Penguin Solutions, Inc. · NASDAQ:PENG

Penguin Solutions — SMART Global Holdings — Q1 2024 Earnings Presentation

23 slides from Penguin Solutions's earnings presentation, Jan 9, 2024

  1. Slide 1: First Quarter FY24 SGH Financial Results

    FIRST QUARTER FY24 SGH FINANCIAL RESULTS JANUARY 9, 2024

  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: SMART Brazil Classified as Discontinued Operations

    SMART Brazil Classified as Discontinued Operations We completed the sale of 81% of our SMART Brazil operations at the end of our fiscal first quarter. As a reminder, our SMART Brazil operations were classified as discontinued operations in our financial statements from the end of our fiscal 2023 and

  4. Slide 4: Speakers

    Mark Adams President and CEO SGH SPEAKERS Ken Rizvi SVP and CFO SGH © 2024 SGH | 4

  5. Slide 5: Q1 FY24 Highlights

    Q1 FY24 Highlights Continuing Operations  Revenue of $274M, with record 25% from services  Record Non-GAAP gross margin of 33.3%, up 200 bp vs Q1 FY23 reflecting continued shift towards higher value enterprise solutions  Non-GAAP EPS of $0.24  Strong Balance Sheet − Record cash and investments o

  6. Slide 6: Our Business Lines

    OUR BUSINESS LINES Mark Adams, President and CEO © 2024 SGH | 6

  7. Slide 7: Intelligent Platform Solutions

    Intelligent Platform Solutions  Revenue of $119M; 43% of total SGH revenue − Services revenue, the majority of which is generated in IPS, was a record 25% of total SGH Q1 FY24 revenue  Penguin Solutions − Immersion cooling technology, pioneered with and deployed by a major oil and gas customer for

  8. Slide 8: Memory Solutions

    Memory Solutions  Revenue of $86M; 31% of total SGH revenue − Excludes Brazil, which is reflected in discontinued operations  Specialty Memory − Pricing stabilizing; customer inventories remain elevated; lead-times low − Increasing activity with customers on new product offerings: • Compute Expres

  9. Slide 9: LED Solutions

    LED Solutions  Revenue of $70M, 25% of total SGH revenue − Up 6% from Q4 FY23  Third sequential quarter of top-line improvement − First quarter of positive operating margins since Q4 FY22  Cree LED remains a technology and brand leader − A robust portfolio of intellectual property © 2024 SGH | 9

  10. Slide 10: Financial Review

    FINANCIAL REVIEW Ken Rizvi, SVP and CFO © 2024 SGH | 10

  11. Slide 11: Brazil Divestiture Recap

    Brazil Divestiture Recap  Completed sale of 81% of SMART Brazil operations at end of Q1 FY24  Received gross proceeds, inclusive of working capital adjustments, less taxes paid, of ~$140 million  Brazil classified as discontinued operations from the end of our fiscal 2023 and for all periods pres

  12. Slide 12: Non-GAAP Q1 FY24 Results

    Q1 FY24 REVENUE $274M Guidance: $275M +/- $25M Non-GAAP Q1 FY24 Results Q1 FY24 NON-GAAP GROSS MARGIN 33.3% Continuing Operations Key financial metrics at Guidance: 31.5% +/- 1% or above midpoint of guidance range Q1 FY24 NON-GAAP EPS $0.24 Guidance: $0.15 +/- $0.15 • Guidance provided on Q4 FY23 ea

  13. Slide 13: Q1 FY24 Revenue Detail

    Q1 FY24 Revenue Detail Revenue Breakdown – Total $274M Revenue Mix by Business Product Revenue 25% $206M 43% Service Revenue 31% $68M LED Solutions Memory Solutions Intelligent Platform Solutions © 2024 SGH | 13

  14. Slide 14: Q1 FY24 Non-GAAP Operating Results

    Q1 FY24 Non-GAAP Operating Results Continuing Operations ($M) Q1 FY24 Q4 FY23 Q1 FY23 Revenue $274.2 $316.7 $391.9 Intelligent Platform Solutions $118.8 $145.4 $211.0 Memory Solutions $85.7 $105.2 $118.3 LED Solutions $69.8 $66.0 $62.5 Non-GAAP Gross profit* $91.3 $100.3 $122.8 Non-GAAP Operating ex

  15. Slide 15: Q1 FY24 Balance Sheet Highlights

    Q1 FY24 Balance Sheet Highlights Continuing Operations Working Cash Capital Capital Q4 FY23 Q1 FY24 Flow Q4 FY23 Q1 FY24 Expenditures Q4 FY23 Q1 FY24 Net Cash, CapEx $7.7M $4.6M Accounts $219M $171M Equivalents & ST $391M $553M Receivable investments (at period end) Days Sales Depreciation $7.3M $7.

  16. Slide 16: Our Guidance

    OUR GUIDANCE © 2024 SGH | 16

  17. Slide 17: Q2 FY24 Guidance

    Q2 FY24 Guidance Continuing Operations GAAP Outlook Adjustments Non-GAAP Outlook Net Sales $285 million +/- $25 million — $285 million +/- $25 million Gross margin 29.5% +/- 1% 3% (A) 32.5% +/- 1% Operating expenses $81 million +/- $3 million $(15) million (B)(C) $66 million +/- $3 million Diluted e

  18. Slide 18: Powering Growth. Expanding Possibilities.

    POWERING GROWTH. EXPANDING POSSIBILITIES. © 2024 SGH | 18

  19. Slide 19: Appendix

    APPENDIX © 2024 SGH | 19

  20. Slide 20: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations © 2024 SGH | 20

  21. Slide 21: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations © 2024 SGH | 21

  22. Slide 22: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations © 2024 SGH | 22

  23. Slide 23: Convertible Dilution

    Convertible Dilution • Note: Dilution in millions of shares © 2024 SGH | 23

SMART Global Holdings — Q1 2024 Earnings Presentation on 6ix