Smart Global Holdings Inc (NASDAQ:SGH) stock surges 15.57% (As on Oct 13, 12:25:57 AM UTC-4, Source: Google Finance) after the company posted strong results for the fourth quarter of FY 21. In fiscal 2021, the company had closed the acquisition of Cree LED, and with that SGH organized the company into three lines of business: Intelligent Platform Solutions under the Penguin brand, Memory Solutions under the SMART Modular brand, and LED Solutions under the Cree LED brand. The company has achieved a more diversified mix of business with Memory Solutions accounting for just 53% of Q4 revenue, down from 77% in the prior year same quarter. Each of the individual businesses achieved outstanding results from record revenues at Penguin to new customer wins and new vertical markets at SMART Modular to significant gross margin expansion at Cree LED. Further, with the recent announcement of Penny Herscher joining the SGH’s board, the company is reinforcing the company’s commitment to greater independence, diversity and public company board experience.
Moreover, the IPS team continues to make progress on its managed service growth initiatives, with total software and managed services revenue growing by 40% in Q4 fiscal 2021 versus Q4 of last year. In the Memory Solutions Group, revenue grew by 7% Q4 fiscal ’21 versus Q4 fiscal 2020 to reach $247 million. LED Solutions Group revenues grew to $123 million dollars in Q4.
SGH in the fourth quarter of FY 21 has reported the adjusted earnings per share of $2.16, beating the analysts’ estimates for the adjusted earnings per share of $1.60, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 57 percent to $467.71 million in the fourth quarter of FY 21, beating the analysts’ estimates for revenue by 1.31%. Non-GAAP gross margin for the fourth quarter was a record 26.4%, up from the 21.9% in the prior quarter and up from 19.5% in the fourth quarter of 2020. Adjusted EBITDA for the fourth quarter of 2021 was $75.9 million or approximately 16% of sales compared to $33 million or approximately 11% of sales in the fourth quarter of 2020.
The company expects the net sales for the first quarter of 2022 to range from approximately $440 million to $480 million. Non-GAAP gross margin for the first quarter of 2022 is expected to be approximately 25% to 27%. Cash capital expenditures for the first fiscal quarter are expected to be in the range of $10 million to $12 million.