Super Micro Computer Inc at Citi TMT Conference Transcript

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

Question: Asiya Merchant - Citi - Analyst : Okay. Within each of those three different categories, like how is Super Micro positioned? Like where do you lead? Why do you lead that? Just if you can double-click on the competitive moat across those three segments.

Question: Asiya Merchant - Citi - Analyst : And how would you characterize -- you talked a little bit more about Neo clouds, but we also have the sovereigns and we have the enterprises that are also adopting. The conversations, if you can, is there any differences at the speed at where they are in terms of adoption of these, not just on the rack stuff, but on the DCBS (sic - DCBBS) as well across these verticals? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 1:30PM, SMCI.OQ - Super Micro Computer Inc at Citi TMT Conference

Question: Asiya Merchant - Citi - Analyst : Okay. And then AI, great tailwind for you guys, some of your peers as well, but it's also extremely lumpy. There's no -- there's transitions going on at the chip level and then all the various components that need to go to support the memory, for example, the cables, all that stuff. So just help us understand the level of visibility that you have and considering that there is so many -- so much lumpiness. And how -- what are some of the risk mitigation stuff that you do on your end, so you don't have like terrible margins as a function of the lumpiness?

Question: Asiya Merchant - Citi - Analyst : Okay. All right. Data center building block, DCBBS, if I got the acronym right. Just maybe -- I know you touched on it a little bit earlier, but just help us understand why is it unique to Super Micro? If I talk to some of your peers, I think I hear some of the similar commentary. But just why is this unique to Super Micro? And how do you think it accelerates your growth? Why does it accelerate your growth? And I think you already touched base on maybe this sovereigns are still kind of trying to figure out the licensing issues, et cetera. When do you see that inflection happening outside of Neo clouds?

Question: Asiya Merchant - Citi - Analyst : And now you guys are very -- I mean, when I look at your OpEx ratio, it's like great. But just the introduction or the expansion of DCBBS as a growth driver result in increasing that OpEx? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 1:30PM, SMCI.OQ - Super Micro Computer Inc at Citi TMT Conference

Question: Asiya Merchant - Citi - Analyst : Okay. And then the same thing on free cash flow is this -- does this become a more working capital intense if you're having to host a lot of the components that go beyond just the rack? You talked a little bit about that. Does that become a working capital?

Question: Asiya Merchant - Citi - Analyst : Okay. So I got lots of questions on that, your growth in your major customers. So it's great you brought that up because just help us understand what does the concentration look like today? Now you have four large customers. You're talking about two to four more in the current fiscal year. Where are these customers, maybe vertical geos? Are they Neo clouds? Are they enterprises?

Question: Asiya Merchant - Citi - Analyst : Okay. All right. And again, from a geo perspective, are these -- I'm assuming this is not just a US phenomenon. I'm thinking about these large customers.

Question: Asiya Merchant - Citi - Analyst : Yes. Okay. Just wanted to clarify.

Question: Asiya Merchant - Citi - Analyst : Yes. But to the extent that they become a major customer this fiscal year, right, you feel pretty strong about that two to four customers.

Question: Asiya Merchant - Citi - Analyst : Okay. All right. We're going to just see if the audience has any questions here. Please raise your hand. We have one here. Unidentified Participant Hi, thank you for taking the question. Do you have confidence that the inference-based models and some of these new expansion areas will be

Question: Asiya Merchant - Citi - Analyst : One more here. Unidentified Participant Could you just comment briefly on the kind of competitive situation with Dell? You had the early lead, but they've been ramping fairly fast on the relative side compared to you?

Question: Asiya Merchant - Citi - Analyst : One more there. Unidentified Participant Hi, thanks for taking that question. Can you expand a little bit more on how you see funding in the case where you do need to do a more aggressive, I guess, working capital build-out and how you think about, I guess, issuing more equity of the facility you mentioned or even raising more convertible debt in the future? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 1:30PM, SMCI.OQ - Super Micro Computer Inc at Citi TMT Conference

Question: Asiya Merchant - Citi - Analyst : I think -- since we are talking about competition, just on margins, I mean, I think they're hovering around 10% gross margins. So -- but they are down relative to the last few quarters. As you think about DCBBS, as you think about expanding your customer concentration to more customers, how could the margins move up towards the target model? Is that the scope for this year? Are we looking beyond this year?

Question: Asiya Merchant - Citi - Analyst : Okay. And then I know liquid cooling, Charles talks a lot about Super Micro's moat in liquid cooling. Just help us understand about the adoption there, what's going on? What's your market share as it relates to liquid cooling? Are there certain customers that are perhaps adopting it faster?

Question: Asiya Merchant - Citi - Analyst : Okay. All right. Just on the guide, I think you guys talked about fiscal '26, which has already kicked off for you of more than 50% growth or roughly the math there. So what gives -- what are you seeing now? You've already guided. It's been a month, I guess, but what are you seeing that gives conviction in that? Is that based on backlog? Some of your peers do report that. I

Question: Asiya Merchant - Citi - Analyst : Okay. Let me ask about lots of hurdles that are behind you that plagued you guys last year. I think you passed a lot of those. And kind of looking forward, I think that's what gives you conviction as well in the 50% growth. Where are we with all those recommendations that perhaps a special committee provided? Are there still things that need to be done? Do you guys feel like, okay, all those things are behind us now, and we're well set for the growth? Or could there be -- I think as Charles put it, some of those impeded some of your growth last year -- last fiscal year.

Question: Asiya Merchant - Citi - Analyst : Okay. And then inventory, I know sometimes you end up with excess inventory, whether it relates to a prior chip generation, et cetera. How well is Super Micro now with all the processes that you've put in place to manage that kind of risk?

Question: Asiya Merchant - Citi - Analyst : Outside of chips, what about some of the other components? I mean there's always supply-demand imbalances that are going on there. How does Super Micro manage that? Do you tend to do strategic buys on some of the commodities?

Question: Asiya Merchant - Citi - Analyst : Okay. We have a little bit more than a minute to go, Mike. So I want to thank you, but I want to talk to you about what are investors maybe underappreciating or what would you like the investment community to know more about Super Micro?