“We ask Nvidia (about Blackwell availability) daily. So I hope their production can run smoothly and reach high volume very soon. And once available, our solutions are fully ready,” said Charles Liang, President and CEO of Supermicro.

Supermicro is poised to continue the rapid growth of the AI ​​sector as its strategic partner Nvidia ramps up its Blackwell GPU production, but for now is focused on getting its financial records in order following the resignation of its auditor, EY.

Supermicro President and CEO Charles Liang, in his prepared remarks during Tuesday’s Q1 Fiscal 2025 Quarterly Financial Analyst Conference Call, began by sharing his thoughts on recent challenges, noting that the company requires confidence in its financial reports.

“We are actively recruiting a new auditor,” Liang said. “We are working urgently to be up to date with financial information again. »

(Related: Supermicro CEO: “We are in what I call an AI revolution”)

Liang then cited the response from the company’s special committee that was formed by its board of directors in response to the information brought to the attention of the board’s audit committee, which reads:

“The special committee completed its investigation based on a set of initial concerns raised by EY. Following a three-month investigation by an independent lawyer, the committee’s investigation to date has found that the audit committee acted independently and that there is no evidence fraud or misconduct on the part of management or the board of directors. The Committee recommends a series of corrective actions for the Company to strengthen its internal governance and oversight functions, and the Committee expects to deliver the full report on the work completed this week or next. The Special Committee has other work in progress but hopes to have it completed soon.

Both the special committee in its preliminary financial report and Liang during his fiscal first 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 impact Supermicro’s ability to serve our customers and partners as we continue to grow rapidly and strongly with the AI ​​revolution, and my confidence in Supermicro and its people remains as strong as ever .

This “AI revolution” has been a good thing for Supermicro during the first fiscal quarter. » said Liang.

“Preliminary net sales for the fiscal first quarter were between $5.9 (billion) and $6.0 billion,” he said. “At the midpoint, this figure is up 181% year-over-year, driven by strong demand for AI from our existing and new customers. This was one of our strongest first quarters in history despite many customers (awaiting an upcoming release) of next generation GPU chips.

Supermicro deployed the world’s largest DLC (Direct Liquid Cooling) SuperCluster server during the quarter with 100,000 Nvidia GPU in record time, Liang said.

“This landmark achievement reflects our engineering expertise and complex logistical capabilities for deploying AI infrastructure at scale,” he said.

Supermicro is also expanding its Data Center Build Block Solution (DCBBS) capabilities, which Liang says can reduce the time it takes customers to build a new data center from about two years to a few quarters.

DCBSS also helps accelerate the adoption of Supermicro’s DLC technology, which helps improve efficiency and performance while reducing operating expenses and promoting greener computing, he said.

“This year, the market share of DLC will be at least 10 times that of last year due to the maturity of DLC liquid cooling products and the rapid growth of AI,” he said. declared.

To increase the performance of DLC technology, Supermicro recently introduced its new SuperCloud Composer (SCC), Liang said.

“SCC is capable of end-to-end management, from the chip level to the rack level and data center cooling towers, making it the most comprehensive DLC data center management software powerful in the market today,” he said. “SCC (enables) simplified delivery of highly automated software-defined infrastructure supporting customers with rapidly changing workload requirements. With the addition of SCC, Supermicro is well prepared to serve many more customers and grow data center (DLC) market share.

Supermicro continues to pursue its goal of transforming itself into a leading AI IT infrastructure company in the United States and globally, Liang said.

“We are off to a strong start to fiscal 2025,” he said. “Our global IT solutions deployments are evolving rapidly and our new product developments are proceeding smoothly.

Our Nvidia GB200 NVL72 is ready. And our (Nvidia HGX) 10U B200 air-cooled and 4U liquid-cooled systems are fully production ready.

During the question and answer period of the financial conference call, when asked if the lower-than-expected revenue for the quarter was due in part to a delay in Nvidia Blackwell GPUs, Liang said it was a complicated question.

“I think the availability of new chips has a major impact, because Blackwell chips certainly offer much better performance per dollar,” he said. “(It looks like they will) be available gradually, and I hope (the) volume in the first quarter will become much better. So that’s the major factor, I think.

When asked when Nvidia Blackwell GPUs would appear in Supermicro’s profit and loss accounts, Liang said that was a very big question.

“We approach Nvidia every day,” he said. “So I hope their production can run smoothly and reach high volume very soon. And once available, our solutions are fully ready. So we continue to work very closely with them to develop (the) liquid-cooled and air-cooled GB200 NVL72 and B200. And we’ve also designed some really improved rack-scale solutions. So in terms of overall solutions, we have a very strong offering waiting for the chips. So we need fast support from Nvidia.

Supermicro in numbers

For its first fiscal quarter 2025, Supermicro reported preliminary revenue between $5.9 billion and $6.0 billion. This compares to the company’s previous guidance of $6.0 billion to $7.0 billion. This also compares to revenue of $2.12 billion for its fiscal 2024 first quarter.

About 70% of Supermicro’s revenue came from AI-related sales, the company said.

Supermicro also reported a preliminary GAAP and non-GAAP gross margin of approximately 13.3 percent, down from 16.7 percent last year.

The company reported preliminary GAAP net income of 68 cents to 76 cents per share, compared to 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 a previous forecast of 67 cents to 83 cents per share. For its first fiscal quarter 2024, Supermicro reported GAAP earnings of $2.75 per share and non-GAAP earnings of $3.43 per share.

Looking to the future

For its second fiscal quarter 2025, Supermicro expects revenue between $5.5 billion and $6.1 billion, an increase from last year’s $3.66 billion.

The company also expects GAAP net income of between 48 cents and 58 cents per share, up from $5.10 per share last year. On a non-GAAP basis, Supermicro expects fiscal second-quarter 2025 net income of 56 cents to 65 cents per share, compared to $5.59 per share last year.