Penguin Solutions, Inc. · NASDAQ:PENG

Penguin Solutions — SMART Global Holdings — Q1 FY2022 Earnings Presentation

19 slides from Penguin Solutions's earnings presentation, Jan 4, 2022

1. Slide 1: Q1 FY2022 SGH Financial Results

   Q1 FY2022 SGH FINANCIAL RESULTS JANUARY 4, 2022

2. Slide 2: Disclaimer

   Disclaimer This presentation and oral communications made during the course of this presentation will contain "forward- Statement Regarding Use of Non-GAAP Financial Measures: looking statements," including, among other things, statements regarding future events and the future financial performance

3. Slide 3: Speakers

   Mark Adams President and CEO SMART Global Holdings SPEAKERS Ken Rizvi SVP and CFO SMART Global Holdings 03

4. Slide 4: SGH Q1 FY22 Highlights

   SGH Q1 FY22 Highlights Record Revenue Record Gross Margin • $470M, up 61% YoY • GAAP gross margin: 26%, up ~800 bp YoY • 7th consecutive quarter of YoY growth • Non-GAAP gross margin: 27% up ~850 bp YoY EPS Up Significantly Announced • GAAP EPS of $0.73, 2-for-1 up 813% YoY Share Split • Non-GAAP EP

5. Slide 5: Intelligent Platform Solutions

   Intelligent Platform Solutions PERFORMANCE HIGHLIGHTS SOLUTIONS HIGHLIGHTS RECOGNITION Q1 FY22 record revenue of $119M Launched GovPOD HPC/AI Cloud Solutions Hyperion Research – November 2021 § Up 80% vs. Q1 FY21 § An on-demand, high-performance, secure § Penguin Computing: the fastest growing major

6. Slide 6: LED Solutions

   LED Solutions PERFORMANCE HIGHLIGHTS MANUFACTURING TRANSFORMATION PRODUCT/TECHNOLOGY HIGHLIGHTS Q1 FY22 revenue of $112M Transition to Sapphire + fab-lite model Delivering innovative, application-optimized LEDs § In line with expectations § Remains on track § Launched 3 new products in the Extreme H

7. Slide 7: Memory Solutions

   Memory Solutions PERFORMANCE HIGHLIGHTS PRODUCT HIGHLIGHTS TECHNOLOGY HIGHLIGHTS Q1 FY22 revenue of $239M New products; new vertical markets Developing solutions for upcoming DDR5 transition § Up 6% vs. Q1 FY21 § Open CAPI DDIMM products ramping at a § Up 20% vs. Q1 FY21 adjusting for one-time leadi

8. Slide 8: Financial Review

   FINANCIAL REVIEW KEN RIZVI, SVP AND CFO © 2021 SGH 8

9. Slide 9: Record Non-GAAP Quarterly Results

   Record Non-GAAP Quarterly Results 7th consecutive quarter of year-over-year growth Non-GAAP Non-GAAP Net Sales Gross Margin EPS Q1 FY22 $470 M 27% $2.16 Change vs. Q1 FY21 up 61% up ~850 bp Up 177% Q1 Guide* $440-$480 M 25-27% $2.00 +/- $0.20 * Guidance provided on Q4 FY21 earnings call which took p

10. Slide 10: Q1 FY2022 Non-GAAP Operating Results

    Q1 FY2022 Non-GAAP Operating Results ($ M) Q1 FY21 Q4 FY21 Q1 FY22 Net sales $291.7 $467.7 $469.9 Intelligent Platform Solutions $65.9 $97.6 $118.7 Memory Solutions $225.8 $247.3 $239.4 LED Solutions* — $122.8 $111.9 Gross profit $54.1 $123.6 $127.0 Operating expenses $30.4 $57.0 $57.9 Net income $1

11. Slide 11: Q1 FY2022 Net Sales by End Market

    Q1 FY2022 Net Sales by End Market Mobile & PCs 21% Network & Telecom 24% Servers & Storage 10% AI/Data Analytics/Machine Learning 18% Industrial, Defense & Other 12% 15% Advanced Lighting © 2021 SGH 11

12. Slide 12: Q1 FY2022 Balance Sheet Highlights

    Q1 FY2022 Balance Sheet Highlights Working Q4 FY21 Q1 FY22 Q4 FY21 Q1 FY22 Q4 FY21 Q1 FY22 Capital Cash Flow CapEx Net Accounts Cash & $313.4M $344.1M $223.0M $233.1M CapEx $7.6 M $12.8 M Receivable Equivalents (at period end) Days Sales 39 days 39 days CF from Depreciation $9.4 M $9.5 M Outstanding

13. Slide 13: Q2 FY 2022 Guidance

    Q2 FY 2022 Guidance (excludes impact of share split to be distributed on Feb 1, 2022) GAAP Non-GAAP Outlook Adjustments Outlook Net Sales $415 to $455 million ‒ $415 to $455 million Gross Margin 23% to 25% 1% (A) 24% to 26% Diluted EPS $0.70 ± $0.15 $0.75 (A,B,C) $1.45 ± $0.15 Diluted Shares 29 mill

14. Slide 14: Powering Growth. Expanding Possibilities.

    POWERING GROWTH. EXPANDING POSSIBILITIES. © 2021 SGH 14

15. Slide 15: Appendix

    APPENDIX © 2021 SGH 15

16. Slide 16: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations (dollars in thousands) Q1 FY22 Q4 FY21 Q1 FY21 GAAP gross profit $ 122,201 $ 117,794 $ 52,644 Share-based compensation expense 1,731 1,785 838 Amortization of acquisition-related intangibles 3,096 3,997 647 Non-GAAP gross profit $ 127,028 $ 123,576 $ 54,129 GAAP oper

17. Slide 17: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations (dollars in thousands, except per share data) Q1 FY22 Q4 FY21 Q1 FY21 GAAP net income attributable to SGH $ 20,027 $ 20,652 $ 2,027 Share-based compensation expense 9,775 9,010 11,088 Amortization of acquisition-related intangibles 6,343 7,244 3,413 Change in fair va

18. Slide 18: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations (dollars in thousands) Q1 FY22 Q4 FY21 Q1 FY21 Net income attributable to SGH $ 20,027 $ 20,652 $ 2,027 Interest expense, net 5,106 5,031 3,154 Income tax provision 7,755 6,981 3,275 Depreciation expense and amortization of intangible assets 15,813 16,642 8,367 Share

19. Slide 19: Convertible Dilution

    Convertible Dilution Convertible Net Share Capped Share Share price Dilution Call Dilution $50.00 1.16 (1.16) — $52.50 1.39 (1.39) — $55.00 1.61 (1.52) 0.09 $57.50 1.81 (1.45) 0.36 $60.00 1.99 (1.39) 0.60 $62.50 2.16 (1.33) 0.83 $65.00 2.31 (1.28) 1.03 $67.50 2.45 (1.23) 1.22 $70.00 2.58 (1.19) 1.39

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