Super Micro Computer Inc (SMCI) Q2 2025 Earnings Call Highlights: Strong Revenue Growth
Q: Can you discuss the $40 billion fiscal 2026 revenue outlook and what informs your confidence in achieving it? A: Charles Liang, CEO, explained that the confidence stems from the continuous growth of their product line, including industry-standard and confidential products under development. He noted that their production capacity is underutilized, with significant room for growth in the USA, Taiwan, and Malaysia. The company expects at least a 65% growth, which they consider a conservative estimate.
Q: How should we think about gross margins through the Blackwell cycle, and is there a concern about margin pressure? A: Charles Liang, CEO, acknowledged that mature products face price competition, but new products like Blackwell offer better margins. He emphasized the growing market share of liquid cooling, which provides a competitive edge. David Weigand, CFO, added that operating margins are above targets, translating into shareholder value.
Q: What impact do you expect from the transition to new NVIDIA products on your revenue targets? A: Charles Liang, CEO, stated that they are well-prepared for the transition, with significant capacity for liquid cooling and a strong customer base ready to deploy in high volume. He expects strong growth once Blackwell is in volume production, similar to the growth experienced with previous NVIDIA product launches.
Q: How do you view the impact of new AI models like DeepSeek on your business, and what is your strategy for enterprise customers? A: Charles Liang, CEO, believes that while software efficiency improves, the market size will not shrink. He highlighted their strong presence in the enterprise market, with a focus on service, management software, and end-to-end data center solutions to grow quickly in this segment.
Q: Can you elaborate on the data center building block architecture and its impact on your business? A: Charles Liang, CEO, described it as a comprehensive solution for building data centers, offering key components like liquid cooling, cabling, and management tools. This approach aims to provide a one-stop shop for customers, reducing time to market and costs, and enhancing quality.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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