The company is enhancing product capabilities and breadth of service offerings to meet the demand of the AI market and datacenters. This strategic move positions the company to capture a larger share of the expanding AI market.

The company is focusing on Rack Scale Total Solutions built from its portfolio of server and storage systems. This strategic focus on providing complete solutions can lead to increased customer value and higher revenue per customer.

Management is committed to remediating material weaknesses and fostering continuous improvement in internal controls. This proactive approach to addressing control deficiencies demonstrates a commitment to improving financial reporting and governance.

The company is expanding its workforce and investing in key talent to support growth and innovation. These investments are critical for sustaining the company's competitive advantage and driving future growth.

The company acknowledges that its business and financial outlook face challenges due to adverse macroeconomic conditions and uncertainties. These factors encompass labor shortages, disruptions in the supply chain, inflation, higher interest rates, and fluctuations in capital markets.

The company is involved in various legal proceedings, disputes, claims, and regulatory or governmental inquiries and investigations arising from the normal course of business activities. The resolution of any such matters have not had a material impact on the Company's condensed consolidated financial condition, results of operations or liquidity as of December 31, 2024 and any prior periods.

The period-over-period increase in net sales of our server and storage systems was primarily driven by an increase in the demand from customers for GPU servers, high performance computing ("HPC"), and rack-scale solutions which are generally more complex and of higher value, resulting in an increase of average selling price ("ASP").

The Company outsources a portion of its design activities and a significant part of its server chassis and power supplies manufacturing to Ablecom and Compuware. This strategy can help the company focus on core competencies and reduce capital expenditures.

The company works closely with microprocessor and other key component vendors to take advantage of new technologies as they are introduced. This collaboration allows the company to rapidly introduce new products and deliver the latest application-optimized server and storage solutions.

On February 20, 2025, the Company amended the terms of the 2029 Convertible Notes pursuant to a first supplemental indenture and a second supplemental indenture. The terms of the 2029 Convertible Notes were amended to (i) bear interest from February 20, 2025 at an annual rate of 3.50%, payable semi-annually in arrears on each March 1 and September 1, beginning on September 1, 2025 and (ii) include an updated initial conversion rate of 11.9842 shares of the Company's common stock per $1,000 principal amount of 2029 Convertible Notes (equivalent to an initial conversion price of approximately $83.44 per share of the Company's common stock).

On February 20, 2025, the Company issued $700.0 million aggregate principal amount of 2.25% Convertible Senior Notes due 2028 (the "2028 Convertible Notes") pursuant to an indenture, dated as of February 20, 2025 by and between the Company and U.S. Bank Trust Company, National Association, as trustee for gross proceeds of $700 million and approximately $50 million of issuance cost.

The provided 10-Q filing does not contain specific information about ESG initiatives. This suggests that ESG factors may not be a primary focus in the company's disclosures or that this information is reported elsewhere.

The increased use of artificial intelligence ("AI"), which has required increased datacenter capabilities, has substantially increased demand for our products in the recent past. We expect that the AI market, and thus the need for additional datacenter capabilities, will continue to strengthen