SMCI - Earnings call transcript Q4 2021 | Super Micro Computer, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Super Micro Fourth Quarter and Full-Year Fiscal 2021 Earnings Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. to conference like Noutsios, to now Relations. Investor would turn over the Nicole I ahead. go Please

Nicole Noutsios

the fiscal is and of distributed afternoon of to the full have that XX, results call for was you now, release available discuss for ended trading Company's should year regular from XXXX. and company By quarter a website. Good close fourth you news financial at thank copy on the attending received which and June the XXXX, Super Micro's the

As participants the a & a company's company will presentation that Events during today's reminder, call, IR the refer is in of the tab. to available section under to website Presentations the

and on future of potential you’ll commentary our gross that future differ today a the management's number cause business have discussion risk including business and note statements, hear will published taxes, our from consist materially We operations. of to are information of expenses, without operating Micro's Super company’s capital website. expenses, revenue, during on results could regarding also the limitation those allocation, There forward-looking our outlook, that scripted COVID-XX results factors income Please of other including margin, expectations. impact the and some of

our these SEC we in our and release for filings. You afternoon, can learn more about earlier other issued filing XXXX, risks fiscal this the press most XX-K recent

website. Super to statements. of assume on Most All of refer and presentation IR obligation Micro's today's will results non-GAAP business We available to these documents any of are no section financial update outlook. forward-looking the

today. accompanying presentation financial measures, release non-GAAP refer or published of the press explanation to an our For to our earlier please

release Liang, Chairman prepared to now in the to is Charles? we to contained analysts Charles and call information today's will turn to of a and At the ask of Founder, non-GAAP In attached for remarks, questions. addition, session sell-side the today's reconciliation presentation. over GAAP today's in have Q&A a CEO. end supplemental results press I'll

Charles Liang

you, time and good everyone. I $X afternoon, the to first quarterly am our has Nicole, exceeded pleased for Thank revenue announce that billion.

year-over-year XXXX, For delivered fiscal we growth QX of revenue XX.X%.

fiscal grew X.X%. our whole the year For revenue XXXX,

from have resumed large delay revenue enterprise green high-tech These year, COVIDXX our fast time-to-market, Micro March from finally of computing AI some the this the from and and driven quarter after XG We markets. XX-K by customers growth companies. plug-and-play technology, Cloud, and faster impact challenges. choose solutions, IT share market large customers growth past multi-nation wins total was in because appliance, and especially gained Super and starting The

highlights Now, look at some let’s the from key quarter.

totaled range. at sales geographies than that net growth XX.X%, quarterly contributed year-over-year both fourth-quarter of fiscal Our of year-over-year All $X.XX This our end top our guidance is believe, much quarter-over-quarter, I double-digit billion, growth. industry. rate, up major higher the the and

was per Our increase fiscal significant new from up a $X.XX, saw last customers. $X.XX and share earnings in from large, fourth-quarter high-profile same We existing period non-GAAP year. sales

to that is mainly IT hardware, software, services. consists our driven expansion and of strong total solution momentum hardware from Our solution business by

Through the and this provided have partners, close in allow customers months past engineering execute XX us optimized, our doubled have We resources tested, fully to software reference we engagement strategic our with swiftly plan. and hardware software certified, architectures. to leading collaboration and ready-to-deploy

motherboards, XXX ship Lake, scale Intel supply three foundation to manage win-win a software of a based Solution. created These enclosures, began innovations, customers’ result, and leveraging Block deployed optimized and launch and through having systems close power customers all product chain on to including more supplies, large It’s They disruption. we of technologies. and QX, NVIDIA management the deploy, in-house, AXXX and for and hyperscalers. to fiscal What’s our without timely more, Milan security the lines processes in orders Ice are our application-optimized compatibility, of to hardware Building validation, manner GPU successfully are are of executed empower Earlier in everyone. enterprises software based AMD a As timely strong go than volume to solutions. Server cooling product subsystem decades from complicated

the memory, persistent FPGA the solutions best GrandTwin, From providing new are and upcoming Ice FatTwin side, optimal the configurations, performance workloads. SuperBlade, lines to NVMe support and these enterprise Lake-based TCO BigTwin, to a among to all resource-saving scale dense MicroBlade and On flexible of product customer out customers Optane cloud looking and product GPU variety gained XXX our tractions datacenters. their great multi-node generation have who and

Our the product and lines with memory GPU Lake are application support GPU Ice Milan-based AI/ML of These accelerate growth lines product on-GPU applications. explosion intensive and compute continuing demands. larger their new strong

Universal These even to X-node their provide for ratio to solutions, to Taiwan validation and a introducing the & GPU to will our limit customers. our product resource-saving line in campus a configurations complete racks Rack completed efficient it IT our push process the Upon integral XU they cloud, improve sales, engineers, further immediately performance these weeks. product We system configurations results. for to to GPU broadly system design launch proven Play tool optimization enable automation, and to enterprise, optimal solution thanks further and of faster of have making competition. since CPU-to-GPU applications, to our solution be and XX% makes many Computex to Announced undergone part achieve Plug time and expansion. and compared few the leverage our receiving Our of auto-configurator top-seller GPU more that will XG/Telco, XXXX, Later line BXB/BXC and introduction, product in decisions seeing more brand-new which securely customers. mix To different to we combination, connect coming has when customers and thorough, total strategy level among This be tool its AI, going up turn-key sales CPU shortening density will this year, to June be then only is ready its a efficiency, service storage flexible during need we’ll and operations power forward. networking, modules from customers ready an built run and are the features. recently our

X agility, with feet Now Micro market well total equipped with to facilities Valley Taiwan, share to lower fast-growing quality solidly and Micro scale, supply company. solution from across company million parts are In campus customers' working To Netherlands, our Silicon we satisfy chain summary, total also positioned Super the cost critical a been but in of into in demands, only the economy Super a capacity, shortage. our aggressively is delivery rapid and grow transforming square not manufacturing has supply chain sufficient we deliver structure. with Combined are resilience, hardware mitigate time. to IT server global

for solution, Telco greenest now software total products ready AI In addition and the service to and enterprise, customers. our providing are large cloud, hardware

Second, our structure. doubles and cost expansion campus Taiwan our lowers solution capacity our

to if do we our decide Valley start can Now Silicon HQ. expense reduce to we in so,

transformation, a delivery customer business our configuration systems, summary, process, including order BXB/BXC and year optimization. that our than pleased with our to our Third, and as $X.X by shortened in which least improve I program, four at With progress in billion up faster reach fiscal will quality automation resulting and the the business with of to revenue much I believe grow has experience business better fiscal am time solution speed start 'XX. past and will our years. XXXX customer streamlining started auto-configurator significantly execution closing, In

able efficiently David much even and more in now details are to pull IT Chief company, now to grow Officer, As able achieve quicker, or we a billion to $XX With business to Financial solution our goal we sooner. quarter. total XXXX are provide of Weigand, additional on call will the that, the XXXX I from revenue pass perhaps our

David Weigand

Thank you, Charles.

revenue at high services. key We all and billion for products and in from areas major quarter, was was and continued continued large range. by $X guidance to companies worldwide, and our end accelerate demand Growth strength for of customers exceeded geographies the solid high-tech company the our major wins the of which enterprise driven all across in

fourth $X.XX a a increase Our quarter-on-quarter on basis. billion, XX% quarter revenue year-on-year and fiscal totaled reflecting both

this the Micro's System Edge/IoT machine million Super the and Systems will XX%, Asia XX% unless a revenue World margin vertical, OEM and while vertical, learning quarter. Europe this $XXX Europe World geographies and increased X%, increased basis, $XX Looking our volume be shipped and center quarter-on-quarter. across data QX and systems Asia U.S. major Rest the decreased market in and was million large sales on increased strong non-GAAP discussing and achieved increased XX%, was ASPs AI financial Working U.S. XX I XX%, quarter-on-quarter. the increased enterprise of X%. On in forward, metrics year-over-year. From down up a points year-over-year, of down QX XX while was a and of and Rest down organic Performance we P&L, in XX%, at year-on-year verticals, total in vertical. revenue basis increased comprised million XX.X%, shipped $XXX points all point On increased sequential were basis, year-on-year basis channel X%. year-over-year gross and of noted, three XG/Telco otherwise decreased basis. XX%, nodes

to We due QX. expected in basis incurred improve margin our costs gross discreet to XX points QX

basis increased fees did expected, QX, XX however costs As expedite those points not costs in quarter-over-quarter. repeat and shipping by

world, supply of related As chain by variants other of persist. reported the to pressures COVID-XX companies around resurgence many the

including were to a Turning increases by which essentially in Other we loss basis mostly million expenses caused decrease quarter-on-quarter a quarter-on-quarter year-on-year The by headcount to $XXX a X% to gain quarter. income other our operating X% and million. X% The million quarter-on-quarter human incentive invest basis, bonuses, higher year-on-year last as a $XX and address compared costs headcount increased a decrease as expense continue flat increased this and non-GAAP in $X.X OpEx offset related decreased interest to million. to and was QX year, capital is FX. On change operating in The year-on-year to primarily expense $X.X expenses, to to R&D. GAAP on was year-on-year and growth was sequential related personnel opportunities.

benefit $X.X This on was million expense basis quarter of our an basis. $X.X million a on GAAP and non-GAAP tax a

Our non-GAAP X% quarter. tax the was rate for

in share quarter. of $X.XX totaled from per totaled to as loss year. operations from XXXX million CapEx $XX receivables and quarter $X.X an last to included increase QX. our providers of our key increases the fiscal was of revenues. included and in non-GAAP million million resulting $X.XX million to service revenue of share deferred uses of of while quarter diluted cash of of million this compared JV of $XX due of cash the was contracts. income and Key in totaled last used during in in compared accounts to $X.XX Lastly, flow to cash flow higher compared $XXX payable in million. Cash $XX $X.X as QX in million same flow $XXX deferred earnings operations $XX million The quarter in free our QX sales a inventory increase cash

shares We also used million $XX quarter. repurchase in to the

$XX while closing million, $XXX sheet in cash of bank million. balance was debt net balance $XXX Our cash position was resulting a million,

the days, was XX quarter, to down to and working Turning metrics day cash XX to our capital last compared XX cycle days. target QX, range from balance which beating QX of our from in sheet XX conversion

of Sales XX Days XX days of the days inventory while inventory While decreased. increased, Days totaled absolute days XX days. at Outstanding level Payables was Outstanding our

outlook the to for turning business. Now our

resulted non-GAAP income $XXX range diluted of $X.XX in million share We $X.XX sales $XXX per XX, to year the expect to XXXX. ends which which September GAAP of fiscal first $X.XX of diluted per share $X.XX million, of net for and quarter net XXXX net to a income in

to at and levels supply we gross We potential costs maintain margins price expect upside remain with chain as discipline. sequentially, similar manage

expenses operating $X not million stock-based non-GAAP other million GAAP Taiwan $XXX upcoming further expect Over in new and traction model in forecasted margins we expenses to include gain to and solutions. in operating and BXC are configurator auto expenses target BXB achieve product we million included $X our compensation within and operations expenses. and as be approximately the offerings our from begin our quarters, to scale

a are expense, NRE approximately net GAAP and $X other and to be share. expense, expenses XX% and personnel count and common other taxes, income in share costs. fully diluted per continued net for operating income assume We for income common million includes per excluded projections per XX.X to approximately of R&D, expect common compensation The diluted net that from from and forecasted JV. expect a investment diluted a non-GAAP net non-GAAP. outlook and including lower nominal quarter-on-quarter from rate of non-GAAP fiscal year company’s total higher million roughly share $X are for interest million for income expected up shares of and contribution diluted shares million our GAAP both Non-GAAP The stock-based GAAP QX share in XXXX XX.X expected of tax expenses,

million We tax net $X.XX projections least income of GAAP ends both in XX, are expenses, XXXX. expected common of XX% other for a of diluted per diluted shares count $X.X which million non-GAAP The XXXX in income and for from and non-GAAP non-GAAP. range expect common and XX.X diluted billion per $X income net share $XX net June compensation diluted million The for of fiscal of per GAAP diluted that net billion, sales net approximately a includes diluted excluded per net shares fully income $X.X at of share. taxes, and for least year XXXX common company’s rate non-GAAP stock-based to income and at per a net fiscal approximately year share outlook share share assume for XX.X GAAP share GAAP

first I’ll it turn We of back for to approximately expect quarter the CapEx XXXX Q&A. for million. $XX of $XX to Nicole, you fiscal

Operator

first Hosseini Mehdi the [Operator SIG. with of comes line question Instructions] Your from

line open. Your is

Mehdi Hosseini

couple the Yes, understand XXXX. range seems words, guide for earnings. maybe maybe the costs a key a, was take had fiscal profit case? for in operating of for component the follow-up what taking conservative get base case a of is year this to is points leverage of a want thanks basis a assumptions And question. to I are other I It of or if very is, a that? follow-ups I midpoint bit XXX little in I improvement there to $X have What to like

Charles Liang

our a though although conservative relationship base so I genetically overall supply And good would with now base, well but chain incentive have but program tight. our a because global rather based of anyway to Taiwan continued on able is say, to it’s supplier cost. its it’s very to because conservative operation we all, expanded - so

Mehdi Hosseini

most so Right components - what supply experiencing most of are you're shortage? where have the segment the is difficult relatively that the chain the most time What the - key you're procuring?

Charles Liang

chip. IC chip IO especially

Mehdi Hosseini

fiscal question And flow what XXXX? the quarter the what year Okay. and cash was assume reported for the amortization June depreciation, on be for should

Charles Liang

this. on get back I’ll Mehdi to

Mehdi Hosseini

Okay.

moderate the Taiwan Given and we fiscal the year expect XXXX should the on CapEx from growth million in the $XX buildup to here? facility, CapEx of

Charles Liang

BXB/BXC comes start to for order same service we customer the over will few our and just yes people they XXX operation weeks. always trained. add the Absolutely, year month. about our all as Other we now last and mentioned new much moved We because month than last customer. are apply in and to hire pretty offer the in building and been just have is And people Taiwan year all to we ready about And free staff in that, information well certain they people the next the later. Taiwan into and

Mehdi Hosseini

Okay great.

back in I’ll queue? So get

Charles Liang

there… have been investment, My

Mehdi Hosseini

you decline fiscal the Charles, should in that are implying CapEx XXXX? So

Charles Liang

growing because it won’t are so expect we to continue limited because may - of consistent already I very operation I grow there. kind guess we XXXX/XXXX/XXXX Maybe expense very grow the growth shrink we invested mean,

Operator

with Your next Nehal Chokshi Northland. question comes from

Your line is open.

Nehal Chokshi

It’s for commentary trained the very on Yes a I delta environment like payable pulled off on this relative thank an looks component base and expecting free our strong cash with is flow nice free environment. results big last mean, this we’re and basically? drain enjoy and especially given increasing to based it congratulations of expectation you the how quarter cash.

Kevin Bauer

the have the near inventory quarter. at a did that came we lot now of of end So

what result that's with accounts a rise in in And payable so rise to and DTO. caused

Nehal Chokshi

Okay.

Charles Liang

can is And customer strongly those see a kind now we keep high I positive there needed so of believe because inventory products.

Charles Liang

yes…. And the so by

Nehal Chokshi

please? sorry ahead Go

Charles Liang

All right, forecasts from traditionally are our our revenue not as that you can dipping from QX. tell they forecast sales in do our

hand, ended which this flow have to challenges we for inventory more for position. good to a why, we up flow alluded therefore, in QX. projecting cash cash I of needed so on And the was But

Nehal Chokshi

the we is this didn't demand, is quarter you're saying up what at simply that as the the the up increase, because the you’re But showing a increased base payable. payable seeing so of end the and inventory, September built quarter received sheet base strong inventory. terms see is of I you're satisfied I the timing guess you balance actually which

Charles Liang

That's exactly right.

Nehal Chokshi

XX-K guidance. but you it I I'm don't not have year year one you okay I in last year time during Got few if or XXXX, gave held. understood full-year before, years, okay. certainly or think don't fiscal XXXX you filing fiscal did past And sure delay recall

has you year consensus XX% full the on guide almost and what importantly, visibility estimate? of So basis, to changed give the that

Charles Liang

much Taiwan, in and are company tool. build company. to but have Not the congregator much and expanding auto total expansion in successful a reason, a BXC because automation, pretty including IT hardware solution company business also solution we a also BXB, from And

a of and open So picture kind more year it’s the saw market, good a to completed idea whole the future. we for for

Nehal Chokshi

And is right. expectation? fiscal growth this to tied midpoint server of year all guidance for XXXX Okay growth any - this and industry sort XX%

Charles Liang

was what sorry, of last to it your is part tied I'm what? question the

Nehal Chokshi

server to growth? or any of is of industry server tied server it independent industry industry growth it Is expectation growth sort

Charles Liang

Not not quite, quite.

in mentioned, other As returned model. we we had faster to faster growth

we If growth before four been had And believe being are our to to faster were returned industry. you times remember, we attending XXXX, two model. this faster our than times the always delays growth we

even or believe or our and And outperform industry to double March more, looking in growth our in I rate will to June start from start industry. start So we maybe triple outperform forward. last we quarter,

much we lower. the here are very in So

Nehal Chokshi

rate XX%, got year-over-year X% an are on thoughts there clearly Yes, growth that? urge expecting share XX% but that industry X%, you your a is undoubtedly, particular I

Charles Liang

X% our growth a XX% believe industry our We over it may should our to there be people grow and double to operate.

Nehal Chokshi

final great. share? midpoint per $X guidance? revenue that then question, the Does minimum revenue of or guidance, that the Okay, end of correspond the my is to And the low to

Charles Liang

say number. a it’s conservative rather I

Operator

of with Your next Loop Baruah Ananda question line comes the from Capital.

Your line open. is

Ananda Baruah

sure Good afternoon, and of a guess guys. I if execution guide a out taking long-term I rough I have couple gross make just just spoke here? you well. those. could David, as word the Thanks components congratulations for And visibility to I year strong could, on back the the put then and you on through up to I'm a me to the quick follow that margin? want straight fiscal from walk question on revenue that

David Weigand

when which and finished last know quarter so Certainly, didn't discrete points about costs, some you was at principally and mainly, included costs basis as occur. streets of at, that we we XX some assumption we to expect it But XX.X, costs well. had discrete

So it But not a did this more and those to shipping our we really demand. did expect was quarter, deliver product to time. was caused And costs. basis XX And customers occur. our of what it customers that’s our directed effort by have points on

really the that’s reason able were to not raise occur. that So margin we

these… because Just

Ananda Baruah

That’s cool.

then XX right. - me I’m doing you brought the XX was wrong. lost basis so will I’m headwind you that down it you XX XX.X%, that think you XX and and if sorry, you down math or And took so the and that incremental to if then and And then there I then got you so to to to you XX an XX.X% more then Correct to XX%. XX point lost back had about there, I take that And that XX.X%? to take so, gained you it to - was

Kevin Bauer

to million. two was. of added sheet we We things. One, about deferred had there $XX we that our had balance Well, revenue

for we was also product the to And carve-out rest mix services. had, and… we our So some just income had just

Ananda Baruah

Got it.

- the pushes magnitude, mentioned that way any XX% should if may how What like of helpful the and the also. the there? pulls the remarks are move by pushes it pulls? and in in to quarters And up then, order And there’s prepared to what you sort would expect Okay. the into range. of we coming to are them give be You that XX%

Kevin Bauer

Sure, absolutely.

the with So, we COVID that Delta over. realized it’s hard to say is variant, that

to shipping And costs. continue we so challenges expect therefore, supply to have chain on

BXC more However, and well such transition our we our as do product to Taiwan attractive attractive especially that new and expect our our configurator. over offerings, - have verticals in as BXB those as gross other margins, initiatives and

the of to to benefit those come in upcoming expected the things to start quarters. We business

know in that So has we run, the gone Taiwan short online.

However, to start take it's to a quarters couple to going realize benefits.

Ananda Baruah

- I’m what could you we this. look sense XXXX for some the only the chance sure us margin - intrigued Any of not Any fiscal I’m gross - to get you like? about give can one

Charles Liang

further going So line gross improve, top we’ve given But the guidance. margins fact than guidance we're we that other line. bottom on not - we're not the the and expect to giving

Ananda Baruah

But not it. the unreasonable in the end would got – the of you that range year of end to by I it’s be fiscal… think

Charles Liang

Yes.

- go this think to is and is target I Our in notes. the

Our be to year. during back target our is range within the

Ananda Baruah

range? Our

Charles Liang

by was to Yes, our XX% the way XX%. range Yes.

Ananda Baruah

helpful. Yes. the That's I'll queue Appreciate back I really it. it. appreciate get in Thanks. here.

Operator

Your Fargo. next Wells the Rakers question Aaron line from with of comes

Your line open. is

Aaron Rakers

see you in that - to the to Thanks the guys, the you is, all current is taking shortages, the question all you demand? the current able I’m semiconductor, better the curious to industry supply own way, it customers shortages, just that of and that and are for get that guidance meet it been have tied quarter? on you meet outperformed on deals lead your of but in Put visibility? assuming you provided demand supply number of IC invoke then business. congrats were if able to extended just industry chain would questions with And whole that another for the Have you as I’m quarter. not you and able times kind to this has of the provide your the cetera. actually that to side et curious with heels of as with on you quarter

Charles Liang

cannot whatever get still, we we Very however possible good although Again, highly want. we could, but it’s question.

that, customer, I customers our our most shift loss wanted cannot shift to maybe weighted repeat longer older And we customer. than have So demand going we of we say, But had to the time. of regular still customer. can a all

understand the they basically difficulty, lead to is people so that, a are they like cooperative. but So see times global longer don’t

customer So need, but basically cannot customer we with service. shift happy wider physical our

Aaron Rakers

current of of normalizes? fiscal supply expectations starts year XXXX Does reflect normalize the view further your to semiconductor are? than do tightness view when your through is Just you or that your it’s fiscal guidance that that? thoughts think a chain the out what And this in curious of what

Charles Liang

mean, Yes. believe now, Double was faster than I our I And as to I get before our traditionally, story that back double to quadruple already than our faster growth and industry. shared industry. quadruple from we momentum.

global the because that growth of a for maybe sure. And stay I little impact of big shortage believe will that. that humbled because are much our equivocally. billion than a $X.X to that’s bit we be why better now growth even Now shortage, our

Aaron Rakers

guys future. the where around is, question ASPs that and really platforms. growth there things a from perspective? positive compute is lot the seeing to you at drive we’re benefits and GPU a can that think the blended on you in how just richness upward - server foreseeable actually for narrative in the server the curious architectures trend of of growth you’re evolve that I’m a so term universe quick curious you’re point configurations seeing architectural of how I’m maybe that what there Do longer a and of kind going then final semiconductors is the And Yes. accelerated server on.

Charles Liang

Yes.

based GPU, Grand Valley, not to a like why And platform company on I and that’s this And challenge. new of ready will technology very knowledge. introduce that lots tech by big like different the lots a We architecture be brand a a lots a to platform, Twin we we soon. As a technical trends market a why different That’s examining to year. of Silicon GPU CPU, end will different of universal also us. mentioned, new just we

flexible on different and different factor. the kind multiple more vendor, to those So support CPUs, all of multiple much is vendor, of different provide GPU form

you So and customers. are all to Twin the think optimize of we our we Grand kind and architecture universal benefit able for building of thank solution, platform kind will to And especially GPU solution. our

very - excited we to So opportunity. are the see happy really

Operator

Securities. of Your comes Jon from line with next question the CJS Tanwanteng

Your line is open.

Jon Tanwanteng

you afternoon, guys, the down outlook revenue. that how just have confidence analysis in bottoms like pretty Is drill impressive. is quarter Good qualified up customer and that? great $X.X I’m the I also build may and been that indication billion achieve is on to before or in leads - previous and on with a can you of wanted have how actually that more interest? that? out there you Contracts go that signed to or have get already you to wondering

Charles Liang

it down Again, direction see It’s where both very we be from bottoms because growth up and top the will both strong. it’s not of shortage. global

and operation, than new the engaged better more achieved that. current product six months last many better growth our customer high be with with with currently. much we also should profile Our in And and

feel pretty of optimistic that. we So

Jon Tanwanteng

airfreight this knows you know pass paying ability environment? I to time. extra it’s at going last about expedited get to feel get I on to you customers talked ask, And everyone about things shipping. that shipping doing quarter think I were just was price things your in this do without to that how point through charges. of that You impossible would to

methods be so, to if pass the So or if to it? other And they receptive that wondering surcharges you’re able to are on I’m pricing customer. through running

Charles Liang

complicated question too. good a and Very question

the communicate I maybe of have say that to to we overall, customers. we plus-XX% at with absorb have to try customer. well whenever would So But least XX% possible percent of

customer cooperative kind very provide So way. of we tried a to

much can as grow we that So there well.

Jon Tanwanteng

think before time all you one two? of pricing. should costs? absorb do When How And one pricing it of to on on the able higher you’re up we that? input to Great. Okay. maybe or quarter lag just a final the can you think catch Is just

Charles Liang

it’s Again, all on. the because complicated pandemic the going a question airfreight still

in So be customers. cost that, - maybe we very overhead believe problem will in to last will are normal. but once the soon. XX-XX pass getting recover able COVID-XX But and can COVID-XX be ends Likewise, hopefully but to those getting end actual better, we quarter, to I before they

So normal we will to back get automatically.

Operator

Your with the Lopez next Group. question line comes from Vertical Jon

line Your is open.

Jon Lopez

That’s great. had trouble. phone I sorry. very I'm

that. Thanks, David. Sorry about

as So in come like say two, fiscal you quarter, and to in pattern have fiscal trending comfortably summer guess I after I two that the second pattern just actually But I QX. the and so maybe being QX seasonal out QX. I back way. fiscal calculated referenced and to a thought not wanted below both last pretty your in bit we declining that’s for QX you March come made normal fiscal to guidance this a above

guess looking is question can what those or differently you your we when issues And then at I said meant Thanks. quantify is So, guidance numbers logistical maybe component one set any you through constraint to revenue are relative two, just not me there are perhaps that? you on than declining. my you if

David Weigand

Sure.

- allow think struggles I the faced range us that for chain. that range supply think a our does in is I what the we

with And range we can provided feel we can range. overachieve a enough also, but therefore, we like that we comfortable that So broad we feel

Charles Liang

employees’ because salary one, reason didn't guess the I the last COVID-XX that other adjust much. factor that year is we

the adjustment have for QX, and of So also a salary QX of our expected expansion. this why see we much may employees. one adjustments, because year, you we growth, bigger Taiwan see That's portion salary

contribute were and hire ready Taiwan train in people we people, revenue to our but and to So profitability. they

Jon Lopez

bit. guess I for question margin guess to my to I other the come helps gross Yes, that a second. thanks. just a back Okay,

margin especially arrive Charles, figure on the to this $X does I mean figure, what $X north at OpEx the you're So referencing gross based there need. of

be to pretty to think, close XX%. I

the you $X might maybe some we don't you like the between get other on to number, to you OpEx if of interplay through back have that logistical walk fiscal us way, in as guess issues of have visibility committing line have any or issues, why feel your year? I As think things ending look if like, of to do are And calendar you the into and of though we and remainder sight just or get cost why abating? these you of calendar out as $X these not, do you some rain comfort we QX? QX beyond

Charles Liang

[indiscernible]. David

David Weigand

so movement to is cost of over of our things Sure, structure, the again, the Taiwan. helps one production that our

to give new we product to that's, expect server offerings, the as we well So which the as bring expect our traditional margins us - higher in benefit, business. that attraction than

factors the us insight of, know, you targets that of that to into supply which in that challenges, through, managed with, terms price we which will chain that spite are have that give are air in deal believe can we shipping spite to those we've to costs, So achieve which which higher and And in of we confidence continued deliver we forecasting. management margins, and the us allow we've the an we still freight, meet.

Charles Liang

see be other very in the answer to too confident are happen, have is to resource Yes, if we year way fiscal didn't explained now. we XXXX question directly more will means that case much growth significant that it But XXXX. our happen. then we your and And that in

had do to but that So so, I have reduce if in we and we we we may USA we will, some hope option. don't quota. resources

So close hope that zero. don't that go we our operation reduce way. to need over over will I

Operator

from with follow-up SIG. Mehdi We Hosseini have a question

is line open. Your

Mehdi Hosseini

Thank you.

or up. quick quarters? next How and I do follow the memory want trend one to current get a you And the two pricing I'm about asking your Just on view over trends? availability you see prices.

Charles Liang

this question getting is but last the to Very as is put see complicated take, availability question, moment, at better how we very quarter. than good in

down. when So a carefully. going than very better or on the changes were as We a should stop price before. growing, will price be And watch to price

this moment, last no we at least than but at it’s So feel quarter. clear date, better

Mehdi Hosseini

color. months. beyond a the know couple to it’s look of very Thanks for difficult I

incremental type that think think AI you ramp. to for some 'XX guide, material projects Do A to of hyperscalers should think FY of more are meaningful there? a consistent wait lot about you we 'XX revenue your should have opportunities expected your captures Or about 'XX As and contribution? I revenue how FY them? guide FY

Charles Liang

Telco we And grew I telco better telco. year. much is for And XXXX year very than last believe XXXX, I even we Right. maybe I aware to XX%, year another buildings well, continue I we last will will in mean hope. than AI, Good question. well believe we’re our territory more fiscal XXXX. grow for our And very the very grow year. this - year rule

So last area still year are us. strong for very

operation Taiwan with our is hyperscaler, As now to ready.

chance But if where will. I have we a some select So we we a can we believe for be service to value, customers, start provide of hyperscaler to. selective customer will some bid very to we

Mehdi Hosseini

And Charles, when you of you the hyperscaler do arm talked kind about lump the into segment? AI, does CPU that includes based AX that or

Charles Liang

future very A But… question.

Mehdi Hosseini

Right.

Charles Liang

prefer have arms arm design we Few customer already Yes, we as - submission. have well. some some

the submission some have there belt. We under

Mehdi Hosseini

Okay.

it’s right? talk necessarily based So solution arm when it’s AI general, about an not more

Charles Liang

Many NVIDIA. -- still the base in are interior in

Mehdi Hosseini

predominantly referenced that's you arm But Sure. base when solutions? hyperscalers

Charles Liang

mean, I necessarily. hyperscale as to [indiscernible]. Not

Mehdi Hosseini

Okay. Got it. All right.

Okay.

independent isolate right? So that solution, it’s - can't really arm base determine to too we perhaps because arm base early just

Charles Liang

be customer need ready. When we will it,

Operator

we last with Ananda have follow-up Baruah for And question a Loop the Capital. from

Your open. line is

Ananda Baruah

the Thanks, guys Yes. follow-up. for

be fairly be could pattern but there Just it year fiscal seasonality different us will Thanks. a wanted Will to revenue give any I about a context on ask mean, it we will usual than you basis? think ratable XXXX? seasonal or how there pattern will the during year-over-year be. be seasonal

Charles Liang

Yeah.

you As now September right, exceeding. know, always may

for this So Although try number global demand right? we that with September we when have you share no quarter. a be we the to year reason exception, that but shortage major conservative strong

Ananda Baruah

the assume range? the to And then the should get of Charles, year, through seasonality the just into typical we - rest guidance to

Charles Liang

good Yes, basically. But traditionally always December and quarter. June, our

Operator

for call. joining. Thank you. conference today’s concludes you This Thank

You disconnect. may now

Super Micro Computer (SMCI) 11 Aug 212021 Q4 Earnings call transcript