8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 26, 2017

SUPER MICRO COMPUTER, INC.

(Exact name of registrant specified in its charter)

Delaware	001-33383	77-0353939
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

980 Rock Avenue, San Jose, California 95131

(Address of principal executive offices, including Zip Code)

Registrant’s telephone, including area code: (408) 503-8000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 26, 2017, Super Micro Computer, Inc. issued a press release announcing its operating and financial results for the second quarter of fiscal year 2017. A copy of the press release including consolidated financial statements for the second quarter ended December 31, 2016 is being furnished as Exhibit 99.1. The slides for Super Micro Computer Inc.’s second quarter earnings presentation on January 26, 2017 are being furnished as Exhibit 99.2. The information in this report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), and is not to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language contained in such filing, unless otherwise expressly stated in such filing.

Item 9.01 Financial Statements and Exhibits.

Exhibit Number	Description
99.1	Press Release of Super Micro Computer, Inc. dated January 26, 2017 announcing its operating and financial results for the quarter ended December 31, 2016.
99.2	Slides for Super Micro Computer, Inc.’s second quarter earnings presentation on January 26, 2017.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		SUPER MICRO COMPUTER, INC.
Date:	January 26, 2017	By:	/s/ Charles Liang
			Charles Liang President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)

Exhibit Index

Exhibit Number	Description
99.1	Press Release of Super Micro Computer, Inc. dated January 26, 2017 announcing its operating and financial results for the quarter ended December 31, 2016.
99.2	Slides for Super Micro Computer, Inc.’s second quarter earnings presentation on January 26, 2017.

EX-99.1

Exhibit 99.1

Super Micro Computer, Inc. Announces 2nd Quarter 2017 Financial Results

SAN JOSE, Calif., January 26, 2017 (BUSINESS WIRE) -- Super Micro Computer, Inc. (NASDAQ:SMCI), a global leader in high-performance, high-efficiency server, storage technology and green computing, today announced second quarter fiscal 2017 financial results for the quarter ended December 31, 2016.

Fiscal 2nd Quarter Highlights

• Quarterly net sales of $652.0 million, up23.3% from the first quarter of fiscal year 2017 and up2.0% from the same quarter of last year.

• GAAP net income of $22.0 million, up62.5% from the first quarter of fiscal year 2017 and down36.6% from the same quarter of last year.

• GAAP gross margin was 14.3%, down from 15.1% in the first quarter of fiscal year 2017 and down from 16.6% in the same quarter of last year.

• Server solutions accounted for 68.1% of net sales compared with 67.6% in the first quarter of fiscal year 2017 and 71.0% in the same quarter of last year.

Net sales for the second quarter ended December 31, 2016 totaled $652.0 million, up23.3%from $529.0 million in the first quarter of fiscal year 2017. No customer accounted for more than 10% of net sales during the quarter ended December 31, 2016.

GAAP net income for the second quarter of fiscal year 2017 was $22.0 million or $0.43 per diluted share, a decrease of 36.6% from net income of $34.7 million, or $0.67 per diluted share in the same period a year ago. Included in net income for the quarter is $4.7 million of stock-based compensation expense (pre-tax). Excluding this item and the related tax effect, non-GAAP net income for the second quarter was $25.0 million, or $0.48 per diluted share, compared to non-GAAP net income of $38.0 million, or $0.73 per diluted share, in the same quarter of the prior year. On a sequential basis, non-GAAP net income increased from the first quarter of fiscal year 2017 by $8.4 million or $0.16 per diluted share.

GAAP gross margin for the second quarter of fiscal year 2017 was 14.3% compared to 16.6% in the same period a year ago. Non-GAAP gross margin for the second quarter was 14.4% compared to 16.7% in the same period a year ago. GAAP gross margin for the first quarter of fiscal year 2017 was 15.1% and Non-GAAP gross margin for the first quarter of fiscal year 2017 was 15.2%.

The GAAP income tax provision for the second quarter of fiscal year 2017 was $9.3 million or 29.7% of income before tax provision compared to $14.1 million or 28.8% in the same period a year ago and $6.4 million or 32.0% in the first quarter of fiscal year 2017. The effective tax rate for the second quarter of fiscal year 2017 was lower than the first quarter primarily due to an increase in the domestic production activities deduction and U.S. federal research and development ("R&D") tax credits.

The Company's cash and cash equivalents and short and long term investments at December 31, 2016 were $131.5 million compared to $183.7 million at June 30, 2016. Free cash flow for the six months endedDecember 31, 2016 was $(72.2) million, primarily due to an increase in the Company's cash used in operating activities and used in the development and construction of improvements on the Company's properties.

Business Outlook & Management Commentary

The Company expects net sales of $570 million to $630 million for the third quarter of fiscal year 2017 ending March 31, 2017. The Company expects non-GAAP earnings per diluted share of approximately $0.34 to $0.42 for the third quarter.

“We are pleased to report record second quarter revenues of $652.0 million that exceeded our guidance and outpaced a strong compare with last year. Contributing to this strong growth was our Twin family product line including our FatTwin, Storage, HPC, MicroBlade, and strong growth from enterprise cloud and Asia Pacific, particularly China. Component shortages and pricing, product and geographic mix adversely impacted gross margins while improved leverage allowed us to deliver stronger operating margins from last quarter,” said Charles Liang, Chairman and Chief Executive Officer. “We expect to continue the growth of last quarter and be reflected in the year-over-year revenue growth in the March quarter based on an increasing number of sizable customer engagements demanding the performance and advantages of our leading product lines. In addition, we are well positioned to benefit from technology transitions in 2017 and have upgraded our product lines to optimize these new technologies.”

It is currently expected that the outlook will not be updated until the Company’s next quarterly earnings announcement, notwithstanding subsequent developments. However, the Company may update the outlook or any portion thereof at any time. Such updates will take place only by way of a news release or other broadly disseminated disclosure available to all interested parties in accordance with Regulation FD.

Conference Call Information

Super Micro Computer will discuss these financial results in a conference call at 2:00 p.m. PT, today. To participate in the conference, please call 1-888-211-0193 (International callers dial 1-913-312-0947) 10 minutes prior. A recording of the conference will be available until 11:59 pm (Eastern Time) on Thursday, February 9, 2017, by dialing 1-844-512-2921 (International callers dial 1-412-317-6671) and entering replay PIN 7473642. The live web cast and recording of the call will be available on the Investor Relations section at www.supermicro.com two hours after the conference conclusion. They will remain available until the Company's next earnings call.

Cautionary Statement Regarding Forward Looking Statements

Statements contained in this press release that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate, among other things, to our expected financial and operating results, our ability to build and grow Super Micro Computer, the benefits of our products and our ability to achieve our goals, plans and objectives. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated. These include, but are not limited to: our dependence on continued growth in the markets for X86, blade servers and embedded applications, increased competition, difficulties of predicting timing, introduction and customer acceptance of new products, poor product sales, difficulties in establishing and maintaining successful relationships with our distributors and vendors, shortages or price fluctuations in our supply chain, our ability to protect our intellectual property rights, our ability to control the rate of expansion domestically and internationally, difficulty managing rapid growth and general political, economic and market conditions and events. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings.

Use of Non-GAAP Financial Measures

Non-GAAP gross margin discussed in this press release excludes stock-based compensation expense. Non-GAAP net income and net income per share discussed in this press release exclude stock-based compensation expense and the related tax effect of the applicable items. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, detailed reconciliations between the Company's GAAP and non-GAAP financial results is provided at the end of this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings.

About Super Micro Computer, Inc.

Supermicro®, a global leader in high-performance, high-efficiency server technology and innovation is a premier provider of end-to-end green computing solutions for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and Embedded Systems worldwide. Supermicro's advanced Server Building Block Solutions® offer a vast array of components for building energy-efficient, application-optimized, computing solutions. Architecture innovations include Twin, TwinPro, FatTwin™, Ultra Series, MicroCloud, MicroBlade, SuperBlade®, Simply Double, Double-sided Storage®, Battery Backup Power (BBP®) modules and WIO/UIO. Products include servers, blades, GPU systems, workstations, motherboards, chassis, power supplies, storage, networking, server management software and SuperRack® cabinets/accessories delivering unrivaled performance and value.

Founded in 1993 and headquartered in San Jose, California, Supermicro is committed to protecting the environment through its "We Keep IT Green®" initiative. The Company has global logistics and operations centers in Silicon Valley (USA), the Netherlands (Europe) and its Science & Technology Park in Taiwan (Asia).

Supermicro, FatTwin, TwinPro, SuperBlade, Double-Sided Storage, BBP, SuperRack, Building Block Solutions and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc.

All other brands, names and trademarks are the property of their respective owners.

SUPER MICRO COMPUTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
			December 31,			June 30,
			2016			2016
ASSETS
Current assets:
	Cash and cash equivalents		$	128,752		$	180,964
	Accounts receivable, net		366,885			288,941
	Inventory		599,269			448,980
	Prepaid income taxes		5,164			5,682
	Prepaid expenses and other current assets		13,738			13,435
		Total current assets	1,113,808			938,002
Long-term investments			2,643			2,643
Property, plant and equipment, net			193,670			187,949
Deferred income taxes – noncurrent			32,255			28,460
Other assets			7,480			8,546
		Total assets	$	1,349,856		$	1,165,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	341,940		$	249,239
	Accrued liabilities		74,331			55,618
	Income taxes payable		1,048			5,172
	Short-term debt and current portion of long-term debt, net of debt issuance costs		92,443			53,589
		Total current liabilities	509,762			363,618
Long term debt, net of current portion and debt issuance costs			34,732			40,000
Other long-term liabilities			53,001			40,603
		Total liabilities	597,495			444,221
Stockholders' equity:
	Common stock and additional paid-in capital		291,275			277,339
	Treasury stock (at cost)		(20,491		)	(2,030		)
	Accumulated other comprehensive loss		(83		)	(85		)
	Retained earnings		481,499			445,971
		Total Super Micro Computer Inc. stockholders' equity	752,200			721,195
	Noncontrolling interest		161			184
		Total stockholders' equity	752,361			721,379
		Total liabilities and stockholders' equity	$	1,349,856		$	1,165,600

SUPER MICRO COMPUTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2016			2015			2016			2015
Net sales	$	651,954		$	638,964		$	1,180,922		$	1,158,582
Cost of sales	558,576			532,602			1,007,480			980,005
Gross profit	93,378			106,362			173,442			178,577
Operating expenses:
Research and development	34,033			30,264			67,224			58,590
Sales and marketing	18,153			16,461			34,069			30,710
General and administrative	9,429			10,511			20,184			18,711
Total operating expenses	61,615			57,236			121,477			108,011
Income from operations	31,763			49,126			51,965			70,566
Interest and other income, net	45			24			74			111
Interest expense	(497		)	(400		)	(827		)	(724		)
Income before income tax provision	31,311			48,750			51,212			69,953
Income tax provision	9,315			14,061			15,684			21,565
Net income	$	21,996		$	34,689		$	35,528		$	48,388
Net income per common share:
Basic	$	0.46		$	0.73		$	0.74		$	1.02
Diluted	$	0.43		$	0.67		$	0.69		$	0.94
Weighted-average shares used in calculation of net income per common share:
Basic	48,124			47,651			48,144			47,584
Diluted	51,521			51,489			51,352			51,405
Stock-based compensation is included in the following cost and expense categories by period (in thousands):
	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2016			2015			2016			2015
Cost of sales	$	325		$	258		$	634		$	498
Research and development	3,012			2,472			5,920			4,874
Sales and marketing	520			435			998			839
General and administrative	852			841			1,661			1,671
Stock-based compensation expense before taxes	$	4,709		$	4,006		$	9,213		$	7,882

SUPER MICRO COMPUTER, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
(Unaudited)
	Six Months Ended
	December 31,
	2016			2015
OPERATING ACTIVITIES:
Net income	$	35,528		$	48,388
Reconciliation of net income to net cash provided by (used in) operating activities:
Depreciation and amortization	7,711			5,953
Stock-based compensation expense	9,213			7,882
Excess tax benefits from stock-based compensation	(745		)	(355		)
Allowance for doubtful accounts	356			805
Provision for inventory	6,391			3,780
Exchange loss (gain)	232			(1,539		)
Deferred income taxes, net	(3,791		)	(4,380		)
Changes in operating assets and liabilities:
Accounts receivable, net	(78,300		)	7,613
Inventory	(156,680		)	(26,818		)
Prepaid expenses and other assets	941			(4,259		)
Accounts payable	96,774			20,738
Income taxes payable, net	(3,176		)	650
Accrued liabilities	18,234			9,715
Other long-term liabilities	12,442			18,749
Net cash provided by (used in) operating activities	(54,870		)	86,922
INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(17,372		)	(15,235		)
Restricted cash	(287		)	(404		)
Net cash used in investing activities	(17,659		)	(15,639		)
FINANCING ACTIVITIES:
Proceeds from debt, net of debt issuance costs	130,116			14,400
Repayment of debt	(96,552		)	(13,300		)
Payment to acquire treasury stock	(18,461		)	—
Proceeds from exercise of stock options	5,873			2,439
Excess tax benefits from stock-based compensation	745			355
Payment of obligations under capital leases	(118		)	(86		)
Advances (payments) under receivable financing arrangements	787			(18		)
Minimum tax withholding paid on behalf of employees for restricted stock units	(1,542		)	(504		)
Net cash provided by financing activities	20,848			3,286
Effect of exchange rate fluctuations on cash	(531		)	(119		)
Net increase (decrease) in cash and cash equivalents	(52,212		)	74,450
Cash and cash equivalents at beginning of period	180,964			95,442
Cash and cash equivalents at end of period	$	128,752		$	169,892
Supplemental disclosure of cash flow information:
Cash paid for interest	$	749		$	693
Cash paid for taxes, net of refunds	20,004			19,636
Non-cash investing and financing activities:
Equipment purchased under capital leases	86			127
Accrued costs for property, plant and equipment purchases	5,325			5,366

SUPER MICRO COMPUTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended						Six Months Ended
		December 31,						December 31,
		2016			2015			2016			2015
GAAP GROSS PROFIT		$	93,378		$	106,362		$	173,442		$	178,577
	Add back stock-based compensation (a)	325			258			634			498
Non-GAAP GROSS PROFIT		$	93,703		$	106,620		$	174,076		$	179,075
GAAP GROSS MARGIN		14.3		%	16.6		%	14.7		%	15.4		%
	Add back stock-based compensation (a)	0.1		%	0.1		%	0.0		%	0.1		%
Non-GAAP GROSS MARGIN		14.4		%	16.7		%	14.7		%	15.5		%
GAAP INCOME FROM OPERATIONS		$	31,763		$	49,126		$	51,965		$	70,566
	Add back stock-based compensation (a)	4,709			4,006			9,213			7,882
Non-GAAP INCOME FROM OPERATIONS		$	36,472		$	53,132		$	61,178		$	78,448
GAAP NET INCOME		$	21,996		$	34,689		$	35,528		$	48,388
	Add back stock-based compensation (a)	4,709			4,006			9,213			7,882
	Add back adjustments to tax provision (b)	(1,673		)	(704		)	(3,035		)	(1,787		)
Non-GAAP NET INCOME		$	25,032		$	37,991		$	41,706		$	54,483
GAAP NET INCOME PER COMMON SHARE – BASIC		$	0.46		$	0.73		$	0.74		$	1.02
	Add back stock-based compensation and adjustments to tax provision (a) (b)	0.06			0.07			0.13			0.12
Non-GAAP NET INCOME PER COMMON SHARE – BASIC		$	0.52		$	0.80		$	0.87		$	1.14
GAAP NET INCOME PER COMMON SHARE – DILUTED		$	0.43		$	0.67		$	0.69		$	0.94
	Add back stock-based compensation and adjustments to tax provision (a) (b)	0.05			0.06			0.11			0.10
Non-GAAP NET INCOME PER COMMON SHARE – DILUTED		$	0.48		$	0.73		$	0.80		$	1.04
WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE
	BASIC –GAAP	48,124			47,651			48,144			47,584
	BASIC - Non-GAAP	48,124			47,651			48,144			47,584
	DILUTED – GAAP	51,521			51,489			51,352			51,405
	DILUTED - Non-GAAP	52,555			52,113			52,391			52,166

(a) Amortization of Financial Accounting Standards Board Accounting Standards Codification Topic 718 stock-based compensation for the three and six months endedDecember 31, 2016 and 2015.

(b) The provision of income taxes used in arriving at the non-GAAP net income was computed using an income tax rate of 30.5% and 31.0%for the three and six months endedDecember 31, 2016, respectively, and 28.0% and 30.0% for the three and six months endedDecember 31, 2015, respectively.

SOURCE: Super Micro Computer, Inc.

Super Micro Computer, Inc.

Howard Hideshima, 408-503-8000

SVP, Chief Financial Officer

ir@supermicro.com

or

Perry G. Hayes

SVP, Investor Relations

ir@supermicro.com

SMCI-F

EX-99.2

Confidential © 2016 Supermicro Second Quarter Fiscal 2017 Earnings Conference Presentation January 26, 2017 Exhibit 99.2

Confidential CY’ Q1’ Q4’ 2 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 expected financial and operating results, our ability to build and grow Supermicro, the benefit of our products and our ability to achieve our goals, plans and objectives. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated. These include, but are not limited to: our dependence on continued growth in the markets for X86 based servers, blade servers and embedded applications, increased competition, difficulties of predicting timing of new product introductions, customer acceptance of new products, poor product sales, difficulties in establishing and maintaining successful relationships with our distributors and vendors, shortages or price fluctuations in our supply chain, our ability to protect our intellectual property rights, our ability to control the rate of expansion domestically and internationally, difficulty managing rapid growth and general political, economic and market conditions and events. For a further list and description of risks and uncertainties, see the reports filed by Supermicro with the Securities and Exchange Commission. Supermicro disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Supplemental information, condensed balance sheets and statements of operations follow. All monetary amounts are stated in U.S. dollars.

Confidential CY’ Q1’ Q4’ 3 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-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operating performance. However, these non-GAAP financial measures have limitations as an analytical tool, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, detailed reconciliations between the Company's GAAP and non-GAAP financial results is provided at the end of the press release that was issued announcing the Company’s operating and financial results for the quarter ended December 31, 2016. In addition, a reconciliation from GAAP to non-GAAP results is contained in the financial summary attached to today’s presentation and is available in the Investor Relations section of our website at www.supermicro.com in the Events and Presentations section. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings.

Confidential CY’ Q1’ Q4’ 4 Q2 FY2017 Non-GAAP Financial Highlights (in millions, except per share data)  Direct business was 53.8% of total revenues  System business was 68.1% of total revenues Change Q2'17 YoY Sequential Revenue $652.0 2.0% 23.3% Profit after Tax $25.0 -34.1% 50.1% EPS $0.48 -34.2% 50.0% * Note: Non-GAAP, please see Non-GAAP financial measures on page 3.

Confidential CY’ Q1’ Q4’ 5 Revenue Trend Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 $639 $533 $524 $529 $652 $'s millions Supermicro Revenue Trend Y/Y 27.0% 13.1% -8.6% 1.8% 2.0% Seq. 23.0% -16.6% -1.6% 0.9% 23.3%

Confidential CY’ Q1’ Q4’ 6 Revenue Analysis Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 $185 $160 $181 $171 $208 $454 $372 $343 $357 $444 $'s millions Supermicro Subsystems/System Revenue Subsystems Systems

Confidential CY’ Q1’ Q4’ Q2 FY2017 Major Markets  Storage  24.3% of Total Revenue  19.7% YoY Growth  Datacenter/Cloud  13.8% of Total Revenue  -52.6% YoY 7

Confidential CY’ Q1’ Q4’ 8 Q2 FY2017 Revenue by Geography Other – 4.0% United States 55.0% Europe 19.9% Asia 21.1%

Confidential CY’ Q1’ Q4’ IoT/Embedded  9.9% of Total Revenue  12.7% YoY Growth 9

Confidential CY’ Q1’ Q4’  The Ultra 1U and 2U Broadwell Product Lines  24 DIMM, 160W Xeon CPU, Flexible I/O, NVMe support  3 to 10% Less power consumption than competition  The Twin Architecture: TwinPro, FatTwin and BigTwin  Most optimized for Hyper-converged and HPC Applications  Best performance/watt and price/performance ratio  SuperBlade, MicroBlade and MicroCloud  Densest computing nodes, 0.05U/0.1U/0.2U per node  95% less cable, easy maintenance, and cost effectiveness  GPU and Xeon Phi/KNL Product lines  KNL optimized platforms with 100G OPA connectivity  170 TFlops with 8x Pascal GPUs in 4U  Lowest latency of data access and transfer  90 Bay/60 Bay, JBOD, Storage Server & 2U All-Flash Storage Array  24 DIMM DP redundant node and 200W+ CPU support  Up to 48 hot-swap dual-port NVMe/SAS3 in 2U  Big Data and Software Defined Storage Solutions  Embedded /IoT Product lines  Integrated compute, storage, and networking  Optimized for Small Business, Education, Hybrid IT, Edge Computing Application  Rack Scale Design (SRSD) and Management Software World’s Best Server/Storage Product Lines NEW! 10 NEW!

Confidential CY’ Q1’ Q4’ 11 Non-GAAP Gross Margins Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 16.7% 14.9% 14.1% 15.2% 14.4% * Note: Non-GAAP, please see Non-GAAP financial measures on page 3.

Confidential CY’ Q1’ Q4’ 12 Non-GAAP Operating Margins Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 8.3% 5.3% 3.1% 4.7% 5.6% * Note: Non-GAAP, please see Non-GAAP financial measures on page 3.

Confidential CY’ Q1’ Q4’ 13 Summary P&L non-GAAP (in millions, except per share data) Q2'17 YoY Sequential Q2'16 Q1'17 Operating Expense $57.2 $3.7 $1.6 $53.5 $55.7 Operating Expense Ratio 8.8% 0.4% -1.7% 8.4% 10.5% Operating Income $36.5 -$16.7 $11.8 $53.1 $24.7 Net Income $25.0 -$13.0 $8.4 $38.0 $16.7 EPS $0.48 -$0.25 $0.16 $0.73 $0.32 Diluted Common Share Count 52.6 52.1 52.2 Effective Quarterly Tax Rate 30.5% 28.0% 31.7% * Note: Non-GAAP, please see Non-GAAP financial measures on page 3.

Confidential CY’ Q1’ Q4’ 14 Q2 FY2017 YTD Summary Statement of Cash Flows ($’s millions) 6 Months Ended 6 Months Ended 31-Dec-16 31-Dec-15 Net Income $35.5 $48.4 Depreciation and amortization $7.7 $6.0 Stock-based comp expense $9.2 $7.9 Other reserves $2.4 -$1.7 Net change in AR, Inventory, AP -$138.2 $1.5 Other prepaids and liabilities $28.4 $24.9 Cash flow from operations -$54.9 $86.9 Capital expenditures -$17.4 -$15.2 Free cash flow -$72.2 $71.7 Net cash - investing activities -$0.3 -$0.4 Net cash - financing activities $20.8 $3.3 Effect of exchange rate fluctuation on cash and cash equivalents -$0.5 -$0.1 Net change in cash -$52.2 $74.5

Confidential CY’ Q1’ Q4’ Q2 FY2017 Summary of Balance Sheet Metrics ($’s millions) 15 Q2'17 Q1'17 Change Cash Equivalents & Investments $131.5 $149.4 $(17.9) Accounts Receivable $366.9 $328.3 $38.6 Inventory $599.3 $500.0 $99.3 Accounts Payable $341.9 $287.6 $54.3 DSO 49 54 -5 DIO 91 97 -6 DPO 52 55 -3 Cash Cycle Days 88 96 -8

Confidential CY’ Q1’ Q4’ 16 Supplemental Financials Second Quarter Fiscal 2017 Ended December 31, 2016

Confidential CY’ Q1’ Q4’ 17 Non-GAAP Financial Summary (in millions, except per share data) * Note: Non-GAAP, please see Non-GAAP financial measures on page 3. Q2'17 Q1'17 Q2'16 Net Sales $652.0 $529.0 $639.0 Non-GAAP Gross Margin 14.4% 15.2% 16.7% Non-GAAP Operating Expenses $57.2 $55.7 $53.5 Non-GAAP Operating Income $36.5 $24.7 $53.1 Non-GAAP Net Income $25.0 $16.7 $38.0 Non-GAAP Net Income per share $0.48 $0.32 $0.73 Fully diluted shares for calculation 52.6 52.2 52.1

Confidential CY’ Q1’ Q4’ 18 Prior Period Net Income Comparisons (in millions, except per share data) * Note: Non-GAAP, please see Non-GAAP financial measures on page 3. Q2'17 Q1'17 Q2'16 Net Income (GAAP) $22.0 $13.5 $34.7 Stock-based Compensation Expense (tax affected)* $3.0 $3.2 $3.3 Net Income (Non-GAAP)* $25.0 $16.7 $38.0 Diluted Net Income per common share (GAAP) $0.43 $0.26 $0.67 Stock-based Compensation Expense (tax affected)* $0.05 $0.06 $0.06 Diluted Net Income per share (Non-GAAP)* $0.48 $0.32 $0.73 Shares used in diluted EPS calculation (Non-GAAP) * 52.6 52.2 52.1

Confidential CY’ Q1’ Q4’ 19 Quarterly Net Income (Loss) GAAP to Non-GAAP Reconciliation (in millions, except per share data) * Note: Non-GAAP, please see Non-GAAP financial measures on page 3. Q2'17 Q1'17 Q4'16 Q3'16 Q2'16 Net income (GAAP) $22.0 $13.5 $7.0 $16.7 $34.7 Adjustments: Stock-based compensation expense $4.7 $4.5 $4.4 $3.9 $4.0 Income tax effects of adjustments $(1.7) $(1.3) $(1.0) $(1.6) $(0.7) Net income (Non-GAAP)* $25.0 $16.7 $10.4 $19.0 $38.0 Diluted Net Income per share (GAAP) $0.43 $0.26 $0.13 $0.32 $0.67 Adjustments: $0.05 $0.06 $0.07 $0.04 $0.06 Diluted Net Income per share (Non-GAAP)* $0.48 $0.32 $0.20 $0.36 $0.73 Diluted shares used in GAAP per share calculation 51.5 51.1 52.3 52.2 51.5 Diluted shares used in Non-GAAP per share calculation 52.6 52.2 53.0 53.1 52.1