieved $X.X year of year fiscal per 'XX, we were year XX% doubled strong fiscal of growth year year. target of billion, met growing year billion. 'XX, XXX% fiscal of and fiscal non-GAAP the non-GAAP 'XX

$X.XX were billion of remains $X.X XXX% of up year-over-year $X.X air-cooled markets Growth guidance enterprise and to rack across platforms, service revenues XX% provider of over midpoint strong. revenues the demand and XX% driven billion, representing QX above by up cooled and direct was scale quarter-over-quarter for GPU billion. next-generation where and AI cloud liquid demand strong

growth win year large in pipeline the year DLC exited XXXX. innovative continued in acceleration with positioning and a us We products, design a strong fiscal backlog, an for

clusters DLC, the year in efficiencies to We and and expect introductions. and mix, new by operating gross GPU customer new for manufacturing gradually increase platform margins driven product AI

short chain in discussed, As shipments Charles the advanced new key term constrained may by to continue bottlenecks supply for platforms. components our for be

lower expansion to Americas as However, in in Europe. will the margins long-term benefit addition costs we and scale in up Malaysia manufacturing Taiwan, gross production and from

X% OEM the billion down IoT XX% billion, $X.XX quarter-over-quarter. million last and in revenues. During revenues quarter-over-quarter. the Emerging of year-over-year last appliance year-over-year up XX% revenues QX, up versus XX% QX center XX% up XX% QX representing in of enterprise $XX and were quarter, channel edge The revenues we segment telco quarter, large recorded representing of versus X% $X.XX in vertical, and or XXX% data revenues XX% the XG were

represented emerging revenues. 'XX. revenues represented center large XXX% year customer XX% of and telco to The represent revenues center CSP grew XX% total One large XG XX% total for data Enterprise appliance edge approximately The revenues. fiscal For of fiscal represented 'XX, total IoT of of revenues. segment segment XX% year data X% grew and channel OEM

and our Server XX% accessories year-over-year ASPs on and represented increased of total Europe, driven revenues; by XX%; and of subsystems U.S. X%. and and XX%. on Asia, represented comprised of quarter-over-quarter revenues XX% At the QX year-over-year solutions. systems geography, world, complexity basis, a and rest a U.S. QX value of increased X%. storage IT basis, XX%; rack-scale revenue

new increased increased U.S. XXX%. of the increased to DLC XX%, Europe XXX%; quarter-over-quarter focus on winning ramping world competitive increased production increased strategic The XX%, gross QX in XX.X% Asia AI customer world Europe GPU in a basis, rest due mix, increased the XXX%; and of costs Asia of initial designs QX revenues new margin XX% higher and increased clusters. pricing rest was product and non-GAAP and On XX.X% XXX%. with versus

gross 'XX, 'XX. For non-GAAP margin the XX.X% was fiscal for versus fiscal XX.X% year year

driven to our by efficiencies on based DLC a higher million, range multiple to innovative solutions. GAAP path introduce our partners target on year-over-year a gross platforms the to we and and XX% have improved expenses and manufacturing margins new basis XX% expenses XX% quarter-over-quarter headcount. We compensation on increased operating strategic as to improve of from QX technologies XX% by $XXX

On and lower due million. was expense and margins. quarter-over-quarter from basis, and foreign operating in million was XX% investments. expenses a million to QX higher million to XX% of non-GAAP for from X.X% gross operating Other versus a the cash income year-over-year margin interest increased non-GAAP by balances, QX loss $XXX QX $XX $XX expense offset on interest income and consisting in $X exchange other XX.X%

we was down sequentially the decreased was operating in X%. rate QX $X.XX was million tax EPS X.X%, for provision diluted tax non-GAAP 'XX below and to per XX.X% year basis. tax The GAAP The non-GAAP fiscal GAAP fiscal as was 'XX $X.XX lower in on to the diluted a and year in GAAP expenses the earnings was the a gross rate non-GAAP XX.X% of for and QX Interest for tax was X.X% guidance of fiscal bank versus $X.XX short-term quarter. to and $X.XX rate $X.XX tax on fiscal QX of year The GAAP share rate paid versus XX.X% the for $XX 'XX. $X year million basis below of higher and credit non-GAAP 'XX due $X.XX was expenses guidance facilities. margins

X from recent the business diluted million share $XXX fully $X.XX the to in of to compared count million the accounts XX and convertible in reflecting quarter-over-quarter increased XX.X increased count timing receivable and shipments. million, stock XX.X sequentially bond offerings previous the and effects The non-GAAP and flow GAAP offering. shares, inventory million to operations cash share levels million of of from XX.X was the due QX grew used to quarter billion as higher

support operations $X.X For in revenue XXX% to fiscal needs used was strong to working 'XX, year of design billion wins. growth cash and customer due capital large

$X.X million, for anticipation inventory up year was invested closing $XX of negative fiscal QX for our sheet in of greenfield globally, for net net $XXX billion $XX in bank million, in new position resulting and 'XX balance in note $XXX The flow of and cash year was $X.X a of QX as quarter. debt closing a versus -- while equipment $XXX QX plant CapEx future quarter. growth. $X.X the convertible fiscal billion, cash was position resulting Malaysia plant. was million million was property, including million position $XXX CapEx million negative cash we 'XX in last from billion,

and XX the unchanged last working was to outstanding versus by decreased quarter. X of XX the Days XX The capital days. in quarter to compared at days. inventory QX of while Days outstanding XX conversion cash days balance by payables sheet days Turning to to prior days XX XX compared was days metrics days QX. decreased XX days to days cycle sales

'XX. year fiscal QX for outlook the to turning Now

design new customers. new as expect we wins GPU We growth with AI air-cooled and existing DLC and strong ramp

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

We operating million are expenses in expect customer $XXX included expected improve stock-based approximately to to mix expenses. and million operating product to include due that gross efficiency. compensation and and manufacturing not expenses sequentially non-GAAP $XX in improving are GAAP be margins

The million expenses, fully common diluted approximately and million, includes XXXX of non-GAAP outlook diluted tax income EPS year fiscal for GAAP expected $XX excluded compensation are net from effects which net stock-based share. QX per $XX of of

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

the of expect $XX million for $XX CapEx We in be QX to million. range to

billion. fiscal $XX billion Michael, ready XXXX, of to Q&A. For we for revenues now year $XX are introducing for guidance we're

[Operator Instructions] question today Ng of of is first Michael Sachs. Our the from line Goldman

X. around just just could around assuming about have revenue as the of was color and if the little little of then supply I the bit to have availability. the long-term of revenue I year? in improvement Encouraged a operating for be $XX you and the And exiting as might the to terms well I terms I the of you was provide billion targets 'XX. that that in assumptions margin the you and secondly, wondering applicable year. billion color gross guidance guess full a you contingencies margin some provide wondering see guidance bit more $XX if year fiscal any for think visibility could backlog throughout or Should for gross we underpinning

engagement cooling a also a and we as what wins, mean DLC share, continue engage customer including us. I Building I available, design to of mean customer like we liquid with with Okay. and to also we gain new see and lot Solutions, product new Block Datacenter more

continue billion grow, our $XX margin, to to XX just target next liquid $XX mature. capacity been very cooling mentioned, gross our for as billion. have our months. to That's now DLC the And what as with So we

build time So their job we customers' much Datacenter center better take Solutions that advantage to customers data data value, also from and to able that and improve ease online are a provides to center. Building also Block

all will profitability of those increase gradually. So our .

the from of line JPMorgan. is today question next Our of Chatterjee Samik

you're you 'XX. much be have of And How have you the the sustainability if mix repeat start It doesn't margin that part customer, which that should saying which that's orders sounds should I margin the that's like had, impact know confirm improvement probably I Maybe to think impacted but we about in don't mentioned and see as I quarter. customer? follow-up. product through fiscal performance hyperscale wanted of well. from customer thinking have repeat gross repeat, if or and customer there. a as it couple you hyperscale a just the can sort we is really about a how you I with

Yes.

are mean Valley based, I we Valley. have was operations in Silicon very Silicon We consistent. before been

before. we advantage performance So from customer. only, we And we this it to take on that's data higher we when start center in Taiwan, enterprise, But operation be focus Malaysia, to a have grow will now high-quality, start huge customer large-scale production ready later by capacity year.

with So economic advantage, waiting large large-scale we the a for are customer.

customer time, So we also base. enterprise to we continue will same enhance to the customers. our large with At continue grow

also So our the the I well. as I more mean, recently, Building for gain to customers data Datacenter solution, some Block our enterprise see we software growth attraction enterprise demand Solutions, mean in we start total center, from with

believe and Malaysia to cost advantage long-term economic we margin overall enterprise that -- base advantage we scale, customer and gross way So the [indiscernible] Taiwan grow a have and

for Got recently delay have of it. more there follow-up, Got the And Charles, from my it. been reports GB about NVIDIA. XXX the

if thoughts you're or account? the accounted you liquid now talk wondering through can year? into COMPUTEX. you to what cooling looking you you of some robust on higher conversion impact the taking share the about that Just is at when those at how delays of portion that pipeline backlog a would about being for your than that revenue Are talked materially And

problem have heard customer HXXX I product, out they new may we normal push Yes. out a right? us, like some little we believe we have possibility. a In day, have delay a I bit. treat bit. it solution yes, technology, introduced a little to cooling. And are new the NVIDIA When no with liquid But this to pushed case, provide chance to that mean, they a as always new

of like lot that. customers a have We

pushed to us. It should for company, So schedule, that's although too be much. but good out we impact not this technology overall a hope

Merrill of America is of of Ruplu today line Bhattacharya from Our next Bank Lynch. the question

X have of I them.

of relates XXX The the And customer solutions? which first how mix much the Is GPUs in was margin X of mix, in terms liquid is Or the like things that the can I of all margins? $XXX quarter. versus of was much gross of result ramping you And specify Charles, bps related of quarter said of cooling hyperscale sequential to performance liquid the in David, was cooling gross customer higher how that million -- impact related? decline, components. the you impact the to about nonavailability other because well? revenue think, lost to as that you

But mean when cooling much a like to move have now I we components August, cooling ready much liquid Pretty available key components now. much now. it's related. July, we are key

it wasn't was Ruplu, loss. pushed It a next into out quarter. the

Yes.

So -- we that demand there of amount really the market. we was -- this surprised had in were we by

And -- has so manufacturing our been day. we every -- efficiency improving improves

we continue, to and so as forward And deploy expect going at that our help racks going scale. gross margins that's liquid we to cooled

racks And it the to is expected these throughout more linear cool Or deployment that back-end liquid year? for loaded? be is

try to about with hardware not liquid customer costs. acquisition And liquid higher cooling, a the the cost Basically, a cooling percentage energy save deploy cost we support is the they liquid handful them, of same, of will cooling. most they because -- for our continue once will they lot but

this consistently growth believe I growing. So will be

the Capital. Ananda next line today is question of Baruah Our Loop from of

good stuff call. Charles, lot Yes. you a of on said this

up cooling to company It relative its service well. to of X a is frame the would of guys So cooling I how providing some But you to capability really a as others big ask for it on start, just technical be maybe why us competitively context follow-up. guys the But liquid least about how and been I additional thinking high you positioned here. about showing have are guidance. conversation. your sounds That's are X who liquid things I are guess useful. seems . just at quick think like of capability super the you the reasons I'll be in top to could and try around

have I been than just size you And months always X,XXX to market and to I if But you XX liquid June center than in more deployment. racks, alone, would X% and market the data Yes. overall more for right, Thank data X%, new years or XX% X,XXX AI center July market. as small, racks about has you. know, global a share cooling with compared X less mean is the we on to say. rack shipped calculate close than

very we happy. So are

that's that same costs and reduce liquid industry cooling happy save liquid quicker centers liquid cooling to time, power are DLC availability powering higher company. air customers' require don't met data At for power, help data have energy We to from the the from XX% why the a carbon less to to customer XX% footprint. because pushed wait cooling, and center because cooled of customers it's

cooling among So customers liquid overall, see solution. like we our

guys And Charles, share in accurately you liquid think June XX% you hear that did did quarter? I you the cooling

in July June for may XX% least the in liquid cooling ship that and liquid next believe world. compared to X XX% the we I the all at months, cooling with

liquid for we XX% cooling, So have XX% at market to least share.

I . expanding air about useful. wondering That's follow-up earlier envision if -- an cooled sort your give you how it made is you've us the of liquid past my capacity rack in that's you're real -- was on and to for think cooled just me. the for could of the you recent update then RAC both this remarks sort into expansion future. how over and thinking And about capacity year how just about quick,

question. last month, good And very liquid grow a racks another cooling X,XXX already we per mean, have capacity. XX%. we month It's about we I today,

rack liquid year-end, per By X,XXX grow month. capacity. cooling. per X,XXX month rack So now a have that will we what we to this That's

engineering we world our So they liquid market, for kind value cooling. And consumption minimized a believe because when costs. liquid of choice them team, operation have save the the much customers. very are customer to of really the provide we discuss really and cooling most growing we strongly. happy consultation to love base liquid better especially is we're And for common been with customer power again, and cooling for And

year and the end fiscal of the And that's fiscal fiscal year year, year?

big will believe months, portion next the coding XX liquid our business. a For of be I

Aaron Our Rakers the of next Wells line from is Fargo. of question today

go the the earlier as I've on a I we full kind X well. think for going Yes. I to it's lot to to question guess of investors of got want a because just as key I year especially back guidance. here, focal Blackwell point be shape

So Charles, I want to be clear.

guidance about these we quarter, believe the think full quarter? the going that do be the should revenue how the availability not more you Or in to year and weighted the year of of solutions as NVL the contemplated guidance. Blackwell we your of the cetera. et given guide us I'm of quarterly on guidance full XX curious December the a for to to platforms, you're think want give and about quarter-by-quarter you'll Blackwell cadence to up basis. fiscal is a shipping around timing concerns December platform that just shaping bit XX has about year So think Appreciate for back half of some say you Street

So

because new relatively are do we may conservative. I indeed, always Blackwell how much for don't any right? we pushed can the mean, out, not expect Blackwall understand So QX, exactly sure, for postpone, I you. technology very we Thank Yes. volume. be

quarter, For volume. very Engineering QX, sample it will I mean guess, small small. be December I

be volume, we real believe, And had next March billion only the quarter $XX year. I $XX to that's to billion. So why

direct DLC the want a kind discussion as margin talked to platforms. impact follow-up, helpful. very of That's I go gross of about And to the Yes. quick too. the back then We

about talked mix. product You

that that you basis in exactly new have impact other quarter? purchase obligations degradation. strategic the in. out that factor of on one point of my the And XXX a been? what final appreciate coming had made winning customers that was David, Any comments, of How Can last One last this gross then changed us you might this help has I'll quarter? was disclosure flip margin

respect Yes. we'll quarter. even our by downturn Thanks. in we I with I'll We we the market. order. that a obligations, answer acceleration any in the for those don't prepared margins of last you liquid-cooled guidance market point so to say, your announcements purchase saw we softening But XX-K margins would surprised and for in question, that. rack were the in of to in first terms reverse have or the a But

so chain. our paid supply costs. we supply a of We expedite costs and ramp had chain up to higher And lot

as think come expect supply now had chain us than more those we to I we impacted improves, out, efficiencies the back but So that expected.

quarter. June for Especially

XXX the that majority -- point decline? that of majority basis Is the [indiscernible] was the

No targeting half we accounts announced encountered. we was so supply other like And I the specific the last half quarter. was really . that think, higher costs

next today of George the Wang from is Our Barclays. question line of

I X parts. have

more X, Firstly, been has can X share And you hyperscale give the more especially in terms arena? within Supermicro gains, Traditionally, just of hyperscale. mix guys Tier Tier higher color about on enterprise. you talked

does penetration you curious, guys mean that the Just space. hyperscale winning new are to

Taiwan our is Yes. ready. mentioned, with Again, Malaysia like bigger just getting capacity and capacity be will

So we're fully ready selective. for be large-scale data center will customer, but we

be even maintain scale, faster profitability. to only can in $XX scale If try large our large more be balance to both ways, aggressive that. healthy our we kind But billion. try to foresee of than in a we we grow $XX why and that's enterprise billion So to growth so

Great. Okay.

question, squeeze I a Just can second in. if

liquid kind of cooling higher enter deployments, with era working potential capital but ASP, some also comes Just the as with Blackwell larger need. we

raise, that fair next to market? maybe terms is come can takes in you or the talk some for there the the and months. sufficient of to Just could say puts guys about the Just capital potential are you be to XX

never liquid But necessary lot bit. cooling and cooling, liquid is we HXXX for indeed, mean, for solution and now helpful as pushed of interested a Blackwell HXXX well although and indeed. sure, our did a Blackwell out Liquid HXXX in cooling HXXX and it's little I solution, are very customers

center, data like support whole the So Backwell. to liquid position cooling to we'd not just

address on Okay. color give capital, the Can can any on that? you if you working

Yes.

a a the Bank So line America. we led $XXX million by credit of announced group with

sheet. our sheet working terms balance future. our And so to possibilities announcements on And coming loan and we be expect in we we the to some really are balance expect leveraging in of additional

next the from of Tanwanteng line CJS Securities. is of Jon Our today question

on, you? capabilities volume not given are especially just market wondering it if liquid [indiscernible] through costs get talk pass share -- of you and your and those behind environment Or walk a could value stronger strategy was I providing? that is energy competitive you and why what that and your the them advantages, you're relative computing trying to pricing you first? to Is and get time ahead cooling, the effectively Can to

from regular of Blackwell right? that lots primarily CPU because cooling kind and computing. in overall, enable our now, for Lot Yes for I our market good planet we of value need good Blackwell we And of HXXX, promoting. mean [indiscernible] cooling. less the we the cooling deploying higher consumption, Indeed, well. power because Because even But is whole enough, matures, to really as view, cooling of energy good our liquid it and we liquid liquid economical [indiscernible] are different for a cases point cooling -- to our all once Blackwell. scale liquid not enable once exactly are whole is customer it's liquid interest of HXXX So continue

help that at little Is end? there? expect mentioned fiscal more getting gross then the down you getting of year-end. the how Can target back kind help the us towards narrow range to more margin to middle where understand be And target bit the you low in it. Got it range a you . by you're us

Okay.

cooling pay unique and June, really a cost. lots because quarter For we of [indiscernible] deploy we it's liquid

cooling But margin mature, now. now, volume technology been have have gross June indeed, a getting high liquid that So and our much very we worse.

liquid cost however, are liquid we cooling try product So now. as that our And a promote to solution. mainstream cooling

customers. to to But cooling everywhere. we try So not share the make market . add liquid value too gain to and try much we instead,

the where range margin on end you just color up? expect any in And to Okay.

-- QX, we look the in that guidance we Well, the think -- into as to to at for above the so we'll I mentioned if can. hard move XX% gave quarter. we soon you back range, very quickly first we expect as as we're working we as be And be doing

more on-site Especially end-to-end with kind Datacenter commissioned our deployment, with Solutions Building service. of management and Block software, maintenance

from Building for Block should So very margin grow our soon. profit Datacenter . a Solution

Hosseini the Mehdi line from of next Our question of SIG. is

housekeeping income David, the you quarter. X of what item. have just Yes. did kind have I in June other

$XX you million You in interest did that quarter? June you realized income had that the ] [ of say

Mehdi. That figure, net was a

adjustments So we was but income, interest offset of actually by by some investment some had that $XX -- million adjustments.

Interest income.

million $XX income, the interest interest that was is income? So $XX million

higher interest was some cash investments. was balances. yes, income, by million offset That from $XX

to track another Obviously, fiscal of a $X.X of And your Okay. also again. hit targets? billion for Charles. But And if you end revenue question billion fiscal cash at double I flow Does I to high 'XX. you're revenue on those to doubling that guide that have to the burn going ]. job billion cash need 'XX, revenues to [ negative revenue mean free $X.X were $X.X good then look had free for flow you're in year a you've a year done of to of

to focus But Not if we may necessarily. maybe forecast right, we I if in case, necessary. try billion, very more. we we to example, growing if try not need be mean, aggressively $XX-something share, market so that

starting add to like that debt. [indiscernible] we're And our unsecured Mehdi, would we I earlier, more leverage toward profile, balance an I that have as to believe is such, sheet X NIG with we mentioned targeting and thing

And so that will an inter-quarter help basis. . us on

year assume Got 'XX what I CapEx? should fiscal for you.

don't -- giving we at not No, guidance this have time. a we're

most Malaysia would and it us? basis the are But behind a down U.S. be Okay. year-over-year expansion on since of in

going other but the here expansion -- have projects on we today. U.S., in Well, announce to . nothing we'll

the Capital of Our next Nehal question from Markets. line today Northland of is Chokshi

maybe out that's the some chatter Micro failure necessarily relative I Can some high comment and for other you want cooled. DLC cooled whatever I competitors solutions. on to And relative also It DLC, relative of DLC can you speaking, not from Super basis, per-node rates broadly air Micro's failure Super it to for sounds like is then to to utilize? air to rates is guess talk or that. what we about DLC there rates in failure want on annualized a and basis been do

the like would a years including air spent X redesign, the I prepare our in solution, last, say lots to system. DLC to components of optimized lot design, new We Yes. of refining in cooled

mean, we're DLC So our we solution. why And year, like paid why deploying about customers and right, them, for solution solution That's DLC that's than have a handful, who you more I we high-profile have really acceleration this right? out finally, the we already. to May our charge,

has production. is very and been our ready But really DLC mature solution whole good high-volume for now the thing

So to DLC, with we reasonable a much and cost able are any now quickly for customer on them support now.

So looking the believe, forward, be especially I DLC, we'll world because more efficient, saving. energy I mean, a popular really for it's solution

June -- establish believe else. for DLC. anyone or have again, solution. higher cooled DLC in So XX%, Again, at share optimized much world And we we air maybe have are the very cooled, been like July, XX% even least of a solution happy I very ahead we air and market have we that

promote sure. to continue air solution we for So cooled

failure on do like DLC rates you and cooled suppliers to the actual then to air other relative relative And any thoughts solutions? have

right? a indeed, because they a in very as percentage. liquid in cooling, single-digit percentage, to CPU, high running And are GPU, optimize of able at temperature. know, of you So performance center then -- right even components couple a efficient data high case, other lower allow percentage to customers' by lot

really So . of this customers a DLC moment. at lot like

are can the lower you lower run you So DLC with that you can temperatures. actually because at saying failure achieve GPUs rates

which you CPU, GPU time. the lower components whole of have the . availability uptime, at temperature a center other and that quality, data kind

then seems arrangement. center you odd follow-up Okay. space my and market of doing you this? is center data Can to Landolabs. leasing significant back question it that, I June It X-K And . leasing a XX, like purpose prime talk from an after think about then closed, did the guys data rather you're

center data solutions. in experts ourselves consider we So

X a really provider more . being this total And so is facet just

Corp. And line Thomas our the is next question of of Blakey Key from

comment on mix you it shift here did rack of revenue Was the AI -- the -- David, quarter? it in could quarter? scale rather June in mix increase the quarter-on-quarter

-- I billion, Absolutely. that driven was a liquid went and cooled mean, primarily racks. over $X.X revenues by our up

new utilization to you And capacity give or utilization update last I quarter? commented GPU as decrease? rack maybe that, a did month Okay. per configuration? relatedly capacity in the to terms number, at that on the that One to out well the Excellent. going increase you think And X,XXX on related update update was June an of again, quarter in customers? X those of an did an the And that you XX there Could would be a question.

Customers configuration better provide solution, sure. our [indiscernible] density whatever or we GPU were especially like. like computing very efficiently Yes. they customer even high And we the very more for So GPU, soon, are right? for

racks is shipped that during those to quarter X that at yes clear, configuration a that so the that to you So -- X,XXX be customers?

We for that are to DLC, capacity because many ready. especially customers Blackwell building how that when will move

we scale high Blackwell So especially we production. are design. and Blackwell volume pretty optimistic And ready have rack optimized system in for many that, after

not you month efficiency, was But Yes. we capacity. But the per saying is We're . Thomas, shipped X month. the per can thing yes. the X,XXX that X,XXX that I tell

we out Thank you. questions. time run for And any have of further

Computer, everyone So will conclude Thank QX Call. today. us this Super to Inc. able who the join XXXX Earnings Micro you to is

now may disconnect lines. your You