Super Micro Computer (SMCI) investor relations material

Market environment and demand trends

• Industry experiencing significant dynamism with configuration changes causing shipment delays, but strong demand and $13B in recent orders signal robust growth.

• Guidance for fiscal 2026 increased from $33B to $36B, reflecting high visibility and confidence in future demand.

• Market opportunity estimated at $1T or more, with current share around 10%, indicating substantial room for expansion.

• Expansion in NeoCloud and sovereign opportunities expected to broaden customer base and reduce concentration.

• Edge AI and IoT markets seen as emerging high-volume opportunities, complementing core data center focus.

Product and technology strategy

• Emphasis on supporting diverse AI applications and verticals, not just standard solutions, to address customer-specific needs.

• Data Center Building Block Solutions (DCBBS) offer integrated, customizable infrastructure including power, cooling, and service elements.

• Liquid cooling and advanced rack solutions are key differentiators, with 3,000 of 6,000 planned racks for 2026 being liquid cooled.

• Engineering strength and ability to support both NVIDIA and AMD platforms, as well as custom ASICs, provide flexibility for evolving workloads.

• Reliability, quality, and integration of complex systems are highlighted as core competitive advantages.

Financial outlook and operational efficiency

• Margin improvement expected through broader customer and product mix, manufacturing efficiencies, and scaling new product launches.

• Operating structure remains lean and frugal, with a focus on maintaining efficiency despite increased R&D intensity.

• Double-digit gross margins targeted as customer base diversifies and operational scale increases.

• Capacity expansion underway globally, with plans to add more sites and increase rack output to meet growing demand.

• Revenue growth supported by high-value liquid cooled racks and expanding service offerings.