Super Micro Computer, Inc.

Ladies and gentlemen, thank you for standing by. And welcome to Supermicrocomputer Inc.' 's fiscal fourth 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 during this time, please 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. Nicole Nupsios. Investor Relations, you may begin your conference.

Good afternoon, and thank you for attending Supermicro's call to discuss financial results for the fourth quarter, which ended June 30, 2022. With me today are Charles Liang, Founder, Chairman and Chief Executive Officer, and David Regan, 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 referred to a presentation that's available to participants in the Best Relations section of the company's website under 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 consists of four looking statements, including, without limitation, those regarding revenue, gross margin, operating expenses, other income and expenses, taxes, capital allocation, and future business outlook, including guidance for the first quarter of fiscal 2023 and the full year of 2023 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, our most recent 10-K filing for fiscal 2021, and our other SEC filings. All of these documents are available on the IR page at Supermicro's website. We assume no obligation to update any forward-looking statements. Most of today's presentation refer to the non-GAAP financial results and business outlook. For an explanation of our non-GAAP financial measures, please refer to the accompanying presentation which our press release published today. In addition, a reconciliation of GAAP to non-GAAP results is contained in today's press release and the supplemental information attached in today's presentation. At the end of today's prepared remarks, we'll have a Q&A session for our self-taught analysts to ask questions. And I'll turn the call over to Charles.

Thank you, Nicole, and good afternoon, everyone. Today, I'm pleased to announce record year-end results with annual revenue surpassing a milestone of $5.2 billion, growing 46% year-over-year. We ended the year with another great quarter with fiscal Q4 2022, revenues of $1.64 billion, growing 53% year-over-year. and 21% quarter-on-quarter, surpassing both top and bottom nine estimates. Our quarterly and year-end results were above our guidance given three months ago and exceed our recently updated range given several weeks ago. Our strong growth is assured by a recent trend in design based on our large-scale total IT solutions, especially on GPU solutions and AI platforms. And I believe our solutions will continue to drive plenty of new design ways and further accelerate our strong growth in the coming quarters and years. More customers are also recognizing and adopting the value of our green computing solutions rising environmental challenges and energy costs. The total solution strategy and green computing solution values have resulted in our four consecutive quarters of growth at a minimum three times faster than competitors' growth rate. Now, let's look at some of the key highlights from that year and quarter. First, our quarter 2022 net revenue total 5.2 billion, up 46% year-on-year, above our guidance range of 5 billion. Our fiscal year non-GAAP earnings per share of $5.65 grew 128% year-over-year, compared to $2.48 a year ago. This exceeds the higher end of our guidance range of $4.53 to $4.71. Our fiscal fourth quarter net revenue totals $1.64 billion, up 53% year-on-year, and up 21% quarter-on-quarter, above our guidance range of $1.4 billion to $1.48 billion. Our fiscal fourth quarter non-GAAP earnings per share triple year-over-year and was $2.62 compared to $0.81 a year ago and was way above the high end of our guidance range of $1.51 to $1.69 and demonstrated a strong operating leverage and customer preference toward our large-scale total IT solution. With our total IT solutions, business has experienced robust growth in USA this year. We will continue to gain even greater domestic attraction going forward. We will also expand our total IT solution to both Europe and Asia market. in the coming quarters and years. We are excited at this generational opportunity to become the global leader of large-scale product and play IT solutions. Our robust fiscal year results reinforce our confidence in achieving the $10 billion in annual revenue target, much stronger than we got last year. And we are now preparing for our $20 billion midterm mission that we discussed last quarter. Based on our current supply and capacity, at the midpoint of our guidance range, we are forecasting $1.57 billion in revenue for the upcoming September quarter. I'm also confident that Our full fiscal 2023 revenue will be above the prior guidance range of $6 billion to $7 billion. We now expect revenue to be in the range of $6.2 billion to $7 billion with EPS at least at $7.50. Although the macroeconomic conditions are uncertain. We are optimistic that some of the supply chain and logistics issues will begin to subside. From a market perspective, we continue to see increasing demand for accelerating compute and AI platforms. We are meeting this demand at both system and web scale level with our total IT solution. which are supported by our over 20 years of system building block developments. These building blocks allow us to create highly optimized, large-scale, product-in-place data center solutions for our customers with lower infrastructure costs and increase in significant TCO savings. Our Total IT solution approach streamline design, validation, sourcing, and integration, resulting in much shorter lead times for our customers. We optimize quality and performance. Moreover, our total IT solution simplifies each case of firmware, management software, division control. In addition, our super cloud composer, arbitrator, security, and other software products can optimally manage, compute, acceleration, storage, and network building blocks at a cloud level, including rich analytics. Data center operator can easily leverage this information to make critical decisions that improve workload efficiency. Soon, we are expanding our investment in full data center management software space. That will enable future infrastructure as a service and secure monitoring as a service functionality, further enhancing our total IT solution capability and value. This one-stop-shop approach We are aligned with the emerging growth market across AI, machine learning, software-defined storage, networking, public and hybrid cloud, and 5G, IoT, and telco. We previously shared that we will send people in our commuter-based intelligent business automation. This new B2B, B2C automation platform is being used and validated by more and more of our customers as we speak. This intelligent auto calculator will leverage our system building block methodology, scaling our application optimized solutions to a much broader customer base. We expect this tool will dramatically improve our go-to-market initiatives, product design, operations, and service effectiveness. Most importantly, the automation process will considerably grow our customer base and improve customer satisfaction starting from pretty much this fiscal year. Our current manufacturing scale and capacity is built to support between 10 billion to 12 billion in annual revenue as we continue to ramp up our rack scale capabilities in our global facilities. During the June quarter, we shipped over 1,000 plaza and freight racks. Today, in the September quarter, we have doubled our rack scale capacity with enhanced features at our new building. Our rack scale capacity can be up to 6,000 racks per quarter now. Our product development activities continue to grow strongly with close partnerships like NVIDIA, expanding our GPU system product lines, including the new DeltaMax H100, Raystone Max, and Grace Harper product lines. Our early deployment programs with the upcoming Intel, Sapphire Rabbit, and AMD Genoa product lines are mostly ready, just are waiting for the new Intel and AMD processors to be available. We stay committed to lead the market in green computing solutions with our resource-saving designs, both to reduce environmental impact and the cost of customers' operations. As we apply our green computing solutions at a large scale level, we can bring even better quality and time to market value to our customers. Higher energy costs and limitation on electricity usage will continue to strain on many companies in the near future. And so this dynamic and challenge seems like decades ago. And we have been at a forefront with technology and solutions that help customers go for higher temperature operation data center. free air cooling, or liquid cooling. Many of our customers have achieved significant TCO and COE reduction in their data centers, down to 1.05 from industry's average of 1.57 or even higher. By our calculations, worldwide adoption of our green computing solutions or other suppliers' solutions with similar energy efficiency, who potentially save the IT industry more than $10 billion in electricity costs per year, or eliminating the equivalent of more than 30 fossil fuel power plants. That is equal to saving 8 billion trees on our planet. I'm very glad to see increased demand for energy-efficient solutions, for cost-saving, but more importantly, we must do this for our Mother Earth. In corrosion, we are focused on building and delivering much more greener, red-scale total energy solutions. From an industry perspective, This is the greatest opportunity Supermicro has ever seen since our founding 29 years ago. Our year-over-year top and bottom nine performance is evidence that our total IT solution strategy is accelerating. I see our room to grow is at least another 4x in the coming years, where we believe that our plan will continue to expand with new applications. We will continue to address this technology intersection by enhancing our total ID solutions capability and capacity with more software and services. We will continue to gain mass share and extend it to new verticals, which increase our business scale and operating My team and I will continue to execute our growth strategies and are accelerating the timeline to our $10 billion revenue target in short term and $20 billion revenue in term issue. I will now pass the call to David Reagan, our Chief Financial Officer, to provide additional details on the project.