Super Micro Computer, Inc.

Good day and thank you for standing by. Welcome to the Supermicro fourth quarter and full year fiscal 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. Thank you. I would now like to hand the conference over to Nicole Nustiok.

investor relations please go ahead good afternoon and thank you for attending super marco's call to discuss financial results for the fourth quarter and full year fiscal 2021 which ended june 30th 2021. by now you should have received a copy of the news release from the company that was distributed at the close of the regular trading and is available on the company's website As a reminder, during today's call, the company referred to a presentation that's available to participants in the IELTS text for the company's website and the events and presentations tab. We've also published management scripted commentary on our website. Please note that some of the information you hear during our discussion today will consist of four looking statements, including, without limitation, those regarding revenue, gross margin, operating expenses, other intimate expenses, taxes, capital allocation, and future business outlook, including the potential impact of COVID-19 and the company's business results of operations. There are a number of risk factors that can cause Supermicro's future results to differ materially from our expectations. We've learned more about these risks in the press release issued earlier this afternoon and most recent 10-K filing for fiscal 2020 and our other SEC filings. All these documents are available on the IR section of Supermicro's website. You see no obligation to update any forward-looking statements. Most of today's presentation referred 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. In addition, a reconciliation of GAAP to non-GAAP results 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 have a Q&A session from self-led analysts to ask questions. And now I'll turn the call over to Charles Liang, Founder, Chairman, and CEO. Charles.

Charles Liang Thank you, Nicole, and good afternoon, everyone. I'm pleased to announce that for the first time, our quarterly revenue has exceeded $1 billion. For fiscal Q4 2021, we delivered year-over-year revenue growth of 19.3%. For the whole fiscal year 2021, our revenue grew 6.5%. We have gained much share and finally resumed faster growth starting from March quarter this year after the impact from the past 10K delay and COVID-19 challenges. The revenue growth was driven by some wins from large enterprise customers and large multi-nation high-tech companies. These customers choose Supermicro because of our green computing technology, faster time-to-market, and part-and-play total IT solutions, especially in appliance, cloud, AI, and 5G markets. Now, let's look at some key highlights from the quarter. Our fiscal first quarter net sales totaled $1.07 billion, up 19.3%, most year-over-year and quarter-over-quarter, at the top end of our guidance range. This growth rate, I believe, is much higher than that of our industry. All our major geographics contributed double-digit year-over-year quarterly growth. Our fiscal first quarter non-GAAP earnings per share was $0.81, up from $0.68 in the same period last year. We saw a significant increase in sales from new and existing large high-profile customers. Our strong momentum is mainly driven by our business expansion from hardware solution to total IT solution. That consists of hardware, software, and service. We have doubled our software engineering resource in the past 24 months to allow us to swiftly execute this plan. Through engagement and close collaboration with strategically leading hardware and software partners, we have provided our customers more optimized, tested, certified, and ready to deploy reference architectures. As a result, large volume order are deployed timely without customers having to go through complicated process of hardware validation software compatibility, and supply chain disruption. It's a win-win for everyone. Earlier in fiscal Q4, we successfully executed the launch of Intel i7, AMD Mi 9, and NVIDIA A100 GPU-based product lines and began to ship more than 200 application-optimized product solutions. They are all based on the strong foundation of our server building block solution. These optimized systems are created in-house, leveraging close to three decades of subsystem innovations, including manageable enclosure, power supplies, and cooling technologies. What's more, our security and management software empower customers to deeply manage and scale in a timely manner, from enterprise to hyperscale. On the product side, our new Ice Lake-based X12 generation multiple node solutions against great traction among customers who are looking to scale out their enterprise and cloud data centers. from SuperBrain, MicroBrain, to BigTwin, FatTwin, and the upcoming GrandTwin. All these resource-saving product lines support a dense NVMe and often persistent memory, flexible GPU and LPGA configurations, providing optimized performance and a basic TCO to a variety of customer workloads. Our GPU product lines are continuing their strong growth with the explosion of AI machine learning application demands. These new iStack and Mi9 based GPU product line support larger on GPU memory and accelerated compute intensive applications. Our 2U2NO GPU system has proven to be a top seller since its introduction, thanks to its optimal mix of CPU to GPU ratio and resource saving features. Later this year, we will be introducing a brand new universal GPU product line. That will provide even more flexible configuration for many different CPU and GPU module combination. For the push that limit our system density and performance up to 50% when compared to competition. Along in June, during Computex 2021, our project player, RAC4.9, is a integral part of our complete solution strategy going forward this turnkey wax has undergone as solar solution level design and validation process and built securely for our ai 5g telco enterprise cloud and storage customers upon receiving these total ip solutions Customers only need to connect power and networking. Then they are immediately ready to run their applications. Shorten the time from making decisions to seeing results. To further improve sales and operation efficiency, we will launch our auto-converter tool to enable B2B, B2C automation, which will be thoroughly ready to service our customers in the coming few weeks. This tool makes it faster to achieve product optimization and more efficient to leverage the configuration among our sales, engineer, PM, and customers. We recently completed our Taiwan campus expansion. Now, we have a total 3 million square feet campus in Taiwan. We are equipped to deliver not only sufficient capacity, supply chain design, but also lower cost structure. Combined with manufacturing facility in Silicon Valley and Nassau, Supermicro is well positioned to grow market share with economical scale, agility, quality, and rapid delivery time to satisfy our customers' faster growing demands. We are working aggressively across our global supply chain to improve our critical parts shortage. In summary, SuperMineco has been solidly transforming into a total IT solution company from a server hardware company. In addition to providing the greenest hardware total solution, our software and service products are now ready for large enterprise, cloud, AI, and telco customers. Second, our Taiwan campus expansion doubles our solution capacity and lowers our cost structure. Now, if we decide to do so, we can start to reduce our expense in Silicon Valley headquarters if we select 2.0. Third, our business automation program, including the auto calculator, and B2B, B2C systems were significantly improved customer experience by streamlined customer configuration and order process, resulting in shortened solution delivery time with better quality and optimization. With the above summary, I believe our fiscal year 2022 revenue will reach at least 4.3 billion dollars. and start to grow much faster than our past four years. In closing, I'm pleased with the progress of our business transformation, which has started to speed up our business execution in fiscal 2021. As a total IT solution company, we are now able to grow business much more efficiently. and achieve our $10 billion revenue goal quicker. Perhaps we are able to pull in from 2026 to 2025 or even sooner. With that, I will now pass the call to David Wagon, our Chief Financial Officer, to provide additional details on the quarter.