Good afternoon and thank you for attending Supermicro's call to discuss financial results for the fourth quarter and full fiscal year, which ended June 30, 2023. With me today 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 news 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 have also published management's 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 year 2024 and the full fiscal year 2024. There are a number of risk factors that could cause Supermicro's future 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 2022, and our other SEC filings. All of 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 accompanying presentation or to our press release published earlier today. In addition, a reconciliation of GAAP to 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, we will have a Q&A session for sell-side analysts to ask questions. I'll now turn the call over to Charles.

Thank you, Michael, and good afternoon, everyone. Today, I am pleased to announce a new record fiscal result of $7.12 billion annual revenue, a 37% year-over-year growth rate. We have also achieved our first landmark $2.18 billion quarter, which is 34% growth year-over-year and 70% quarter-on-quarter. We are continuing to exceed both top and bottom-line results and performing well beyond our previously guided ranges. It’s no secret that our strong growth has been driven by the demand for our leading AI platforms in plug-and-play rack-scale, especially for the large language model-optimized NVIDIA HGX-based Delta Next solution. Our engineering capability enabled us to deliver optimized, first-to-market AI products and solutions to our customers, distinguishing us from the competition and empowering us to take market share. I am also proud of our logistics and production teams’ execution to maintain our time to market advantage and deliver our total solution to our key partners much sooner than competition. Our investment of 4,000 racks-per-month state-of-the-art validation and production facility in Silicon Valley is one of the major factors in delivering high-performance AI racks quickly with both air-cooled and liquid-cooled options. Let’s go over some key financial highlights: We enter FY24 with record-high backorders, many more new design wins and new customers. Again, our fiscal year 2023 net revenue totaled $7.12 billion, up 37% year-on-year, above our mid-point guidance range of $6.7 billion. Fiscal year 2023 non-GAAP earnings per share grew 109% year-over-year to $11.81, compared to $5.65 a year ago, exceeding the higher end of our revised guidance range of $10.50 to $11.00. Fiscal Q4 net revenue totaled $2.18 billion, up 34% year-on-year and up 70% quarter-on-quarter, above our guidance range of $1.7 billion to $1.9 billion. Fiscal Q4 non-GAAP earnings of $3.51 per share grew 34% year-over-year compared to $2.62 a year ago, and it was well above the high end of our guidance range of $2.21 to $2.71, demonstrating strong operating leverage and continued customer preference towards our rack-scale Total IT Solutions. For 30 years, we have been diligently building our company strength and foundation. As the only U.S.-based scale AI platform designer and manufacturer, we have been shipping our winning products in volume to our partners for more than a quarter. A couple of months ago, I was honored to have my close friend, NVIDIA CEO Jensen Huang, join me on stage at Computex to highlight our optimized new-generation GPU solutions for this AI era. We are deploying not just systems, but complete rack-scale total solutions to large generative AI innovators. Supporting HGX H100 Delta-Next, H100 PCIe GPUs, and the just-announced L40SGPUs; our Delta-Next, Redstone-Next, and 8-GPU OVX systems have become the benchmarks of excellence for the industry. We are also getting good traction on Intel’s Gaudi 2 and PVC, as well as AMD’s MI-250 accelerator solutions. The demand for artificial intelligence infrastructure is perfectly addressed by our building block server architecture, and due to our building block solutions, we have the best and broadest application-optimized GPU solutions on the market. We plan to extend this leadership with the upcoming MGX platforms that we announced at Computex, bringing modular flexibility on acceleration with X86, Grace, C2 and Grace-Hopper CG1 Superchip. The MGX platform is a shared vision of AI computing between NVIDIA and Supermicro, designed to be open, flexible and future-proof for multiple generations of GPUs, CPUs, and DPUs. We already have many customers engaged with these new MGX platforms as we speak, and soon they will be in volume production. With nearly half of our revenues this quarter based on AI-related designs, I expect this AI growth momentum to continue expanding our TAM across all customer types from major AI innovators, super large CSPs, Tier 1 DCs, Tier 2 cloud, and to the general enterprise market. As the performance of GPU, CPU, DPU, and memory technologies increase, enhanced storage performance is also necessary to feed massive data sets to the applications without becoming a bottleneck that slows the entire system down. Supermicro's new PCIe Gen 5 based E1.S and E3.S Petascale All-Flash storage servers offer industry-leading storage performance and capacity. Together, with our U.2 NVMe, top-loaded scale-out, and traditional storage platforms, we are fulfilling customers’ AI, compute, and storage needs with a one-stop total solution shopping experience, with the best optimization in performance, time-to-online, and cost. With accelerated computing and storage, the power consumption and thermal challenges of these new technologies have risen dramatically. 40KW or even 100KW rack solution demand is rapidly expanding and required for compute-intensive DC, CSP, and other verticals. Having high power efficiency, free-air and liquid cooling expertise has become one of our key differentiators of success. We have made major investments across a variety of technologies to drive the adoption of direct liquid cooling in data centers to address the thermal challenges. In addition to increasing computing density and reducing TCO, liquid cooling reduces the environmental impact of data centers dramatically, aligning with our green computing mission. Similarly, our liquid immersion solution is making good progress, and we will be happy to provide that option to interested partners soon. The reality is that data center infrastructure is getting more complex, especially with the unprecedented demand for AI. The design complexity and integration skills, along with the requirement to deploy in a timely fashion are heavy burdens to many end customers. Supermicro Total IT Solutions approach saves them from the complications of design, validation, sourcing, and integration. It also streamlines network switching, firmware, and software management in data center scale. Customers’ peace of mind is topped off by the value of our 24/7 Global Service tiers. Given the current infrastructure demand, we have been continuing to evaluate our footprint beyond our recently announced Malaysia expansion. We have recently added another new building close to our Silicon Valley HQ and are aiming to further increase our current 4,000 rack-per-month capacity in this fiscal year. To further support demand from key domestic partners, we are also planning to build another manufacturing campus in North America. At this moment, our U.S. headquarters and Taiwan facility can support at least $15 billion in revenue while the new Malaysia facility will further increase our total revenue potential by serving scale builds on a reduced cost structure in the coming CY'24. In closing, Supermicro is in a great position to continue our growth momentum with our leading AI portfolio, our infrastructure readiness, and our ability to deliver products in a timely manner. Due to the current key components supply shortages, we forecast revenue in the range of $1.9 billion to $2.2 billion for the September quarter. However, given the record-high backlog, we see fiscal year 2024 revenue between $9.5 billion to $10.5 billion with room to deliver more depending on availability of supply. Our role as the leader of rack-scale Total AI and IT Solutions has only just begun. We are ready to deliver optimized AI infrastructures to existing and emerging markets, along with our value-added software and services. To say it plainly, our foundation and capacity are fully ready, and our demand is growing strongly. With large language models and other AI applications booming, I now expect the $20 billion annual revenue target to be just a couple of years away. Before passing the call to David Weigand, our Chief Financial Officer, I want to say thank you to our partners, customers, Supermicro employees and to our shareholders for your continued support. Thank you, David.

Thank you, Charles. Fiscal fourth quarter revenues were $2.18 billion, up 34% year-over-year and up 70% quarter-over-quarter. Q4 revenues exceeded initial guidance range of $1.7 billion to $1.9 billion and were at the high end of the recently updated range of $2.15 to $2.18 billion. For Fiscal 2023, we reported revenues of $7.12 billion, representing a 37% growth over FY'22 revenues of $5.20 billion. Next-generation CPU and AI platforms continue to drive record levels of design wins and orders. Exiting fiscal year 2023, with a record backlog, we are well-positioned for fiscal year '24 with an outlook for continued revenue growth and profitability. We expect diversified growth driven by top-tier data centers, emerging CSPs, enterprise AI build-outs, CPU upgrades, and edge IoT and telco markets. We are also targeting new opportunities in adjacent markets such as Storage, Switches, Software & Services. We note that our shipments against a record backlog may continue to be constrained by supply chain bottlenecks for key new components for our advanced AI server platforms. Q4 results were driven by our high-growth AI/GPU and rack-scale solutions which represented 52% of our total revenues. We had two 10% customers for Q4 and did not have any 10% customers for fiscal year '23. During Q4, we recorded $976 million in the Enterprise and Channel vertical, representing 45% of revenues versus 50% last quarter. This was up 19% year-over-year and up 51% quarter-over-quarter as we ramped several key enterprise programs. The OEM appliance and large data center vertical achieved $1.17 billion in revenues, representing 53% of Q4 revenues versus 47% last quarter, up 59% year-over-year and up 94% quarter-over-quarter as we gained momentum from existing and new datacenter, CSP, and OEM cloud appliance customers. Our emerging 5G, Telco, Edge, IoT segment achieved $43 million in revenues, representing 2% of Q4 revenues versus 3% last quarter. For the fiscal year 2023, Organic Enterprise and Channel and AI/ML revenues grew 10% to represent 48% of total revenues. The OEM appliance and large data center segment grew 102% and represented 49% of total revenues. The emerging 5G Telco Edge IoT segment decreased 36% and represented 3% of total revenues. The mix of complete systems and rack-scale Total IT Solutions has increased over the last two years. Server and Storage Systems comprised 93% of Q4 revenue and Subsystems and Accessories represented 7%. ASPs continued to increase on a quarter-over-quarter and year-over-year basis driven by the value and complexity of our rack-scale Total IT Solutions. By geography, U.S. represented 76% of Q4 revenues, Asia 11%, Europe 10%, and Rest of World 3%. On a year-over-year basis, U.S. revenues increased 55%. Asia decreased 17%, and Europe increased 1%, and Rest of World increased 12%. On a quarter-over-quarter basis, U.S. revenues increased 112%, Asia increased 10%, Europe decreased 1%, and Rest of World increased 11%. The Q4 non-GAAP gross margin was 17.1%, down quarter-over-quarter from 17.7% in Q3 as we focused on winning strategic new designs and market share. For fiscal year '23, the non-GAAP gross margin of 18.1% versus 15.4% for fiscal year '22 was driven by an increased rack-scale product/customer mix and higher manufacturing efficiencies. Turning to operating expenses, Q4 Opex on a GAAP basis increased by 14% quarter-over-quarter and 19% year-over-year to $145 million driven by headcount and related expenses. On a non-GAAP basis, operating expenses increased 14% quarter-over-quarter and 17% year-over-year to $133 million. Our non-GAAP operating margin increased significantly to 11% for Q4 versus 8.7% last quarter due to operating leverage driven by higher revenues that outpaced increases in operating expenses. For fiscal year '23, we achieved a non-GAAP operating margin of 11.4% versus 7.2% in fiscal year '23 due to higher gross margins and operating leverage from higher revenues and expense controls. Other Income & Expense for Q4 was an expense of approximately $1.5 million consisting of $3.5 million in interest expense offset primarily by a net foreign-exchange gain of $2.0 million. Our interest expense increased sequentially as we utilized our short-term credit lines for working capital requirements along with higher short-term interest rates on our borrowings. The tax provision for Q4 was $31.3 million on a GAAP basis and $36.6 million on a non-GAAP basis. The GAAP tax rate for Q4 was 13.9% and the non-GAAP tax rate was 15.4%. The GAAP tax rate was 14.7% for fiscal year '23 versus 15.7% in fiscal year '22 and the non-GAAP tax rate was 15.9% versus 17.7% in fiscal year '22. We delivered strong Q4 non-GAAP diluted EPS of $3.51 which exceeded the high end of the original guidance range of $2.21 to $2.71 and the recently updated range of $3.35 to $3.45. The increase in Q4 EPS was due to a combination of higher revenues and operating leverage. For the full fiscal 2023, we reported non-GAAP diluted EPS of $11.81, up 109% year-over-year versus fiscal 2022 non-GAAP diluted EPS of $5.65 and higher than the FY'23 guidance of $10.50 to $11.00. Cash flow used in operations for Q4 was $9 million compared to cash flow generated by operations of $198 million in Q3 due to higher accounts receivable, offset by lower inventory and higher accounts payable from backend-loaded shipments in the quarter due to supply constraints. CapEx was $8 million for Q4 resulting in negative free cash flow of $17 million versus positive free cash flow of $190 million last quarter. For fiscal year '23, we had free cash flow from operations of $664 million, CapEx of $37 million resulting in free cash flow of $627 million. We have $50 million remaining under the authorized buyback program which expires on January 31, 2024. The closing balance sheet cash position was $440 million, while bank debt was $290 million resulting in a net cash position of $150 million down from net cash position of $176 million last quarter as we utilized our bank lines of credit to support higher revenues and accounts receivable as we ramped up production of new AI/GPU design wins. Turning to the balance sheet and working capital metrics compared to last quarter, the Q4 cash conversion cycle improved to 77 days versus 126 days in Q3. Days of Inventory was 75, representing a decrease of 51 days versus the prior quarter of 126 days. Days Sales Outstanding was down 13 days quarter-over-quarter to 38 days while Days Payables Outstanding came down by 15 days to 36 days. Faster inventory turns contributed to the improvement in our cash conversion cycle. Now turning to the outlook, we remain enthusiastic about our diversified business model, covering a wide range of AI, core computing, storage, 5G telco edge and IoT applications. Design wins span across enterprise/channel, large datacenter/emerging AI CSP, and Telco and OEM customers. We are carefully observing the global macro-economic situation and continuing supply chain constraints, especially for leading AI platforms. For the first quarter of fiscal 2024 ending September 30, 2023, we expect net sales in the range of $1.9 billion to $2.2 billion, GAAP diluted net income per share of $2.02 to $2.80 and non-GAAP diluted net income per share of $2.75 to $3.50. We expect gross margins to be similar to Q4 levels. GAAP operating expenses are expected to be approximately $185 million and include $48 million in stock-based compensation and other expenses that are not included in non-GAAP operating expenses. GAAP and non-GAAP operating expenses are expected to increase due to continued investments in R&D and higher personnel costs adding to our great engineering and sales teams. The outlook for Q1 of fiscal year 2024 fully diluted GAAP EPS includes approximately $44 million in expected stock-based compensation and other expenses, net of tax effects of $9 million, which are excluded from non-GAAP diluted net income per common share. We expect other income and expense, including interest expense, to be a net expense of approximately $1.5 million. The company’s projections for GAAP and non-GAAP diluted net income per common share assume a GAAP tax rate of 14.7%, a non-GAAP tax rate of 15.4%, and a fully diluted share count of 56 million for GAAP and 57 million shares for non-GAAP. We expect CapEx for the fiscal first quarter of 2024 to be in the range of $10 million to $12 million. For the fiscal year 2024 ending June 30, 2024, we are giving guidance for revenues in the range of $9.5 billion to $10.5 billion. Okay, Michael, we’re now ready for Q&A.

Thank you. And congratulations on an amazing quarter and amazing fiscal year '24 revenue guidance of $9.5 billion. Definitely want to dig into. First off, Charlie, I think he said you have 50% in revenue exposure to AI for the June quarter. That's incredible, makes a very strong statement that Super Micro, indeed the leader in AI systems. What do you think is a sustainable differentiation that you guys are wielding with rack-scale AI systems that's driving that incredibly fast increase in revenue exposure to AI systems?

Yeah, thank you for your question. Yes, as AI has been our major focus since a few years ago, and we work with AI chip companies very closely. And we could develop lots of our platforms, including our MTX. Now coming MTX, as you know, to support a C2 and CG1. So our AI solution with rack scale, or cloud scale, customer scale solutions that make our customers deploy even much easier. And full rehab, they also solution for energy cost as they've been for time to online. So I believe our AI product line will continue to grow in the near future, maybe continue to be more than 50% of our revenue.

Yes, thanks for taking my question. And Charles, I think it would be very helpful if you could provide clarity on how you see your path to $10 billion of revenue. And perhaps any kind of color on ASP increase that would capture your increased content would give us insight unless you have other ways of explaining to get to $10 billion net.

We continue to get lots of new customers or partners that continue to like our solution. And we continue to gain new customers with our rack scale, cloud scale, total solution, including various applications. So we see a very strong demand and a rapidly growing order flow. So $10 billion should be kind of a short-term target this year.

Last question, your competitors also argue for innovative cooling? And they also argue for efficiency? Is there something with your cooling technology that is better offers better cost performance compared to some of the emerging cooling that your competitors are marketing?

Yeah, indeed, our engineering team is strong and dedicated. Everyone can design systems, our systems are simply better than others, not just better in quality and performance, but also earlier time to market. And together with service, software, and system management, it's a total solution and service. So we feel pretty confident that we will continue to gain market share.

Okay, maybe move on, because they are becoming more than 50% of your revenue. How is your pipeline as you look into the second half of the calendar year? Do you already have a pipeline that gives you confidence you're going to hit that 50% plus AI as the mix of revenue or do you still have to go and qualify and win the business to hit that target?

Indeed, our pipeline I believe is very strong. And that momentum, its ability is very clear. So we are very confident especially with another couple of key customers too.

Hi, good afternoon. Thank you for taking my questions and congrats on a really strong quarter outlook again. My first one, is I just wanted to dig into your confidence for the outlook. Can you just in various parts, maybe talk about your confidence in supply chain, being able to supply that maybe 40% growth guidance at the midpoint? Maybe talk about your ability to get allocations from key suppliers. And then within your order book and backlog? What is your assurance? Or how can you identify if there's double or triple ordering? And how do you protect yourself against that if they do exist?

Yeah, it's a complicated question. We have a very good product many product line for delta max for redstone max for grace for alternative solutions. So the solution is really strong, and we work with our vendor very closely every day. And so hopefully that situation will be consistently improved, but it's not 100% controlled by our sales. So although we have a good partnership with our vendors, it's not 100% controlled by our sales. So we will need to continue working together, and the situation will continue to improve, I believe.

In order side, double protection against double and triple?

Also, John, we have a lot of NCNR orders as well. That protects against double and triple booking.

Yeah. Good afternoon, guys. And thanks for taking the questions. Yeah, congrats on the strong results and the ongoing momentum. I have a couple if I could. Charles, you've talked in the prepared remarks about the unprecedented demand you're seeing and you guys have talked about actually adding new customers, including top-tier data center customers, I think you mentioned and some of these generative AI server forecasts for 2024 calendar are really, really strong. And you're also talking about gaining share, et cetera. And so I guess the first question is, is what's the opportunity do you see to maybe even exceed stronger than the fiscal '24 guidance. I guess, what would be the puts and takes there? And, if you were to be able to exceed the 2024 guidance, what would be some of the things you think would need to occur? And then I have a quick follow up. Thanks.

Yeah, thank you. Very good question. Again, we continue to gain generative AI innovators, and we have a very good partnership. We partnered with some small OEMs. And for sure, they need 10 times 20 times more systems. And we just cannot ship at this moment because of supply chain issues. And at the same time, we also continue to engage with large CSPs and large data centers. So we continue to gain more customers. Our major focus now is on the supply chain, working with various parties.

That's really helpful. So, Charles, just to clarify, if you can obtain more from the supply chain and utilize it effectively, would that provide you with order visibility to share gains and potentially exceed the fiscal '24 range you mentioned? Is this all contingent on supply chain issues? Did I understand that correctly?

Yeah, absolutely. I mean, we continue to prove to our customers and our vendors, say, hey, we have a business solution. So okay with us, that's where we went wherever you want.

I got it. And then let me just ask a quick follow up to that one. Is there any way you guys could provide in context for us around I guess how constrained you are, like, what might the demand outlook sort of look like if you were not constrained? So not like a guidance, obviously, you gave your guidance to just content context for us and really getting a sense of what the structural positioning of the company is if there were not constraints?

Yeah, I can. We have a very good product. And we have a very good partner customer base. We pushed our vendors. And we know our vendors are doing their best to support us at the same time. So we just have to continue to work together.

Charles, I have one more quick one, I appreciate it. Sounds like the gross margin guidance for the September quarter is a pretty solid most attractive guide. For fiscal '24, should we assume that same 17% kind of gross margin range or what's the right way to think about that? And that's it for me. Thanks.

Sure, Ananda, this is David. So we're targeting to hold our margins. And that's all the guidance that will give right now.

Yeah, thanks for taking the questions. And also congrats on the results tonight. So I first of all, I just want to clarify, I want to make sure I heard the number clearly. The 50% or 52% of the revenue that was from your AI and rack scale solutions last quarter?

Yeah, Adam. Charles, in his script said approximately 50% and I clarified 52%.

Okay, so I guess the question isn't either that is that, one of the questions I get asked a lot about, is the spending around AI being so strong. And it sounds like obviously, you're carrying a pretty good backlog looking out over the next several quarters, given the supply dynamics. But if I take that number and I say the non-AI business, how has that trended or basically, are you reallocating capacity away from more of the non or traditional compute side to satisfy demand on the AI side? Or have you seen spending slowdown outside of these AI investments that you're clearly benefiting from?

Yeah, now AI server storage, IoT telco, we keep evolving and a bit blend. Understand that industry has been declining, we are not declining, above Fed. And we try to grow as well. And that's why we are growing in many directions like manufacturing in Taiwan and Malaysia. And we may have another North America campus. So that's all to increase our capacity so that we can grow traditional data center business as well, instead of focusing solely on AI.

Okay. Just to clarify, you have some limitations on your supply in traditional computing due to the demand for AI. Is that accurate?

Not exactly impacted, but not exactly. Indeed, as traditional servers, traditional data center business, and a bit blend from the demand side. So we faced similar experiences as well, but we're not declining.

Yep. Okay. And then the final question for me is just thinking about the AI opportunity. And I think you alluded to this in your prepared comments you mentioned positioning around I think it was the Intel Ivy chip and then also I think another vendor coming to market the MI300 from AMD. How do you see that playing out for your opportunity? Does it help satisfy the demand? Are you seeing indicators that, this AI opportunity is going to be much more diversified here as we move into '24 versus what you've seen on the NVIDIA side at this point? Just curious how you're seeing kind of the competitive landscape or maybe opportunities that expand for you with those newer other solutions coming to market?

Yeah, in retail solutions, the industry is indeed waiting for NVIDIA capacity to grow. And other solutions from Intel and from AMD are very much anticipated. Because our box solution is ready to go now. So that's the advantage we have. So we are just waiting for their solutions to be available in production.

Thank you very much.

Thanks.

Operator?

Now we have the first question from Nehal Choski of Northland Capital Markets. Your line is open. Thank you, everyone for joining today's conference call. This will conclude the call at this time. You may now disconnect. Thank you, everyone.