Penguin Solutions, Inc. · NASDAQ:PENG
Penguin Solutions — SMART Global Holdings — Q4 FY2023 Earnings Presentation
31 slides from Penguin Solutions's earnings presentation, Oct 12, 2023
Slide 1: Fourth Quarter and Full Year FY23 SGH Financial Results
FOURTH QUARTER AND FULL YEAR FY23 SGH FINANCIAL RESULTS OCTOBER 12, 2023 © 2023 SGH | 1
Slide 2: Disclaimer
Disclaimer This presentation and the oral communications made during the course of this presentation contain forward-looking Form 10-Q and SGH’s other filings with the U.S. Securities and Exchange Commission. In addition, such risks, uncertainties statements within the meaning of Section 27A of the
Slide 3: SMART Brazil Classified as Discontinued Operations
SMART Brazil Classified as Discontinued Operations On June 13, 2023, we entered into an agreement to sell an 81% interest in our SMART Brazil operations. The transaction is expected to close at the end of calendar 2023 or early 2024, subject to required regulatory approvals and satisfaction of custo
Slide 4: Speakers
Mark Adams President and CEO SGH SPEAKERS Ken Rizvi SVP and CFO SGH © 2023 SGH | 4
Slide 5: FY23 Highlights: Continuing our transformation
FY23 Highlights Continuing our transformation MEMORY MODULE COMPANY ENTERPRISE SOLUTIONS COMPANY Completed Acquisition of Announced Divestiture of Expanded Beyond Stratus Technologies SMART Brazil Memory Adding high-availability, fault-tolerant Expected to close at the end of 52% from IPS, capabilit
Slide 6: FY23 Highlights: Strong performance from Continuing Operations
FY23 Highlights Strong performance from Continuing Operations MEMORY MODULE COMPANY ENTERPRISE SOLUTIONS COMPANY Improved Revenue Mix w/ Record Non-GAAP Strong Balance Sheet High Margin Services Gross Margin Cash, equivalents and $248M in FY23, or 17% 31.7% in FY23 ST investments of $391M of revenue
Slide 7: Our Business Lines
Our Business Lines Providing high-performance high-availability enterprise solutions Intelligent Platform Memory LED Solutions Solutions Solutions Computing solutions and Design, development, and Application optimized LED chips services that span Edge, Core, advanced packaging of specialty and compo
Slide 8: Q4 FY23 Highlights
Q4 FY23 Highlights Continuing Operations ▪ Revenue of $317M ▪ Non-GAAP Gross Margin of 31.7%* up 460 bp vs. year ago quarter ▪ Non-GAAP EPS of $0.35* ▪ Strong Balance Sheet − Cash flow from operating activities totaled $38M − Cash, equivalents, and short-term investments of $391M * For the definitio
Slide 9: Our Business Lines
OUR BUSINESS LINES Mark Adams, President and CEO © 2023 SGH | 9
Slide 10: Intelligent Platform Solutions
Intelligent Platform Solutions ▪ Revenue of $145M; 46% of total SGH revenue − Services revenue, the majority of which is generated in IPS, was 19% of total SGH Q4 FY23 revenue ▪ Penguin Solutions − Penguin Solutions named channel partner by NVIDIA for large scale AI development ▪ Stratus Technologie
Slide 11: Memory Solutions
Memory Solutions ▪ Revenue of $105M; 33% of total SGH revenue − Reminder: excludes Brazil – which is reflected in discontinued operations ▪ Specialty Memory − Early signs of potential price stabilization; inventories elevated; lead-times low − Remain focused on Hyperscalers and Data Centers, especia
Slide 12: LED Solutions
LED Solutions ▪ Revenue of $66M; 21% of total SGH revenue − Q4 FY23 sales up 3% sequentially; continuing recovery ▪ Design activity improving; new opportunities emerging − Launched XLamp® XP-G4, a significant upgrade of one of our flagship products © 2023 SGH | 12
Slide 13: Visit www.sghcorp.com to learn more
visit www.sghcorp.com to learn more
Slide 14: Financial Review
FINANCIAL REVIEW Ken Rizvi, SVP and CFO © 2023 SGH | 14
Slide 15: Historical Financials
Historical Financials Continuing Operations** $1.40 $1.44 31.7% 12.7% 12.5% $2.65 $2.52 29.2% $1.06 24.4% 7.9% $1.23 FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 Revenue Non-GAAP Non-GAAP Non-GAAP Growth ($B) Gross Margin* Operating Margin* EPS* *For the definitions of Non
Slide 16: Historical Revenue Detail
Historical Revenue Detail Continuing Operations Revenue Mix by Business Revenue Mix by Product vs. Service 21% 17% 9% 11% 17% 29% 32% 33% $1.06Bn $1.40Bn $1.44Bn 52% $1.06Bn $1.40Bn $1.44Bn 31% 46% 40% 91% 89% 83% FY 2021 FY 2022 FY 2023 FY 2021 FY 2022 FY 2023 IPS Memory LED Product Service © 2023
Slide 17: Non-GAAP FY23 Results
FY23 NON-GAAP GROSS MARGIN* 31.7% Up from 29.2% in FY22 Non-GAAP FY23 Results FY23 NON-GAAP EPS* Continuing Operations $2.52 Down from $2.65 in FY22 FY23 Adjusted EBITDA* $209M Up from $199M in FY22 *For the definitions of Non-GAAP Gross Margin, Non-GAAP EPS and Adjusted EBITDA, and reconciliations
Slide 18: Q4 FY23 Non-GAAP Operating Results
Q4 FY23 Non-GAAP Operating Results Continuing Operations ($M) Q4 FY23 Q3 FY23 Q4 FY22 Revenue $316.7 $344.4 $362.5 Intelligent Platform Solutions $145.4 $170.9 $144.7 Memory Solutions $105.2 $109.5 $134.6 LED Solutions $66.0 $64.1 $83.1 Non-GAAP Gross profit* $100.3 $109.0 $98.4 Non-GAAP Operating e
Slide 19: Q4 FY23 Balance Sheet Highlights
Q4 FY23 Balance Sheet Highlights Continuing Operations Working Cash Capital Capital Q3 FY23 Q4 FY23 Flow Q3 FY23 Q4 FY23 Expenditures Q3 FY23 Q4 FY23 Net Accounts Cash, Equivalents $222M $219M $347M $391M CapEx $12.0M $7.7M Receivable & ST investments (at period end) Days Sales 41 days 48 days CF fr
Slide 20: Our Guidance
OUR GUIDANCE © 2023 SGH | 20
Slide 21: Q1 FY24 Guidance
Q1 FY24 Guidance Continuing Operations GAAP Outlook Adjustments Non-GAAP Outlook Net Sales $275 million +/- $25 million — $275 million +/- $25 million Gross margin 28.5% +/- 1% 3% (A) 31.5% +/- 1% Operating expenses $82 million +/- $1 million $(15) million (B)(C) $67 million +/- $1 million Diluted e
Slide 22: Powering Growth. Expanding Possibilities.
POWERING GROWTH. EXPANDING POSSIBILITIES. © 2023 SGH | 22
Slide 23: Appendix
APPENDIX © 2023 SGH | 23
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations © 2023 SGH | 24
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations © 2023 SGH | 25
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations © 2023 SGH | 26
Slide 27: Consolidated Statements of Operations
SMART Global Holdings, Inc. Consolidated Statements of Operations (In thousands, except per share amounts} (Unaudited) oom a3ems_ ans ais cane ar ana cir assy _azeri_aiva1 reaps sy2022__pvz001 Tae ‘Memon Selutans S 105481 5 103ase § 110599 5 118236 5749 § 128477 $ 121,620 § 115451 $ 120357 S 443.261
Slide 28: Reconciliation of GAAP to Non-GAAP Measures
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Slide 29: Reconciliation of GAAP to Non-GAAP Measures
SMART Global Holdings, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands, except per share amounts) (Unaudited) "GAAP net income (loss) irom continung operatfons ate loulable 1 SOF Share-basec compensation expense ‘Amortization of acqustion-elated intangibles Flowtheaugh of inventory st
Slide 30: GAAP Statements of Operations - Brazil
SMART Global Holdings, Inc. GAAP Statements of Operations - Brazil (In thousands) (Unaudited) August 25, August 26, August 27, Year ended 2023 2022 2021 Net sales $185,377 5 423,476 5 445,613 Cost of sales 184,016 361,301 375,206 Gross profit T361 62,175 70,407 Operating expenses: Research and devel
Slide 31: Convertible Dilution
Convertible Dilution • Note: Dilution in millions of shares © 2023 SGH | 31
SMART Global Holdings — Q4 FY2023 Earnings Presentation on 6ix