Abdelrahman
Super Micro Computer (SMCI) Earnings Conference Call Summary for the Quarter Ending December 31, 2024
Source: The Motley Fool
Super Micro Computer, Inc. (SMCI -9.47%) will be hosting its Q2 2025 earnings call on February 11, 2025, at 5:00 p.m. ET. The call will feature prepared statements from key executives followed by a Q&A session with analysts. Presenting will be Charles Liang, the founder, president, and CEO; David Weigand, CFO; and Michael Staiger, senior vice president of corporate development.
Conference Call Highlights:
Prepared Remarks by Operator:
Thank you for your attention. We are currently experiencing technical difficulties. Please remain on the line. After the speakers’ presentations, we will facilitate a question-and-answer segment.
Remarks by Michael Staiger:
Good afternoon, everyone. We appreciate your participation in Super Micro’s fiscal Q2 2025 business update conference call for the period ending December 31, 2024. Today, I am joined by our founder and CEO Charles Liang and CFO David Weigand. Following our prepared remarks, we will engage in a question-and-answer session specifically for sell-side analysts. Please note that we will not be addressing inquiries concerning the delay in filing our fiscal year 2024 10-K or subsequent 10-Q reports.
During today’s call, we will delve into current business trends, financial projections, operational strategies, and the competitive landscape impacting our performance in the second quarter. We will reference preliminary figures subject to refinement based on future SEC filings.
You should have received a copy of our press release, which was disseminated after market hours and is available on our website, where this call is also being broadcast live. Any forward-looking statements made today are based on assumptions valid as of now, and we have no obligation to revise them. Actual outcomes may differ significantly from those projected due to various risks and uncertainties detailed in our SEC filings.
Please be aware that all financial figures discussed, with the exception of revenue and cash and investments, are non-GAAP measures. This call is being recorded for playback purposes, and an archived version will be hosted on our investor relations site.
Our Q3 fiscal 2025 quiet period commences at the close of business on March 14, 2025. With that, I will now turn the discussion over to Charles Liang.
Remarks by Charles Liang:
Thank you, Michael, and thank you all for being here today. I’m excited to share essential updates regarding our financial filings, operational advancements, and technology innovations as we mark the midpoint of fiscal 2025.
I’ll begin with key financial highlights from the December quarter. Our estimated fiscal Q2 net revenue is anticipated to be between $5.6 billion and $5.7 billion, representing a year-over-year growth rate of 54% at the midpoint. The quarter was positive despite challenges stemming from cash flow issues and market perceptions associated with the 10-K delay, driven by strong AI demand from both our existing and new client base.
Looking ahead, we believe our growth trajectory remains strong, especially as we advance from Hopper to Blackwell GPUs. We expect growth from the next-generation platforms to pick up momentum as supply increases this quarter and beyond. Should our supply chain meet demand effectively, we are optimistic about our growth in calendar year 2025 mirroring or even exceeding that of calendar year 2023.
Preliminary fiscal Q2 non-GAAP earnings are projected to range from $0.58 to $0.60 per share compared to $0.56 the previous year, marking a 5% increase. Our non-GAAP gross margin is approximately 11.9%, while the non-GAAP operating margin stands at around 7.9%. Margins experienced temporary pressure due to the disruption caused by the delayed 10-K filing, increased R&D in new product lines, and the mix of customers and products.
We also announced the completion of a private placement of $700 million in new 2.25% convertible notes due in 2028 to support our rapid growth. We’ve also updated a portion of our existing convertible notes to bolster our initiatives, including our Super Micro 4.0 project and our DataCenter Building Block Solutions (DCBBS).
Financial Filing Update:
As for our financial filings, our finance team, along with our new auditor BDO, is diligently finalizing the necessary processes. We are confident that we will file our fiscal year 2024 Form 10-K and the first two quarters of fiscal year 2025 Form 10-Q by February 25, 2025.
As we transition towards discussing our operational achievements, we are thrilled to announce that our NVIDIA Blackwell products are now shipping. We have initiated volume shipments of both air-cooled 10U and liquid-cooled 4U NVIDIA B200 HGX systems, with our NVIDIA GB200 NVL72 racks also fully prepared.
As we ramp up production, we will be able to fulfill current AI solution backlogs while continuously addressing demand from enterprises, CSPs, sovereign entities, and hyperscalers. Our innovations include expanding our total liquid-cooled datacenter infrastructure, exemplified by our xAI Colossus, the largest liquid-cooled AI supercomputer globally.
Super Micro is leading the push for liquid cooling technology, which not only reduces operational costs for clients but also promotes sustainable computing. We anticipate that over 30% of new datacenters worldwide will embrace liquid-cooled infrastructure in the upcoming year, reinforcing our competitive edge.
Conclusion:
In summary, Super Micro has long been a pioneer in the IT industry, and as we fortify our internal operations and expand our manufacturing capabilities, we aim to convert these advancements into value for our stakeholders. We are poised for continued growth as we deliver top-tier AI infrastructure and integrated solutions.
As we finish this fiscal year, we project revenues to fall between $23.5 billion and $25 billion, with the potential to reach $40 billion by fiscal year 2026.
Financial Overview by David Weigand:
Thank you, Charles. Please keep in mind that our numbers are preliminary and unaudited, and they may be subject to change pending the completion of reviews.
For fiscal Q2 2025, we anticipate revenues between $5.6 billion and $5.7 billion, reflecting a year-over-year increase of 54%. Our year-over-year growth is predominantly driven by demand for our AI-capable platforms across both enterprise and cloud service provider markets.
In terms of margins, our non-GAAP gross margin is projected at approximately 11.9%, while our operating margin is around 7.9%. This adjustment reflects various factors, including customer and product mix, as well as increased expenditures tied to R&D initiatives.
We also hope to finalize our upcoming audit and financial reporting by the February filing deadline set by NASDAQ.
Closing Remarks:
Thank you all for your continued support and engagement. We look forward to sharing more updates as we progress throughout the fiscal year.
Q&A Session:
We now welcome questions from analysts. Please remember to follow the operator’s instructions.
(Questions and responses from various analysts will follow in the full transcript.)
