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Super Micro Computer is a developer and manufacturer of server and storage solutions and specializes in cloud-computing and data center infrastructure. The company’s modular, open-architecture server and storage systems have gained popularity because of the AI boom, and it has become a key supplier for companies adding or building AI infrastructure. Super Micro Computer faced significant headwinds in 2024 after its auditor resigned and it faced a potential delisting, but it has since regained compliance with Nasdaq listing requirements.

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Q2 2025

Super Micro Computer (SMCI): Company Profile, Stock Price, News, Rankings

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Super Micro Computer

super micro computer

you for attending Supermicro's second quarter fiscal twenty twenty five business update conference call for the second quarter, which ended 12/31/2024. 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 and 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 twenty twenty four ten ks and 10 Qs due thereafter. During today's conference call, Supermicro will address business and market trends from the second quarter of fiscal twenty twenty five, 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. A reference to any financial results are 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.

This has a discussion of some of the risks and uncertainties relating to our business as contained in our filings with the SEC, and we refer you to those public filings, including our most recent annual report on Form 10 ks. During this call, all financial metrics associated and growth rates are non GAAP measures other than revenue and cash investments. This call is being live broadcast on the Super Michael Investor Relations website and is being recorded for playback purposes. An archive of the webcast will be available on the IR website as the property Micro. Our third quarter fiscal twenty twenty five acquired period begins to close the business Friday, 03/14/2021.

That incorporates technology innovation and business opportunities as we are close to the midpoint of fiscal twenty twenty five. I will begin by reviewing some key financial highlights from the December. Our preliminary fiscal Q2 net revenue is projected to range between $5,600,000,000 and $5,700,000,000 making a 54% year on year increase at the midpoint. Despite some negative impacts on cash flow and market misperception due to the ten K delay, we achieved a fairly good quarter, driven by sustained AI demand from both existing and new customers. Our growth trajectory for fiscal year twenty five remain promising.

Highlighted by the beginning of our transition from hardware to black wire GPU, we expect the growth in new generation platform to accelerate as supply ramp this quarter and beyond. We had confidence that our calendar year 2025 growth could be a repeat of calendar year 2023, if not better, assuming that supply chain can keep pace with demand. Our preliminary fiscal Q2 non GAAP earnings was in the range of $0.58 to $0.6 per share was $0.56 last year, representing approximately 5% year on year growth. Non GAAP gross margin was approximately 11.9% and non GAAP operating margin was approximately 7.9%. Margin was temporarily under pressure due to the ten ks delay disruption, the new product R and D investment and customer and product mix.

In a separate press release issued today, we announced private placement of $700,000,000 in new 2.25 convertible senior notes due in 2028 to support our rapid business growth immediately. We have also privately amended a portion of our existing convertible nodes during 2029 with almost all investors participating in the amended nodes. This will support our growth, including Chipmunkle for Tahoe initiatives, data center building blocks solution, DC BBS and some brand new GPU platform architecture design. Before diving into the details of our operation progress, let me begin by sharing an update regarding our financial filings. 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 twenty twenty four from 10 K and the first two quarters of fiscal year twenty twenty five Form 10 Q will be filed by February 25, this year. As previously stated, the special committee found no evidence to support our formal auditors' reasons for resignation. However, over the past two quarters, we have added senior leaders in corporate communication, operation, finance, legal and compliance departments. We will continue to add more top experienced leaders to build a stronger corporate foundation for our rapidly growth and expanding 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 Black Whale products are shipping now. We have begun volume shipping of both AirCore, 10U and L core 4U NVIDIA P200 HGX system. Meanwhile, our NVIDIA GV200 MVR 72 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 optimize 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 DLLC data center fill up. 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 DATIS DLLC technology, exemplified by the XAI Prosus, the world's largest deep core AI supercomputer. Supermicro is the disruptive leader in driving industry wide adoption of DLLC technology, which reduce customers' OpEx and achieve green computing. We expect more than 30% of new data centers worldwide to adopt liquid cooling infrastructure within the next twelve months, driven by the rapid and continued growth of AI.

Winning computing deserves to be everywhere in the world. Our TRC long term investment and leadership provide a sustainable competitive edge and economics of scale, far ahead of competition. Supermicro's data center building blocks 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 blocks 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 accelerated new data center deployments and helped modernize existing infrastructure in weeks or months rather than quarters and years.

Significantly improved data center TTD and TTO, our time to delivery and time to online. We are expanding our data center building, which includes more and more of systems quarter after quarter, and we have become a true one stop shop data center partner to the whole industry. On a production from our new Malaysia campus, we also ship a 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 DLLC Nuance Scale production capacity.

The U. S. Tempers boast an impressive 20 megawatts of power, enabling us to produce over 1,500 DLLC 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. These strategic expansion will ensure we meet the increasing demand for our product and service, while maintaining our commitment to a Chief Partner for quality, security, PCO, total cost of ownership, TTP, again Tantu delivery and TTO Tantu online. To summarize, we have been the 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 these progresses into value for shareholder, customers and partners. Our first to 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 power solution. We are continuing to reinforce our partnership as the premier U.

S. Based data center infrastructure solution provider. With our expanding technology leadership and today's AI trends, 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 RMB23.5 billion to RMB25 billion. And I believe we are pleased to reach RMB40 billion for fiscal year twenty twenty six.

Before passing the call to David for the financial overview, I want to send all of our partners, customers, investors and Shubomago team members and express my deeper appreciation for their continued support. With that, I will now turn the call

Thank you, Charles. Please note these numbers are preliminary and unaudited subject to change upon completion of review by management, our audit committee. Additionally, our independent audit firm has not completed its review procedures with respect to this preliminary financial information. So to start, again, we expect Q2 fiscal year twenty twenty five revenues in the range of 5,600,000,000 to $5,700,000,000 up 54% year over year.

Again, growth was driven by demand for air cooled and DLC rack scale AI GPU platforms. AI related platforms again contributed over 70% of revenue for Q2 across enterprise and cloud service provider markets. The Q2 non GAAP gross margin is approximately 11.9% versus 13.1% last quarter due to lower margins from product and customer mix. And you'll recall that on the Q1 earnings business update call, we guided down 100 basis points for this quarter. The non GAAP operating margin is approximately 7.9%, which excludes $82,000,000 in stock based compensation expenses versus 9.7% in Q1 due to those lower gross margins.

Other income and expense is approximately $8,000,000 consisting of $15,000,000 in interest and other income, offset by $7,000,000 in interest expense. The tax rate is approximately 15% for GAAP and 17% for non GAAP. GAAP net income is will range from $315,000,000 to $325,000,000 and non GAAP net income $375,000,000 to $392,000,000 Non GAAP net income excludes $63,000,000 in stock based compensation expenses, net of the related tax effects of $19,000,000 GAAP diluted EPS is approximately $0.5 to $0.52 versus prior guidance of $0.48 to $0.58 Non GAAP diluted EPS is approximately $0.58 to $0.6 versus guidance of $0.56 to $0.65 We expect a GAAP diluted share count of approximately $636,000,000 and a non GAAP diluted share count of $647,000,000 The closing inventory was approximately $3,600,000,000 versus $4,900,000,000 last quarter. CapEx was $28,000,000 Cash used in operations was approximately $240,000,000 versus cash generated from operations of approximately $4.00 $9,000,000 in Q1. Supermicro began the second quarter with approximately $2,100,000,000 in cash and recorded approximately $320,000,000 in GAAP net income for the second quarter.

Cash was provided from lower inventory and other sources totaling $1,500,000,000 And then the company used cash to pay down accounts payable by $1,200,000,000 We realized higher other receivables from purchase rebates and prepaid inventory of $484,000,000 We had increased accounts receivable of $335,000,000 We also reduced our bank loans by $346,000,000 net and we incurred capital expenditures of $28,000,000 and had other uses of cash totaling $87,000,000 This resulted in a reduction in cash during the quarter of $660,000,000 thereby ending the company's second quarter fiscal year twenty twenty five quarter with $1,400,000,000 in cash at the December. Now I want to point out we've continued to prudently manage our working capital. And for the month ended 01/31/2025, we we ended with approximately $2,000,000,000 in cash. Turning to the balance sheet and working capital metrics compared to last quarter, the Q2 cash conversion cycle was up to one hundred and four days versus ninety seven days in Q1. Days of inventory was seventy eight days compared to the prior quarter of eighty three days.

Days sales outstanding for Q2 was forty seven days versus forty two days last quarter, while days payables outstanding was twenty one days compared to twenty eight days last quarter. In a separate press release issued today, we announced a private placement of $700,000,000 of new 2.25% convertible senior notes due 2028, and we privately amended our existing $1,700,000,000 convertible senior notes due 2029. The company is reconfirming that no previously issued financial statements require a restatement. The company, however, made certain adjustments to the preliminary unaudited results for the fourth quarter of fiscal twenty twenty four that it had announced on 08/06/2024. The adjustments recorded in the results for the fourth quarter of fiscal year twenty twenty four include an increase in net sales of approximately $46,000,000 and an increase in the cost of sales of approximately $96,000,000 which included a charge due to an increase in inventory reserves of approximately $45,000,000 dollars There was also an increase in operating expenses of approximately $5,000,000 Until the company's fiscal year twenty twenty four financial statements are filed, the company is required to reassess its accounting estimates for financial reporting.

The charge for inventory reserves results from an unanticipated decline in the market value of certain components that were held in the company's inventory or on non cancelable purchase orders at the end of fiscal year twenty twenty four. Collectively, these changes resulted in a downward adjustment to the previously announced preliminary unaudited fiscal year twenty twenty four and fourth quarter of fiscal year twenty twenty four GAAP and non GAAP diluted net income per common share of approximately $0.09 That's based on a post split diluted shares outstanding basis. The foregoing adjustments are to previously announced preliminary unaudited financial results and as such, they do not constitute a restatement. For the third quarter of our fiscal twenty twenty five, we are expecting net sales in the range of $5,000,000,000 to $6,000,000,000 dollars We expect the GAAP and non GAAP gross margin to be approximately 12% We expect GAAP and non GAAP operating expenses to be up approximately $17,000,000 sequentially and GAAP and non GAAP other income and expenses to be a net expense of approximately $12,000,000 We expect GAAP net income per diluted share of $0.36 to $0.53 and non GAAP net income per diluted share of $0.46 to $0.62 The company's projections for GAAP and non GAAP net income per diluted share assume a tax rate of approximately ten point seven and twelve point seven respectively, a diluted share count of approximately $642,000,000 shares for GAAP and a diluted share count of approximately $653,000,000 shares for non GAAP.

The outlook for Q3 of fiscal year twenty twenty five GAAP net income per diluted share includes approximately $65,000,000 in expected stock based compensation expense and other expenses net of related tax effects of approximately $17,000,000 which are excluded from non GAAP net income per diluted share. So again, I want to point out revenues for the trailing four quarters are between $20,000,000,000 and $21,000,000,000 And for the fiscal year 2025, we are updating our revenue guidance from a range of $26,000,000,000 to $30,000,000,000 to a new range of $23,500,000,000 to $25,000,000,000 dollars So we're very happy to announce that the company has raised money through the issuance of new bonds and we will continue to improve our liquidity as our growth requires it. The final I want to end by saying that the final financial results reported for this period may differ from the results reported here based on the review by BDO, our new independent registered public accounting firm. We expect to complete our fiscal year twenty twenty four audit by the February 25 filing extension date that we have been granted by NASDAQ. So Michael, I'll turn it back to you.

Our first question comes from Michael Ng with the company Goldman Sachs. Michael, your line is now open.

Hi, good afternoon. Two questions for me, if I could. First, I was wondering if you could talk a little bit about the $40,000,000,000 fiscal 20 20 6 revenue outlook. What informs your confidence there? If you could shed any light on backlog or pipeline or product roadmap that is informing the outlook, that would be great.

Yes. I mean, our product line continue to grow. We have industry standard product line plus lots of shipwasserts, including some confidential product under development. And we have a customer engaged with us for those projects. So this year, even 10 ks today, we grew about 60%.

Last year, we grew 110%. So the coming year, fiscal twenty twenty six, at this moment, we believe at least we will grow 65% at least. So that's, I believe, a very conservative estimation. And the past in production capacity, I mean USA now our utilization rate only about 55%, Taiwan utilization rate only about 60%, Malaysia utilization rate is still about 1% only. So there are lots of room to grow for us.

Great. Thank you, Charles. And just as my second question, I was wondering if you could talk about the mix of Blackwell and Hopper servers in the quarter. Not looking for anything specific, but was it different than what you may have expected? Was hopper stronger?

Was Black Will affected by any supply chain constraints? Thank you.

Yes. We have both already, right. Hopper, for sure, have been a very mature product, H200, for example. And then back to where we have GP200, fully ready in production. And then for B220 HETGX, we have a 10U air core, fully ready for production and then 4U deep core fully ready for production.

And we already accumulated some good volume backlog backorder and continue to see lots of new order coming. So I believe we do not share that detail about the percentage. But basically, for sure, more and more customers like to have a B200 and GB200, but we have all of them ready.

Thank you for the thoughts, Charles. Appreciate it.

Our next question comes from Ananda Baral with the company Loop Capital. Ananda, your line is now open.

Hey, good afternoon, guys. Thanks for taking the questions. And congrats on what's a pretty solid print and delivering some news here. I guess two, if I could, the first is just on gross margins. Dave, what's a good way to think about June gross margins in the context of your guide?

And then just sort of the second one there, this is the second part of my first question, I have a follow-up question as well. What's a good way to think about gross margins through the Blackwell cycle? This is obviously a key question for people and they want to remove the concern off the table that there could be material margin pressure through the Blackwell cycle? So those two and then I have a follow-up. Thanks.

Yes. Thank you for your question. For sure, when products become mature like H120, H220, then we had to face to price competition strongly. But for BlackWel, doesn't matter GB220 or B220, For sure, whenever they are new product, our margin will become much better. And especially talking about deep cooling, we believe DLLC or overall deep cooling max share will grow all our way to 30% or even more in next twelve months.

And in terms of deep cooling, in last twelve months, I believe we have we offer the majority of global liquid cooling. So when faced to a black wire opportunity, most of the customers now do go for liquid cooling, I believe we have a much better position.

let me just add that while they are focused hang on a second, Ananda, most of us are focused on the gross margins, but don't miss the critical point that we're driving operating margins above our targets that translates into shareholder value.

So Ananda, this is David. One thing I would add is, to what happened with H100, as Charles mentioned, Supermicro was the ones that had the company that had a stable platform, and which became a market leader. And so that helped our margins as they crept up to 18.8%. Now of course, we're targeting we said we target 14% to 17%. But the question is, with to your point on Blackwell, what will be what will the competition be able to deliver?

And I think that's going to be a big indicator of margins. We feel like we're in pretty good position because we've already been I

appreciate it. Yes. Yes. Appreciate that, guys. And then the follow-up is on the rev guide.

Charles, the $40,000,000,000 so a couple of things. You mentioned calendar year 'twenty five could be similar to calendar year 'twenty four, which is about 40% growth. So that would suggest maybe $8,000,000,000 on average in the September, December quarter of revenue. And then the $40,000,000,000 the at least $40,000,000,000 for fiscal 'twenty six would tend to suggest maybe at least $12,000,000,000 on average the March and June quarters of 'twenty six fiscal year. So is that sort of what you're talking about?

And then what gives the confidence, I guess, what's the thought process underpinning that $40,000,000,000 and those kind of rev quarters? And is it GPUs as well as custom ASICs as the TAM opens up? So just kind of a customer question there as well. Thanks. That's it for me.

Yes. Thank you. Again, whenever there are new technology, we have a good chance to grow, right, kind of like this time, Blackwell, right, and kind of DRCD cooling. And again, we have a much higher capacity ready for liquid cooling compared with the market. And last year, we grew 110% and this year, basically, we grew we will grow about 60 something percent, right?

So next year, fiscal year 26%, I believe 65% is a very conservative estimation. And personally, I hope we can grow more than that, but that's to be conservative.

Thank you. Thanks guys. Really appreciate it.

Our next question comes from Sameet Chatterjee with the company, JPMorgan. Sameet, your line is now open.

Yes. Thanks for taking my question and have a couple of questions as well. Maybe just to start off, Charles, I think the last time you mentioned, which was in 2024, that we could expect sequential revenue increases in the medium term on a quarterly basis. When I sort of look back at it in hindsight, it looks like what derails that sequential growth to some extent was the product transition from NVIDIA in going from one product generation to another, which also drove some change in customer behavior. As you're thinking about the revenue target here for $40,000,000,000 for fiscal twenty twenty six, I mean, is there an underlying assumption that you won't see a similar customer behavior change towards the next generation product as NVIDIA goes through a transition again in that timeframe?

Or is there something that I'm missing in that sort of overall product transition that we should expect from your GPU supplier? And then a quick follow-up.

Yes. I mean, for calendar twenty five, for example, I believe we should be pretty able to repeat 2023 history. In 2023, H120 launched and we are ahead of competition. So we grew very well. In 2025 calendar year 2025, we are facing to same opportunity now, except before our old AirCore and now it's DeepCore.

And in terms of DUC cooling, especially DLLC, we have a major market share and we have a huge capacity, 15 Antue rack per month capacity ready. And we already have many customers already approved, and they are quickly in a data center and getting ready to deploy in high volume. So once backware in volume production, I believe we will have strong growth. And now we are just preparing diligently preparing all the logistics, including the system enclosure, thermal solution, for sure the GPU supply from our vendor Nvidia. So we are well prepared and once logistic ready, we are ready to ramp up our growth.

Okay. Maybe Charles, I'll follow-up on that.

Plus, I mean, we are spending more effort in Asia and Europe now. In 2023, '20 '20 '4, most our market in USA. But now our team in Asia and Europe are becoming much ready, much stronger to grow market share in Europe and Asia as well.

it. And Charles, I'll just follow-up with a question that I'm getting from investors today after the print, which is when we look at that sort of $40,000,000,000 revenue target, how confident are you about achieving that revenue target with the current customer engagements that you have relative to what you need in terms of additional customers or new customer engagements to get to that revenue that you're targeting? If you can share your thoughts on that, please. Thank you.

Yes. In last few years, our growth have been very strong except 10,000 interrupt, right? So in that four months, five months, we suffered a 10 ks impact. So our growth a little bit slowed down. But we will fix 10 ks file in very soon and cash flow won't be a problem anymore.

So product is strong, capacity here customer is ready. So I believe $40,000,000,000 forecast is relatively conservative estimation.

Okay. Thank you. Thanks for taking the questions.

Our next question comes from Roblaut Bhattacharya with the company Bank of America. Roblaut, your line is now open.

Thanks for taking my questions. I have two. The first one is on gross margin. Overall, do you think industry margins are now under secular pressure given more competition from other AI server manufacturers? And is liquid cooling really a competitive advantage which you can charge more for?

Or is that also becoming commoditized since it looks like everyone seems to be offering their version of liquid cooling? David, how are you thinking about the long term gross margin range for your business? And I have a follow-up on revenues.

Certainly. So what I would say about gross margins are that, number one, what we count on Rupaulu is being the first to market with the very best solutions. And so right now we have shipped GV200 for instance, And we're very confident in its quality as a product and that's really what helps to drive good margins. So it's not just liquid cooling, it's really it's stable systems that have high quality, high reliability and also really the best performance. So I think that our abilities in liquid cooling were already demonstrated in the prior quarters.

And it's really our data center building block solutions, which give us a plan for the future. And so we have a lot of things planned for the future, but data center building block solutions are one of those, where we offer a lot more solutions for the complete data center at all levels. So again, we haven't changed our target margin. And yes, there is competition. There's always going to be competition.

But I think that if you look at how we've performed historically and our ability to engineer in all the latest technologies, I think that's our moat, that's our advantage.

I mean the CLRC, yes go ahead. Yes. CLRC, everyone talking about the CLG solution, but how many competitors really have a CLRC deeper even in high volume. I guess it's very minimal. Last year, I believe we shipped at least 60% of our worldwide TLRC solution.

So that means those are competitors indeed, they are ready, but they have not experienced yet. And talking about data center billing data center billing block solution, not many providers are able to provide on-site deployment and on-site cabling, on-site servicing. And now with DLLC with 150 kwatt per rack or even more power per rack, I believe the on-site deployment, cabling service become a very important value to customer. And we as a company have exactly older experience, older successful story.

Okay. For my follow-up, if I can ask, as new efficient AI models like Deepsea come about, how are you thinking about the impact on your business? And as we move from training to inference, what is Supermicro doing to further penetrate the enterprise vertical? I know you have enterprise customers, but for those enterprise customers who don't have a large engineering presence, what is your strategy for attacking that customer base as well as for Sovereign customers? Thank you for taking my questions.

Okay. So for deep seeking, I mean, for sure, the software can always be more efficient quarter over quarter. So we know that, but industry's expense really depends on financial plan. So I believe the market size won't shrink because of deep seeking. And in terms of enterprise, we have been in enterprise market for more than ten years.

And our team in enterprise have been much stronger than before ever, especially with our service team, management software and end to end data center solution, I believe it's the right time for us to grow quickly in enterprise segment.

Okay. Thanks for all the details. Appreciate it.

Our next question comes from Nehal Chokshi with the company in Northland Capital Markets. Nehal, your line is now open.

All right. Thank you. Quick question here. Can Can you tell us whether or not backlog is up Q or Q for the December?

So we don't generally give out backlog figures, Nehal. But what we can say though is that backlog tends to follow the chip cycle. And so when you have new chip solutions coming out, you'll see backlog start to build as solutions become dependable and reliable. And then they'll tail off as the products mature. And so with the expectation of some of the new chips coming out, we believe that you'll see growing backlog industry wide.

And then I apologize in advance. This question is going to sound a bit Turkish. But Charles, you characterized a $40,000,000,000 target at 60% year over year growth. And given that fiscal year 'twenty five is going to be around 60% year over year growth and likely impacted by the ten ks delay. Therefore, 60% year over year growth for fiscal year twenty twenty five is potentially conservative.

But I mean, is historical year over year growth really a good indicator of future demand? Have you looked at the actual pipeline of demand and said, yes, we believe that this is the how big is the pipeline and this is a reasonable conversion rate and therefore $40,000,000,000 is indeed very reasonable?

Yes, very good question. From both, I mean, we validate the business and from all different dimension, right? I mean, from our historical growth, last few years, we have been growth more than 60% year over year basically, except this year, right, according to the year because of 10,000 today and we have some cash flow constraint. So we grew we may grow only about 60% or 60% shift. But other than that, I believe looking forward next few years, our growth should be every year should be more than 60%.

And second, from a customer demand, from a customer backlog, from customer commitment, sales commitment, looks like RMB40 billion is relatively very conservative target.

Great. Thank you. And if I might squeeze one more in. I'm sorry, but I'm not quite getting what you mean by data center building block architecture. Can you give me a concrete example as far as what does that mean?

Is it like basically the cooling tower design or something else? Could you put a little more concreteness behind that?

Okay. It's still a little bit confidential, but I'm happy to share. I mean, it's like our rack scale building power solution. Customer want to build in their ROAC, we have ambition for them. Samsung, customer want to build their data center, we will have ambition for them.

And today, we offer more and more key components. For example, deep cooling, the older kind of deep cooling pump, right, and water tower, right, dry tower, water tower and then older kind of Yes, cable. I mean, anyway, older people, build a data center need those key components. We try to provide all of them, including software, including management, tool and experience. So I hope customer can one stop shop with Supermichael to build their data center, Make their data center time to market much quicker and also cheaper and lower cost, right, and quicker to build their data center and that's our consumption.

Super Micro Computer (SMCI) Q2 2025 Earnings Call Transcript

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