Slide 1: Earnings Conference Presentation FY2017 Q3
Earnings Conference Presentation FY2017 Q3 April 27, 2017 Charles Liang, CEO Howard Hideshima, CFO 1 We Keep IT Green™
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may relate, among other things, to our expecte
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP gross margin in this presentation excludes stock-based compensation expense. Non-GAAP net income and net income per share in this presentation exclude stock-based compensation expense and the related tax effect of the applicable items. Management presents non- GA
Slide 4: Charles Liang
Charles Liang Chairman and Chief Executive Officer 4 We Keep IT Green™
Slide 5: Q3 FY2017 Non-GAAP Financial Highlights
Q3 FY2017 Non-GAAP Financial Highlights (in millions, except per share data) Revenue and EPS Trends Change $652 $700 $631 $0.60 Q3'17 YoY Sequential $600 $533 $524 $529 $0.50 $500 18.5% -3.2% $0.48 $0.40 Revenue $631.1 $400 $0.36 $0.38 $0.30 $300 $0.32 Profit after Tax $20.3 7.0% -18.8% $200 $0.20 $
Slide 6: Revenue Trends
Revenue Trends Revenue by Customer Group Revenue by Subsystem/System #039;s in millions #039;s in millions $700 $700 $600 $600 31.9% 30.0% $500 46.2% 46.0% $500 30.1% 34.5% 32.4% $400 45.6% 46.8% 50.0% $400 $300 $300 68.1% 70.0% $200 53.8% 54.0% $200 69.9% 65.5% 67.6% 54.4% 53.2% 50.0% $100 $100 $0 $- Q3'
Slide 7: Q3 Revenue Mix & Growth Highlights
Q3 Revenue Mix & Growth Highlights Storage up 28.7% YoY Market Verticals Next Gen up 74.2% YoY Storage 22.5% NVMe design win traction IOT up 38.0% YoY Other IDC 56.3% 10.7% Accelerated computing up 176.3% YoY IOT Deep learning, machine learning, and Other includes HPC, Enterprise, and Ch
Slide 8: Vertical Markets
Vertical Markets % of Revenue: 22.5% % of Revenue: 10.7% % of Revenue: 10.5% STORAGE CLOUD IoT 45-Bay JBOD BigTwin Edge Device Top Loading High reliability fanless robust design • 45 Hot-swap 3.5" SAS3/SATA3 • Low Power Consumption (9W, 4 core) drive bays + 2 rear 2.5“ SYS-2028BT-HNC0R+ • Extreme op
Slide 9: Vertical Markets Enterprise X11 Skylake
Vertical Markets Increasing Revenue % of Revenue: 5.9% Seeding and Early Deployment Now! Accelerated Enterprise Computing X11 Skylake MicroBlade 1U Pascal SuperBlade 0.1U per Computing Node Blade computing without the premium • Up to 40°Coperating temperature • DP Skylake-EP and beyond • 20% power s
Slide 10: Progression to Tier 1 Provider
Progression to Tier 1 Provider Presence EMEA Domestic Asia Pacific Fortune 1000: Verticals: Brand recognition Market Channel: Cloud, Enterprise, Distributors/VARs Accelerated Computing Innovation Subsystem Server System Total Solution Motherboards Architecture Complete solutions: and server innovati
Slide 11: Howard Hideshima
Howard Hideshima Chief Financial Officer 11 We Keep IT Green™
Slide 12: Q3 Revenue
Q3 Revenue Market Verticals Market Vertical QoQ Storage 22.5% Storage -10.3% IDC -25.2% Channel 47.1% IDC IOT 2.0% 10.7% HPC -1.7% HPC IOT 5.9% 10.5% Enterprise -38.3% Note: Channel is 46% without Enterprise 3.3% Channel -3.6% overlap with HPC and Storage Systems Systems 85K system
Slide 13: Non-GAAP Margins
Non-GAAP Margins Gross Margin Compare Non-GAAP Margin Trends 40 basis points lower QoQ Prices increases for memory and SSD’s 14.9% 15.2% continued this quarter with only slight 14.1% 14.4% 14.0% improvement to offset Utilization was lower at 55% 90 basis points lower YoY Component pricin
Slide 14: Summary P&L non-GAAP
Summary P&L non-GAAP (in millions, except per share data) Change Q3'17 YoY Sequential Q3'16 Q2'17 Operating Expense $61.4 $10.3 $4.2 $51.1 $57.2 Operating Expense Ratio 9.7% 0.1% 0.9% 9.6% 8.8% Operating Income $27.2 -$1.1 -$9.2 $28.3 $36.5 Net Income $20.3 $1.3 -$4.7 $19.0 $25.0 EPS $0.38 $0.02 -$0
Slide 15: Cash and Cash Conversion Cycle
Cash and Cash Conversion Cycle Cash & cash equivalents and short & Q3'17 Q2'17 Change long-term investments: $110.5M Cash Equivalents & Down $21.0M QoQ Investments $110.5 $131.5 $(21.0) Down $68.6M YoY Accounts Receivable $391.3 $366.9 $24.4 Cash Conversion Cycle (QoQ) Inventory $642.3 $599.
Slide 16: Supplemental Financials
Supplemental Financials Third Quarter Fiscal 2017 Ended March 31, 2017 16 We Keep IT Green™
Slide 17: Revenue Trend
Revenue Trend Supermicro Revenue Trend #039;s in millions $700 $600 $500 $400 $652 $631 $300 $533 $524 $529 $200 $100 $0 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Y/Y 13.1% -8.6% 1.8% 2.0% 18.5% Seq. -16.6% -1.6% 0.9% 23.3% -3.20% 17
Slide 18: Q3 FY2017 YTD Summary Statement of Cash Flow
Q3 FY2017 YTD Summary Statement of Cash Flow ($’s millions) 9 Months Ended 9 Months Ended 31-Mar-17 31-Mar-16 Net Income $52.2 $65.1 Depreciation and amortization $11.8 $9.5 Stock-based comp expense $14.0 $11.8 Other reserves $1.2 -$0.3 Net change in AR, Inventory, AP -$200.7 -$8.4 Other prepaids an
Slide 19: Non-GAAP Financial Summary
Non-GAAP Financial Summary (in millions, except per share data) Q3'17 Q2'17 Q3'16 Net Sales $631.1 $652.0 $532.7 Non-GAAP Gross Margin 14.0% 14.4% 14.9% Non-GAAP Operating Expenses $61.4 $57.2 $51.1 Non-GAAP Operating Income $27.2 $36.5 $28.3 Non-GAAP Net Income $20.3 $25.0 $19.0 Non-GAAP Net Income
Slide 20: Prior Period Net Income Comparisons
Prior Period Net Income Comparisons (in millions, except per share data) Q3'17 Q2'17 Q3'16 Net Income (GAAP) $16.7 $22.0 $16.7 Stock-based Compensation Expense (tax affected)* $3.7 $3.0 $2.3 Net Income (Non-GAAP)* $20.3 $25.0 $19.0 Diluted Net Income per common share (GAAP) $0.32 $0.43 $0.32 Stock-b
Slide 21: Quarterly Net Income (Loss) GAAP to Non-GAAP Reconciliation
Quarterly Net Income (Loss) GAAP to Non-GAAP Reconciliation (in millions, except per share data) Q3'17 Q2'17 Q1'17 Q4'16 Q3'16 Net income (GAAP) $16.7 $22.0 $13.5 $7.0 $16.7 Adjustments: Stock-based compensation expense $4.8 $4.7 $4.5 $4.4 $3.9 Income tax effects of adjustments $(1.2) $(1.7) $(1.3)