MILPITAS, Calif. - SMART Global Holdings, Inc. (NASDAQ: SGH) today announced its financial results for the second quarter of fiscal 2024, revealing a slight earnings beat but a revenue shortfall compared to analyst expectations. The company reported adjusted EPS of $0.27, marginally higher than the analyst estimate of $0.25. However, revenue for the quarter was $284.8 million, falling short of the consensus estimate of $285.09 million.
The stock reacted negatively to the news, plunging 10.76% as investors responded to the revenue miss and weaker-than-expected guidance for the upcoming quarter. For Q3 2024, SMART Global Holdings expects adjusted EPS to range between $0.15 and $0.45, with the midpoint of $0.30 falling slightly above the analyst consensus of $0.28. The company anticipates revenue between $275 million and $325 million, with the midpoint of $300 million below the consensus of $308 million.
CEO Mark Adams commented on the quarter's performance, highlighting the company's transformation into a high-value enterprise solutions company and its unique position in addressing the rapid adoption of AI with its high-performance computing and specialty memory solutions. The period also saw the appointment of Pete Manca as President of Intelligent Platform Solutions (IPS), bringing his extensive experience from Dell Technologies (NYSE:DELL) to SGH.
Comparing year-over-year performance, the company's revenue saw a significant drop from $388.37 million reported in the second quarter of the previous fiscal year. The GAAP gross margin also decreased to 28.8% from 30.2% in the prior quarter, while adjusted gross margin fell to 31.5% from 33.3%.
The market's reaction to the earnings release and forward guidance suggests investor concerns over the company's revenue trajectory and the ability to meet market expectations in the near term. Despite the earnings beat, the revenue miss and cautious outlook overshadowed the positive aspects of the report, leading to the stock's sharp decline.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.