Super Micro Computer, Inc.

At this time, I would like to welcome everyone to the Supermicrocomputer Inc. SMCI U.S. Third Quarter Full Year 2025 Earnings Call. With us today are Charles Wei Yang, Founder, President, and Chief Executive Officer, David Wiegand, CFO, and Michael Sager, Senior Vice President of Corporate Development. 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'd like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to Michael Seeger.

Uh, Victoria, thank you. Good afternoon and thank you for attending Supermicro's call to discuss financial results for the third quarter, which ended March 31st, 2025. With me today are Charles Liang, founder, chairman and chief executive officer, and David Wiegand, 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. is available on the company's website. As a reminder, during today's call, the company will refer to a presentation that is available to participants in the investor relations section of the company's website under the events and presentations tab. We've also published management scripted commentary on our website. Please note that some of the information you'll hear during our discussion today will consist of forward 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 fourth quarter and full fiscal year 2025. There are a number of risk factors that can cause Supermicro's 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 year 2024, and our other SEC filings. All these documents are available on the investor relations page of Supermicro's website. We assume no obligation to update any forward-looking statements Most of today's presentation will refer to non-GAAP financial results and business outlook. For an explanation of our non-GAAP financial measures, please refer to the company presentation or to our press release published earlier today. In addition, the reconciliation of GAAP and 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 march, we'll have a Q&A session for SELFA analysts. I will now turn the call over to Charles.

Thank you Michael and thank you everyone for joining us. As previously announced. Our physical Q3 net revenue total 4.6 billion coming in lower than our original forecast. This decline was primarily due to our customer waiting and evaluating AI platforms between the current hopper and the coming and upcoming of Blackwell GPUs leading to a delay commitment. We expect many of these engagements to materialize in the June and September quarters, strengthening our confidence in meeting our long-term growth target as we close out this eventful fiscal year. Despite macroeconomic conditions, and tariff impact, our ability to expand the market share in IT and AI remains strong. On the earning form, our physical Q3 non-GAAP EPS stood at $0.31 per share compared to $0.66 last year. This decline was largely driven by an inventory breakdown of old generation GPU and related components, while the new platforms are finally ramping quickly about now. Although our quarterly performance did not align exactly with our expectation, we successfully fulfilled our commitment to regain financial regulatory compliance. At the same time, we continue to enhance technical innovation and development, which results in successful high volume delivery of our new generation AI platforms at the end of March. Looking ahead, some major background new innovation are set to service the market in this quarter and the new fiscal year, especially our coming soon DCDBST. With a clear time-to-market advantage, Supermicro once again leads the AI infrastructure technology and DRC solutions. This strong position enables us to explore new opportunities and expand the market share. During the quarter, we achieved volume shipment of air-cooled, 10U, and liquid-cooled 4U NVIDIA B200 HGX systems. both are exactly the first to the market again as well as gp 200 mvl 72 racks additionally we start to offer amd mi325x solutions to further broaden our ai portfolio leveraging our system building blocks We will again over time to market on the upcoming new platform such as Nvidia B300, GB300, and AMD MI350 platforms this summer for customers seeking leading technology, more optimized, higher density, and greener AI solutions. Building our strong foundation of technology leadership building block solution and building computing DNA. We have been deeply focused on developing the industry's first end-to-end AI IT data center total solution. We are now about fully ready to share this exciting news with the market in the coming days. by launching our brand new data center building block solution. We call it DCBBS, featuring our second generation system, liquid cooling technology. We call it DLC2. With DCBBS, we are able to dramatically shorten customers' efforts to build a data center, reduce their cost, and most importantly, make their data center better quality and performance, greener and with higher availability. DCPBS consolidates critical components, including AI service systems, storage, rack, power and play, all different kinds of switches, DLC systems, water tower or dry tower, chill door, power shelf, battery backup unit, typical BBU, on-site deployment, networking design, cabling, and data center end-to-end management software, and all different scopes of services into a streamlined process. The true value of DCPBS lies in its ability to reduce power consumption optimize space and decrease water usage delivering up to 30 percent lower tco more importantly it accelerate new data center deployments and upgrade existing data center in a matter of months or even weeks rather than many quarters or years Driven significant improvement in data center time to deployment. We call TTD and time to online. TTO. One or a key components of DC PBS is our industry leading DLC solutions. She will Michael remains at a full form of driven industry adoption of DLC technology. Directly cooling technology. setting new standards for performance efficiency and sustainability. Last year, we shipped 4,100 ky AI racks equipment with DLLC, helping our customers reduce energy costs by up to 25 or even 30%. We are committed to double this volume in the coming year, further amplifying the impact of green computing. With the upcoming DLLC2 technology, Supermicro will be able to deliver even greater savings and benefits to our customers. For example, it will save power and water up to 40% and reduce data center noise level down to about 50 dB. That is almost as quiet as a library. We are going to announce the detail In the coming days. Winning computing can be everywhere and without DRC2 solutions, we are making that vision a beautiful reality. Our long term investment and leadership in DRC has solidified a sustainable competitive edge. Providing economics of scale and keeping us far ahead of the competition. Our global operation continue to expand with our new Malaysia campus, begin shipping product to partners. Meanwhile, our facility in Taiwan and Europe are scaling up their capacity and capability, providing customer with flexible options for their logistic choice and minimize their cost during the market and tariff uncertainties. To further strengthen support for key partners and align with government initiatives, we continue to expand our U.S. domestic manufacturing capacity, including new facilities in the Midwest and other locations. This strategic expansion will allow us to meet rising demand while continuing to enhance our commitment in quality, security, and TCO, TTD, and TTO. In summary, Physical Q3 was dynamic and productive. We successfully navigated financial challenges while continuing to strengthen our leadership in product and technology innovation. Our first to market advantage in AI infrastructure along with the expanded reach of DCPBS data center building block solution and. And the advancement in the DLC technology. Order so solidify our industry position. I remain highly confident and optimistic about our long term strong growth and much share again. However, near-term macroeconomic and market uncertainty make it difficult to precisely forecast the pace in the technology adoption. Despite this, I'm confident that we will close the fiscal year on a strong note. Given the current condition, we anticipate a Q4 revenue of at least $6 billion. and will resume providing a broader forecast range once we have better visibility. Before passing the call to David for a financial overview, I want to thank you all for our partners, customers, investors, and Supermega team members, and express my deep appreciation for their continuous support. With that, I will now turn the call over to David.