Penguin Solutions Reports Fourth Quarter and Full Year Fiscal 2024 Financial Results

SMART Global Holdings Is Now Penguin Solutions

Q4 FY24 Revenue Across All Business Segments Up Sequentially

MILPITAS, Calif.--(BUSINESS WIRE)--October 15, 2024-- 

Penguin Solutions, Inc. ("Penguin Solutions," "we," "us," or the "Company") (NASDAQ: PENG) today announced its new company name and reported financial results for the fourth quarter and full year fiscal 2024.

New Company Name and Ticker Symbol

The Company is pleased to announce the successful completion of its name change from SMART Global Holdings, Inc. to Penguin Solutions, Inc., a move that reflects the Company's strategic transformation and evolving focus on key areas such as artificial intelligence ("AI") infrastructure deployment, advanced memory enterprise solutions and high-performance computing. Effective today, the Company's ordinary shares are trading under the new ticker symbol "PENG" on Nasdaq.

Fiscal 2024 Highlights

   -- Net sales of $1.2 billion versus $1.4 billion in fiscal year 2023 
 
   -- GAAP gross margin of 29.1%, up 30 basis points versus fiscal year 2023 
 
   -- Non-GAAP gross margin of 31.9%, up 20 basis points versus fiscal year 
      2023 
 
   -- GAAP EPS of $(0.85) versus $0.15 in fiscal year 2023 
 
   -- Non-GAAP EPS of $1.25 versus $2.52 in fiscal year 2023 

Fourth Quarter Fiscal 2024 Highlights

   -- Net sales of $311 million, down 1.7% versus the year-ago quarter 
 
   -- GAAP gross margin of 28.0%, down 90 basis points versus the year-ago 
      quarter 
 
   -- Non-GAAP gross margin of 30.9%, down 80 basis points versus the year-ago 
      quarter 
 
   -- GAAP EPS of $(0.46) versus $1.17 in the year-ago quarter 
 
   -- Non-GAAP EPS of $0.37 versus $0.35 in the year-ago quarter 

"We are pleased with our Q4 results, highlighted by our third consecutive quarter of sequential top line growth," said Mark Adams, CEO of Penguin Solutions. "Our Company's transition to Penguin Solutions reinforces our commitment to solving the complexities of AI infrastructure, managing our customers' implementations with the design, build, deployment, and management of cutting-edge AI solutions," concluded Adams.

Annual Financial Results

 
                        GAAP (1)               Non-GAAP (2) 
                 -----------------------  ---------------------- 
(in thousands, 
except per 
share amounts)      FY24         FY23        FY24        FY23 
---------------  -----------  ----------  ----------  ---------- 
Net sales: 
   Intelligent 
    Platform 
    Solutions    $  554,552   $  749,708  $  554,552  $  749,708 
   Memory 
    Solutions       356,426      443,264     356,426     443,264 
   LED 
    Solutions       259,818      248,278     259,818     248,278 
                  ---------    ---------   ---------   --------- 
Total net sales  $1,170,796   $1,441,250  $1,170,796  $1,441,250 
                  =========    =========   =========   ========= 
 
Gross profit     $  340,776   $  415,171  $  373,981  $  456,578 
Operating 
 income              18,295        8,745     120,257     179,794 
Net income 
 (loss) 
 attributable 
 to Penguin 
 Solutions          (44,324)       7,858      66,907     127,681 
Diluted 
 earnings 
 (loss) per 
 share           $    (0.85)  $     0.15  $     1.25  $     2.52 
 

Quarterly Financial Results

 
                            GAAP (1)                     Non-GAAP (2) 
                 ------------------------------  ---------------------------- 
(in thousands, 
except per 
share amounts)    Q4 FY24   Q3 FY24    Q4 FY23   Q4 FY24   Q3 FY24   Q4 FY23 
---------------  ---------  --------  ---------  --------  --------  -------- 
Net sales: 
   Intelligent 
    Platform 
    Solutions    $149,355   $144,968  $145,432   $149,355  $144,968  $145,432 
   Memory 
    Solutions      95,832     91,629   105,181     95,832    91,629   105,181 
   LED 
    Solutions      65,961     63,983    66,045     65,961    63,983    66,045 
                  -------    -------   -------    -------   -------   ------- 
Total net sales  $311,148   $300,580  $316,658   $311,148  $300,580  $316,658 
                  =======    =======   =======    =======   =======   ======= 
 
Gross profit     $ 87,086   $ 88,906  $ 91,585   $ 96,007  $ 96,962  $100,300 
Operating 
 income (loss)      8,791     11,511    (1,639)    33,739    33,325    30,295 
Net income 
 (loss) 
 attributable 
 to Penguin 
 Solutions        (24,547)     5,616    64,841     20,007    20,221    18,406 
Diluted 
 earnings 
 (loss) per 
 share           $  (0.46)  $   0.10  $   1.17   $   0.37  $   0.37  $   0.35 
 
 
(1)    GAAP represents U.S. Generally Accepted Accounting Principles. 
(2)    Non-GAAP represents GAAP excluding the impact of certain activities. 
       Further information regarding the Company's use of non-GAAP measures 
       and reconciliations between GAAP and non-GAAP measures is included 
       within this press release. 
 

Business Outlook

As of October 15, 2024, Penguin Solutions is providing the following financial outlook for fiscal year 2025:

 
                      GAAP                                        Non-GAAP 
                     Outlook              Adjustments              Outlook 
---------------  ---------------  ---------------------------  --------------- 
                 15% YoY Growth                                15% YoY Growth 
Net sales            +/- 5%                   --                   +/- 5% 
Gross margin       30% +/- 1%                2%      $(A)$         32% +/- 1% 
                  $335 million                                  $275 million 
Operating            +/- $15                                       +/- $15 
expenses             million      ($60) million     $(B)$(C)         million 
Diluted 
earnings per 
share            $0.30 +/- $0.20          1.40  (A)(B)(D)$  $1.70 +/- $0.20 
Diluted shares    56.3 million                --                56.3 million 
 
 
Non-GAAP adjustments (in millions) 
-------------------------------------------------------------------  ------- 
(A) Share-based compensation and amortization of 
 acquisition-related intangibles included in cost of sales           $ 31 
(B) Share-based compensation and amortization of 
 acquisition-related intangibles included in R&D and SG&A              48 
(C) Other adjustments                                                  12 
(D) Estimated income tax effects                                      (12) 
                                                                      --- 
                                                                     $ 79 
                                                                      === 
 

Fourth Quarter and Full Year Fiscal 2024 Earnings Conference Call and Webcast Details

Penguin Solutions will hold a conference call and webcast to discuss the fourth quarter and full year fiscal 2024 results and related matters today, October 15, 2024, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Interested parties may access the call by dialing +1-833-470-1428 in the United States or +1-929-526-1599 from international locations, using the access code 916986. The earnings presentation and a live webcast of the conference call can be accessed from the Company's investor relations website where they will remain available for approximately one year.

Use of Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements concerning or regarding future events and the future financial and operating performance of Penguin Solutions; statements regarding the extent and timing of and expectations regarding Penguin Solutions' future revenues and expenses; statements regarding Penguin Solutions' strategic transformation and priorities; statements regarding long-term effective tax rates; and statements regarding the business and financial outlook for the next fiscal year described under "Business Outlook" above.

These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipate," "target," "expect," "estimate," "intend," "plan," "goal," "believe," "could," and other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results or aspirations and are subject to a number of significant risks, uncertainties and other factors, many of which are outside of our control, including but not limited to: global business and economic conditions and growth trends in technology industries (including trends and markets related to AI), our customer markets and various geographic regions; uncertainties in the geopolitical environment; the ability to manage our cost structure; disruptions in our operations or supply chain as a result of global pandemics or otherwise; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of our strategic initiatives including our rebranding and related strategy, any potential collaborations and additional investments in new products and additional capacity; acquisitions of companies or technologies and the failure to successfully integrate and operate them or customers' negative reactions to them; issues, delays or complications in integrating the operations of Stratus Technologies; failure to achieve the intended benefits of the sale of SMART Brazil and its business; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or

(MORE TO FOLLOW) Dow Jones Newswires

October 15, 2024 16:05 ET (20:05 GMT)