Super Micro Computer Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Simon Leopold - Raymond James - Analyst : Thank for taking the question. I wanted to get a better understanding of some of the bottlenecks or gating factors for sales. And what I'm looking at is we've got full year revenue outlook of $33 billion, so that's better than $8 billion a quarter. And we're looking at September being roughly $6 billion to $7 billion. So I would have thought that availability of Blackwells, GB200 could have given you maybe some more upside to September and a more linear outlook for the year, but this would suggest more of a back-end load. So if you could help us understand how you're thinking about the cadence through that fiscal year? And what are the bottlenecks? Or what are the restraints in terms of the September quarter and availability of the chips? Thank you.

Question: Simon Leopold - Raymond James - Analyst : And is any of this related to customers perhaps waiting for GB300? Or is that not a factor?

Question: Ruplu Bhattacharya - Bank of America - Analyst : Hi, thanks for taking my questions. I have two of them. The first one is a higher-level question. Can you talk about management strategy for competing in the AI server market, if your focus on revenue growth and gaining market share? Or is your focus on margin expansion? And if it's both, then what gives you confidence that you can grow revenues and grow margins in this competitive market? And I have a follow-up. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 9:00PM, SMCI.OQ - Q4 2025 Super Micro Computer Inc Earnings Call

Question: Ruplu Bhattacharya - Bank of America - Analyst : Okay, thanks for that. Okay. For my follow-up can you talk about the opportunity with sovereigns. You announced an MOU at wall during the quarter. Can you give us your thoughts on expected rollout of that opportunity? And David what margin uplift should we expect from sovereign customers versus your existing customer base for two CSPs, I mean how should we think about the revenue and margin opportunity here? Thank you.

Question: Ruplu Bhattacharya - Bank of America - Analyst : All right, thank you for all the details.

Question: Ananda Baruah - Loop Capital Markets LLC - Analyst : Yeah guys, thanks for taking the question. Yeah, Two, if I could, -- the first one is maybe a little bit more of a clarification. In the first six months of the calendar year, you guys saw -- as did the industry elongated a little bit elongated customer purchase cycles, first from the HCX from the HCX GB decision-making situation in the March quarter, then the B200, B300 sort of decision-making situation in the June quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 9:00PM, SMCI.OQ - Q4 2025 Super Micro Computer Inc Earnings Call Charles, it sounds like it's one of the first questions. I think it was to Sumit's question, you may have suggested it sounds like you were suggesting there may then currently be some B300 sort of elongated customer decision-making as well. So just to clarify, are you still going through, are we still not yet to normalize customer decision-making cycles? Because if that's the case, I think it's useful for us to understand that as distinct from what the organic demand backdrop may be as we go through the year here? And I have a follow-up after that.

Question: Ananda Baruah - Loop Capital Markets LLC - Analyst : And just as a follow-up, can you guys, any context you can give us guys around the comment of large-scale data center customers expanding to six to eight in fiscal '26. Sort of what flavor of customers might that be? When do you consider someone to large scale? And what market domains like those additional large-scale data center customers fit into?

Question: Ananda Baruah - Loop Capital Markets LLC - Analyst : Okay, thanks, guys.

Question: Samik Chatterjee - JPMorgan Chase & Co - Analyst : Hi, thanks for taking my question. I have to -- but maybe for the first one, you talked about the data center building block solutions and that it's still maybe a bit early for you to forecast gross margins on that front. But anything that you can help us in terms of what does a typical sales cycle? Or what are you expecting for the sales cycle on that front to look like, have any of your larger data center customers shown interest in data center building lock solutions. I guess the question more is, when should we start to see -- or what should we expect in terms of material revenues in REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 9:00PM, SMCI.OQ - Q4 2025 Super Micro Computer Inc Earnings Call relation to when that does come into the P&L what will be the earlier if you were sort of going and talking to your customers about these solutions now what should be our expectation on this front? And I have a follow-up. Thank you.

Question: Samik Chatterjee - JPMorgan Chase & Co - Analyst : Got it. And for my follow-up, you mentioned the investments that you're making on the enterprise opportunity or edge opportunity as well I mean assuming some of those are better margin opportunities in the data center building block solutions related to your business currently on the sort of where you -- around this 9%, 10% gross margin right now. Do you see an opportunity still to get back to the long-term targets that you had on the gross margin of 14% to 17%? Or like are these new opportunities necessary big enough and at a margin high enough to get you back to that 14% to 17% run rate? Or do you think the expectations of investors should be at a maybe a more modest level in terms of what the gross margin rate of the company would be in the future?

Question: Samik Chatterjee - JPMorgan Chase & Co - Analyst : Great. Thank you.

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Hey, good afternoon, thank you for the questions. I just have two. First, on the greater than 10% customers for fiscal '25. I was wondering if you could just let us know what the revenue exposures were for those customers? I can appreciate we'll eventually get it in the 10-K, but any early color would be helpful. And then second, thank you for all the guidance on 2026. I was wondering if you could just talk about how we should think about gross margins for the full year is the first quarter gross margins that you spoke to, a good indication about how we should think about the full year. Thank you very much.

Question: Nehal Chokshi - Northland Securities Inc - Analyst : Yeah, thank you. I have two questions. First one is, what is going to be the driver of the projected Q2 uptick to the September quarter revenue? And maybe that can also help us understand why you're guiding to no operating leverage, I believe, effectively the guidance implies about a flat operating margin from the June quarter, September quarter.

Question: Nehal Chokshi - Northland Securities Inc - Analyst : And why with the incremental $1 billion of revenue, we won't see any operating margin leverage?

Question: Nehal Chokshi - Northland Securities Inc - Analyst : Okay. And then my second question is that the data center building solutions -- is that being pushed more as a discrete service or the value of that discrete service is fractional to Gen AI factory or is it bundled in Gen AI factory where it's end to drive a better margin profile for that Gen AI factory?

Question: Nehal Chokshi - Northland Securities Inc - Analyst : So basically, it's the latter of the situations that I had proposed. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 9:00PM, SMCI.OQ - Q4 2025 Super Micro Computer Inc Earnings Call

Question: Nehal Chokshi - Northland Securities Inc - Analyst : Yeah. So is that center building block solutions at least going to be representative of 10% of the deals that 10% of the deal value that you're going to be doing in the September quarter?

Question: Brandon Nispel - KeyBanc Capital Markets Inc - Analyst : Hey guys, thanks for taking the question. I was hoping you could unpack gross margins during the quarter. Last quarter, you had provided some adjusted gross margins based on inventory reserves. Maybe you could help us understand whether there were any inventory reserves this quarter and if you're expecting any in 1Q, including maybe potential impact from tariffs. Thank you.

Question: Brandon Nispel - KeyBanc Capital Markets Inc - Analyst : Thanks for taking the questions.

Question: Jonathan Tanwanteng - CJS Securities Inc - Analyst : Hi, good afternoon, and thank you for taking my questions. First one, just on the data center building block solutions. I was just wondering what the gross margin profile looks like they're compared to the corporate average and what an incremental dollar of sales in that kind of solution adds to your gross profit?

Question: Jonathan Tanwanteng - CJS Securities Inc - Analyst : Okay. Great. That's helpful. And then just on the B300 launch, do you expect to see yourself in yourself from competitors both pricing-wise and allocation-wise, when that reaches volume? Or is there how any reason to believe that you may see more of what you've seen in the B100 and B200 time frames?

Question: Jonathan Tanwanteng - CJS Securities Inc - Analyst : Okay, thank you.