Penguin Solutions, Inc. · NASDAQ:PENG

Penguin Solutions — SMART Global Holdings — Q3 FY2023 Earnings Presentation

22 slides from Penguin Solutions's earnings presentation, Jun 29, 2023

1. Slide 1: Third Quarter FY23 SGH Financial Results

   THIRD QUARTER FY23 SGH FINANCIAL RESULTS JUNE 29, 2023

2. Slide 2: Disclaimer

   Disclaimer This presentation and the oral communications made during the course of this presentation contain forward-looking Any forward-looking statements that we make in this presentation speak only as of the date of this presentation. Except statements within the meaning of Section 27A of the Sec

3. Slide 3: Speakers

   Mark Adams President and CEO SGH SPEAKERS Ken Rizvi SVP and CFO SGH © 2023 SGH | 3

4. Slide 4: Q3 FY23 Highlights

   Q3 FY23 Highlights  Non-GAAP Gross Margin of 28.0%* − Up 230 bp vs. year-ago quarter  Non-GAAP EPS of $0.66* − Q3 FY23 guidance range of $0.30 - $0.50  Revenue of $383M − Above mid-point of guidance range of $355-$395M − Services ~15% of total SGH revenue, vs. ~13% in prior quarter  Strong Balan

5. Slide 5: Our Business Lines

   OUR BUSINESS LINES Mark Adams, President and CEO © 2023 SGH | 5

6. Slide 6: Intelligent Platform Solutions

   Intelligent Platform Solutions  Revenue of $171 Million; 45% of total SGH revenue − Up 79% vs. Q3 FY22 − Up 31% vs. Q3 FY22 excluding Stratus Technologies, which was acquired August 2022  New Technologies and Capabilities − Penguin releases new version of its flagship Scyld ClusterWare® Software P

7. Slide 7: Memory Solutions

   Memory Solutions  Revenue of $148 Million; 39% of total SGH revenue − Relatively flat sequentially − Achieved Q3 FY23 segment operating margin of ~8%, representing solid performance in a challenging pricing environment  Specialty Memory − Business stable due to specialty nature of our value-add bu

8. Slide 8: LED Solutions

   LED Solutions  Revenue of $64 Million; 17% of total SGH revenue − Q3 FY23 sales up 15% sequentially; believe recovery is underway − Outsourced manufacturing model and continued innovation position us well as the sector recovers − Expect modestly higher Q4 FY23 based on improving customer demand  R

9. Slide 9: Financial Review

   FINANCIAL REVIEW Ken Rizvi, SVP and CFO © 2023 SGH | 9

10. Slide 10: Strong Non-GAAP Quarterly Results

    Q3 FY23 REVENUE $383M Strong Non-GAAP Q3 FY23 Guidance $375M +/- $20M Quarterly Results Q3 FY23 NON-GAAP GROSS MARGIN* Key financial metrics 28.0% within or above Q3 FY23 Guidance 28% +/- 1% guidance range Q3 FY23 NON-GAAP EPS* $0.66 Q3 FY23 Guidance $0.40 +/- $0.10  Guidance provided on Q2 FY23 ea

11. Slide 11: Q3 FY23 Revenue Detail

    Q3 FY23 Revenue Detail Revenue Breakdown – Total $383M Revenue Mix by Business Product Revenue 17% $326M 45% 39% Service Revenue $58M LED Solutions Memory Solutions Intelligent Platform Solutions © 2023 SGH | 11

12. Slide 12: Q3 FY23 Non-GAAP Operating Results

    Q3 FY23 Non-GAAP Operating Results ($M) Q3 FY23 Q2 FY23 Q3 FY22 Revenue $383.3 $429.2 $462.5 Intelligent Platform Solutions $170.9 $222.5 $95.3 Memory Solutions $148.4 $151.1 $265.8 LED Solutions $64.1 $55.6 $101.3 Non-GAAP Gross profit* $107.2 $123.9 $118.9 Non-GAAP Operating expenses* $70.9 $72.5

13. Slide 13: Q3 FY23 Balance Sheet Highlights

    Q3 FY23 Balance Sheet Highlights Working Cash Capital Q2 FY23 Q3 FY23 Q2 FY23 Q3 FY23 Q2 FY23 Q3 FY23 Capital Flow Expenditures Net Accounts Cash & $229M $244M $376M $401M CapEx $12.6M $13.3M Receivable Equivalents (at period end) Days Sales 36 days 42 days CF from Depreciation $9.0M $9.5M Outstandi

14. Slide 14: Transaction Overview

    Agreement to Sell 81% Interest  Based on enterprise value of $205M; valuing 81% disposition at $166M  Up-front cash payment: approx. $138M  Deferred cash payment of approx. $28M to be Transaction paid 18 months post-closing Overview Retention of 19% Interest  Put/call option exercisable between

15. Slide 15: Our Guidance

    OUR GUIDANCE © 2023 SGH | 15

16. Slide 16: Q4 FY23 Guidance

    Q4 FY23 Guidance GAAP Outlook Adjustments Non-GAAP Outlook Net Sales $375 million +/- $25 million — $375 million +/- $25 million Gross margin 26% +/- 1% 2% (A) 28% +/- 1% Operating expenses $87 million +/- $2 million ($16) million (B)(C) $71 million +/- $2 million Diluted earnings per share $0.02 +/

17. Slide 17: Powering Growth. Expanding Possibilities.

    POWERING GROWTH. EXPANDING POSSIBILITIES. © 2023 SGH | 17

18. Slide 18: Appendix

    APPENDIX © 2023 SGH | 18

19. Slide 19: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations

20. Slide 20: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations © 2023 SGH | 20

21. Slide 21: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations © 2023 SGH | 21

22. Slide 22: Convertible Dilution

    Convertible Dilution • Note: Dilution in thousands of shares © 2023 SGH | 22

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