Please stand by. Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Super Micro Computer Incorporated Third Quarter Fiscal 2018 Business Update Conference Call. The company's news releases issued earlier today are available from its website at www dotsupermicro.com.
During the company's presentation, all participants will be in a listen only mode. Afterwards, Securities analysts will be invited to participate in a question and answer session, but the entire call is open to all participants in a listen only basis. As a reminder, this call is being recorded Thursday, May 3 2018. A replay of the call will be accessible until midnight, Thursday. 17 2018 by dialing 1-844-512-2921, and entering replay PIN 2033 880.
International callers should dial 14123176671. With us today are Charles Lee Yang, Chairman and chief executive officer, Kevin Bauer, Senior Vice President and Chief Financial Officer, and Perry Hayes, Senior Vice President, Investor Relations. And now, I would like to turn the conference over to Mr. Hayes. Mr.
Hayes, please go ahead, sir.
Good afternoon, and thank you for attending Super Micro's Business Update Conference Call for the third quarter of fiscal 2018. Which ended March 31, 2018. As announced in our press release earlier today, The company has completed the previously disclosed investigation conducted by the Audit Committee. In furtherance of the preparation of the financial statements, the audit committee is overseeing additional testing that the company believes is nearing completion. To date, the company's cash flows have not been impacted by the findings of the investigation or the additional testing.
Additional time is required to analyze any impact of the results of the investigation and additional testing on the company's historical financial statements as well as to complete additional reviews before the company will be able to finalize its annual report on Form 10 K for the fiscal year into June 30, 2017, otherwise known as the 2017 10 K. The company presented an updated compliance plan to the NASDAQ stock market hearings panel on April 26, 2018, and the company requested an additional exception period. For continued listing of its common stock on the NASDAQ Global Select Market. Through August 24, 2018, in order for it to complete and file its 201710 K and subsequent delinquent SEC quarterly findings. The company is unable at this time to provide a date as to when the 2017 10 K will be filed or to predict whether the company's historical financial statements will be adjusted or if so, the amount of any such adjustment.
The company intends to file its quarterly reports on Form Ten Q for the quarters ended September 30, and December 31, 2017 March 31, 2018 promptly after filing the 201710 K. Based on these delays, during today's conference call, Super Micro will address business and market trends from the 3rd fiscal quarter of 2018, and we'll discuss estimated financial results. But reference to any financial results are 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 distributed at the close of regular trading and is available on the company's website. Before we start, I'll remind you that our remarks include forward looking statements.
There are a number of risk factors that could cause SuperMarco's future results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon our most recent 10 K and our other SEC filings. All of those documents are available from the Investor Relations page of SuperMarco's website. We assume no obligation to update any forward looking statements. Most of today's presentation will refer to non GAAP financial results and outlooks.
At the end of today's prepared remarks, we will have a Q and A session which sell side analysts will be permitted to ask questions. Questions should be directed to the company's business update covered in today's call. The company will not address any questions regarding the audit committee investigation or the delay in the dialing of the company's 10 K. I'll now turn the call over to Charles Leon, Chairman and Chief Executive Officer. Thank you, Perry, and good afternoon, everyone.
Let me summarize the third quarter. Our third quarter revenue will be in the range of $785,000,000 to $795,000,000, which surpassed our quarterly guidance and represents approximately 26% increase year over year. This was the 6 straight quarter of double digit, 20% plus growth, which demonstrates the success of our Supermangos redao efforts to scale our people, process and operations to support strong customer demand. On a year over year pace, we grew in almost all market verticals, including growth of 102% in accelerated AI Machine Learning, 244 percent in enterprise. 58% in internet datacenter and cloud, 9% in IoT and embedded.
14% in channel and 15% in storage. In a traditionally soft quarter, we were able to succeed despite the shortage of both minor and key components. The results could have been stronger. It will not hold a component shortage and supply chain uncertainty. Our system revenue reached 80% of our total sales, demonstrating our customer confidence in our integrated products and total solutions.
The total number of nodes shipped last quarter was up by 13% compared to last year. We shipped over 1,200,000 total units including subsystems and computer systems in 2017 calendar year. And we will also recognize as the 3rd largest provider of servers in the world. My IDC at the end of calendar 2017. ASPs or notes grew 28% over last year due to increased demand for flooring integrated systems.
With the shibomichael qualified and validated component. Most notably, the shibom tray and I must know the twin family or in high demand and contribute to higher ASPs. The Twin family was 30% of total revenue and was up 72% year over year. The cheaper brand was up 470% compared to last year. ASP products, including direct solutions, which was up more than 300% and Ultra Systems that grew about 10%.
When computing, there has always been a priority at shivermichael. And we have introduced our new resource savings architecture to further improve datacenter cost revisions. And environmental friendly needs. The system architectures can achieve up to 60% hardware acquisition cost savings. By the Eugene system in Projio, cables, hardware, networking, processor modules, storage module, and cooling phase.
Furthermore, resource saving system, a capable of achieving 1.05 PUE. In datacenter to save 1,000,000 of dollars in energy costs while significantly reduced e waste. More resources saving advantage can be utilized and are scaled. Data center environment, leveraging Chipu MicroDrax scale design, RSP, to manage threats of this aggregate server throughout compostable storage and networking with industry standard grayfish, direct for APIs. We already had large scale deployments and the design win with our strong resource saving product portfolio.
Including a disaggregated play and between and other products in our enterprise and large data center customer base. The resource savings technology drivers dramatically improve efficiency. Increased utilization, reduce initial acquisition costs and TCO. Most importantly, that can help our mother earth because it reduce pollution and energy consumption.
On the
new technologies, Supermichael continues to bring new models breakthrough innovations to the market. For storage, we have introduced a new heidi configurable 1U0Fresh storage platform. Supporting the latest stories in India, such as Intel DuoFresh, and the Samsung NF1 NVMe. Let's deliver up to 300% increase in storage spaces. We significantly higher performance and bandwidth atascale.
For AI and Machine Learning, we have introduced the 4 digit selection of GPU server platforms. Supporting NVIDIA test W100 GPU in both PCIe and SXM form factors. Now for your GPU system in particular can support up to a GPU from a single route with that update and winning offering optimal performance in a hyperscale environment for application in self driving car, smart city, healthcare, scientific research, big data analytics and phone. On the networking side, we are the first to introduce a wider range of 25g NIC solutions. Let's deliver 100 percent better performance for dollars.
2nd award compatibility, plus the future proof upgraded as 2 100 gs. Chipotle also recently announced new additions to its extensive IoT, network and security appliance portfolio featured in system based on the NIM SOC system on chip, NPL DRUND2100 processor. With high gross features available in Ultra 10, lower power device, cheaper manhood, X11 IoT platform, deliver balanced compute, storage, and networking for the intelligent edge and the emerging scale. Emerging cost of new 5G enabled service. Lastly, to support increasing demands, We extend our Silicon Valley operation to over 2,000,000 square feet, which does when opening our building 22 at our in computing campus.
My extension allow for additional capacity for system integration and a dedicated rack integration facilities, however, by 1 order Silicon Valley's first clean fuel cell energy. At a 3 megawatt, the facility features, automated, address burning with autonomous guide, low parts in operation. Currently, 6 gigabytes can be built and be burning simultaneously. With capacity of delivering 1600 completed rack per month. In summary, Supermangoes continue to execute on it.
Supermangoes Switau's strategy and drive a market share again. In total solution and direct end user engagement with large enterprise and data center customers. Our 6 consecutive quarter of double digit growth despite of vulnerable component shortage reflects our advantage of first to market, technology and products. Which will continue to accelerate the customer demand for Chivu Nai Group. And let me hand it over to Kevin Power for more financial
detail. Thank you, Charles, and good afternoon listeners. In addition to the growth rate Charles highlighted on a year over year basis, I'd like to provide a longer is evidenced by our performance in the following areas by comparing with the last 12 months to the preceding 12 months. In other words, last 12 months as of March 2018 revenue compared to last 12 months, as of March 17. In the area of accelerated AI and machine learning, our last twelve performed last 12 months performance was 148 percent over the previous 12 month period.
In enterprise, our last 12 month performance was 162 percent over the previous 12 month period. In IoT and embedded, our last 12 month performance was 19% over the previous 12 month period. And in storage, our last 12 month performance, was 28% over the previous 12 month period. Returning to the quarter and sequential comparisons. This quarter, we saw our strongest regional growth in EMEA that was up.
63%, offsetting, offsetting slow performance in China due to the Lunar New Year holidays. The U. S. Remained our biggest market with 13.2 percent and includes stock based comp of $400,000 and this quarter accelerated building depreciation expense of $2,600,000 that's related to a partial demolition of a building in our new green computing park. Without these two items, our estimated range of non GAAP gross margin is from 13.3% to 13.5%.
Despite continued component pricing pressure, our gross margin remains stable. I'd like to make a few comments since the expanded new credit facility for an amount of up to $250,000,000, then increased our domestic borrowing capacity by 60%. In addition, this new facility provides a conversion opportunity to expand borrowing capacity of $400,000,000 after certain conditions have been met. With this new source of capital, we increased our network of relationship banks and are able to invest in additional working capital to continue to execute on our long term growth strategy. At the same time, we have exercised our organization to improve on all three facets of the cash conversion cycle.
By focusing on customer collections and being more precise about payments to suppliers and the scheduling of incoming inventory materials We immediately reduced our outstanding balance from the prior related to the loan We're pleased with Don Clegg's leadership of the sales team. He has summoned the team's bench strength to step up to new challenges. Is further upgraded the team to bring enhanced professionalism and stronger strategic selling capability to bear in our efforts to win and serve our target customers. Don is emphasizing a stronger team approach utilizing the company's technical experts to improve customer's experience. The sales team is retooled and ready to compete.
And will help us fully achieve Supermicro3.0 objectives. In the SEC filings process, As we stated in our press release and as Perry articulated during the introduction, we continue to expand great effort to complete our financial statements, and work with our independent auditor to complete the fiscal year 2017 audit process and ultimately file our delinquent reports with the SEC. As previously indicated, we'll now have a Q And A session where sell side analysts will be permitted to ask questions. I'd like to remind you that your questions should be directed to the business update that we just provided. We will not answer any further questions relating to the audit committee investigation or the delayed filing of our 10 K.
Ladies and gentlemen, our question and answer We will take your questions in the order that you signal. And if you have found that your question has been asked and answered before you could ask it or would like to remove yourself from the queue,
please
make sure that your mute function is disengaged so that your signal can reach your equipment. Finally, we ask that you limit yourself to one question and one follow-up until all in the queue have had an opportunity to ask We will then come back Our first question today will come from Mehdi Hosseini with Susquehanna Financial Group.
Thanks. This is David Ryzhik for Mehdi Hosseini. Charles, regarding the enterprise, it seemed pretty strong, 244% growth. We can you offer any more metrics around maybe customer growth, whether that is solely in North America or globally? Just any other insights would be, would be helpful.
And that follow-up.
Yeah. In enterprise, we continue to grow very strongly. Primarily, I'll start from USA, because of, on-site service. And kind of, management solar already now. And we also start to expand to Asia and Europe.
So it's kind of global, available now. And we anticipate strong growth to continue.
Great. Thanks. And just on gross margins, would you be able to comment on, component conditions? I guess your your your estimate for gross margins, suggests maybe flattish, you know, you see revenue ticked down seasonally, but you know, year over year, you grew revenue very strong and you noted that China was a little weak, in the quarter. So just wondering what what hampered your gross margins from kind of growing from expanding more given the volume?
As you may know, do I, I mean, DRAM and, SSD price is getting, stabilized, right, especially in the, SSD price is slightly dropping now. So this will have our, are looking for a gross margin as it will be. And plus our, economical scale continue to grow. That way I have a 2.
I think one other little, unique item for the quarters that we took a little bit more in provision as well.
Okay. And what percent of systems were new processors? In the March quarter?
Yeah. So we're talking about Skylake. So it looks as if as a as a percentage of revenue for Skylight this quarter was roughly about 18%.
So the new platform has stabilized now in March year, yes.
Okay. I think it was 12% a few quarters ago. Any any reason why it's not accelerating further, or you guys just think that the detail is gonna be longer or when do we reach that 30, 40, 50 percent?
I guess, still maybe two quarters away. Okay, Nava, we'll be the same.
Thank
you. Our next question will come from Aaron Makers with Wells
Fargo. Yeah. Thank you. Can you hear me okay?
Yeah, Aaron.
Okay. Yes, sorry I'm in an airport. So I want to go back to the component side of the equation. As you look out over the next couple of quarters. What you mentioned that that SSD pricing starting to come down.
I think your word was slightly how are you seeing component pricing and availability play out, not just out over the next quarter or so, but looking into the second half of the year, there's been some some questions around whether or not, particularly Dan Flash and even DRAM would tighten back up into the into the second half.
Yeah. As you may know, right? I mean, DRAM continue to have a certain, short, shortage. But it's a much better condition than before, while, SAP, kind of a a pricing is slightly broken now. So that means a surprise more than enough.
However, we did see a global, other component shortage. Including, PCB, or material, and all other small components like the TTRO. So, it it was surprising. But it looks like that those are small components shortage may continue for a minute or 2 to go.
Okay. Okay. Perfect. And and and and can you quantify how much of an impact that has had on your ability to generate revenue? I mean, how much more revenue would you have generated weren't for some of the component shortages?
I would like to say that some more components, global shortage. Have impact our revenue in the last quarter, I mean, even March quarter. But looking forward, we continue to enhance our relationship and our able to, create a better relationship and, safety inventory. So hopefully that impact won't be too big.
Okay. And then kind of a
couple other quick questions if I can. You know, it looks like your cash balance continues to kind of come down here a little bit you're definitely doing some things on the debt side. So I'm curious of how we should think about it looks like utilizing your revolver with still having about $140,000,000 of cash. So how am I thinking about, I guess, why use the revolver? How do I think about the capital management side, for the company?
Yeah. So under the new revolver, as I mentioned, we, you know, upon getting funding, we actually drew down less than what our existing balances were. And what I was trying to signal to you as we go forward is that our cash balances will probably be, smaller than they had been historically. And we're going to be borrowing, just in time, to a greater extent so that we can meet the interest cost impact of the rate while we're in this period of where the rate is more expensive.
Okay. And then real final go ahead.
Yeah. At the same time, because our peers have been very stable, a stable growing. So I personally do not feel catch free will be a pleasure. So we see the new wrong system and systems that are here that cash flows should not be, issue. Okay.
Perfect. And it looks like your cash balance was more or less flat sequentially. So I apologize for that misstatement. The the the the real final thing for me would be, you know, just remind us again as you kinda, you know, build out, it sounded like 2,000,000 square feet of manufacturing capacity, how we should think about the company's current capacity situation relative to your systems business. How how you know, just remind us again, your total capacity in terms of what you can produce on a systems level.
Yeah. As you know, we have been a faster growing company from a subsystem to computer system to complete a solution. And now complete the ROIC and kind of computer data center solution. So we have been growing very aggressively. And that's why economical scale have been always a challenge.
And this thing is in all our area I just mentioned, including product solution and direct scale, now our economic scale, have been much better than before. And situation can be only better. So that's why those capacity we put a tail, we have to have for our future goals. So, Aaron, as you know, prior to this additional, building, which we talked about today on the call, we had a capacity, in the neighborhood of $3,500,000,000. And that fit nicely with, you know, the run rate that we're on.
With the additional capacity, you know, we're above that now more in the range of $4,000,000,000 to $5,000,000,000.
Very helpful. Thank you.
Thank you. We'll take a follow-up from Mehdi Hosseini.
Hi. Thanks. This is David again. For storage, would you be able to provide a little insight, into next gen versus legacy, what the growth rates were?
Yes. So are you talking about period over period?
Year over year.
Year over year. Yes. So, as it relates to a year over year in terms of IBC and non IDC. Yeah. So, I think Quarter over quarter year over year.
So non IDC, I think enterprise Charles highlighted was 244%. And enterprise was like about 54%.
Sorry. I I, I was I I was referring to the storage business just within storage. There's legacy and then there's
Next chance. I'm sorry.
Yeah. I get overall, it's about 15%. And,
Yeah, I'm sorry. So, traditional up about 29% next gen about 2.
Okay. Any, Are you seeing anything in the market for next gen, for the for the slower growth, hyperconverged, all flash? You know, anything that would account for some of the some some of the softness?
I guess in a overall talking about next few quarter or next few years, we will continue to have a strong growth on both sides, traditional storage and next gen. Last quarter, specifically 2% only for next gen, I guess, is just a coincidence. Mhmm. The overall work is a continuous and strong growth for both traditional and next gen.
Okay. And just one for, Kevin, Just if you can provide an update on your cash cycle efforts, any measures that you've taken already and when we can expect improvements to the cash conversion cycle?
Yeah. Naturally, you know, that's gonna take some period of time. As I mentioned earlier, we worked on the collection side, being, more specific with customers in terms of expecting payments on time, and being a little bit tighter in terms of, you know, not shipping until we saw customers become current, you know, just basic blocking and tackling. On the payment side, we work to tighten up, when we pay customers. And then as I said earlier, we're being more precise about when we bring, in inventory.
So to the extent where maybe we brought in stock for the whole month and the beginning of the month, I'm exercising organization to be a little bit more just in time as relates to when we bring in inventory. That's going to take some time to, bear fruit. So stay tuned. Yeah.
I mean, as you know, we are quickly growing, in, enterprise. And enterprise, you are divided to those solutions. That's why that cash cycle time a little bit longer. However, we continue to work with our customer for, kind of, better payment terms. And we got a very good support for a matter some enterprise customers, basically.
And we've had some suppliers help us out too with, with, terms being a little bit longer.
Yeah. So overall cash flow should be, should be safe.
Great. Thanks so much. Appreciate it.
Thank you. Our next question will come from Michael Sigar with Oden Capital.
Afternoon. Thanks for taking my question. Hey, are you guys seeing an increase in RFPs for designs and incorporate GPUs or ARM based servers? And And if so, where would you expect those segments to break out in
the future in a percent of
revenue basis? And would they be accretive to your curve programs, or would they be replacement or a substitution of, like, the traditional builds that you're doing? And what would the gross margins profile look like, on those as well? Thanks.
Big question. So when it comes to GPU, that's that's included in our high performance computing, or in AI. So we just shared that, year over year, that grew 102%. So That's within our current tracking. So you'd want to keep your eye on that.
Is is our ARM based servers, you know, part of your build cycle right now? Or
We we do have ARM based.
No. No. No. I'm sorry. Yeah.
Alright. Great. Thanks.
Thank you. Our next question will come from Neil Chokshi with Maxim. And your line is open. Please go ahead. Hello?
Your line is open. On the line?
Yeah. Sorry. So I'm sorry. And I've been skipping between calls, so this may have been asked before. But with your, regulations on a debt raise.
And I'm wondering what kind of number 1, were there other banks that ask actually participate in the debt race, or do they just simply indicate interest in Bank of America did, is responsible for all of the debt to increase that capacity that you have right now.
Nehal, I'm going to answer that question. The syndicate that we had actually was, as we pointed out, was broad. We increased the number of new our relationship with a number of new banks who have joined. And in addition to that, I will also tell you that The commitments were oversubscribed, and we had to cut back. So it worked out very well for us, not only an increased facility size, but so new banking relationships for the company.
Okay, great. And so, what kind of due diligence were they able to do? Did they have a full access to the investigation that was done? And then the follow-up question is that I just want early on what does testing mean? I'm not too sure what that means.
I'll answer the first half of that and I'll let Kevin answer the second half of that question. So, with
regard to
the the bank group, you know, as is typical, they are under NDA type of arrangements with us. And so we could provide a bit more information to them, than we could to, to investors who are not under an NDA. So yes, a little bit more information was provided I think in addition
to that, we held weekly meetings with them where we showed our cash flows and they saw how we have a new team managed cash and we were impressed by that. So I think they gained comfort over the fact that our cash flow continued to be strong and came to their conclusion. As it relates to the additional testing, if you, I'll remind you that we're not going to be answering questions about that, but it's just the continuation of the process to get our arms around, all of the issues that occurred during that time frame. So as we said, we believe that we think we're nearing completion there. And we're working in parallel with other teams to be able to get our filings done as expeditiously as possible and we'll leave it at that.
Thank you very much.
Thank you. Our next question will come from John Lopez with Vertical Group. And John, your line is open. Please go ahead.
Hi. I apologize. Thank you.
I have a couple of quick ones, if
you guys don't mind. The first one, the data center, Internet data center vertical, Looks like it was pretty healthy. I mean, I know disclosures have gone a little bit all over the place, but it looks like it was a complete double digit sequentially end up, as you guys said, 58 or so percent year on year. Can you just talk a bit about what's driving that? And in particular, are you seeing any resurgence in what used to be a reasonably customer for you after they took a break for a while there?
Yes, very good question. Yeah, our old customer continue to adopt our own product. And, we also continue to win a more new customer. And the key reason I believe is because our our green computing followed by resource saving. So that we can be seen and this is the saving solution.
It's not just the same customers, uh-uh, energy cost, in each of hardware, acquisition costs, but also, I mean, Megadell, people in India. And, also kind of, our mother, for the police So all are positive factors. And so we would believe we are continuing very strongly in those areas.
Thanks. So it sounds like, I'm sorry to rephrase what you said, but it sounds like that's a reasonably diversified kind of resurgence in that segment. Is that a fair way to characterize it?
Yeah. Again, most of the kind of our multiple node, right, twin and a twin pro and picked in product line, including our Michael Rae and she will operate, because a lower cost and better performance, energy saving. So not for advantage. That that's why the market continue to like our solution and more and more new customer that will engage with us.
Got you. Very helpful.
Continued growth resurgence as you described the customer coming back. And then we've had a sprinkling of new customers too.
Got you. Thank you. That's really helpful.
Indeed, there are major impact negative impact in last few quarter in that shortage. Kind of memory shortage, FSP shortage is followed by a small component shortage. So we have been suffering a lot before, and that's where say our fourth quarter for short is the issue. And this situation is getting better.
That actually ends up nicely to my second question, which is, I know you guys aren't going to give us explicit guidance, but just conceptually, Given that we are seeing a little bit of leveling off and some easing in memory, which is reasonably large for you as a bill of materials. And I understand some of of the problems in other places like capacitors and things like that, but those, I think, are reasonably small, certainly relative to memory. So I guess the thrust of my question is, as the year progresses, Is it reasonable for us to see the gross margin lift from this kind of flattish range you've been in for the last three, four quarters, or are the headwinds in those other buckets? Enough to prevent that?
In some of the shortage and component repricing, I believe looking for next few quarters, we'll be in a positive effect.
Yes, I think it will be positive, but modestly, I think so I expect that we'll be operating in this gross margin range for now, not anything appreciably large, but certainly now that I've been on the job for roughly about 90 days. And after we get job 1 done in terms of getting our SEC filings done, we'll be able to devote more attention to developing programs internally to improve gross margin over time. And, over time, we'll look forward to sharing progress with you in that regard.
Got it. Thanks. 2 more real quick ones. I apologize. If I look at the OpEx, it's kind of implied in where things are shaking out.
It looks like OpEx has been pretty flattish, non GAAP in about $68.69 in that ballpark for the couple of quarters, excuse me, is that an area you would expect to hold in this same range, or do you think is some of the facility spending whatnot layers in that we would expect OpEx to maybe pick up a little bit?
Well, facility spending is mostly going to be within, the manufacturing arena. So it will be, you know, hitting gross profit as we turn it on. But it will be at a modest pace In terms of OpEx, you know, we're continuing to invest in higher to scale. So it will it will have some modest, uplift as we go forward.
Okay. Got you. And then very last one, just coming back to the cash real quick. I just want to make sure I understand dynamics, your gross cash was noted. It was up like a $1,000,000, but you drew like an incremental 9, excuse me, off the facilities.
Roughly. My question is, was that timing related to any extent, like, as you're getting rid of the old facility and bringing the new facility on? Or if not, kind of, what drove that draw in the revolver?
Yeah. It was just needed to, for working capital and specifically to to buy inventories. Recognize that we closed a new facility on in April, which is after March. So there's no history there. That's why I wanted to preview for you that, as compared to our current cash balances, don't be surprised in June that our cash balances are going to
come down because of the
fact that we're going to be much more prudent in terms of borrowing and managing closer.
I got you. Understood. So should see both light on us to be down in other words in June?
Yeah. Yeah.
Okay. Really helpful. Thanks very much.
Thank you. And it appears at this time, we have no further questions. I'd like to turn the conference over back over to Mr. Leing for any additional or closing comments.
Thank you for joining us today and we're looking forward to finish fiscal year 2018. On a strong note. Thank you, everyone. Have a great day.
Thank you. And again, ladies and gentlemen, that does conclude the Super Micro Third Quarter Fiscal 20 business update conference call. We do appreciate your participation. You may disconnect at this time.