SMART Global Holdings(US:SGH)2026-01-06 21:33Financial Performance - Total net sales for the three months ended November 28, 2025, were $343,071,000, a slight increase from $341,102,000 for the same period in 2024, representing a growth of 0.6%[18] - Gross profit for the three months ended November 28, 2025, was $96,109,000, compared to $97,812,000 in the prior year, indicating a decrease of 1.7%[18] - Operating income increased to $19,582,000 for the three months ended November 28, 2025, up from $17,356,000 in the same period of 2024, reflecting a growth of 12.8%[18] - Net income attributable to Penguin Solutions for the three months ended November 28, 2025, was $5,270,000, slightly higher than $5,217,000 for the same period in 2024, an increase of 1.0%[18] - Earnings per share (basic and diluted) for the three months ended November 28, 2025, were both $0.04, down from $0.10 in the prior year, a decrease of 60%[18] - Cash flows from operating activities for the three months ended November 28, 2025, were $31,058,000, significantly higher than $13,819,000 for the same period in 2024, an increase of 125.5%[23] - Total net sales for the three months ended November 28, 2025, were $343,071,000, a slight increase from $341,102,000 in the same period last year[18] - Net income attributable to common stockholders for Q1 2026 was $2.0 million, compared to $5.2 million in Q1 2025, a decrease of approximately 61.5%[103] - Basic earnings per share (EPS) for Q1 2026 was $0.04, down from $0.10 in Q1 2025, reflecting the decline in net income[103] Assets and Liabilities - As of November 28, 2025, total assets decreased to $1,598,195 thousand from $1,617,200 thousand as of August 29, 2025, reflecting a decline of approximately 1.5%[17] - Total current liabilities decreased to $458,110 thousand from $473,899 thousand, a decline of approximately 3.3%[17] - Total liabilities decreased to $993,726,000 as of November 28, 2025, from $1,008,973,000 as of August 29, 2025[17] - Long-term debt remained relatively stable at $442,333 thousand compared to $441,893 thousand, showing minimal change[17] - Long-term debt as of November 28, 2025, was $442.3 million, slightly up from $441.9 million as of August 29, 2025[46] - Accounts payable increased to $304.9 million as of November 28, 2025, from $267.5 million as of August 29, 2025, reflecting a rise in operational liabilities[45] Cash and Cash Equivalents - Cash and cash equivalents increased to $461,451 thousand from $453,754 thousand, showing a growth of about 1.5%[17] - Cash, cash equivalents, and restricted cash at the end of the period on November 28, 2025, totaled $461,767,000, compared to $370,611,000 at the end of the same period in 2024, an increase of 24.6%[23] - As of November 28, 2025, cash and cash equivalents totaled $434.3 million, an increase from $426.9 million as of August 29, 2025[33] Shareholder Activities - The company repurchased shares amounting to $20,193,000 during the three months ended November 28, 2025, compared to $11,123,000 in the same period of 2024, an increase of 81.5%[23] - The company declared and paid preferred cash dividends of $3.1 million in Q1 2026, with accrued preferred dividends of $0.4 million as of November 28, 2025[72] - The Board of Directors approved a total of $225.0 million in stock repurchase authorizations, with $96.5 million remaining available as of November 28, 2025[77] - In Q1 2026, the company repurchased 791 thousand shares for $15.0 million, and in Q1 2025, 467 thousand shares for $7.8 million under the current authorizations[77] Strategic Initiatives - The company is focusing on strategic initiatives, including rebranding and potential acquisitions, to enhance its market position and operational efficiency[8] - The company anticipates continued growth in technology industries, particularly in artificial intelligence, despite potential macroeconomic challenges[8] - The company expects to recognize $47.9 million of the deferred revenue balance in the next 12 months[90] - The company anticipates additional restructuring activities in future quarters, which may lead to further charges[94] Research and Development - Research and development expenses for the three months ended November 28, 2025, were $18,693,000, down from $19,811,000 in the prior year, a decrease of 5.6%[18] Impairments and Charges - The company reported a loss on impairment of non-marketable equity investment of $10,000,000 for the three months ended November 28, 2025, which was not present in the prior year[23] - The company recognized a full impairment charge of $10.0 million for a non-marketable equity investment during the quarter ended November 28, 2025, reducing the carrying amount of the investment to zero[38] - Restructuring charges amounted to $4.7 million in Q1 2026, significantly higher than $0.1 million in Q1 2025, reflecting a strategic shift in operations[94] Segment Performance - Advanced Computing segment sales decreased to $151.452 million from $177.426 million, a decline of 14.6% year-over-year[109] - Integrated Memory segment sales increased significantly to $136.521 million from $96.706 million, a growth of 41.2% year-over-year[109] - Total costs of goods sold rose to $240.150 million from $235.980 million, an increase of 1.0%[109] - Total operating expenses decreased to $61.393 million from $64.204 million, a reduction of 4.2%[109] - Segment operating income increased to $41.528 million from $40.918 million, a growth of 1.5%[109] Other Financial Metrics - The effective tax rate for Q1 2026 was 23.0%, down from 51.6% in Q1 2025, primarily due to changes in tax liabilities and operational adjustments[99] - The company recognized revenue of $32.2 million from AI hardware solutions and installation services during the quarter, with $15.1 million remaining in accounts receivable as of November 28, 2025[112] - The company is expected to sell its equity interest in Zilia Technologies for a gross cash purchase price of $46.1 million, with the transaction expected to close by March 30, 2026[114] - The carrying value of the investment in Zilia Technologies was $37.8 million as of November 28, 2025[115]