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spk06: Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Supermicrocomputer Inc. fiscal third quarter 2022 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. It's now my pleasure to turn the call over to Nicole Nuzies, Investor Relations. Please go ahead.
spk01: Good afternoon, and thank you for attending Steve and Marco's call to discuss financial results for the third quarter, which ended March 31, 2022. With me today are Charles Liang, Founder, Chairman, and Chief Executive Officer, Patrick Wang, President of East Coast and SVP, Strategy and Corporate Development, and Dave Ringland, Chief Financial Officer. By now, you should have received a copy of the news release from the company that was distributed at the close of regular trading and is available on the company's website. As a reminder, during today's call, the company will refer to a presentation that's available to participants on the IRS section of the company's website. your events and presentations tab. We have also published management scripted commentary on our website. Please note that some of the information here during our discussion today will consist of four looking statements, including without limitation those regarding revenue, close margin, operating expenses, other income and expenses, taxes, capital allocation, and future business outlook, including guidance for the fourth quarter, fiscal year 22, and full year 2022. our long-term revenue goals, and the potential impact of COVID-19 on the company's business and results of operations. There are a number of risk factors that can cause Supermicro's future results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon. The most recent 10-K filing is fiscal 2021. The 10-Q filings made thereafter are other SEC filings. All these documents are available on the IRS section of Supermicro's website. We assume no obligation to update any forward-looking statements. Most of today's presentation refer to non-GAAP financial results and business outlook. For an explanation of our non-GAAP financial measures, please refer to the campaign 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 supplemental information attached today's presentation. At the end of today's prepared remarks, we'll have a Q&A session for cell site analysts to ask questions. I will now turn the call over to Charles. Charles?
spk00: Thank you, Nicole, and good afternoon, everyone. Today, I am pleased to announce our quarterly revenue of $1.36 billion for fiscal year Q3 2022, which was 51% year-over-year growth. and 16% quarter-on-quarter growth, sequentially. These results are way above our guidance given three months ago and above our recently updated range given two weeks ago. Continued five quarters of strong earnings indicate our total IT solution growth strategy is working well, and we are only at the very beginning of the breakout. Now let's look at some of the key highlights from that quarter. First, again, our fiscal third quarter net revenue total 1.36 billion. up 51% year-on-year, and up 16% quarter-on-quarter. We are above our guidance range of $1.1 to $1.2 billion. It's Supermicro's fifth consecutive quarter of faster revenue progression, and we continue to execute our strong growth trajectory at three to four times higher than the overall industry's growth rate. Our fiscal third quarter non-GAAP earning per share was more than triple year over year and was $1.55 compared to $0.50 years ago. This 210% growth was way above the higher end of our guidance range of $0.70 to $0.90 demonstrating strong operating leverages, and the customers accepting the value of our total IT solutions. Growth in our major geographies was well balanced, and our recent Taiwan expansion has contributed to our better operation margin and meeting our growth customer demands. Our results in the past five quarters are showing that we are ahead of our $10 billion annual revenue target that was shared last year March. And our profitability has been improving greatly as well since then. Based on our current demand and capacity, we are forecasting at least $1.45 billion revenue for the coming June quarter to end the fiscal 2022 on a strong note at about $5 billion yearly revenue. Looking further ahead, I believe we will continue to have a strong fiscal year 2023 in the range of $6 billion to $7 billion annually and expect to reach our $10 billion yearly revenue at least one year sooner than the original plan we share back in 2021 March. The fuel that accelerate our revenue came from our success with our total IT solution in AI, Enterprise, Cloud, Edge, Telco, and customers from many other verticals. Riding on the strength and the foundation of Superman Co's optimal building block architecture, Our total IT solutions allow customers to quickly deploy without going through the complications of design, validation, sourcing, and integration. This strategy also positions Shibu Micro very profitably, hence the ongoing supply chain challenge compared to our competition. With our building blocks and fast-growing economy of scale, we can create and deliver workload-optimized solution to customer with time-to-market advantage, quality, performance, cost, and TCO advantages. To grow our solutions and customer base faster and more efficiently, we are on track with our command center base auto calculator, and B2B, B2C automation platforms. Many customers have tried and liked this intelligent database and web-based service for many quarters. This represents our next opportunity to scale up and scale out our application optimization solution to many more customers 24-7 with no downtime and no manpower bandwidth limitation. The B2B and B2C automation program will be greatly launched nationwide in this month. Indeed, next week, I believe. It will dramatically improve our engineering, operation, sales, and service effectiveness and customer satisfaction while accelerating our market share gains. to enrich our total IT solution product portfolio. We have doubled our software engineering resource in the past few years to build new features to power our enterprise data center and OEM customers. Our SuperCloud Composer and other software products manage GPU, compute, storage, and networking building blocks at a cloud scale, including rich analytics, so data center operators can make critical data-driven decisions to improve workload efficiently. In the middle and long term, we see our investment in through our data center management software stack will enable future infrastructure as a service and monitor as a service functionality. And that will further enhance our total IT solution capability and value. Our recent Taiwan and U.S. expansion are focusing on delivering ERROR 10, ERROR 11, and ERROR 12 large-scale total IT solutions Emporium, capable of shipping thousands of racks per month directly from Shibamako campuses. Designed with green computing in mind, these energy saving rack scale solutions leverage our latest free air cooling and liquid cooling technologies. More and more of our customers are able to run their data center with PUE close to 1.06 or even better. Customers can expect lower TCO by saving energy cost while increased performance per megawatt in their facility substantially. In some order cases, our customer increase computing capacity up to 50% with the same energy budget. Many Fortune List customers are quite happy to receive higher-quality, plug-and-play-ready products. They are fully optimized, integrated, and validated by Supermicro. Our R&D organizations are happy and hard at work to expand our new technology product lines with the upcoming new Intel Sapphire Rapids and AMD Genoa processors. We, again, are ready to bring time-to-market advantages to our customers. We are pleased to see a strong trend in terms of customer seeding and early deployment requests. We especially partner closely with NVIDIA and other leading technology partners in the emerging Metaverse and Omniverse ecosystems and double our GPU product line. to support these 3D and immersive workloads. With all of the new technologies, including PCIe Gen 5, CXL, DDR5, the new 350-watt CPU and 700-watt GPU, our portfolio of new platforms for large-scale total IT solutions will continue to evolve and become a key growth driver. for our coming quarters and years. In closing, our 51% year-over-year revenue growth and $1.55 quarterly EPS prove that our Total IT Solutions strategy has been gaining customers' preference and trust. In this growing time, we will continue to enhance our Total IT Solutions capability and value while continuing to lower our operation cost by leveraging our Taiwan production capacity. With our strong technical foundation, dedicated employees, several billion-dollar solutions, and application-optimized green computing products, we are quickly and consistently winning new customers and their satisfaction now. We invest in command center-based B2B and B2C platforms will help us to much efficiently increase our customer base and market share. I and my teams will continue to execute our growth strategies and accelerating the timeline to reach $10 billion revenue target in short term and start to plan and execute Our new $20 billion midterm goal as well. I will now pass the call to David Wagan, our CFO, to provide additional detail on the quarter. David?
spk03: Thank you, Charles. I'm pleased to report solid fiscal third quarter revenue of $1.36 billion, 51% year-on-year increase, and 16% quarter-on-quarter increase. Our revenue exceeded our initial guidance range of 1.1 to 1.2 billion and our recently updated range of 1.3 to 1.35 billion. This was our fourth consecutive quarter of revenues exceeding 1 billion. Year-to-date revenue through our fiscal third quarter increased 43% year-over-year. Our growth initiatives with total IT solutions targeting fast-growing markets and customers with accelerated GPU and AI workloads, software-defined storage and networking, public and hybrid cloud, and edge IoT platforms are gaining momentum. These new growth drivers complement our traditional strength with enterprise, channel, and OEM customers, leading to accelerating revenue growth, expanding margins, and operating leverage. Revenues for the trailing four quarters That's Q4-21 through Q3 of fiscal year 22, totaled $4.63 billion. In the third fiscal quarter, Supermicro recorded balanced revenues across all three of our market verticals, demonstrating the resilient nature of our diversified end markets. We achieved $846 million in organic enterprise and channel and AI NL revenues, representing 62% of Q3 revenues. versus 64% last quarter. It was up 44% year-over-year and 12% quarter-over-quarter, which was driven both by our growing list of large enterprise customers and new product offerings. Our OEM appliance and large data center segment achieved 423 million revenues, representing 31% of Q3 revenues versus 23% last quarter, which was up 54% year-over-year and up 54% quarter over quarter, with strong growth driven by large new and existing data center customers and OEM appliance customers. Our 5G, Telco, Edge, and IoT segments achieved 86 million revenues, representing 7% of Q3 revenues versus 12% last quarter. This was up 159% year over year and down 39% quarter over quarter. This emerging segment represents a fast growth long-term opportunity for us, and our design win momentum and backlog continues to grow, but short-term quarter-to-quarter results can fluctuate depending on the timing of new customer adoption and qualification cycles. Systems comprise 85% of total revenue, and subsystems and accessories represent 15% of Q3 revenues. On a year-over-year basis, the volume of systems and node shifts, as well as system node ASPs increased. On a quarter-over-quarter basis, the volume of systems shift and system node ASPs increased, while node shifts were lower due to product mix. We had a balanced distribution of revenues across geographies, with the U.S. representing 56 percent of revenue, Asia, including Japan, 23 percent, In Europe, 15%, while the rest of the world was 6%. On a year-on-year basis, U.S. revenues increased 53%. Asia, including Japan, increased 50%. Europe increased 27%. The rest of the world increased 184%. On a sequential basis, U.S. revenues increased 19%. Asia, including Japan, increased 9%. Europe decreased 5%, and the rest of the world increased 124%. The Q3 gross margin was 15.6%, which was out of 160 basis points quarter over quarter from Q2, and out of 180 basis points year on year due to price discipline, leverage from higher factory utilization and operating efficiencies, and a continually improving product customer base. The quarter-on-quarter and year-on-year increase in gross margins was achieved despite continued elevated freight and supply chain costs. Turning to operating expenses, Q3 objects on a GAAP basis increased 7% quarter-on-quarter and 14% year-on-year to $121 million. On a non-GAAP basis, operating expenses increased 6% quarter-on-quarter and increased 15% year-on-year to $110 million. Our non-GAAP operating margin increased significantly to 7.5% per quarter versus 5.2% last quarter and 3.2% a year ago, demonstrating both improvements in gross margins and operating leverage. The year-on-year and quarter-on-quarter increases on a GAAP and non-GAAP basis were driven by higher headcount and personnel costs. lower research and development NRE credits. Other income and expense was $3.1 million in income, consisting of $4.6 million in foreign exchange gains offset by interest expense of $1.5 million as compared to a $1.8 million expense last quarter. This quarter, the tax provision was $16.2 million on GAF-ACES and $19.6 million on non-GAF-ACES. Our non-GAAP tax rate was 18.7% per quarter. Our tax rate for GAAP and non-GAAP purposes increased again this quarter, primarily due to a significant increase in pre-tax income in fiscal 2022. Lastly, our share of income from our JV was 0.39 this quarter as compared to 0.29 last quarter. The Q3 non-GAAP diluted earnings per share total $1.55, which exceeded the high end of the original guidance range of $0.70 to $0.90, a recently updated Q3 range of $1.40 to $1.50. The increases to EPS were due to a combination of higher revenues, manufacturing efficiency, price discipline, product and customer mix, and operating leverage. Cash flow used in operations for Q3 was $228 million. compared to cash flow used in operations of 53 million in Q2 as accounts receivable and inventories grew due to increasing demand from our customers and to mitigate the continued impact of supply chain disruptions. Including CapEx of 11 million, Q3 negative free cash flow totals 239 million. Key uses of cash during the quarter included increases to inventory and accounts receivable and a reduction in customer prepayments. This was offset by cash provided from increased accounts payable and short-term debt. We did not repurchase any shares in the quarter. Our closing balance sheet cash position was $247 million, while bank debt was $547 million as we drew down on our bank lines of credit to increase inventory levels as we ramped production of new platforms globally. Turning to the balance sheet, and working capital metrics compared to last quarter, our Q3 cash conversion cycle was unchanged at 98 days relative to Q2 and above our target range of 85 to 90 days due to higher inventories. Day of inventory was 117, representing a slight decrease of one day versus the prior quarter. Day sales outstanding was up by two days quarter on quarter to 39 days, while days payable outstanding was up by one day to 58 days. Now turning to the outlook for our business, we know that our Q4 June quarter is typically seasonally strong, and we are enthusiastic about several new customers and innovative new leading edge total IT solutions ramping multiple end markets. We're carefully watching the global macro and economic situation and impacts to the supply chain from continuing COVID-19-related disruptions. For the fourth quarter of fiscal 2022, ending June 30, 2022, we expect net sales in the range of $1.4 billion to $1.48 billion, GAAP diluted net income per share of $1.45 to $1.64, and non-GAAP diluted net income per share of $1.51 to $1.69. We expect gross margins to be similar or slightly up from Q3 levels GAAP operating expenses are expected to be approximately $121 million and include $8 million in stock-based compensation and $1 million in other expenses not included in non-GAAP operating expenses. We expect other income and expense, including interest expense, to be a net expense of approximately $2 million and expect a nominal contribution from our JV. Non-GAAP operating expenses are forecasted to be up quarter-on-quarter from continued investment in R&D and higher personnel costs. The company's projections for GAAP and non-GAAP diluted net income per common share assume a GAAP tax rate of 17.4%, a non-GAAP tax rate of 19.4%, and a fully diluted share count of 54.3 million for GAAP and 55.79 shares for non-GAAP. For the fiscal year ending June 30, 2022, We are raising our revenue guidance range from $4.2 to $4.6 billion to a new range of $4.96 billion to $5.04 billion. And raising our gap to limited net income per share outlook from at least $2.77 to a range of $4.16 to $4.35. And our non-gap to the net income per share from at least $3.20 to a range of $4.53 to $4.71. The company's projections for GAAP annual net income assumes a tax rate of 16.5% and a rate of 18.7% for non-GAAP net income. For fiscal year 22, we are assuming a fully diluted share count of 53.6 million shares for GAAP and 55.1 million shares for non-GAAP. The outlook for fiscal year 2022 fully diluted GAAP earnings per share includes approximately $39 million in expected stock-based compensation and other expenses, net of tax effects that are excluded from non-GAAP to lose net income per common share. Finally, we expect CapEx for the fiscal fourth quarter of 2022 to be in the range of $10 to $15 million. Nicole, we're ready for Q&A.
spk01: I'm ready to take the line for questions.
spk06: At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Ananda Barwa with Loop Capital. Your line is open.
spk02: Hey, good afternoon, guys. Thanks for taking the questions. Yeah, congrats on the great execution. First half of this calendar year. Sounds like it was a good follow-through here. Two, if I could... You know, Charles and David, what would you guys, you know, first time we've gotten a chance to talk to you guys since you preannounced, what would you guys say you would consider to have been incremental, you know, versus 90 days ago that's leading to such strong revenue execution for both the March quarter and now the June quarter? And then I have a follow-up. Thanks a lot.
spk00: Yeah. Do you know why? Because of supply chain. Because there are always some invisible factor. And that's why, I mean, earlier, I mean, March quarter, we tried to be conservative. But it's turned out we have many customers really like our IT total solution, and we ship a lot of completed work. Indeed, our rack scale PMP, plug-and-play rack solution, grew a lot year over year. Roughly this year compared with last year, our rack scale portal grew about five to six times growth. And this momentum, I believe, will continue to be very strong in the next 12 months. So we expect another three X to five X So that's why, I mean, the growth has been a little bit surprising to us.
spk02: And that's great context, Charles. And then, Charles, I'm just going to ask you sort of one of the next probably more natural follow-ups since you just remarked that you expect another 3x to 5x. Is the 17% to 23% long-term growth rate, is that still the appropriate growth rate? Or should it really be something stronger than that as you look out the next couple of years? Thanks.
spk00: Next couple of years can be very strong. But again, it depends on our global supply chain situation. As David just mentioned, COVID-19 still challenges us. And also medical, economical conditions. So even since it's not much worse, I believe our growth rate year-over-year growth rate will continue to grow.
spk02: Okay, thanks. Thanks a lot. I appreciate it. Thanks so much. Thank you.
spk07: This is Patrick. I'm just going to jump in here. You often note that Charles also talked about his expectations on fiscal 23 and the implied growth rate there. So that's another data point for you.
spk00: Yeah, next year, I mean, fiscal 2023, at this moment, I believe $6 billion to $7 billion will be a relatively very conservative estimation.
spk10: Your next question comes from the line of Mehdi Hosseini with SIG.
spk06: Your line is open.
spk04: yes thanks for taking my question and actually i have a couple of follow-ups charles as you look into next fiscal year how do you see seasonal trend impacting your september quarter and i ask that because you're doing really well especially with diversification of revenue and i think it would really help us how we should think about seasonal factor and how you would set up the company for six to seven billion of revenue round rate in fiscal year 23. And I have a follow up.
spk00: Thank you. Very good question. Indeed, traditionally September will be our slow season, but this time can be quite different because we have a very strong pack order now. And again, lots of customers, high-profile customers really like our rack scale plug-and-play solution. So we are preparing a big growth in that segment. So I believe this year, September, we will have a great quarter. It can be even more than June quarter.
spk04: Okay. Thanks for that color. And then question for David. You've had three consecutive quarter of a cash burn and given the strength and your backlog, should I assume that you're going to burn cash again in the June quarter?
spk03: Yeah, I think that as our demand increases, as we have to add accounts receivable and inventory, we will continue to use cash. But we're using it for customers and for inventory. So we consider that to be really strong uses.
spk10: Great. Thank you.
spk06: Your next question comes from the line of Nehal Chokshi with Northland Capital Markets. Your line is open.
spk05: Yeah, thank you, and congrats on the awesome results and amazing guidance. Would you say that the component availability situation has improved at all quarter to date or during the March quarter relative to the December quarter?
spk00: You know... Few months ago, we suppose the situation will gradually improve. And unfortunately, there are some parts. The availability continues to be very tight. That's why we still are suffering a supply chain availability problem. Some components, yes, have been dramatically improved. But there are some other components still in a serious shortage. So we try to improve the situation for sure.
spk05: Okay. And so, you know, clearly guidance is indicating that there was no pull in the demand, especially in the context of how Intel guided. And thus, the share gains that you guys are putting up appear to be very sustainable. Still, I'd like to hear your pushback that Supermicro's lower lead time and better management of these constrained components are not leading to these massive share gains that you're seeing at this point in time.
spk00: Indeed, because at a rocket scale, I mean, a plug-and-play solution, we plan in advance, work with Cosmo, understand their future demand, and we plan in advance, pull in all our different components in advance. And then we are able to ship. the completed rack to customer kind of a relatively efficient, more timing efficient than others. So this, I believe, is one of the reasons why we are able to grow. And we will continue to extend the customer base to offer them rack scale solution. Indeed, we have prepared to double our rack scale capacity in the coming quarter. Indeed, in June quarter. So we feel pretty strong that we will be able to continue to help Cosmo to help their supply chain challenge.
spk05: Okay, great. And then cash consumption was actually in line with what I had expected. And I presume that it was also in line with what you guys had expected given the revenue outperformance, given the cash conversion cycle was flat as clearly queued. A, is that correct? Was it in line with what you had expected given the revenue out performance?
spk03: No, it was. And also, we also have to look out to Q4 and beyond in planning our inventory levels. So it is going in line. I mean, the fact that we have, you know, the high growth rate, 51% year over year, is definitely going to continue to challenge working capital.
spk05: Yep, yep. And as such, there's been no share buybacks, right? Because all the cash is needed to finance the growth at this point in time, the massive growth that you're seeing.
spk03: That's exactly right.
spk05: Okay. And given that this cash consumption is tracking what you would expect given the revenue growth that you're putting up, Does this give you incremental confidence to utilize debt to make capital returns, track your non-gap earnings, as opposed to waiting for a slowdown in a business before you can really start a share, reach, or purchase program in earnest?
spk03: Well, we also have to watch the overall environment. And so we're trying to strike a balance.
spk00: Yeah, we are talking about a possibility, but given the macroeconomic, still have a lot of unknown factor. That's why we try to be very careful.
spk05: All right. Very good.
spk08: Congratulations.
spk00: Thank you.
spk06: Your next question comes from the line of John Tanwen Tang with CJS Securities. Your line is open.
spk08: Hi. Good afternoon, guys. Thank you for taking my question. And congrats, again, on a really great quarter and the outlook. First question is, well, it's great to hear that your component supply is getting better. I was wondering how much of a corresponding drop you're seeing in component prices, if that's the case. And should we think of improvements in the gross margins going forward as well, maybe towards the high end of the target range?
spk00: Indeed, it's hard to say because the COVID situation in Asia, especially Taiwan and mainland China, is kind of very serious. So I believe it's hard to say. So although we are doing our best and believe situation will be getting improved, but exactly how fast at this moment, no much idea.
spk10: David, how about you?
spk03: Yeah, so the second part of your question, John, we did experience some gross margin expansion from higher efficiency, which means that we actually had higher throughput, our factories, at a lower per unit cost. And so we do expect that to continue, especially as we ramp up production And so, you know, we do look forward to further margin expansion.
spk00: Indeed, one fact that we did not share before, but I'd like to take this chance to share with everyone. With our continuing growing in RAC scale, product and player RAC scale product, indeed with our current facility in USA campus and Taiwan campus, when business continues to grow smoothly, the current capacity, we can support our revenue up to $12 billion. So our capacity is pretty enough. So looking forward in next minute quarter, when our volume continues to grow, our gross margin and net profit will continue to gain advantage on the economical side, economical scale, I mean.
spk08: Got it. That's great, Collin. Thank you. And it's really great to see that capacity. My second question is regarding cash flow, and some people have touched on this a little bit. Is it in your interest to raise permanent financing to support the growth, or you just continue to use a revolver? How should we think about your ability to, you know, just fund the growth that you're seeing?
spk00: We are starting a possibility, kind of a depends on the macroeconomic condition. If the macroeconomic condition continues to be healthy, then we may try to be more aggressively leverage the money from the bank. Otherwise, we may continue to be conservative.
spk10: Okay, understood. Congrats again.
spk06: Again, if you would like to ask a question, press star, follow button number one on your telephone keypad. Your next question is from the line of Ananda Barwa with Loop Capital. Your line is open.
spk02: Hey, thanks, guys, for taking the follow-up. I guess sort of piggybacking Charles off of one of the last questions, I guess how much of the revenue upside for the March and June quarters is from new demand, you know, that you may have been conservative about relative to how much do you think was, you know, demand that you've been getting indications about, but that supply chain became available for. And really, I guess what I'm trying to get a sense of is, you know, how much of this is supply chain related and Is the follow-through dependent to an extent on new supply chain continuing to get relief? I appreciate that. Thanks.
spk00: Yeah, very good question. Indeed, our demand continues growing, has become stronger and stronger. So the really big limitation now indeed is supply chain to us. So that's why every day we are spending time to figure out how to improve the supply chain. So lots of that situation. That demand is strong and keeping growing because of our, you know, better technology, total solution, and getting very strong software support.
spk02: That's really helpful. And just a quick follow-up there. I've been jumping between calls a little bit this evening, so I apologize if this has already been answered. Or spoken to. But you in the prepared remarks mentioned, you know, the total IQ solution being a catalyst for demand in general. And I think actually to completed racks, maybe even specifically in the prepared remarks. And so, you know, any context you can give us about, you know, what you're seeing, I guess, like engagement context. I suppose, with your client, with your customers, that's having the total IT solution, you know, be a real catalyst to revenue right now. Because it looks like it may be, and I guess the implication is it's showing up in an increasingly bigger way first half of this calendar year. Thanks a lot.
spk00: Yeah, indeed, the supply chain. David, do you want to add something or Patrick? The supply chain has been bothering us for many, many quarters, as you know, right? So at this moment, our current customer, existing customer, and some new customer, indeed, all have a strong demand. And we just had to work out. David, maybe you can add something or Patrick.
spk03: Yeah, so we're seeing... Ananda, we're seeing really a lot of high demand in the AI and ML area. And so the workloads that are being addressed there and the solutions that we're providing are being well received by our customers. And so the engagements that we're in, that's the driver that we're seeing. AI has led our growth over the last three to four quarters.
spk10: Yeah, it's Patrick. I'll jump in. I'll jump in here.
spk07: So, you know, the supply chain topic, you know, we've talked about quite a bit. It's not unique to us. But, you know, I think we do have to do kudos and shout-outs to the operations teams here at Supermicro, right, because without their hard work, we're not able to get the supplies we need. But, you know, on the other side, you know, the customers just really like our products. We've got great products. We've talked about strong backlog. We've talked about targeting of top customers. And we've seen all that stuff play out. And so the good news is that we've got great solutions. The customers really enjoy the benefits of our products on the workloads. And it's just turned out to be a very good result. So we're all pretty happy here.
spk00: Agree, supply chain and cash flow. Those are two areas we will continue to figure out to study how can we better utilize or how can we further grow the supply chain and more efficiently utilize our cash flow.
spk10: Excellent. Thanks so much for the context, you guys. There are no further questions at this time. Ladies and gentlemen, thank you for your participation.
spk06: This concludes today's conference call. You may now disconnect.
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