SMART Global Holdings(US:SGH)2021-10-13 02:32Financial Data and Key Metrics Changes - Total revenue for fiscal 2021 was $1.5 billion, an increase of 34% year-over-year [9] - Non-GAAP gross margins reached 22%, up 240 basis points from the prior year [37] - Q4 revenue was approximately $468 million, a record for the company, representing a 57% year-over-year increase [38] - Non-GAAP diluted earnings per share for Q4 was $2.16, up 163% from $0.82 in Q4 2020 [45] Business Line Data and Key Metrics Changes - Intelligent Platform Solutions (IPS) revenue grew by approximately 30% year-over-year to a record $345 million for fiscal 2021 [36] - Memory Solutions revenue grew by approximately 9% year-over-year to $932 million, with Q4 revenue at $247 million [36][40] - LED Solutions Group contributed approximately $225 million in sales during fiscal 2021, with Q4 revenue at $123 million [36][41] Market Data and Key Metrics Changes - Breakdown of net sales by end markets for Q4: Mobile and PCs 23%, Network and Telecom 11%, Servers and Storage 12%, AI/Data Analytics/Machine Learning 13%, Advanced Lighting 26%, Industrial Defense and Other 15% [46] Company Strategy and Development Direction - The company organized into three lines of business: Intelligent Platform Solutions, Memory Solutions, and LED Solutions, focusing on custom solutions for niche markets [7][8] - The company is targeting high-growth market segments such as AI, Machine Learning, Data Analytics, In-Memory Compute, Edge Computing, and Advanced LED lighting technologies [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about fiscal 2022, highlighting strong demand and growth potential across all business lines [33][57] - The company is navigating supply chain constraints while maintaining a focus on growth and innovation [114] Other Important Information - The company appointed Sandeep Nayyar as Lead Independent Director and announced the addition of Penny Herscher to the Board, enhancing governance and diversity [11] - The company released its inaugural ESG report for 2020, showcasing its commitment to sustainability [12] Q&A Session Summary Question: Can you explain the margin leverage seen this quarter? - Management indicated that margin improvement was driven by better performance in Cree LED and a higher mix of managed services in IPS [63][64] Question: What contributed to the growth in Memory Solutions? - The growth in Memory Solutions was primarily due to the Specialty Memory business, despite a revenue reclassification impacting reported figures [66] Question: What is the confidence level in building inventory for the next fiscal year? - Inventory growth was attributed to preparations for shipments in IPS and increased inventory for the Memory Solutions Group [68][70] Question: What is the timing for the $68 million DoD contract? - The revenue from the DoD contract is expected to flow in during Q2 and Q3 of fiscal 2022 [92] Question: What is the impact of the Brazil R&D credit ending? - The Brazil R&D credit is expected to end in January 2022, which may increase operating expenses by approximately $6 million in Q3 and Q4 [94][96]