Super Micro Computer, Inc.

Thank you for standing by. Founder, President, and Chief Executive Officer David Wiegand, CFO, and Michael Steger, Senior Vice President of Corporate Development. All lines have been placed on a mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question, it is star followed by one on your telephone keypad. If for any reason you would like to remove that question, it is star followed by two. Again, to ask a question, it is star one. Thank you.

Good afternoon. Thank you for attending Supermicro's second quarter fiscal 2025 business update conference call for the second quarter, which ended December 31st, 2024. With me today are Charles Liang, founder, chairman, and chief executive officer, and David Wiegand, chief financial officer. At the end of today's prepared remarks, we will have a Q&A session for sell-side analysts. Additionally, the company will not address any questions regarding the delay in the filing of the company's fiscal year 2024 10-K and 10-Qs due thereafter. During today's conference call, Supermicro will address business and market trends from the second quarter of fiscal 25, including our financial outlook and operations, our strategy, technology, and disadvantages, our current and new product offerings, and competitive industry and economic trends. We will discuss estimated financial results by reference to any financial results or preliminary and subject to change based on finalized results contained in future filings with the SEC. By now, you should have received a copy of today's news release that was issued after the close of market and is posted on our website where this call is being simultaneously webcast. Any forward-looking statements that we make are based on facts and assumptions as of today, and we undertake no obligation to update them. Our actual results may differ materially from the results forecasted, and reported results should not be considered as an indication of future performance. has a discussion of some of the risks and uncertainties relating to our businesses contained in our filings of the SEC, and we refer you to those public filings, including our most recent annual report on Form 10-K. During this call, all financial metrics associated and growth rates are non-GAAP measures other than revenue and cash and investments. This call is being broadcast on the Supermicroinvestor Relations website and is being recorded for playback purposes. An archive of the webcast will be available on the IR website as the property is super

micro our third quarter fiscal 2025 quiet period begins to close the business friday march 14 2020 progress technology innovation and business opportunities as we approach the midpoint order fiscal 2025 i will begin by reviewing some key financial highlights from that december quarter our preliminary physical q2 net revenue is projected to range between 5.6 and 5.7 billion making a 54% year-on-year increase at the midpoint. Despite some negative impacts on cash flow and market misperception due to the 10K delay, we achieved a fairly good quarter, driven by sustained AI demand from both existing and new customers. Our growth trajectory for physical E-Authentify remains promising. Highlights by the beginning of our transition from Apple to BlackWare GPU. We expect the growth in new generation platform to accelerate as supply ramp this quarter and beyond. We have confidence that our calendar year 2025 growth could be a repeat of calendar year 2023, if not better. Assuming the supply chain can keep pace with demand. Our preliminary physical Q2 long gap earnings was in the range of $0.58 to $0.60 per share, worth $0.56 last year, representing approximately a 5% year-on-year growth. Long gap growth margin was approximately 11.9%, and long gap operating margin was approximately 7.9%. Temporarily under pressure due to the 10K delay disruption. The new product R&D investment and customer and product mix. In a separate place release issue today, we announced a private placement of 700 million in new 2.25% convertible senior nodes. due in 2028 to support our rapid business growth immediately. We have also privately amended a portion of our existing convertible nodes due in 2029, with almost all investors participating in the amended nodes. This will support our growth, including Supermicro 4.0 initiatives, data center building block solution, uh dc bbs and some brand new gpu platform architectural design before diving into the details of our operation progress let me begin by sharing an update regarding our financial violence our financial team and our new auditor bdo have been fully engaged in completing the auditor process Based on our progress to date, we are confident that our fiscal year 24, Form 10-K, and the first two quarters of fiscal year 25, Form 10-Q, will be filed by February 25th this year. As previously stated, the special committee found no evidence to support our formal auditor's reasons for resignation. However, over the past two quarters, we have added senior leaders in corporate communication, operations, finance, legal, and compliance departments. We will continue to add more top experienced leaders to build a stronger corporate foundation for our rapid growth and expanding a global business, including the CFO, CCO, and other position. As you know, we have grown strongly. Moving on to our technology progress, we are excited to announce that our NVIDIA Blackwell products are shipping now. We have begun volume shipping of both L-Core 10U and D-Core 4U NVIDIA B200 HGX system. Meanwhile, our NVIDIA GB200 MVL72 racks are fully ready for production as well. Utilizing our system building blocks, we are going to soon offer more brand new platforms for customers seeking further optimized, higher density, and even greener AI solutions. While most of the key components are ramping at a full speed, it will take some time to fulfill our current AI solution backlog. Some customers also need more time to finish their DLC data center view out. At the same time, we see strong new demands are keeping coming from enterprise CSPs, serving entity and hyperscale. We are expanding and enhancing our total liquid core data center infrastructure solution, featuring the latest DRC technology exemplified by the XAI process, the world's largest deep core AI supercomputer. Supermicro is the disruptive leader in driving industry-wide adoption of DRC technology, which reduce customers' OPEX and achieve green computing. We expect more than 30 percent of new data centers worldwide to adopt liquid cooling infrastructure within the next 12 months driven by the rapid and continual growth of ai winning computing deserves to be everywhere in the world our dlc long-term investment and leadership provide a sustainable competitive edge and economics of scale far ahead of competition super michael's data center building block solution consolidated server racks networks storage water tower software management on-site deployment cabling and service for an end-to-end solution The true value of data center building block solution is to save power, reduce space, and decrease water consumption, resulting in up to 40% lower TCO for our customers according to our detailed calculation. It accelerates new data center deployments and helps modernize existing infrastructure in weeks or months rather than quarters. and EOS. Significantly improve data center TTD and TTO, time to delivery and time to online. We are expanding our data center to include more and more systems quarter after quarter. And we have become a true one-stop shop, a data center partner to the whole industry. On the product front, Our new Malaysia campus, sorry, own the production from our new Malaysia campus. We also ship the product to our regional partners. Our Taiwan and European production capacity are also growing significantly. In Silicon Valley, we are rapidly expanding our manufacturing site to increase our DLSE direct scale production capacity. The U.S. campus boasts an impressive 20 megawatt of power, enabling us to produce over 1,500 DLC GPU racks per month in the U.S. To better support our key partners and align with current government initiatives, When needed, we are also ready for other domestic manufacturing expansion in various regions across the U.S. This strategic expansion will ensure we meet the increasing demand for our product and service while maintaining our commitment to keep partner for quality, security, TCO, total cost of ownership, TTD, again, time to delivery, and TTO, time to online. To summarize, we have been a product and technology leader in the IT industry for over three decades. As we continue to strengthen our internal operation and expand our U.S. and global manufacturing footprint, we aim to turn this progresses into value for shareholders, customers, and partners. Our first true market advantage of delivering the most innovative AI infrastructure technology with BlackWare coupled with exceptional product quality service software, networking, and security. with data center building block solution. We'll continue to reinforce our partnership as the premier US-based data center infrastructure solution provider. With our expanding technology leadership and today's AI trend, we believe it will result in a similar growth trend for us like 2023. With that, I'm confident we will finish this fiscal year strongly with revenue in the range of $23.5 billion to $25 billion. And I believe we have potential to reach $40 billion for fiscal year 26. Before passing the call to David for a financial overview, I want to thank all of our partners customer investor and she will make a team members and express my deep appreciation for their continuous support, which is that I will now turn the call to David.