‘We are asking Nvidia every day [about Blackwell availability]. So I hope their production can go smoothly and go for high volume very soon. And once they have achieved availability, our solutions are fully ready,’ says Supermicro President and CEO Charles Liang.
Supermicro is ready to continue the rapid growth in the AI business as strategic partner Nvidia ramps up its Blackwell GPU production, but for now is focused on getting its financial records in order after its auditor, EY, resigned.
Supermicro President and CEO Charles Liang, in his prepared remarks during Tuesday’s first fiscal quarter 2025 quarterly financial analyst conference call, started off by sharing thoughts on recent challenges, noting that the company demands confidence in its financial reports.
“We are actively in the process of engaging a new auditor,” Liang said. “We are working with urgency to become current again with our financial reporting.”
[Related: Supermicro CEO: ‘We Are In What I Call An AI Revolution’]
Liang followed by quoting the response of the company’s Special Committee that was formed by its board of directors in response to information brought to the attention of the board’s audit committee, which read:
“The Special Committee has completed its investigation based on a set of initial concerns raised by EY. Following a three-month investigation led by Independent Counsel, the Committee’s investigation to date has found that the Audit Committee has acted independently and that there is no evidence of fraud or misconduct on the part of management or the Board of Directors. The Committee is recommending a series of remedial measures for the Company to strengthen its internal governance and oversight functions, and the Committee expects to deliver the full report on the completed work this week or next. The Special Committee has other work that is ongoing but expects it to be completed soon.”
Both the Special Committee in its preliminary financial report and Liang in his first fiscal quarter 2025 conference call declined to discuss the matter further.
“We look forward to receiving the committee’s full report in the near future,” he said. “We do not believe the current challenges affect Supermicro’s ability to service our customers and partners as we continue to grow rapidly and strongly with the AI revolution, and my confidence in Supermicro and its staff remains stronger than ever.”
That “AI revolution” was good to Supermicro during the first fiscal quarter. Liang said.
“The preliminary fiscal Q1 net revenue was in the range of $5.9 [billion] to $6.0 billion,” he said. “At the midpoint, this is up 181 percent year on year, driven by strong AI demand from our old and new customers. It was one of our strongest first quarters in history despite many customers [waiting for a soon-to-be-released] new generation of GPU chips.”
Supermicro during the quarter deployed the world’s largest DLC (Direct Liquid Cooling) SuperCluster server with 100,000 Nvidia GPUs in record time, Liang said.
“This milestone achievement reflects our engineering expertise and complex logistics capabilities for large-scale AI infrastructure deployment,” he said.
Supermicro is also growing its Data Center Build Block Solution (DCBBS) capabilities, which Liang said can reduce the time required for customers to build a new data center from around two years to a few quarters.
DCBSS is also helping accelerate the adoption of Supermicro’s DLC technology, which helps drive efficiency and performance while reducing OpEx and promoting greener computing, he said.
“This year, DLC’s market share will be at least 10 times more than last year due to the DLC liquid cooling product maturity and the rapid growth of AI,” he said.
To increase DLC technology performance, Supermicro recently introduced its new SuperCloud Composer (SCC), Liang said.
“SCC is capable of end-to-end management from chip-level all the way to rack-level and data center cooling towers, making it the most powerful DLC data center management software on the market today,” he said. “SCC [allows] for the simplified provisioning of highly automatic software-defined infrastructure supporting customers with rapidly changing workload requirements. With the addition of SCC, Supermicro is well prepared to service many more customers and grow [DLC] data center market share.”
Supermicro continues to push its goal to transform itself into a leading U.S. and worldwide AI IT infrastructure company, Liang said.
“We are off to a strong start in fiscal 2025,” he said. “Our total IT solution deployments are rapidly scaling, and our new product developments are operating smoothly.
Our Nvidia GB200 NVL72 is ready. And our [Nvidia HGX] 10U B200 air-cooled and 4U liquid-cooled year systems are fully production-ready.”
During the question-and-answer period of the financial conference call, when asked whether the lower-than-expected revenue for the quarter was caused in part due to a delay in Nvidia Blackwell GPUs, Liang said it was a complicated question.
“I believe that a major impact is new chip availability because Blackwell chips for sure [offer] much better performance per dollars,” he said. “[It seems they will] be available gradually, and Q1 hopefully [the] volume become much better. So that’s the major factor, I believe.”
When asked when Nvidia Blackwell GPUs will show up in Supermicro’s profit and loss statements, Liang said that is a very big question.
“We are asking Nvidia every day,” he said. “So I hope their production can go smoothly and go for high volume very soon. And once they have achieved availability, our solutions are fully ready. So we continue to work with them very closely to develop [the] GB200 NVL72 and B200 liquid-cooled and air-cooled. And we also designed some really enhanced rack-scale solutions. So in terms of total solutions, we have a very strong offering waiting for the chips. So we need Nvidia’s quick support.”
Supermicro By The Numbers
For its first fiscal quarter 2025, Supermicro reported preliminary revenue of $5.9 billion to $6.0 billion. This compares with the company’s previous guidance of $6.0 billion to $7.0 billion. This also compares with revenue of $2.12 billion for its first fiscal quarter 2024.
About 70 percent of Supermicro’s revenue came from AI-related sales, the company said.
Supermicro also reported preliminary GAAP and non-GAAP gross margin of about 13.3 percent, down from last year’s 16.7 percent.
The company reported preliminary GAAP net income of 68 cents to 76 cents per share, compared with previous guidance of 60 cents to 77 cents per share. On a non-GAAP basis, it reported preliminary net income of 75 cents to 76 cents per share, compared with its previous guidance of 67 cents to 83 cents per share. For its first fiscal quarter of 2024, Supermicro reported GAAP earnings of $2.75 per share and non-GAAP earnings of $3.43 per share.
Looking Ahead
For its second fiscal quarter 2025, Supermicro expects revenue of $5.5 billion to $6.1 billion, which is up from last year’s $3.66 billion.
The company also expects GAAP net income of 48 cents to 58 cents per share, compared with last year’s $5.10 per share. On a non-GAAP basis, Supermicro expects second fiscal quarter 2025 net income of 56 cents to 65 cents per share, compared with last year’s $5.59 per share.
https://www.crn.com/news/data-center/2024/supermicro-ceo-ready-to-grow-as-nvidia-ramps-blackwell-production
