Thank you for standing by. My name is Tamia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Super Micro Computer Inc. SMCI US Q1 FY25 Business Update Call. With us today are Charles Liang, Founder, President, and Chief Executive Officer, David Weigand, CFO, and Michael Staiger, Senior Vice President of Corporate Development. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. Thank you. Good afternoon, and thank you for attending Super Micro's first quarter fiscal 2025 business update conference call for the first quarter, which ended September 30th, 2024. With me today are Charles Liang, Founder, Chairman, Chief Executive Officer; David Weigand, Chief Financial Officer. At the end of today's prepared remarks, we will have a Q&A session for sell-side analysts. I will make additional remarks prior to the beginning of the Q&A, but the company will not address any questions regarding the recent decision of our independent auditor to resign and the delay in the filing of the company's 10-K. During today's conference call, Super Micro will address business and market trends for the first quarter of fiscal 25, including our financial outlook and operations, our strategy, technology and its advantages, our current and new product offerings, and competitive industry and economic trends. We will discuss estimated financial results, but reference any financial results for preliminary and subject to change based on finalized results contained in future filings with the SEC. By now, you should have received a copy of today's news release that was issued after the close of market, and it's posted on our website where this call is being simultaneously webcast. Any forward-looking statements that we make are based on facts and assumptions as of today, and we undertake no obligation to update them. Our actual results may differ materially from the results forecasted, and reported results should not be considered as an indication of future performance. The discussion of some of the risks and uncertainties relating to our business is contained in our filings with the SEC, and we refer you to those public filings, including our most recent annual report on Form 10-K. During this call, all financial metrics and associated growth rates are non-GAAP measures other than revenue and cash and investments. This call is being broadcast live on the Super Micro Investor Relations website and is being recorded for playback purposes. An archive of the webcast will be available on the IR website and it's the property of Super Micro. Our second quarter fiscal 2025 quiet period begins at the close of business Friday, December 13th, 2024. With that, I will turn it over to Charles. Thank you, Michael. Before we dive into the first quarter details, I would like to share some thoughts on the recent challenges that the company has experienced. As we have emphasized in our filing since these challenges emerged, we remain confident in our previous financial reports, and as previously announced, we are actively in the process of engaging a new auditor. We are working with urgency to become current again with our financial reporting. I'm pleased to report that the special committee has today provided the following statement to Super Micro, which is also included in our press release. I quote, "The Special Committee has completed its investigation based on a set of initial concerns raised by Ernst & Young. Following a three-month investigation led by independent counsel, the committee's investigation today 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. 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. End of quote. The Special Committee has not otherwise provided any additional details or information. We look forward to receiving the committee's full report in the near future. We do not believe the current challenges affect Super Micro's ability to service our customers and partners as we continue to grow rapidly and strongly with the AI revolution. And my confidence in Super Micro and its staff remains stronger than ever. Here are some key quarterly highlights. The preliminary fiscal Q1 net revenue was in the range of $5.9-$6 billion. At the midpoint, this is up 181% 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 the many customers waiting for the coming soon new generation GPU chips. The preliminary fiscal Q1 non-GAAP earnings in the range of $0.75-$0.76 per share, worth 30% last year, approximately 122% year on year growth rate. The preliminary non-GAAP gross margin is approximately 13.3%, and non-GAAP operating margin is approximately 9.9%. Both were higher than the previous quarter as customer mix improved and supply chain costs and expedite shipping easier for DLC components. We have deployed the world's largest DLC AI supercluster with 100,000 NVIDIA GPUs in the record time to deployment, TTD, as well as time to online. This milestone achievement reflects our engineering expertise and complex logistics capabilities for large-scale AI Data Center Building Block Solutions, DCBBS, we are now building full-scale liquid cooled data centers with our rack-scale plug-and-play solutions, featuring our latest DLC liquid cooling technology at Data Center Building Block Solutions can reduce the time required for customers to build new data centers from roughly two years to a few quarters, significantly improving data center TTD, TCO, time to delivery, and time to online, and cost for customers of AI. Data Center Building Block Solutions is also helping to accelerate the adoption of DLC liquid cooling, driving efficiency and performance while reducing customers' OpEx, achieving greener computing. We expect 15%-30% of new data centers will adopt liquid cooled infrastructure in the next 12 months. The DLC volume is at least 10 times more than last year. I mean, this year, DLC 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. To keep the DLC solutions performing at their best, our new SuperCloud Composer 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. SCC further simplifies provisioning of a highly automated software-defined infrastructure supporting customers with rapidly changing workload requirements. With the addition of SCC, Super Micro is well prepared to service many more customers and grow DLC liquid cooling data center market share. On the production front, we are in the process of completing our new Malaysia campus, where we expect to begin manufacturing later this quarter. Additionally, we have been nonstop expanding our facilities in Silicon Valley to increase our DLC liquid cooling rack-scale production capacity. Now they are boasting 50 megawatts of power and able to produce more than 1,500 DLC GPU racks per month with plans to scale up further. Our Taiwan and Europe production facilities also are growing at a quick pace. Moreover, we are planning to expand to several other global manufacturing locations in the near future. By leveraging our strengths in technology, innovation, product design, build quality, supply chain management, deployment, and data center services, we are pushing our goal to transform Super Micro into a leading USA as well as worldwide AI IT infrastructure company. We are off to a strong start in fiscal 2025. Our total IT solutions deployments are rapidly scaling, and our new product developments are progressing smoothly. Our NVIDIA GB200 NVL72 is ready, and the 10U air-cooled and 4U liquid-cooled B200 rack plug-and-play systems are fully production ready. The brand new 200 kW plus SuperRack architecture co-developed with NVIDIA, which provides near 100% DLC. I mean, the whole rack, almost no cooling fan required. It's also on the right track. The new SuperRack architecture will be able to achieve power usage effectiveness, PUE, close to 1.0. To complete our broadest AI portfolio, the AMD MI300 and MI325 platforms and Intel Gaudi solutions are ready. The Data Center Building Block Solutions is attracting more new customers, and our long-term investment in DLC liquid cooling is paying off with world-class quality and volume capacity, giving us a sustainable competitive edge and economies of scale. Before passing the call to David Weigand, our CFO, I want to thank our partners, customers, investors, and Super Micro employees and express my appreciation for their patience and support until we can provide more information about our 10-K filing. Data Center Building Block Solutions, and DLC liquid cooling, green computing leadership not only reduce energy costs for our customers but also contribute to a healthier Mother Earth. I believe we are well positioned for strong future growth. Thank you, Charles. We remind investors that the unaudited interim financial information in this report is preliminary. We expect unaudited Q1 fiscal year '25 revenues in the range of $5.9-$6 billion, up 181% year over year and up 12% quarter over quarter versus our guidance of $6-$7 billion. Growth was driven by strong demand for direct liquid-cooled rack-scale AI GPU platforms. AI contributed over 70% of revenues across enterprise and cloud service provider markets. The expected Q1 non-GAAP gross margin is approximately 13.3% versus 11.3% last quarter due to product and customer mix and lower costs coupled with higher manufacturing efficiencies on DLC AI GPU clusters. The Q1 non-GAAP operating margin is approximately 9.9%, excluding $67 million in stock-based compensation expenses versus 7.8% in Q4. The Q1 estimate for other income and expense is expected to be a net expense of approximately $9 million, consisting of $17 million in interest expense offset by $8 million in interest and other income. The Q1 tax rate is approximately 14% for GAAP and 16% for non-GAAP. The Q1 estimate for GAAP net income is $433-$443 million, and non-GAAP net income is $483-$493 million. Non-GAAP net income excludes $50 million in stock-based compensation expenses net of the related tax effects of $17 million. The split-adjusted Q1 GAAP diluted earnings per share range is approximately $0.68-$0.70 versus prior guidance of $0.60-$0.77. The Q1 non-GAAP diluted EPS range is approximately $0.75-$0.76 versus guidance of $0.67-$0.83. We expect a Q1 GAAP diluted share count of 639 million and a non-GAAP diluted share count of 648 million. Operating cash flow is approximately $407 million, an improvement of $1 billion quarter over quarter. Q1 closing inventory was approximately $5 billion. CapEx for Q1 was $42 million. Positive free cash flow was $365 million for the quarter. The Q1 closing balance sheet cash position was $2.1 billion, and total debt was $2.3 billion, with bank debt of $0.6 billion and convertible bond debt of $1.7 billion, resulting in an improved Q1 net cash position of approximately negative $0.2 billion versus a net cash position of negative $0.5 billion last quarter. Turning to the balance sheet and working capital metrics compared to last quarter, the Q1 cash conversion cycle was 97 days versus 94 days in Q4. Days of inventory was 85 days compared to the prior quarter of 82 days. Days sales outstanding for Q1 was 41 days versus 37 days last quarter, while days payables outstanding was 29 days from 25 days last quarter. For the second quarter of fiscal 2025, we expect net sales in the range of $5.5-$6.1 billion. We expect GAAP and non-GAAP gross margin down 100 basis points sequentially due to customer and product mix. We expect GAAP and non-GAAP operating expenses up approximately $34 million sequentially and GAAP and non-GAAP other income and expense to be a net expense of approximately $7 million. We expect GAAP net income per diluted share of $0.48-$0.58 and non-GAAP net income per diluted share of $0.56-$0.65. The company's projections for GAAP and non-GAAP net income per diluted share assume a tax rate of 14% and 15% respectively, a diluted share count of 640 million shares for GAAP and a diluted share count of 648 million shares for non-GAAP. The outlook for Q2 of fiscal year 2025 GAAP net income per diluted share includes approximately $54 million in expected stock-based compensation expense and other expenses net of related tax effects of $14 million, which are excluded from non-GAAP net income per diluted share. The final financial results reported for this period may differ from the results reported here based on the review by the new independent registered public accounting firm to be appointed. We are working diligently to select a new independent registered public accounting firm and complete our fiscal year 2024 audit. Michael, we're ready. Thank you, David. Hey, before we get into questions, we appreciate that you may have further questions about the special committee's findings as well as our audit timeline. We're not in a position to address those questions on the call today. So with that, operator, we'll take a first question. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. The first comes from Michael Ng with Goldman Sachs. You may proceed. Hey, good afternoon. Thank you for the question. Just on the business fundamentals, revenue came in at the lower end of the guidance. I was wondering if you could speak to that and whether you're seeing any market share losses as a result of some of the delayed financial filings. And how do you feel about the $26-$30 billion full-year revenue guidance that you previously gave out? And are you hearing from any customers that once this resolution occurs, they'll be able to step up some of their orders, or is it a gating factor? Thank you. Okay. Thank you for the question, Michael. Indeed, last quarter revenue reduced a little bit. I guess the major reason because there are some customers waiting for the new chip, the Blackwell chip, as you know. So people are waiting for the new solution. And the new solution, I mean, the Blackwell-based liquid cooling, air-cooled, or GB200, our solution indeed is ready. Just waiting for the chip. So I guess that's the major reason. And our capacity continues to grow, and our liquid cooling solution is fully ready. Again, we can produce 1,500 liquid-cooled racks for months now. So we are fully ready. Just waiting for the new chip to be available. And then I believe we can grow our market share and revenue after that. Great. And for David, just on the full-year guidance? Yeah, Michael, we're not providing annual guidance on this call. Okay. Great. Thank you, Charles. Thank you, David. Thank you, Michael. Thank you. The next question comes from Samik Chatterjee with JP Morgan. You may proceed. Hey, guys. Thanks for taking my question. I guess maybe to sort of talk about the gross margins here. You had robust gross margins in the quarter, but you're guiding it down. It seems like maybe it's a bit more choppy in terms of gross margins depending on customer mix. Does the sort of progression to getting back to the 14%-17% that you talked about earlier still remain sort of the base case, or are you having to sort of discount more or be more aggressive on pricing on the current generation products? And, as a separate sort of a side question, just, I know you're not commenting on related to the filings, but any management changes or any changes in how you operate that you're planning or thinking about to sort of overall improve things in terms of getting more sort of more disciplined around and more control around the financial reporting? Thank you. Thank you, Samik. Yes, I mean, it depends on new products, right? When new GPU chip available. As you know, whenever there are new generation of technology, we have an advantage to grow our market share and profitability. data center building block solutions with scc, SuperCloud Composer, that provides a full end-to-end solution that will pursue our way of gradually grow our gross margin and net margin. As to management team, yes, we are always fast growing. In 2023, we grew 40% about. And then 2024, we grew more than double. And this year, again, we will have a big growth. So when companies are fast growing, we continue to add more people, including senior management. So we are evaluating the possibility, including the report from special committee. And by the nature, we continue to grow senior management team as well. Thank you. Thanks for taking the question. Thank you. Thank you. The next question comes from Aaron Rakers with Wells Fargo. You may proceed. Yeah, thanks for taking the questions. A couple if I can as well. I just, Charles, I want to go back. I think when you guys had originally guided this quarter, I think the guidance range is like $6-$7 billion. You came in at about $500 million at the midpoint short of that. I guess given the comments to the prior questions, are you assigning that to just the timing of Blackwell, or was there something that changed the demand or the timing of deployments this last quarter? I'd also add in there, I think last quarter when you had set that guide, I think there was like $800 million of sales that you had alluded to as being pushed out of last quarter into this fiscal first quarter. Did that all close? Just try to bridge that gap for me between the delta and the guide relative to the business update today. Okay, good. I don't think so. I mean, this complicates the question. So I believe the major impact is new chip availability because Blackwell chip for sure is much higher performance, much better performance per dollars, right? And the good thing is that looks like it will be available gradually. And Q1, hopefully Q1 2025, hopefully volume becomes much better. And so that's the major factor, I believe. As to our 10-K today, may impact a little bit. How much, I don't know yet, but certain impact for sure, but hopefully not too big. As to the whole year, yes, today we do not provide any guidance. But basically, with our liquid cooling leading edge, right, in the last few months, we deliver more than 2,000 racks DLC. That I believe is a very high percentage for the whole liquid cooling market. For the future growth, I personally feel very optimistic. Yep. Okay. Then two other quick questions if I can. So first of all, I mean, you mentioned $5 billion of inventory coming out of this quarter. Any thoughts on where that might trend coming out of this next quarter embedded in your outlook that you provided today? Then I apologize for asking. I know that you are not going to address the special committee dynamic, but any thoughts on the timing of an auditor, of getting an auditor assigned? Anything you can share on that front? And I appreciate that you asked. We are not talking much about that, but curious any comments on that front. Okay. For inventory, maybe I can answer a little bit. I mean, the company will continue to grow, I believe. So $5 billion level of inventory, I believe, will continue. And as to the special committee investigation result today, I'm very happy to share some very positive information. But as to the detail, once it's available from them, we will share with the market. Aaron, we have no update with respect to the audit timeline that we could talk about, as we mentioned earlier. Just getting an auditor assigned. Thank you. We're working diligently to get that done, as I mentioned, as quickly as possible. Yep. Thanks, guys. Thank you. As a quick reminder, if you would like to ask a question, please press star one on your telephone keypad. The following comes from Ananda Baruah with Loop Capital. You may proceed. Yeah, guys. Yeah, good afternoon, good evening. Thanks for taking the questions. Too, if I could, I guess the first is on gross margin. Should we expect, well, I guess really the question is, Dave, should we still expect it to improve as we go through the fiscal year as you were previously anticipating? Yeah. So by the way, we guided cautiously in this first quarter on our margin. So we were glad to be able to exceed it. And so in like fashion, we're guiding conservatively into the second quarter. And so we still have our target margin that we're shooting for. And so we're doing everything that we can to improve that. Yeah. The competition will surely bring some pressure, as you know. But Blackwell, I mean, a new technology, I personally feel very optimistic for Super Micro's chance to grow. data center building block solutions, including scc, SuperCloud Composer, that provides end-to-end management from chip level to rack scale to the whole data center water tower. So I believe all of those will help our growth. And then we also start to provide, able to provide the customer on-site deployment, on-site cabling, and service. So all of those are very positive to our business. So I feel very positive to continue to grow the business, I mean. Yeah. Thanks for the margin context. Appreciate that. And the follow-up is just, I guess, just a general working capital financing question. This question has come up a lot with investors. And can you just give us, really, the question is, can you explain sort of the access to capital situation as we go forward? And I guess, really, how would you like the investment community to think about the access to capital situation? Thanks. Sure. So, Ananda, we put in the last eight, nine months $4 billion into working capital from two equity raises and one convert. And so it really left us in a good working capital situation, exiting Q4 at a run rate of around $6 billion. So again, we're forecasting a little bit down in Q2. So that takes care of our working capital needs for a while. So, as is, we have a very strong, growing, and profitable company. And so we don't believe that we'll have any impediments to raising working capital. Yeah. Every quarter, we are making a reasonable, good net profit, though. So basically, we should be in good shape. Okay, guys. Thanks so much. That's helpful. Thank you. Thank you. The next question comes from George Wang with Barclays. You may proceed. Okay, guys. Thanks for taking my question. I have two quick ones. Firstly, can you kind of double-click on which quarter do you think that you will start booking the Blackwell revenue? Last time, you guys alluded to sometime in the June quarter. Just curious whether that's still on track. Just any kind of high level in terms of when do you think the Blackwell is going to show up in the P&L? Yeah. Very good question. Indeed, we're asking NVIDIA every day. So I hope their production can go smooth and go for high volume very soon. And once they have a chip available, our solution is fully ready. So we continue to work with them very closely to develop a current product, GB200 NVL72, and B200 liquid cooler and air cooler. And we also designed some really enhanced rack-scale solution. So in terms of total solution, we have a very strong offering waiting for the chip. So we need NVIDIA's quick support. Thank you. That's helpful. Just a quick one, if I can. Just how to think about gross margin in the area of Blackwell versus Hopper. Just curious if you can talk about pros and cons on the gross margin for the GB200, especially in light of reference design from NVIDIA. Any kind of incremental value add from Super Micro just as we kind of head to the Blackwell? Just in relation to the profitability and the kind of margin profile. Thank you. Yeah. Thank you. But Blackwell for sure, we estimate more competitor, right? Because people know AI market is so big now. So with Blackwell, we expect more competition. But at the same time, we also data center building block solutions with our end-to-end SuperCloud Composer and with our on-site deployment, cabling, service business. So those are new. And I believe we are able to provide a very unique, very efficient time to delivery, time to online advantage to customer. So yes, competition is strong, but I believe we are in good position. Okay. Thanks a lot, Charles. I'll go back to the chip. Thank you. Thank you. The following comes from Nehal Chokshi with Northland. You may proceed. Yes. Thank you. Thank you for taking my questions. A couple of questions, please. First, Dave, any 10% customer exposures in the quarter and the upcoming quarter? Indeed, we will have 10% customers now. Good. Could you give us some detail as far as what% of overall revenue do the 10% customers represent in the September quarter? Yeah. So we're not going to release that data today. Yeah, but at the same time, we continue to gain more new customers, especially in Europe and Asia, so I believe we will be able to keep a healthy ratio. Okay. Great. And then, Charles, I think there's a strong feeling in the investment community that the chairman and CEO roles, if separated, could be quite beneficial to Super Micro. From your perspective, what is the benefit of Super Micro separating these roles? Okay. I would appreciate for the company. That's my consideration. So every day, if not every day, then every week, I have been thinking about the question since many years ago. And so again, why would I base it for business? So I personally have a very open mind. And I'm a technology guy, and technology is my best interest. But still, overall consideration is the best benefit for shareholders and the company. Just to be clear, do you see it potentially being in the best interest of the shareholder of separating these roles here? No comment at this moment, but I'm seriously concerned about it. Someday, I will retire for sure. Hopefully not in one year or two years, but sooner or later, I will retire. I mean, those changes for sure are natural, but why would I base it for shareholders and for our company and for my family too. Thank you for taking my question. Thank you. Thank you. The next question comes from Vijay Rakesh with Mizuho. You may proceed. Hi, Charles. So on the September quarter and December quarter, just wondering how many liquid cooler racks you're shipping in September and if you did your same idea in December? David, do you have a same number this year? It was just a little below last quarter, but I don't have the exact time. I would have to say we had a company ship most of our liquid cooling racks to the market recently, for example, in the September quarter. And our liquid cooling, because ahead of the market. And customers like our liquid cooling because it saves their energy power and saves water requirement and kind of hits the trend. So I believe we will continue to grow liquid cooling percentage. Got it. And when you say down sequentially into December quarter on the H200 liquid cooling, any idea on how much that is sequentially? We did not share the number, but I believe liquid cooling will continue to grow very quickly, and we are very happy to promote that. Got it. And the first last quarter. Yeah. Go ahead. Go ahead, Vijay. Sorry. I think, Dave, on the number 16 deadline, are you guys comfortable that you will have an auditor and file a plan to the Nasdaq? So we're not answering those questions today. Got it. Yeah. So yeah, like I said, we're diligently looking to replace the auditor as quickly as possible, and we will be filing a plan with Nasdaq, and indeed, regarding an extension, and so that's all we have to say about that. Got it. Thank you. Thank you. The next question comes from Jon Tanwanteng with CJS Securities. You may proceed. Hi. Good afternoon. And thank you for taking my question. I was wondering, Charles or David, could you break out what your expected revenue in Blackwell was supposed to be in the Q1 guidance and what you have implied in the Q2 guidance, first of all? And then second, do you see a risk of supply or allocations due to this auditor and filing issue, especially from NVIDIA? Just would they possibly maybe hold back some just until you figure it out? Or are they supporting you through this in just meeting your orders, and especially with the new technology? Thank you. Yeah. Our relationship with NVIDIA has been multiple decades, and our growth, kind of the cooperation between two companies, continues to enhance. We have many important projects co-developed, and I don't expect any negative allocation from them. At this moment, according to our relationship, according to our communication, things are very positive. Great. And then I guess the Blackwell numbers that were implied in the last quarter's and this quarter's guidance? That's hard to answer because we don't know what's the volume NVIDIA will have Blackwell available every month. So we work with them very closely and co-develop a solution, validate the solution, and service the common customer. So once they have a good volume available, I believe we will have a good percentage in our product mix. Got it. Thank you. And then if I could sneak one more in there, if I could. Is there more efficiency to be unlocked in your liquid cooling supply chain, or have you mostly resolved the issues in ramping your production capacity and supply chain there? We focused on liquid cooling much earlier than the industry, right? So in the last few months, we already shipped more than 2,000 racks, right? And so far, the feedback from customers is very happy. Indeed, the quality, the customer satisfaction, even better than our air cooler solution. So we are very excited. Our hardware chain in the last three years got a payoff. And we believe liquid cooling will continue to be our major advantage, including the whole data center end-to-end total solution. Again, not just liquid cooling racks, but kind of deployment, cabling, service, management, software. So we are very excited for our DLC liquid cooling solution. And customers like that. Great. Thank you. And good luck with finding a new auditor. Thank you. Thank you. The following comes from Mehdi Hosseini with SIG. You may proceed. Yes. Thanks for taking my question. David, from what I understand regarding cash flow, it seems like there was a one-time positive impact. Your days of inventory went up, but you were able to significantly increase your operating cash flow. Did I hear you correct? And if so, what is the item that helped you with positive operating cash flow? Sure. I think the answer is, Mehdi, that we've been growing at such a high rate over the past quarters that that's really what's been impacting our operating cash flow. We've had to pour hundreds of millions of dollars into inventory as well as into accounts receivable. So kind of coming off of a quarter where we didn't have such a dramatic increase in revenue, we were able to generate a lot of cash, basically $1 billion worth of improved cash flows. So it was really yeah. So it was really just the fact that for the reasons Charles mentioned, the growth wasn't as high. I understand. We didn't have to acquire as much. Yeah. I understand, but your DSO went up. I'm sorry, your days of inventory went up. And I think from what I heard from you, your DSO didn't really change. So was that improvement in operating cash flow all driven by working capital reduction, or was there something outside of working capital that helped you? No. It was really for those reasons. It was really just for ERP and inventory equation. Mehdi, I mean, maybe I can help it. I mean, when we grow about 200% more year over year, right? So for sure. And we see continued growth, right? So for sure, we need a much higher inventory to support our customer demand. And then when our growth becomes more normal, not 200% year over year, for example, 100% or 80%, then we don't have to grow that much of our inventory. And that will help our cash flow. So it's a good trouble, I would have to say. Actually. It's a good challenge. Sure. Sure. Got it. And then, Charles, maybe you can help us give us an update on your total capacity, especially with the Malaysia expansion, and how is the utilization of the global installed capacity tracking? Very good question. We expect we will continue to grow very fast. That's why we have been preparing a huge capacity in Silicon Valley, in Taiwan, and now especially Malaysia, so long term, we need those capacity, but in terms of our utilization rate at this moment, I would like to say a little bit low because capacity is ready, but not enough new chip, as you said. Not enough new chip. That's why utilization rate now is relatively low, maybe only 50%. I see. Sure. Sorry, David. Go ahead. This is Dave. Yeah. I was going to give you a couple of other tips on cash flow. You'll probably notice that because of an improved gross margin, we had almost $80 million on a non-GAAP basis, more profit this quarter. In addition to that, again, going back to working capital metrics, we increased our accounts payable by several hundred million dollars. So those are other factors that go into improved operating cash flow. Gotcha. Hey, Tamia, before we go to the next question, thank you, Mehdi. Before we go to the next question, I just wanted to clarify one of the comments from earlier with respect to NVIDIA and clarify we have the deepest of relationships with NVIDIA at the technology level that goes back decades. And now we have multiple state-of-the-art projects in progress. And we've spoken to NVIDIA, and they've confirmed they've made no changes to allocations, and we maintain a strong relationship with them and don't expect that to change. So I just wanted to make sure that was clarified. Next question, or actually our last question, Tamia. Absolutely. Our final question comes from Quinn Bolton with Needham & Company. You may proceed. Hey, guys. Thanks for taking the question. I guess I just want to follow up on kind of the slightly weaker-than-expected first half. Really sounds like it's just customers waiting for new Blackwell chips. Are you guys seeing that starting to show up in the order books, meaning you're building backlog for either the NVL rack or the Blackwell B200 systems? So you see a nice building backlog for those systems. Obviously, you don't know when you'll get the chips, but it gives you confidence for a much stronger second half once Blackwell starts to ship, or is it too early for you guys to be actually getting those orders or POs at this point? Yeah. Our solution is very strong, and I believe NVIDIA will continue to allocate their solution to the company, the customer, whoever fits the total solution. Because as I know, common end-user satisfaction is the most important to every company, right? So I would like to say our solution is very strong, and we continue to work with NVIDIA very closely and to provide the best total solution, end-to-end solution to customers. That's why we start to provide on-site deployment, on-site cabling, on-site service, and all of those new offerings are very attractive to lots of new customers and old customers, so we feel very comfortable for the coming soon new chip solution. So the backlog for Blackwell, you're seeing that building on your order books? We're providing kind of remote POC now, and so things are happening. Okay. And a second follow-up question for David. You've recently sort of filed new credit agreements with both of your banks, just setting a date when you would have to provide the audited financials. To the extent that you don't hit that date, what happens? Do you just have to go renegotiate new credit agreements? Do the banks at that point have the right to effectively call those term loans? I'm just wondering if you might be able to address what happens with both the bank debt and if there's any risk to the convertible debt if you don't provide audited financials within the prescribed time. Yeah. So I think we'll just refer you to our 10-K filings. We have long-term and good relationships with the banks, and so as necessary, we will file extensions, yeah, or get waivers, and as I mentioned earlier, we're not concerned about the company's ability to access the capital markets. Thank you. Thank you. There are currently no other questions in queue, so I will now turn it back over to the management team for closing remarks. Hey, thank you for joining our conference call today, and we'll look forward to talking to you soon. This concludes today's conference call.