Supermicro reports strong Q1 and FY 2026 results, highlighting its leading AI portfolio, including Nvidia GB 300 and MP 303 products. The company sees rapid growth in AI compute demand, with over $13 billion in back orders. Supermicro is also preparing for upcoming Nvidia and AMD launches, focusing on generative AI and industry-specific models. Its DC BPS solution is critical for accelerating data center transformation, supporting a robust growth trajectory.

Super Micro is aggressively expanding its global production capacity, focusing on AI data center infrastructure with innovations like TCPP for rapid deployment and reduced total cost of ownership. The company is investing in new facilities worldwide to meet growing demand, aiming for at least $10.5 billion in revenue for the upcoming quarter, with expectations of $36 billion by fiscal 2026, positioning itself as a leader in AI platform and data center solutions.

Despite a significant year-over-year and quarter-over-quarter revenue decline, the company anticipates strong customer demand for the remainder of fiscal year 26. Record new orders exceeding $13 billion and a strategic customer base shift towards Asia highlight key growth areas. Operating expenses decreased, but cash flow used in operations increased. Non-GAAP diluted EPS met expectations.

Discussed Q1 financials with increased inventory and accounts receivable impacting cash flow. Outlined Q2 expectations including sales, margins, and capex, highlighting strategic investments and design wins. Provided guidance on net sales, diluted EPS, and operating expenses, emphasizing growth in higher margin segments.

Discussion focuses on revenue guidance driven by chipset availability and market share, with Nvidia blackware allocation as a key factor. The dialogue also explores the potential of DC BPS solutions to impact gross margins and customer feedback, highlighting their role in accelerating data center deployment and efficiency.

A company discusses its robust order pipeline, emphasizing contributions from GPU and data center solutions, and outlines strategies for improving gross margins and managing increased Opex to support revenue growth. The company highlights the expansion of customer base, including high-value, long-term partners, and the ramping of production to meet growing demand, aiming for efficient global service and profitability enhancement.

Discussion on the company's revenue guidance for upcoming quarters, highlighting capacity expansion, global supplier readiness, and efforts to improve profitability through total solution offerings.

A discussion on fiscal year expectations for Neo Cloud, highlighting the company's anticipated strength, revenue growth, and efforts towards improving gross margins, with a focus on market leadership and technology advancements.

Discussed the current manufacturing capacity, including Malaysia's production ramp-up, with a focus on maintaining high quality and reliability. Explained the potential revenue from full utilization, emphasizing a conservative approach to scaling. Addressed working capital needs and cash flow management strategies, including accounts receivable sales programs, to support revenue growth without tapping markets prematurely.

The discussion revolves around Supermicro's rationale for partnering with X AI, validating their engineering capabilities, and the company's strategy for selective revenue growth based on cash flow. It highlights Supermicro's role as a premier provider of advanced data center solutions and AI data centers, emphasizing their capacity and capability growth. The approach includes working with X AI to learn and improve services, maintaining a long-term partnership, and continuing to secure additional business through successful installations, while being selective about expanding revenue to ensure sustainable growth.

Discussion covers the impact of new facilities on gross margin, emphasizing capacity investment and future growth. Also, the creation and positioning of a federal program for government contracts are highlighted, showcasing the company's design, manufacturing, and service capabilities.

Discusses how reducing margins for initial large orders to gain market share and brand value, leveraging economies of scale, expanding into new geographies, and adding data center solutions can enhance margins over time. Highlights the importance of repeat business and the varying margin profiles based on order sizes and design contributions.

Discusses the impact of large projects on quarterly revenue, acknowledging delays due to customer readiness and supply chain issues, while highlighting a consistent upward trend in annual revenue growth. Also, addresses gross margin concerns and clarifies the company's policy on not disclosing backlog, focusing instead on new orders and design wins.

Discussion revolves around adjusting long-term gross margin targets due to market changes and new platform dynamics, with a focus on achieving double-digit margins through enterprise accounts and supporting large CSPs, despite current competitive challenges.

The dialogue addresses concerns about gross margins implying 0% contribution margin, emphasizing the importance of free cash flow contribution as the business scales. It reassures stakeholders of a strategy focused on market leadership, rapid innovation, and profitability, aiming for consistent bottom-line growth while expanding market share.

Additional engineering, expedite, and overtime costs are being absorbed in Q4 due to the rapid scaling of new technology for a large cluster deployment, which is expected to enhance future quarter performance.

The dialogue captures the conclusion of a conference call, where the speaker expresses gratitude to all participants, confirms the absence of further questions, and officially ends the call, inviting participants to disconnect.