Thank you for standing by. My name is Joel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Super Micro Computer Fiscal Q3 2024 Results on April 30, 2024. With us today are Charles Liang, Founder, President, and Chief Executive Officer; David Weigand, CFO; and Michael Staiger, Vice President of Corporate Development. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

Good afternoon, and thank you for attending Supermicro's call to discuss financial results for the third quarter, which ended March 31, 2024. 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 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, and other income and expenses, taxes, capital allocation, and future business outlook, including guidance for the fourth 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 '23, 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. We achieved another record-breaking quarter, with revenue of $3.85 billion, a 200% increase from the same time last year, and non-GAAP earnings per share of $6.65, up more than 308% year-on-year. Supermicro is at the forefront of the current AI revolution. These strong results reflect the continued demand for our rack-scale plug-and-play total AI solutions. We continue to face some supply chain challenges due to new products that require new key components, especially DLC-related components, and believe this situation will gradually improve in the coming quarters. To sustain this rapid growth, we are making significant investments in production, operation, management software, cloud features, and customer service to further increase our customer base and bring more value to them. To support this scale-up, we raised an additional $3.28 billion through a convertible note and secondary equity offering in the quarter. We like to support strong short- and long-term growth with minimal equity dilution. Overall, I remain optimistic that AI growth will continue for many quarters, if not many years to come. We have long recognized that AI is accelerating the need for liquid cooling, and we have invested heavily in high-quality, optimized direct liquid cooling solutions for high-end CSPs and NCPs. With GPUs reaching 700 watts and soon more than 1,000 watts, efficiently managing the heat from these AI systems has become critical for many customers, especially at the new data centers. I am pleased to announce that our new DLC liquid cooling building blocks and rack-scale total solution technology are finally ready for high-volume production. With our DLC liquid cooling technology, customers can reduce their expense on cooling, saving data center space, and allocate a greater portion of their finite power resources to computing instead of cooling, which aligns with our green computing DNA. Now, let's go over some key financial highlights. Supermicro is pleased to be included in the prestigious S&P 500 Index last quarter. Fiscal Q3 net revenue totaled $3.85 billion, up 200% year-on-year, within our aggressive original guidance of March quarter. If not limited by some key component shortages, we could have delivered more. Fiscal Q3 non-GAAP earnings of $6.65 per share were well above $1.63 last year, which was above 308% year-on-year growth. Our increasing economies of scale contributed to better net profit. Our year-over-year operating margin and net income both continue to improve, and we continue to expect further benefits as we bring our Malaysia facility online later in this calendar year. This fast-growing quarter was driven by end users wanting to accelerate their deployment of the latest generation AI platforms. Through our Building Block Solutions, we provide optimized AI solutions at scale, offering a time-to-market advantage and shorter lead time over our competition. Additionally, our rack-scale plug-and-play total solutions, especially with liquid cooling, ensure optimal system performance while saving energy costs up to 40% at data center scale, delivering much more value to customers. We are leading the AI revolution by deploying NVIDIA HGX H100 SuperCluster solutions to our customers, housed in our new 100-kilowatt racks, with 2 to 3 times higher power density than traditional racks from others. At NVIDIA GTC last month, we unveiled our next-generation Blackwell products, including the GB200 NVL72 solution. To further grow our AI portfolio, we are now strongly focused on developing new generative AI and inference-optimized systems based on the upcoming next-generation NVIDIA H200, B100, B200, GH200, and GB200 GPUs as well as Intel Gaudi2, Gaudi3, and AMD MI300X and MI300A GPUs. Most of them support both air cooling and DLC cooling. As Supermicro is transitioning to our next generation of X14 and H14 product lines featuring the industry's broadest SKUs of Intel Xeon 6 processor-based and AMD Turin-based platforms, we are fully ready for high-volume production and offer early online access for testing and validation through our JumpStart cloud service. Meanwhile, our X14 and H14 storage solutions are addressing the specific requirements of accelerated AI data pipelines with partners like Weka, VAST Data, and many others. The rapid growth of our business is raising the complexity to scale our capacity. Our production teams are making aggressive progress on retrofitting the new Silicon Valley facilities and scaling up our Taiwan and Malaysia factories. We have secured the parts and acquired additional warehouses for our next phase of enterprise and data center businesses. We are currently on track to produce over 2,000 liquid cooling DLC racks per month of AI servers, with volumes steadily increasing. Each DLC rack supports up to 100 kilowatt or even 120 kilowatt. At this moment, we are focusing on delivering more than 1,000 racks of NVIDIA HGX AI supercomputers, each rack supports 64 pieces of H100, H200, or B200 GPUs, with the latest DLC liquid cooling technology to three industry-leading customers, from April to June of this quarter. These three deployments will be among the world's largest DLC liquid-cooled AI clouds, potentially saving our customers up to 40% of energy costs compared to standard air-cooled deployments by our competition. Special thank you to NVIDIA and our close technology partners for this fantastic collaboration. I believe this is just the beginning of our long-term high volume DLC liquid cooling mission. Green Computing can be free with a big bonus. Let's go for Green! In summary, we had a strong quarter with more to come. Supermicro is uniquely capable of delivering new technologies to market faster with our integrated rack-scale plug-and-play solutions, in-house engineering, building block architecture, and green computing DNA. With a robust pipeline of new products in the calendar year 2024, we're confident fiscal Q4 revenue will be in the range of $5.1 billion to $5.5 billion. This will raise our fiscal revenue guidance to $14.7 billion to $15.1 billion, an increase to our recent fiscal 2024 guide. We continue to win market share and remain committed to executing our growth plans across all verticals. This remains truly the most exciting time yet for Supermicro, and I believe this strong year-over-year growth will continue in our fiscal 2025, especially with our new, leading, and ready-to-ship DLC liquid cooling rack-scale plug-and-play solutions and technologies. Before passing the call to David Weigand, our Chief Financial Officer, I want to thank you again for your support, our partners, our customers, our employees, and our shareholders.

Thank you, Charles. Fiscal Q3 2024 revenues were $3.85 billion, up 200% year-over-year and 5% quarter-over-quarter. Q3 growth was again led by AI GPU platforms, which represented more than 50% of revenues with AI GPU customers in both the enterprise and cloud service provider markets. We expect strong growth in Q4 as the supply chain continues to improve with new air-cooled and liquid-cooled customer design wins. During Q3, we recorded $1.88 billion in the enterprise/channel vertical, representing 49% of revenues versus 40% last quarter, up 190% year-over-year and 26% quarter-over-quarter, driven by industry recognition of our solution price-performance metrics and reliability. The OEM appliance and large data center vertical revenues were $1.94 billion, representing 50% of Q3 revenues versus 59% in the last quarter, up 222% year-over-year and down 10% quarter-over-quarter. One existing CSP/large data center customer represented 21% of Q3 revenues, and one existing enterprise/channel customer represented 17% of revenues. Emerging 5G/Telco/Edge/IoT revenues were $37 million or 1% of Q3 revenues. Server and Storage Systems comprised 96% of Q3 revenue and Subsystems and Accessories represented 4%. ASPs increased on a year-over-year and quarter-over-quarter basis. By geography, the U.S. represented 70% of Q3 revenues, Asia 20%, Europe 7%, and Rest of World 3%. On a year-over-year basis, U.S. revenues increased 242%, Asia increased 257%, Europe increased 30%, and Rest of World increased 87%. On a quarter-over-quarter basis, U.S. revenues increased 3%, Asia increased 17%, Europe increased 3%, and Rest of World decreased 11%. The Q3 non-GAAP gross margin was 15.6%, up slightly quarter-over-quarter from 15.5% as we continued to focus on winning strategic new designs, gaining market share, and improving manufacturing efficiencies. Q3 operating expenses on a GAAP basis increased by 14% quarter-over-quarter and 72% year-over-year to $219 million, driven by higher compensation expenses and headcount. On a non-GAAP basis, operating expenses increased 8% quarter-over-quarter and 43% year-over-year to $166 million. Q3 non-GAAP operating margin was 11.3%, which was in-line with Q2 levels. Other income and expense for Q3 was $3.8 million, consisting of $6 million in interest expense and a gain of $10 million principally from foreign exchange. Interest expenses decreased sequentially as we paid down short-term bank credit facilities. The GAAP tax rate was negative 5.2%, resulting in a tax benefit of $20 million for Q3. The non-GAAP tax rate for Q3 was 6%, resulting in a Q3 tax expense of $27 million. GAAP and non-GAAP tax rates were lower due to the impact of higher R&D tax credits and tax benefits from employee stock grants exercised. Q3 GAAP diluted EPS of $6.56 and Q3 non-GAAP diluted EPS of $6.65 exceeded the high end of guidance through record revenues, stable gross margins, and operating margins and lower tax rates. The GAAP share count increased from 58.1 million to 61.4 million and the non-GAAP share count increased sequentially from 59 million to 62 million shares as a result of the two stock offerings and, to a lesser extent, the convertible bond offering. Cash flow used in operations for Q3 was $1.5 billion compared to cash flow usage of $595 million during the previous quarter as we grew inventory and accounts receivable for higher levels of business. Cash flows from strong profitability were offset by higher inventory, a large portion of which was received late in Q3, and higher accounts receivable from increasing revenues. Our Q3 closing inventory was $4.1 billion, which increased by 67% quarter-over-quarter from $2.5 billion in Q2 due to the purchase of key components. Capex was $93 million for Q3 resulting in negative free cash flow of $1.6 billion for the quarter. During the quarter, we raised $1.55 billion from a 0% coupon five-year convertible bond offering due in 2029, net of underwriting discounts and offering expenses. We also raised approximately $1.73 billion in net proceeds from the sale of 2 million shares at a price of $875 per share. The proceeds from these transactions will be used to strengthen our working capital, enable continued investments in R&D, and expand global capacity to fulfill strong demand for our leading platforms. The closing balance sheet cash position was $2.1 billion, while bank and convertible note debt was $1.9 billion, resulting in a net cash position of $252 million versus a net cash position of $350 million last quarter. Turning to the balance sheet and working capital metrics compared to last quarter, the Q3 cash conversion cycle was 96 days versus 61 days in Q2. Days of inventory increased by 25 days to 92 days compared to the prior quarter of 67 days due to key component purchases for higher expected Q4 revenues. Days sales outstanding increased by 8 days quarter-over-quarter to 37 days while Days Payables Outstanding decreased by two days to 33 days. Now turning to the outlook for Q4, we expect strong growth as the supply chain continues to improve with new air-cooled and liquid-cooled customer design wins. For the fourth quarter of fiscal 2024 ending June 30, 2024, we expect net sales in the range of $5.1 billion to $5.5 billion, GAAP diluted net income per share of $7.20 to $8.05, and non-GAAP diluted net income per share of $7.62 to $8.42. We expect gross margins to be down sequentially as we focus on driving strategic market share gains. GAAP operating expenses are expected to be approximately $226 million and include $55 million in stock-based compensation expenses that are not included in non-GAAP operating expenses. The outlook for Q4 of fiscal year 2024 fully diluted GAAP EPS includes approximately $30 million in expected stock-based compensation expenses, net of tax effects of $28 million, which are excluded from non-GAAP diluted net income per common share. We expect other income and expenses, including interest expense, to be a net expense of approximately $8 million. The company's projections for Q4 GAAP and non-GAAP diluted net income per common share assume a GAAP tax rate of minus 2.9%, a non-GAAP tax rate of 2.6%, and a fully diluted share count of 64.8 million for GAAP and 65.3 million shares for non-GAAP. We expect CapEx for Q4 to be in the range of $55 million to $65 million. For fiscal year 2024 ending June 30, 2024, we are raising our guidance for revenues from a range of $14.3 billion to $14.7 billion to a range of $14.7 billion to $15.1 billion, and establishing guidance for GAAP net income per diluted share of $21.61 to $22.46, and non-GAAP net income per diluted share of $23.29 to $24.09. Our projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately 3.6% and 9.2%, respectively, and a fully diluted share count of 61.2 million shares for GAAP and fully diluted share count of 61.8 million shares for non-GAAP. The outlook for fiscal year 2024 GAAP net income per diluted share includes approximately $116 million in expected stock-based compensation, net of related tax effects of $98 million that are excluded from non-GAAP net income per diluted share. We're now ready for Q&A.

Absolutely. We will now begin the question-and-answer session. Our first question is from the line of Ruplu Bhattacharya with Bank of America. Your line is now open.

Hi, thank you for taking my questions, and congrats on the strong guidance. I have two questions. First, I wanted to ask a question on liquid cooling. Do you design most of the components for liquid cooling racks in-house? And as such, do you think you would be able to charge more for liquid-cooled racks? And can this be accretive to gross margins?

Yes, very good question. Yes, we design a lot of key components for our DLC liquid cooling system because we care about quality, maintenance, and also time to market. So, we design many key components while we leverage third-party components as well. So, it's a combination. And, yes, I mean, for liquid cooling, we try to charge customers a minimum premium, and customers can save on air-conditioned equipment costs because cooling is done with liquid. So, at the same time, customers save on total cost of ownership, up to 40% of energy costs. That's why we promote the slogan, 'green computing can be free with a big bonus.' Customers pay a very minimal premium, but they save up to 40% of energy costs. So, I believe a lot of customers will go for that direction. Indeed, we already have a handful of customers with big orders. That's why this quarter alone — I mean, the June quarter, we are preparing more than 1,000 liquid cooling racks for those early adopters. I believe the demand will continue to grow very strong.

Thank you. The next question is from the line of Samik Chatterjee with JPMorgan. Your line is now open.

Yeah. Hi. Thanks for taking my question. I guess in the press release, Charles, you mentioned the visibility into share gains as the new solutions ramp. I was curious if you can sort of give us a bit more color there in terms of when you're thinking about share gains, are these relative to the next-generation GB200 product with NVIDIA? And is this more in relation to hyperscalers? Are you expanding the number of hyperscalers that you are engaged with as you move to these new solutions? Just any more color in terms of the visibility around these share gains? Where is that coming from? And is that more in relation to the next product generation from NVIDIA? Thank you.

Okay. Thank you. Yes, we continue to gain market share, especially our rack-scale plug-and-play solutions that reduce customers' lead time and also reduce customers' time to online. With our rack-scale plug-and-play, customers are able to deploy the system online in the next day or next few days instead of the next few weeks. So, time to online savings is a big advantage to customers. At the same time, the liquid cooling helps customers save energy usage. So, customers can allocate and relocate energy power to support more computing equipment instead of wasting power for air cooling. So, the same money benefits many leading customers, and also rack-scale plug-and-play that make customer time to online. So, we continue to gain new customers while our existing customers continue to grow faster with our beta offerings. So, with GB200, each rack will be around 100 kilowatts. A lot of customers like that. We help them build their liquid cooling systems and optimize their data centers for liquid cooling. So, we are strongly growing our customer base.

Thank you. The next question is from the line of Michael Ng with Goldman Sachs. Your line is now open.

Hey, good afternoon. Thank you very much for the question. I wanted to ask about gross margins. Strong gross margins for the quarter. I know you're guiding to a sequential decline in gross margins. If our math is right, I think that implies 13.5% to 14% gross margins for the June quarter. Is that the right way to think about gross margins on a go-forward basis? Do you still feel comfortable with the prior 14% to 17% long-term gross margins? And any comments just around AI server gross margins in general? And if there are any ancillary services and support that can help improve the margins on just the product sales? Thank you very much.

Yeah. So, our target is still 14% to 17%. If you look at our guidance for Q2, I'm sorry, for Q3, we actually guided slightly down, and we ended up slightly up. And so, it's very hard to guide exactly on the margins. There is a range, and in fact, I think the guidance inside of the models last time was even more conservative. So, I would say, we build conservatively and then seek to overachieve. So, I think if you look at our guidance for revenue and for OpEx, you'll be able to determine our guidance there. But our target is definitely to stay in the 14% to 17% range.

Thank you. The next question is from the line of Aaron Rakers with Wells Fargo. Your line is now open.

Yeah. Thanks for taking the question. I'll try and slip in two here, if I can. So, I guess one of the just kind of housekeeping questions is a very significant increase in inventory this quarter. I know you said it came in towards the end of the quarter. How do we think about the trajectory of inventory as the supply comes on? Do you expect inventory to stay at this level? Do you expect it to start to come down? I'm just kind of curious to how we think that flow through kind of looks as you take on more supply? And then just a quick housekeeping thing too is that the 21% customer you referenced in the prepared remarks, is that the same customer, large customer you had last quarter, or how has that evolved? Thank you.

Two reasons we had to increase inventory. One is because Q4, I mean, the June quarter, we will have strong revenue growth. The second reason we are preparing for high volume liquid cooling. Again, we have more than 1,000 of 100-kilowatt liquid cooling racks we had to ship to customers in Q4. And liquid cooling, as you know, is pretty new. So, we had to prepare enough inventory, so that we can deliver liquid cooling rack-scale product to customers on time or with minimum lead time. Both factors are indeed positive. With our economies of scale continuing to grow, indeed, our inventory average day will slightly improve.

Yeah. So, Aaron, my take on that is I hope that our inventory continues to grow because that means there's a reason behind it. And it's tied to sales. So, to your second question, the 21% customer was the same as last quarter. I wanted to let you know that in the quarterly updates, we're going to be moving to customer A, customer B, customer C, because as we add more customers, we'll try to make it easier to make those distinctions.

Thank you. The next question is from the line of George Wang with Barclays. Your line is now open.

Hey, guys. Congrats on the strong June guide. I'd like to put in two parts. Quickly, just not asking for specific guidance for FY '25 or the September, December quarters, but any sort of high-level kind of color you can provide just to think about how to model the September, December and also the FY '25? And also kind of related, can you parse out kind of utilization in the March quarter? And also kind of what's the expected utilization kind of cadence for the next few quarters?

Yeah. As you know, we have a lot of new products coming soon, right, to support NVIDIA H200, B100, B200, GB200, and AMD MI300 and Intel Gaudi2, Gaudi3. We have many new products already; plus, we're ready to ship high-volume product. So for sure, I mean, the fiscal year '25, I mean, for the September and December quarters, we will be seeing strong growth. I believe this strong growth will continue for many quarters to come, if not many years.

Thank you. The next question is from the line of Ananda Baruah with Loop Capital. Your line is now open.

Yeah. Thanks, guys, for taking the question. Really appreciate it. And Charles, let me maybe ask the remarks you made a moment ago about the strong ongoing growth. Does that — could that mean that you could also grow sequentially from this point forward for a little bit, just given the market share gain opportunities, the components coming online that you talked about in the new products? Any context on the way to think about sequential growth sort of in the coming quarters would be helpful as well. Thanks.

Yeah. As you know, traditionally, in the last 10 years, March and September quarters have always been our soft quarters. However, now, with AI demand growing so strong, we are able to grow sequentially. Although March and September quarters still show a little bit of weakness, due to strong AI growth and our market share growing, the sequential growth will become the norm. Basically, we have even better technologies than ever before, and our economies of scale have become much larger. The Malaysia campus production will be ready by the end of this calendar year. So, we see many positive factors to grow our business.

Thank you. The next question is from the line of Jon Tanwanteng with CJS Securities. Your line is now open.

Hi. Thank you for taking my questions. I was wondering if you could talk a little bit more to the gross margin and if you expect them to go structurally higher at some point in the near future, in the coming quarters. Especially if Malaysia ramps, you get economies of scale there as you transition to GPU products and you add more liquid cooling. Is there a point where that starts to revert higher? Or do you expect it to remain at a relatively constant level for the foreseeable future?

Again, the AI platform is growing in popularity. However, there are more competitors as well. So, we will try to keep a balance. To grow market share, sometimes we may have to be a bit more aggressive with pricing. Overall, we strive to maintain that balance. David, you may add something.

Yeah. And I also agree with your point that Malaysia will provide some opportunity for us. We are also in a transition time when we have lots of new platforms that are being introduced and the customers are highly anticipating them. Supermicro's strength is its fast time to market, and we expect these new platforms and our liquid cooling to put us in front with very compelling solutions. So, we think these factors will help our margins.

Thank you. The next question is from the line of Mehdi Hosseini with SIG. Your line is now open.

Yes, thanks for taking the question. A couple for me. Regarding the channel customer, the 17% of the customer, have you ever had the channel customer that big? I believe in the past you've talked about the 21% customer, but I think this is new. Can you clarify this?

So, this is an existing customer and we actually had a higher customer back in 2022, but they were around 22%. This is still a really good customer and a fantastic opportunity.

Okay. Great. And then, one question for you, David, on the cash flow. Actually, there was a — I believe there were two items. There is a $110 million of cash burn in operations and then there was also a non-current asset. Am I missing something here? These two items were big items that had an impact on overall cash flow. Is that correct?

Sure. We had a number of things that impacted us. In non-current assets, we had deferred taxes grow quite a bit this quarter, which was something unusual. I think those are — I think that's the only unusual item, which was a deferred tax that grew a lot and that affected our tax rate as well.

Thank you. The next question is from the line of Nehal Chokshi with Northland Capital. Your line is now open.

Thank you, and congrats on a strong guide here. Talk about the guide here, inventory increased $1.5 billion Q-over-Q, and David, as you mentioned, you like to see inventory increase. I do too, because it's a strong indicator of things to come. And you've guided the June quarter to increase by $1.6 billion Q-over-Q. If I do this math where I'm looking at the inventory at the quarter-end and then the four-quarter revenue, typically, it's around 60% to 70% of revenue. But with your March quarter ending inventory and your current June quarter guidance, that equates to about 85% of projected revenue. So, can you just explain what seems to be a little bit more unusual inventory buildup given the revenue guidance range?

Sure, absolutely. That's a fair question. So, we actually got a substantial amount of inventory in the last week of the quarter, which obviously we're not going to be able to ship. But we took in $700 million in the last week of the quarter. So that's something that has to do with the timing of inventory arrivals. It does impact our cash flow. However, it doesn't matter because we need that inventory for Q4 shipments.

Yeah. Again, two reasons: Q4, we will have strong revenue, so we had to prepare for Q4. Also, liquid cooling is new, so we had to prepare enough safety inventory for liquid cooling demand for the June quarter and September quarter as well. So that's another reason why we have slightly higher inventory now.

Yeah. And I want to add, Nehal, that that's exactly why we did capital raises too, to prepare for these Q4 shipments, so that we could make those large purchases, and we hope to continue that.

Thank you. The next question is from the line of Matt Bryson with Wedbush. Your line is now open.

Hi, thanks for taking my question. I would be thinking with liquid cooling ramping in fiscal Q4, and not to harp on the gross margin issue, but that you would be seeing a benefit to gross margins. And I guess my question is, is there any chance that either with the liquid cooling solutions or with your other solutions, that you're again seeing some penetration at those larger customers and specifically hyperscalers, and that's why we're seeing gross margins come down? And I guess just one clarification for Dave. If you can provide the magnitude that revenues were affected by your inability to procure components in fiscal Q3? Thanks.

Let me add a little bit: Because liquid cooling is new to us, to speed up quick support for some of our very important customers in the June quarter, we indeed had to pay some premium to speed up the supply. So, we spent some extra on that.

Yeah. So, the two questions, Matt, I would say, first of all, regarding gross margin, again, my philosophy is to give a conservative guidance and to beat that. We were able to do that in Q3, and we'll do everything we can to achieve that in Q4. Ultimately, it will depend also on what we ship. As to the magnitude of revenue, our backlog is at a record high. Therefore, every quarter we could have shipped more if we had more parts. We don't rely on that as an excuse. Rather, we are grateful to be able to produce the products that we are producing for some of the best companies in the world.

Thank you. The next question is a follow-up from Jon Tanwanteng with CJS Securities. Your line is now open.

Hi, thanks for the follow-up. I was wondering if you could speak to your cash usage expectations over the next quarter or two. Are the proceeds from your recent capital raises all spoken for, as you look to the growth in the pipeline and record backlog you spoke to, or do you think that's more in reserve for growth further down the line?

Yeah. So, the way I would answer that is I hope that I need more capital, Jon, because that means that we're growing revenues even faster. We've got capital adequate to get us through the current market. But in a week, we hope that that changes, and we hope that we've got orders that require even more capital. So, all I can say is I hope for the need for more capital.

Yes. Indeed, our plan is very ambitious. We have a very ambitious brand, so we try to continue growing very strong, kind of 3 to 5 times faster than our industry's average. So, when that case happens, and we believe so, we hope so, then for sure we would need more capital.

Thank you.

Thank you. I'll see you in next quarter.

Thank you. That concludes today's conference call. Thank you all for your participation. Have an excellent rest of your day.