Slide 1: Second Quarter FY23 SGH Financial Results
SECOND QUARTER FY23 SGH FINANCIAL RESULTS APRIL 4, 2023
Slide 2: Disclaimer
Disclaimer This presentation and the oral communications made during the course of this presentation contain forward-looking Resources” contained in SGH’s Annual Report on Form 10-K for the fiscal year ended August 26, 2022, Quarterly Report on statements within the meaning of Section 27A of the Sec
Slide 3: Speakers
Mark Adams President and CEO SGH SPEAKERS Ken Rizvi SVP and CFO SGH © 2023 SGH | 3
Slide 4: Q2 FY23 Highlights
Q2 FY23 Highlights Record Non-GAAP Gross Margin of 28.9%* GAAP gross margin of 25.7%, up 60 bp vs. Q2 FY22 Non-GAAP gross margin of 28.9%, up 290 bp vs. Q2 FY22 Non-GAAP EPS of $0.76* Above the high-end of guidance range of $0.45 - $0.75 Revenue of $429 Million Within guidance range of
Slide 5: Our Business Lines
OUR BUSINESS LINES © 2023 SGH | 5
Slide 6: Intelligent Platform Solutions
Intelligent Platform Solutions Revenue of $222 Million − Record revenue performance; up 170% vs. Q2 FY22 − Represents 52% of total SGH revenue − Services revenue doubled vs. Q2 FY22 Industry Recognition − Penguin Computing’s JADE system was one of two supercomputers that powered the recent nucle
Slide 7: LED Solutions
LED Solutions Revenue of $56 Million − Continued macroeconomic headwinds impacted Q2 FY23 − We believe our outsourced manufacturing model and continued innovation position us well for a recovery in the sector − Expect modestly higher Q3 FY23 based on improving customer demand Continued Customer-
Slide 8: Memory Solutions
Memory Solutions Revenue of $151 Million − Lower sequentially due to decline in both worldwide memory pricing and demand for PCs and mobile phones − Achieved Q2 FY23 segment operating margin of ~10%, representing a good performance in a challenging pricing environment − Expect sales to stabilize i
Slide 9: Financial Review
FINANCIAL REVIEW Ken Rizvi, SVP and CFO © 2023 SGH | 9
Slide 10: Strong Non-GAAP Quarterly Results
Q2 FY23 REVENUE $429M Strong Non-GAAP Q2 FY23 Guidance $410-$460M Quarterly Results Q2 FY23 NON-GAAP GROSS MARGIN* Key financial metrics 28.9% within or above Q2 FY23 Guidance 26-28% guidance range Q2 FY23 NON-GAAP EPS* $0.76 Q2 FY23 Guidance $0.60 +/- $0.15 Guidance provided on Q1 FY23 earnings c
Slide 11: Q2 FY23 Revenue Detail
Q2 FY23 Revenue Detail Revenue Breakdown – Total $429M Revenue Mix by Business Product Revenue 13% $374M 52% 35% Service Revenue $55M LED Solutions Memory Solutions Intelligent Platform Solutions © 2023 SGH | 11
Slide 12: Q2 FY23 Non-GAAP Operating Results
Q2 FY23 Non-GAAP Operating Results ($M) Q2 FY23 Q1 FY23 Q2 FY22 Revenue $429.2 $465.5 $449.2 Intelligent Platform Solutions $222.5 $211.0 $82.3 Memory Solutions $151.1 $192.0 $260.1 LED Solutions $55.6 $62.5 $106.8 Non-GAAP Gross profit* $123.9 $129.2 $116.9 Non-GAAP Operating expenses* $72.5 $74.4
Slide 13: Q2 FY23 Balance Sheet Highlights
Q2 FY23 Balance Sheet Highlights Working Cash Capital Q1 FY23 Q2 FY23 Q1 FY23 Q2 FY23 Q1 FY23 Q2 FY23 Capital Flow Expenditures Net Accounts Cash & $306M $229M $325M $376M CapEx $11.6M $12.6M Receivable Equivalents (at period end) Days Sales 33 days 36 days CF from Depreciation $8.9M $9.0M Outstandi
Slide 14: Our Guidance
OUR GUIDANCE © 2023 SGH | 14
Slide 15: Q3 FY23 Guidance
Q3 FY23 Guidance GAAP Outlook Adjustments Non-GAAP Outlook Net Sales $375 million +/- $20 million — $375 million +/- $20 million Gross margin 26% +/- 1% 2% (A) 28% +/- 1% Operating expenses $90 million +/- $3 million $18 million (B)(C) $72 million +/- $3 million Diluted earnings (loss) per share $(0
Slide 16: Powering Growth. Expanding Possibilities.
POWERING GROWTH. EXPANDING POSSIBILITIES. © 2023 SGH | 16
Slide 17: Appendix
APPENDIX © 2023 SGH | 17
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Three Months Ended Six Months Ended February 24, November 25, February 25, February 24, February 25, (dollars in thousands, except per share data) 2023 2022 2022 2023 2022 GAAP gross profit $ 110,381 $ 118,410 $ 112,713 $ 228,791 $ 234,914 Share-based compensation ex
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Three Months Ended Six Months Ended February 24, November 25, February 25, February 24, February 25, (dollars in thousands, except per share data) 2023 2022 2022 2023 2022 GAAP net income (loss) attributable to SGH $ (27,219) $ 4,992 $ 2,458 $ (22,227) $ 22,485 Share
Slide 20: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Three Months Ended Six Months Ended February 24, November 25, February 25, February 24, February 25, (dollars in thousands, except per share data) 2023 2022 2022 2023 2022 Net income (loss) attributable to SGH $ (27,219) $ 4,992 $ 2,458 $ (22,227) $ 22,485 Interest e