Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Super Micro Computer, Inc. fiscal third quarter 2022 results conference call. 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 at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. It's now my pleasure to turn the call over to Nicole Noutsios, Investor Relations. Please go ahead.
Good afternoon, and thank you for attending Super Micro's call to discuss financial results for the third quarter, which ended March 31, 2022. With me today are Charles Liang, Founder, Chairman, and Chief Executive Officer, Patrick Wang, President, East Coast and SVP, Strategy and Corporate Development, and David Weigand, Chief Financial Officer. By now you should have received a copy of the news release from the company that was distributed at the close of regular trading and is available on the company's website. As a reminder, during today's call the company will refer to a presentation that's available to participants on the IR section of the company's website under Events and Presentations tab. We have also published management scripted commentary on our website.
Please note that some of the information here during our discussion today will consist of forward-looking statements, including without limitation, those regarding revenue growth, margins, operating expenses, other income and expenses, taxes, capital allocation and future business outlook, including guidance for the fourth quarter fiscal year 2022 and full year 2022. Our long-term revenue goals and the potential impact of COVID-19 on the company's business results of operations. There are a number of risk factors that can cause Super Micro'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. Most recent 10-K filings for fiscal 2021 and 10-Q filings made thereafter and our other SEC filings. All these documents are available on the IR section of Super Micro's website. We assume no obligation to update any forward-looking statements.
Most of today's presentation refers to non-GAAP financial results and business outlook. For an explanation of our non-GAAP financial measures, please refer to the company presentation or to our press release published earlier today. In addition, a reconciliation of GAAP to non-GAAP results is contained in today's press release and supplemental information attached to today's presentation. At the end of today's prepared remarks, we'll have a Q&A session for sell-side analysts to ask questions. I will now turn the call over to Charles. Charles.
Thank you, Nicole, and good afternoon, everyone. Today, I am pleased to announce our quarterly revenue of $1.36 billion for fiscal year Q3 2022, which was 51% YoY growth and 16% quarter-over-quarter growth sequentially. These results are well above our guidance given three months ago and above our recently updated range given two weeks ago. The continued five quarters of strong earnings indicate our Total IT Solution growth strategy is working well, and we are only at the very beginning of the breakout. Now let's look at some of the key highlights from the quarter. First, again, our fiscal third quarter net revenue totaled $1.36 billion, up 51% YoY and up 16% quarter-over-quarter. We are above our guidance range of $1.1-$1.2 billion.
It's Super Micro's fifth consecutive quarter of faster revenue progression, and we continue to execute our strong growth trajectory at a three to four times higher than the overall industry's growth rate. Our fiscal third quarter non-GAAP earnings per share was more than triple year-over-year and was $1.55 compared to $0.50 a year ago. This 210% growth was well above the higher end of our guidance range of $0.70-$0.90, demonstrating strong operating leverages and the customers accepting the value of our total IT solutions. Growth in our major geographies was well balanced, and our recent Taiwan expansion has contributed to our better operating margin and meeting our growing customer demands.
Our results in the past five quarters are showing that we are ahead of our $10 billion annual revenue target that was shared March last year. Our profitability has been improving greatly as well since then. Based on our current demands and capacity, we are forecasting at least $1.45 billion revenue for the coming June quarter to end the fiscal 2022 on a strong note at about $5 billion yearly revenue. Looking further ahead, I believe we will continue to have a strong fiscal year 2023 in the range of $6 billion-$7 billion annually, and expect to reach our $10 billion yearly revenue at least one year sooner than the original plan we shared back in March 2021.
The growth that accelerated our revenue came from our success with our Total IT Solution in AI, enterprise, cloud, edge, telco, and customers from many other verticals. Riding on the strengths and the foundation of Supermicro's optimal building block architecture, our Total IT solutions allow customers to quickly deploy without going through the complications of design, validation, sourcing, and integration. This strategy also positions Supermicro very profitably despite the ongoing supply chain challenge compared to our competition. With our building blocks and the fast-growing economies of scale, we can create and deliver workload optimized solution to customer with time to market advantage, quality, performance, cost, and TCO advantages. To grow our solutions and customer base faster and more efficiently, we are on track with our command center-based auto configurator, and B2B, B2C automation platforms.
Many customers have tried and like this intelligent database and web-based service for many quarters. This represents our next opportunity to scale up and scale out our application optimal solution to many more customer, 24/7 with no downtime and no manpower bandwidth limitation. The B2B and B2C automation program will be greatly launched nationwide in this month. Indeed, next week, I believe. It will dramatically improve our engineering, operation, sales, and service effectiveness and customer satisfaction while accelerating our market share gains. To enrich our Total IT Solution product portfolio, we have doubled our software engineering resource in the past few years to build the new features to power our enterprise, data center, and OEM customers.
Our SuperCloud Composer and other software products manage GPU, compute, storage, and networking building block at a cloud scale, including rich analytics, so data center operators can make critical data-driven decisions to improve workload efficiently. In middle and long term, we see our investment in full data center management software stack will enable future Infrastructure as a Service and Monitoring as a Service functionality, and that will further enhance our Total IT Solution capability and value. Our recent Taiwan and U.S. expansion are focusing on delivering L10, L11, and L12 rack scale Total IT Solutions in volume, capable of shipping thousands of racks per month directly from Super micro campuses. Designed with green computing in mind, these energy-saving rack scale solutions leverage our latest free air cooling and liquid cooling technologies.
More and more of our customers are able to run their data center with PUE close to 1.06 or even better. Customers can expect lower TCO by saving energy cost while increased performance per megawatt in their facility substantially. In some other cases, our customers increase computing capacity up to 50% with the same energy budget. Many Fortune list customers are quite happy to receive higher quality plug and play ready products. They are fully optimized, integrated, and validated by Super micro. Our R&D organizations are happy and hard at work to expand our new technology product lines. With the upcoming new Intel Sapphire Rapids and AMD Genoa processors, we again are ready to bring time to market advantages to our customers. We are pleased to see a strong trend in terms of customer seeding and early deployment requests.
We are especially partnering closely with NVIDIA and other leading technology partners in the emerging metaverse and Omniverse ecosystems, and double our GPU product line to support these 3D and immersive workloads. With all of the new technologies, including PCIe Gen 5, CXL, DDR5, the new 350-watt CPU and 700-watt GPU, our portfolio of new platforms for rack-scale Total IT Solution will continue to evolve and become a key growth driver for our coming quarters and years. In closing, our 51% year-over-year revenue growth and $1.55 quarterly EPS prove that our Total IT Solution strategy has been gaining customers' preference and trust. In this growing trend, we will continue to enhance our Total IT Solutions capability and value, while continuing to lower our operating cost by leveraging our Taiwan production capacity.
With our strong technical foundation, dedicated employees, server building block solutions, and application optimized green computing products, we are quickly and consistently winning new customers and their satisfaction now. More importantly, we invest in command center-based B2B and B2C platforms will help us to much efficiently increase our customer base and market share. I and my teams will continue to execute our growth strategies and accelerating the timeline to reach $10 billion revenue target in short term, and start to plan and execute our new $20 billion midterm goal as well. I will now pass the call to David Weigand, our CFO, to provide additional detail on the quarter. David?
Thank you, Charles. I'm pleased to report solid fiscal third quarter revenue of $1.36 billion, 51% YoY increase, and 16% QoQ increase. Our revenue exceeded our initial guidance range of $1.1-$1.2 billion and our recently updated range of $1.3-$1.35 billion. This was our fourth consecutive quarter of revenues exceeding $1 billion. Year-to-date revenue through our fiscal third quarter increased 43% year-over-year. Our growth initiatives with total IT solutions targeting fast-growing markets and customers with accelerated GPU and AI workloads, software-defined storage and networking, public and hybrid cloud, and edge IoT platforms are gaining momentum. These new growth drivers complement our traditional strength with enterprise, channel, and OEM customers, leading to accelerating revenue growth, expanding margins, and operating leverage.
Revenues for the trailing four quarters, that's Q4 2021 through Q3 of fiscal year 2022, totaled $4.63 billion. In the third fiscal quarter, Super Micro recorded balanced revenues across all three of our market verticals, demonstrating the resilient nature of our diversified end markets. We achieved $846 million in organic enterprise and channel and AI ML revenues, representing 62% of Q3 revenues versus 64% last quarter. It was up 44% year-over-year and 12% quarter-over-quarter, with growth driven both by our growing list of large enterprise customers and new product offerings.
Our OEM appliance and large data center segment achieved $423 million in revenues, representing 31% of Q3 revenues versus 23% last quarter, which was up 54% year-over-year and up 54% quarter-over-quarter, with strong growth driven by large, new, and existing data center customers and OEM appliance customers. Our 5G telco, edge, and IoT segment achieved $86 million in revenues, representing 7% of Q3 revenues versus 12% last quarter. This was up 159% year-over-year and down 39% quarter-over-quarter. This emerging segment represents a fast long-term opportunity for us, and our design win momentum and backlog continues to grow, but short-term quarter-to-quarter results can fluctuate depending on the timing of new customer adoptions and qualification cycles.
Systems comprised 85% of total revenue, and subsystems and accessories represented 15% of Q3 revenues. On a YoY basis, the volume of systems and nodes shipped, as well as system node ASPs increased. On a QoQ basis, the volume of systems shipped and system node ASPs increased, while nodes shipped were lower due to product mix. We had a balanced distribution of revenues across geographies, with the U.S. representing 56% of revenue, Asia, including Japan, 23%, and Europe, 15%, while the rest of the world was 6%. On a year-over-year basis, U.S. revenues increased 53%. Asia, including Japan, increased 50%. Europe increased 27%, and the rest of the world increased 184%. On a sequential basis, U.S. revenues increased 19%. Asia, including Japan, increased 9%.
Europe decreased 5%, and the rest of the world increased 124%. The Q3 gross margin was 15.6%, which was up 160 basis points quarter-over-quarter from Q2 and up 180 basis points year-on-year due to price discipline, leverage from higher factory utilization and operating efficiencies, and a continually improving product customer mix. The quarter-on-quarter and year-on-year increase in gross margins was achieved despite continued elevated freight and supply chain costs. Turning to operating expenses, Q3 OpEx on a GAAP basis increased 7% quarter-over-quarter and 14% year-on-year to $121 million. On a non-GAAP basis, operating expenses increased 6% quarter-over-quarter and increased 15% year-on-year to $110 million.
Our non-GAAP operating margin increased significantly to 7.5% for the quarter versus 5.2% last quarter and 3.2% a year ago, demonstrating both improvements in gross margins and operating leverage. The year-on-year and quarter-on-quarter increases on a GAAP and non-GAAP basis were driven by higher headcount and personnel costs and lower research and development NRE credits. Other income and expense was $3.1 million in income, consisting of $4.6 million in foreign exchange gains, offset by interest expense of $1.5 million as compared to a $1.8 million expense last quarter. This quarter, the tax provision was $16.2 million on a GAAP basis and $19.6 million on a non-GAAP basis. Our non-GAAP tax rate was 18.7% for the quarter.
Our tax rate for GAAP and non-GAAP purposes increased again this quarter, primarily due to a significant increase in pre-tax income in fiscal 2022. Lastly, our share of income from our JV was $0.3 million this quarter as compared to $0.2 million last quarter. The Q3 non-GAAP diluted earnings per share totaled $1.55, which exceeded the high end of the original guidance range of $0.70-$0.90 on our recently updated Q3 range of $1.40-$1.50. The increases to EPS were due to a combination of higher revenues, manufacturing efficiency, price discipline, product and customer mix, and operating leverage.
Cash flow used in operations for Q3 was $228 million, compared to cash flow used in operations of $53 million in Q2 as accounts receivable and inventories grew due to increasing demand from our customers and to mitigate the continued impact of supply chain disruptions. Including CapEx of $11 million, Q3 negative free cash flow totals $239 million. Key uses of cash during the quarter included increases to inventory and accounts receivable and a reduction in customer prepayments. This was offset by cash provided from increased accounts payable and short-term debt. We did not repurchase any shares in the quarter. Our closing balance sheet cash position was $247 million, while bank debt was $547 million as we drew down on our bank lines of credit to increase inventory levels as we ramped production of new platforms globally.
Turning to the balance sheet and working capital metrics compared to last quarter, our Q3 cash conversion cycle was unchanged at 98 days relative to Q2 and above our target range of 85-90 days due to higher inventories. Days of inventory was 117, representing a slight decrease of 1 day versus the prior quarter. Day sales outstanding was up by two days quarter on quarter to 39 days, while days payable outstanding was up by one day to 58 days. Now turning to the outlook for our business. We note that our Q4 June quarter is typically seasonally strong, and we are enthusiastic about several new customers and innovative new leading-edge Total IT Solutions ramping in multiple end markets. We are carefully watching the global macroeconomic situation and impacts to the supply chain from continuing COVID-19 related disruptions.
For the fourth quarter of fiscal 2022, ending June 30, 2022, we expect net sales in the range of $1.4 billion-$1.48 billion, GAAP diluted net income per share of $1.45-$1.64, and non-GAAP diluted net income per share of $1.51-$1.69. We expect gross margins to be similar or slightly up from Q3 levels. GAAP operating expenses are expected to be approximately $121 million and include $8 million in stock-based compensation and $1 million in other expenses not included in non-GAAP operating expenses. We expect other income and expense, including interest expense, to be a net expense of approximately $2 million and expect a nominal contribution from our JV.
non-GAAP operating expenses are forecasted to be up quarter-over-quarter from continued investment in R&D and higher personnel costs. The company's projections for GAAP and non-GAAP diluted net income per common share assume a GAAP tax rate of 17.4%, a non-GAAP tax rate of 19.4% and a fully diluted share count of 54.3 million for GAAP and 55.79 million shares for non-GAAP. For the fiscal year ending June 30, 2022, we are raising our revenue guidance range from $4.2 billion-$4.6 billion to a new range of $4.96 billion-$5.04 billion. Raising our GAAP diluted net income per share outlook from at least $2.77 to a range of $4.16-$4.35.
Our non-GAAP diluted net income per share from at least $3.20 to a range of $4.53-$4.71. The company's projections for GAAP annual net income assumes a tax rate of sixteen point five percent and a rate of eighteen point seven for non-GAAP net income. For fiscal year 2022, we are assuming a fully diluted share count of 53.6 million shares for GAAP and 55.1 million shares for non-GAAP. The outlook for fiscal year 2022 fully diluted GAAP earnings per share includes approximately $39 million in expected stock-based compensation and other expenses, net of tax effects that are excluded from non-GAAP diluted net income per common share. Finally, we expect CapEx for the fiscal fourth quarter of 2022 to be in the range of $10-$15 million. Nicole, we're ready for Q&A.
Operator, can you give us the line for questions?
At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Ananda Baruah with Loop Capital, y our line is open.
Hey, good afternoon, guys. Thanks for taking the questions. Yeah, congrats on the great execution. First half of this calendar year sounds like it was good follow-through here. Too, if I could, you know, Charles and David, what would you guys, you know, first time we've gotten a chance to talk to you guys since you pre-announced. What would you guys say you would consider to have been incremental, you know, versus 90 days ago, that's leading to such strong revenue execution for both the March quarter and now the June quarter? Then I have a follow-up. Thanks a lot.
Yeah. Do you know why is because of supply chain. Because there are always some invisible factor. That's why, I mean, in March quarter, we tried to be conservative. It turned out we have many customer really like our total IT solution, and we ship a lot of completed rack. Indeed, our rack scale PnP plug and play rack solution grew a lot YoY. Roughly this year compare with last year, our rack scale product grew about 5-6x, 5-6 times growth. This momentum, I believe, will continue to be very strong in the next 12 months. We expect another 3x-5x rack scale PnP product line growth.
That's why, I mean, the growth have been a little bit surprise us.
That's great context, Charles. Then, Charles, I'm just gonna ask you the sort of one of the next probably more natural follow-ups, since you just remarked that you expect another 3x to 5x. Is the 17%-23% long-term growth rate still the appropriate growth rate? You know, or should it really be something stronger than that as you look out the next couple of years? Thanks.
Next couple of years can be very strong. Again, depends on global supply chain situation. As David just mentioned, COVID-19 still challenging us and also macroeconomic condition. If things is not much worse, I believe our growth rate, year-over-year growth rate will continue to grow.
Okay, thanks. Thanks a lot. I appreciate it. Thanks so much.
Thank you.
This is Patrick. I'm just gonna jump in here. You know, you also note that Charles also talked about his expectations on fiscal 2023 and the implied growth rate there. That's another data point for you.
Next year, I mean, fiscal 2023, at this moment, I believe, $6 billion-$7 billion will be a relatively a very conservative estimation.
Your next question comes from the line of Mehdi Hosseini with SIG, y our line is open.
Yes. Thanks for taking my question. Actually, I have a couple of follow-ups. Charles, as you look into next fiscal year, how do you see seasonal trend impacting your September quarter? I ask that because you're doing really well, especially with diversification of revenue. I think it would really help us how we should think about seasonal factor and how you would set up the company for $6 billion-$7 billion of revenue run rate in fiscal year 2023. I have a follow-up.
Thank you. Very good question. Indeed, traditionally, September will be our slow season, but this time can be quite different because we have a very strong back order now and, again, lots of customer, high-profile customer really like our, rack scale, plug and play solution. We are preparing a big growth in that segment. I believe this year, September, we will have a great quarter. It can be even more than June quarter.
Okay. Thanks for that color. Question for David. You've had three consecutive quarter of a cash burn, and given the strengths and your backlog, should I assume that you're gonna burn cash again in the June quarter?
Yeah, Mehdi, I think that as our demand increases, as we have to add accounts receivable and inventory, you know, we will continue to use cash. But you know, we're using it for customers and for inventory. We consider that to be really strong uses.
Great. Thank you.
Your next question comes from the line of Nehal Chokshi with Northland Capital Markets. Your line is open.
Yeah. Thank you, and congrats on the awesome results and amazing guidance. Would you say that the component availability situation has improved at all quarter to date or during the March quarter relative to the December quarter?
You know, few months ago, we suppose the situation will gradually improve. Unfortunately, there are some parts, the availability continue to be very tight. That's why we still suffering a supply chain availability problem. Some components, yes, have been dramatically improved, but there are some other components still in a serious shortage. We try to improve that situation for sure.
Okay. You know, clearly, guidance is indicating that there was no pull in the demand, especially in the context of how Intel guided. Thus, the share gains that you guys are putting up appear to be very sustainable. Still, I'd like to hear your pushback that Super Micro's lower lead times and better management of these constrained components are not leading to these massive share gains that you're seeing at this point in time.
Indeed, because rack scale, I mean, a plug and play solution, we plan in advance, work with customer, understand their future demand, and we plan in advance, pull in all the different components in advance. We are able to ship the computer rack to customer kind of relatively efficient, more timely efficient than others. This, I believe, is one of the reasons why we are able to grow. We will continue to extend the customer base to offer them rack scale solution. Indeed, we have prepared to double our rack scale capacity in the coming quarter, indeed in June quarter. We feel pretty strong that we will be able to continue to help customer to help their supply chain challenge.
Okay, great. Cash consumption was actually in line with what I had expected, and I presume that it was also in line with what you guys had expected, given the revenue outperformance, given the cash conversion cycle was flattish Q to Q. Yeah, is that correct? Was it in line with what you had expected given the revenue outperformance?
No, it was Nehal. We also have to look out to Q4 and beyond in planning our inventory levels. It is going in line. I mean, the fact that we have you know the high growth rate, 51% year-over-year is you know is definitely going to continue to challenge working capital.
Yep. As such, there's been no share buybacks, right? Because all the cash is needed to finance the growth at this point in time, the massive growth that you're seeing.
That's exactly. Yeah, exactly right.
Okay. You know, given that this, you know, cash consumption is tracking what you would expect given the revenue growth that you're putting up, does this give you incremental confidence to utilize debt to make capital returns, track your non-GAAP earnings, as opposed to waiting for a slowdown in the business before you can, you know, really start a share repurchase program in earnest?
Well, you know, we also have to watch the overall environment. We're trying to strike a balance.
Yeah, we are talking about a possibility. Given the macroeconomic, still have a lot of unknown factors. That's why we try to be very careful.
All right. Very good. Congratulations.
Thank you.
Your next question comes from the line of Jonathan Tanwanteng with CJS Securities, y our line is open.
Hi. Good afternoon, guys. Thank you for taking my question, and congrats on, again, on a really great quarter and the outlook. First question is, well, it's great to hear that your component supply is getting better. I was wondering how much of a corresponding drop you're seeing in component prices if that's the case. Should we think of improvements in the gross margins going forward as well, maybe towards the high end of the target range?
Indeed, it's hard to say because of the COVID-19 situation in Asia, especially Taiwan and Mainland China, is kind of very serious. I believe It's hard to say. Although we are doing our best and believe situation will be getting improved, but exactly how fast, at this moment, not much idea. David, how about you?
Okay.
Yeah. Yeah, the second part of your question, John, we did experience, you know, some gross margin expansion from higher efficiency, which means that we actually had higher throughput our factories at a lower per unit cost. You know, we do look forward to further margin expansion.
Indeed, one factor we did not share before, but I'd like to take this chance to share with everyone. With our continuing growth in rack-scale plug-and-play rack-scale product, indeed, with our current facility in USA campus and Taiwan campus, when business continue to grow smoothly, the current capacity we can support our revenue up to $12 billion. Our capacity is pretty enough. Looking forward in next many quarter, when our volume continue to grow, our gross margin and net profit will continue to gain advantage from the economies of scale. I mean.
Got it. That's great color. Thank you. It's really great to see that capacity. My second question is regarding cash flow, and some people have touched on this a little bit. Is it in your interest to raise permanent financing to support the growth, or you just continue to use the revolver? How should we think about your ability to, you know, just fund the growth that you're seeing?
We are studying the possibility. Kind of depends on the macroeconomic condition. If the macroeconomic condition continue to be healthy, then we may try to be more aggressively leverage the money from the bank. Otherwise, we may continue to be conservative.
Okay, understood. Congrats again.
Again, if you would like to ask a question, press star followed by the number one on your telephone keypad. Your next question is from the line of Ananda Baruah with Loop Capital, y our line is open.
Hey. Thanks, guys, for taking the follow-up. I guess sort of piggybacking, Charles, off of one of the last questions, I guess how much of, you know, sort of the revenue upside for the March and June quarters is from new demand, you know, that you may have been conservative about, relative to how much do you think was, you know, demand that you had been getting indications about, but that supply chain became available for? And really, I guess what I'm trying to get a sense of is, you know, how much of this is supply chain related, and is the follow-through, you know, dependent to an extent, on new supply chain continuing to get relief? I'd appreciate that. Thanks.
Yeah, very good question. Indeed, our demand continue growing become stronger and stronger. The really big limitation now indeed is supply chain to us. That's why every day we are spending time to figure out how to improve the supply chain. That's the situation. The demand is strong and keeping growing because of our you know better technology total solution and getting very strong software support.
That's really helpful. Just a quick follow-up there. I've been jumping between calls a little bit this evening, so I apologize if this has already been answered or spoken to. You in the prepared remarks mentioned, you know, the Total IT Solution being a catalyst for demand in general, and I think actually to completed racks, maybe even specifically in the prepared remarks. You know, any context you can give us about, you know, what you're seeing, I guess, like engagement context, I suppose, with your customers, just having the Total IT Solution, you know, be a real catalyst to revenue right now? 'Cause it looks like it may be.
I guess there's the implication that it's showing up in an increasingly bigger way first half of this calendar year. Thanks a lot.
Yeah, indeed, the scale supply chain. David, do you want to add something or Patrick? The supply chain has been bothering us for many quarters, as you know, right? At this moment, our current customer, existing customer and some new customer indeed all have a strong demand. We just had to work out. David, maybe you can add something or Patrick.
Yeah. Now that we're seeing, you know, really a lot of high demand in the AI and ML area. Those workloads that are being addressed there and the solutions that we're providing are being well-received by our customers. You know, the engagements that we're in, that's the driver that we're seeing. AI has led our growth over the last, you know three to four quarters.
Yeah. This is Patrick. I'll just jump in here. You know, the supply chain topic, you know, we've talked about quite a bit. It's not unique to us. You know, I think we do have to give a kudos and shout-outs to the operations teams here at Super Micro, right? Because without their hard work, we're not able to get the supplies we need. You know, on the other side, you know, the customers just really like our product. You know, we've got great products. You know, we talked about strong backlog. We talked about, you know, targeting of top customers, and we're seeing all that stuff play out. The good news is that, you know, we've got great solutions.
The customers really enjoy the benefits of our products on the workloads. Yeah. It just turned out to be a very good result. We're all pretty happy here.
I agree, supply chain and cash flow. Another two areas we will continue to figure out to study how can we better utilize or how can we further grow the supply chain and more efficiently utilize our cash flow.
Excellent. Thanks so much for the context, you guys.
There are no further questions at this time. Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect.