Super Micro Computer, Inc.

Thank you. and Michael Staiger, 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 would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Michael Staiger. Please go ahead.

Thank you, Jen. Good afternoon, and thank you for attending Supermicro's call to discuss financial results for the fourth quarter of fiscal 2026, which ended June 30th, 2026. With me today, as you know, are Charles Liang, founder, chairman, and chief executive officer, and David Weigand, chief financial officer. By now, you should have received a copy of the press 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 is available to participants in the investor relations section of the company's website under the events 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 first quarter of fiscal 2027 and the full fiscal year 27. These statements and other comments are based on management's current expectations and assumptions and involve material risks and uncertainties that could cause actual results or events to material differ from those anticipated and you should not place undue reliance on forward-looking statements. You can learn more about these risks and uncertainties in the press release we issued earlier today, our most recent 10-K filing for fiscal 25 and other SEC filings. All these documents are available on the IR 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 any explanation of our non-GAAP financial measures, please refer to the accompanying presentation or to our press release published earlier today. The non-GAAP measures are presented as we believe that they provide investors the means of evaluating and understanding how the company's management Evaluate the company's operating performance. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. In addition, a 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 remarks will have a Q&A session for sell-side analysts. Our fiscal 27, excuse me, quiet period begins at the close of business of Friday, September 11th, 2026. I'll now turn the call over to Charles. Thank you, Michael, and thank you all for joining today's call.

Fiscal year 2026 was a historical milestone for Supermicro as we nearly doubled our revenue year over year, going from $22 billion last year to $39 billion The world has been transformed by AI, and Schiphol Micro is transforming as well. From a USA-based server manufacturer into a leading AI IT data center total solution company. We design and manufacture our total data center building block solutions, DCPBS, in the USA, with many facilities. in USA, Taiwan, Malaysia, and the Netherlands. The demand for our AI IT solutions is even stronger than ever before as we are transforming into a total BCPBS company. A one-stop-shop company for customers who want to build their data center or AI factory quicker and better. In our pre-announcement, we disclosed over $60 billion in new orders, driven our order book and backlog to a new record levels as we enter fiscal year 2027. While Q4 revenue came in at $11.1 billion due to some short-term customer delay in power shortage, cooling, and Networking. We know this is purely a timing story. The good news is that now our customers can easily leverage our unique DCPBS total solution advantage and upcoming new technology and product lines to accelerate their time to deployment, we call TTD, and time to online, we call TTO, ensuring are strong future growth and long-term value for Supermicro for many years to come. Most importantly, our focus on profitability is yielding clear results. For the first quarter, I'm happy to report Nungap gross margin of 17.6% and $1.70 in Nungap dilute earnings per share. This margin expansion mainly came from our strategy focused on balancing customer mix and product mix while having a one-time positive contribution for the quarter. Since early 2026, we added dedicated departments and resources to focus on growing enterprise customer base and have expand our enterprise CPU-based server storage and IoT product lines. Our quicker growing, influencing, and agentic AI-centric products are also driven healthier profit margins for the company going forward. Another key to this margin expansion is our DCPPS, which delivers total solution value by seamlessly integrate GPU and CPU server, enterprise storage, direct liquid cooling solutions, CDU, chill door, water tower, high-speed data switch, and networking, data center management software, and full lifecycle services. This turnkey ecosystem enables customers to build and scale AI Data Center in quarters rather than years, dramatically reducing TCO and accelerating time to online and time to revenue for customers. We are further elevating this value proposition with our new proactive service model, where our data center management software and feed teams will automatically alert and be ready immediately to fix or maintain the failure unit, preventing reduction of computing power at the customer data center. As a new software with powerful management features and automatic service attached to our hardware builds, they deepen customer trust and drive long-term value. Our PCPBS is getting very powerful and it will soon contribute a significant net income to our business. By early next quarter, more of those solar features and service products will be online. On the operations side, we are complementing this high value strategy by driven higher manufacturing yields through factory automation, design optimization, and our highly versatile building block architecture. At the same time, we remain very focused on logistics and inventory management, significantly reducing inventory reserve and the expedite charge. Together, these operational disciplines will help moderate quarter-to-quarter margin fluctuation are driven by an even customer and product mix, supporting our goal of consistent growing gross margins. Turning to our key product domain, our system building block allows us to quickly optimize every major silicon platform. Through our long-term NVIDIA partnership, we are shipping volume skew across the GB300, MVLR72, HGX B300, B200 MVLR4, and RTX 6000 Pro organized. While preparing first to market Vora Rubin, we are MVLR72, Nubin HGX, and Vera C1, and other high-density Vera systems. With AMD, We launched complete new Helios product line and MI450 total solution alongside strong EPYC CPU, MI350 and MI355X momentum. Working with Intel, we brought Parcel Deck Edge AI system to market and shipping Xeon 6 Plus platform in volume. We also dedicated on developing product for the strong demand of ARM AGI process base, Conan Phoenix. Architecture optimized for high performance per one, influencing workloads. Demonstrating our silicon partners' deep confidence in our engineering excellence. To support a massive demand We continue to expand our physical footprint. In Silicon Valley, we recently announced our new 32-acre DCPBS campus, featuring advanced optical photonics networking lab and data center scale manufacturing, which brings our USA footprint to nearly 4 million square feet. Globally, our facilities in Taiwan, Malaysia, and the Netherlands are also ramping strongly to meet the demand, putting our total manufacturing capacity on track to exceed 6,000 racks per month, including more than 3,000 directly cooling racks per month. Especially, most of our DRC rack production line support a most dense lattice and 250 KY RAC platforms. Before I close, a quick update on our capital structure. Following our 5.6 billion financing in June, our balance sheet fully supports our component supply and business needs. Thank you to our strong cash position and more favorable customer and product mix. We currently have not planned to utilize our APM program, which we initiated a few months ago. At the same time, we remain focused on building financial efficiency. We need all of these operational and other advancements. I want to emphasize that our growth momentum is accelerating where it matters most. By expanding hundreds of new enterprise customers and other customers and leading the transition into an agentic and specialized AI workload, SuperMegal has become a fundamental architect of today's AI platform. Our DCPBS total solution, spanning CPU and GPU compute, storage, A&G, and 1.6T high-speed switch, upcoming optical networking, and our management software suite, including SCM, Supermicro Cloud Composer, SCM, Supermicro Data Center Manager, and SOM, Supermicro Orchestrator Manager, delivers the complete one-stop shop experience than modern enterprise, near-cloud, and any other data center customer needs. Looking to fiscal year 2027, our momentum gives us strong confidence to target our revenue in the range of $65 billion to $72 billion as we are in the process of historic infrastructure build-out. We are balancing top-line expansion with bottom-line profitability by focusing on growing enterprise customer base, customer mix, DCPPS solutions, and operational discipline. We are shaping the future of AI technology while delivering true technology value to our customers. I'm very confident that Thank you, Charles. We are pleased to report record fiscal year 26 revenue of $39.1 billion, up 78% over fiscal year 25 revenues, and $22 billion in record non-GAAP