10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 27, 2022

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38102

SMART GLOBAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Cayman Islands	98-1013909
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

c/o Walkers Corporate Limited
190 Elgin Avenue
George Town, Grand Cayman
Cayman Islands	KY1-9008
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, including Area Code: (510) 623-1231

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, $0.03 par value per share	SGH	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
☒	☐	☐	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 21, 2022, the registrant had 49,991,532 ordinary shares outstanding.

Table of Contents

		Page
PART I. Financial Information
Item 1	Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	35
PART II. Other Information
Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6	Exhibits	39
Signatures		40

2

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) and the documents incorporated herein by reference contain “forward-looking statements” that are not historical in nature, that are predictive or that depend upon or refer to future events or conditions. These statements include, but are not limited to, statements regarding our future financial or operating performance, the extent and timing of future revenues and expenses and customer demand, statements regarding the deployment of our products and services, statements regarding our reliance on third parties, and statements using words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “potential,” “should” and similar words and the negatives thereof constitute forward-looking statements. Forward-looking statements are based on current expectations and preliminary assumptions that are subject to factors, risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Such factors, risks and uncertainties include, but are not limited to, those identified in “Risk Factors,” “Critical Accounting Estimates,” “Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and “Liquidity and Capital Resources” contained in this Quarterly Report and the risks discussed in our other Securities and Exchange Commission (“SEC”) filings.

We urge you to consider these factors, risks and uncertainties carefully in evaluating the forward-looking statements contained in this Quarterly Report. All subsequent written or oral forward-looking statements attributable to our Company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report. We do not intend, and undertake no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Quarterly Report, except as required by law.

About This Quarterly Report

As used herein, “SGH,” “Company,” “Registrant,” “we,” “our,” “us” or similar terms refer to SMART Global Holdings, Inc. and our consolidated subsidiaries, unless the context indicates otherwise. Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal 2022 and 2021 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated.

3

PART I. Financial Information

Item 1. Financial Statements

INDEX TO FINANCIAL STATEMENTS

	Page
Consolidated Balance Sheets	5
Consolidated Statements of Operations	6
Consolidated Statements of Comprehensive Income (Loss)	7
Consolidated Statements of Shareholders’ Equity	8
Consolidated Statements of Cash Flows	10
Notes to Consolidated Financial Statements	11

4

SMART Global Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except par value amount)

(Unaudited)

As of	May 27, 2022		August 27, 2021
Assets
Cash and cash equivalents	$	387,326	$	222,986
Accounts receivable, net (1)	357,457		313,393
Inventories	365,258		363,601
Other current assets	57,525		50,838
Total current assets	1,167,566		950,818
Property and equipment, net	159,111		156,266
Operating lease right-of-use assets	43,524		40,869
Intangible assets, net	83,219		101,073
Goodwill	75,043		74,255
Other noncurrent assets	25,589		21,517
Total assets	$	1,554,052	$	1,344,798
Liabilities and Equity
Accounts payable and accrued expenses	$	448,012	$	484,107
Current debt	8,795		25,354
Other current liabilities	68,089		74,337
Total current liabilities	524,896		583,798
Long-term debt	485,026		340,484
Acquisition-related contingent consideration	101,824		60,500
Noncurrent operating lease liabilities	36,594		32,419
Other noncurrent liabilities	6,643		8,673
Total liabilities	1,154,983		1,025,874
Commitments and contingencies
SMART Global Holdings shareholders’ equity:
Ordinary shares, $0.03 par value; authorized 200,000 shares; 52,432 shares issued and 50,376 outstanding as of May 27, 2022; 50,138 shares issued and 48,736 outstanding as of August 27, 2021	1,573		1,504
Additional paid-in-capital	437,863		396,120
Retained earnings	231,385		184,787
Treasury shares, 2,056 and 1,402 shares held as of May 27, 2022 and August 27, 2021, respectively	(67,345)		(50,545)
Accumulated other comprehensive income (loss)	(210,874)		(221,615)
Total SGH shareholders’ equity	392,602		310,251
Noncontrolling interest in subsidiary	6,467		8,673
Total equity	399,069		318,924
Total liabilities and equity	$	1,554,052	$	1,344,798

(1) Receivables from related parties were de minimis and $14,057 as of May 27, 2022 and August 27, 2021, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

5

SMART Global Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales (1)	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Cost of sales	348,077		353,241		1,032,278		842,847
Gross profit	114,463		84,487		349,377		190,586
Operating expenses:
Research and development	20,298		16,718		56,749		32,534
Selling, general and administrative	58,732		48,475		164,396		118,195
Change in fair value of contingent consideration	124		16,400		41,324		16,400
Total operating expenses	79,154		81,593		262,469		167,129
Operating income	35,309		2,894		86,908		23,457
Non-operating (income) expense:
Interest expense, net	5,110		5,049		14,678		12,568
Other non-operating (income) expense	550		489		3,570		1,187
Total non-operating (income) expense	5,660		5,538		18,248		13,755
Income (loss) before taxes	29,649		(2,644)		68,660		9,702
Income tax provision	5,154		4,010		20,495		8,485
Net income (loss)	24,495		(6,654)		48,165		1,217
Net income attributable to noncontrolling interest	382		557		1,567		557
Net income (loss) attributable to SGH	$	24,113	$	(7,211)	$	46,598	$	660
Earnings (loss) per share:
Basic	$	0.48	$	(0.15)	$	0.94	$	0.01
Diluted	$	0.44	$	(0.15)	$	0.84	$	0.01
Shares used in per share calculations:
Basic	50,095		48,071		49,543		48,542
Diluted	54,998		48,071		55,756		51,167

(1) Sales to related parties were de minimis in 2022 and were $20,103 and $53,251 in the three and nine months ended May 28, 2021, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

6

SMART Global Holdings, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net income (loss)	$	24,495	$	(6,654)	$	48,165	$	1,217
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	18,802		2,574		10,741		(3,017)
Comprehensive income (loss)	43,297		(4,080)		58,906		(1,800)
Comprehensive income attributable to noncontrolling interest	382		557		1,567		557
Comprehensive income (loss) attributable to SGH	$	42,915	$	(4,637)	$	57,339	$	(2,357)

The accompanying notes are an integral part of these consolidated financial statements.

7

SMART Global Holdings, Inc.

Consolidated Statements of Shareholders’ Equity

(In thousands)

(Unaudited)

	Shares Issued	Amount		Additional Paid-in-capital		Retained Earnings		Treasury Shares		Accumulated Other Comprehensive Income (Loss)		Total SGH Shareholders’ Equity		Non- controlling Interest in Subsidiary		Total Equity
As of August 27, 2021	50,138	$	1,504	$	396,120	$	184,787	$	(50,545)	$	(221,615)	$	310,251	$	8,673	$	318,924
Net income	—	—		—		20,027		—		—		20,027		671		20,698
Other comprehensive income (loss)	—	—		—		—		—		(19,440)		(19,440)		—		(19,440)
Shares issued under equity plans	734	22		5,007		—		—		—		5,029		—		5,029
Repurchase of ordinary shares	(51)	(2)		2		—		(2,666)		—		(2,666)		—		(2,666)
Share-based compensation expense	—	—		9,739		—		—		—		9,739		—		9,739
As of November 26, 2021	50,821	1,524		410,868		204,814		(53,211)		(241,055)		322,940		9,344		332,284
Net income	—	—		—		2,458		—		—		2,458		514		2,972
Other comprehensive income (loss)	—	—		—		—		—		11,379		11,379		—		11,379
Shares issued under equity plans	372	11		2,420		—		—		—		2,431		—		2,431
Repurchase of ordinary shares	(4)	—		—		—		(229)		—		(229)		—		(229)
Share-based compensation expense	—	—		9,848		—		—		—		9,848		—		9,848
Distribution to noncontrolling interest	—	—		—		—		—		—		—		(3,773)		(3,773)
As of February 25, 2022	51,189	1,535		423,136		207,272		(53,440)		(229,676)		348,827		6,085		354,912
Net income	—	—		—		24,113		—		—		24,113		382		24,495
Other comprehensive income (loss)	—	—		—		—		—		18,802		18,802		—		18,802
Shares issued under equity plans	1,243	38		4,351		—		—		—		4,389		—		4,389
Repurchase of ordinary shares	—	—		—		—		(13,905)		—		(13,905)		—		(13,905)
Share-based compensation expense	—	—		10,376		—		—		—		10,376		—		10,376
As of May 27, 2022	52,432	$	1,573	$	437,863	$	231,385	$	(67,345)	$	(210,874)	$	392,602	$	6,467	$	399,069
The accompanying notes are an integral part of these consolidated financial statements.

8

SMART Global Holdings, Inc.

Consolidated Statements of Shareholders’ Equity

(In thousands)

(Unaudited)

	Shares Issued	Amount		Additional Paid-in-capital		Retained Earnings		Treasury Shares		Accumulated Other Comprehensive Income (Loss)		Total SGH Shareholders’ Equity		Non- controlling Interest in Subsidiary		Total Equity
As of August 28, 2020	48,988	$	1,469	$	347,431	$	163,475	$	(2,032)	$	(228,241)	$	282,102	$	—	$	282,102
Net income	—	—		—		2,027		—		—		2,027		—		2,027
Other comprehensive income (loss)	—	—		—		—		—		(16,525)		(16,525)		—		(16,525)
Shares issued under equity plans	956	29		3,077		—		—		—		3,106		—		3,106
Repurchase of ordinary shares	(139)	(4)		4		—		(3,483)		—		(3,483)		—		(3,483)
Share-based compensation expense	—	—		11,088		—		—		—		11,088		—		11,088
As of November 27, 2020	49,805	1,494		361,600		165,502		(5,515)		(244,766)		278,315		—		278,315
Net income	—	—		—		5,844		—		—		5,844		—		5,844
Other comprehensive income (loss)	—	—		—		—		—		10,934		10,934		—		10,934
Shares issued under equity plans	371	11		2,534		—		—		—		2,545		—		2,545
Repurchase of ordinary shares	(1,104)	(33)		33		—		(44,481)		—		(44,481)		—		(44,481)
Share-based compensation expense	—	—		5,398		—		—		—		5,398		—		5,398
As of February 26, 2021	49,072	1,472		369,565		171,346		(49,996)		(233,832)		258,555		—		258,555
Net income (loss)	—	—		—		(7,211)		—		—		(7,211)		557		(6,654)
Other comprehensive income (loss)	—	—		—		—		—		2,574		2,574		—		2,574
Shares issued under equity plans	806	24		7,482		—		—		—		7,506		—		7,506
Repurchase of ordinary shares	(6)	—		—		—		(337)		—		(337)		—		(337)
Share-based compensation expense	—	—		8,344		—		—		—		8,344		—		8,344
Acquisition of noncontrolling interest	—	—		—		—		—		—		—		7,478		7,478
As of May 28, 2021	49,872	$	1,496	$	385,391	$	164,135	$	(50,333)	$	(231,258)	$	269,431	$	8,035	$	277,466

The accompanying notes are an integral part of these consolidated financial statements.

9

SMART Global Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Nine Months Ended	May 27, 2022		May 28, 2021
Cash flows from operating activities:
Net income	$	48,165	$	1,217
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense and amortization of intangible assets	48,461		32,468
Amortization of debt discount and issuance costs	7,476		6,503
Share-based compensation expense	30,295		24,867
Change in fair value of contingent consideration	41,324		16,400
Amortization of operating lease right-of-use assets	7,953		4,944
Other	1,294		488
Changes in operating assets and liabilities:
Accounts receivable	(41,490)		(15,455)
Inventories	(116)		(66,493)
Other assets	(5,884)		(14,163)
Accounts payable and accrued expenses	(46,969)		122,095
Operating lease liabilities	(7,205)		(4,460)
Deferred income taxes, net	721		(3,083)
Net cash provided by operating activities	84,025		105,328
Cash flows from investing activities:
Capital expenditures and deposits on equipment	(29,298)		(40,017)
Acquisition of business, net of cash acquired	—		(28,613)
Other	(746)		222
Net cash used for investing activities	(30,044)		(68,408)
Cash flows from financing activities:
Proceeds from debt	270,775		11,439
Proceeds from borrowing under line of credit	84,000		122,500
Proceeds from issuance of ordinary shares	11,849		13,157
Repayments of debt	(125,000)		—
Repayments of borrowings under line of credit	(109,000)		(97,500)
Payments to acquire ordinary shares	(16,800)		(48,301)
Distribution to noncontrolling interest	(3,773)		—
Other	(3,841)		—
Net cash provided by financing activities	108,210		1,295
Effect of changes in currency exchange rates on cash and cash equivalents	2,149		(34)
Net increase in cash and cash equivalents	164,340		38,181
Cash and cash equivalents at beginning of period	222,986		150,811
Cash and cash equivalents at end of period	$	387,326	$	188,992

The accompanying notes are an integral part of these consolidated financial statements.

10

SMART Global Holdings, Inc.

Notes to Consolidated Financial Statements

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include SGH and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended August 27, 2021. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. These consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 27, 2021. Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Fiscal Year: Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2022 and 2021 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years end on July 31 of each year.

Subsequent Event

On June 28, 2022, SGH entered into a Share Purchase Agreement (the “Stratus Purchase Agreement”) with Storm Private Holdings I Ltd., a Cayman Islands exempted company (“Stratus Holding Company” and together with its subsidiaries, “Stratus Technologies”), and Storm Private Investments LP, a Cayman Islands exempted limited partnership (“Stratus Seller”). The transaction, which was approved by our Board of Directors, is expected to close by the end of calendar year 2022.

Pursuant to the Stratus Purchase Agreement, among other matters, and subject to the satisfaction or waiver of the conditions set forth therein, Stratus Seller will sell to SGH, and SGH will purchase from Stratus Seller, all of Stratus Seller’s right, title and interest in and to the outstanding equity securities of Stratus Holding Company (the “Stratus Share Purchase”).

Pursuant to the terms of, and subject to the conditions specified in, the Stratus Purchase Agreement, upon consummation of the Stratus Share Purchase (the “Closing”), (i) SGH will pay to Stratus Seller a cash purchase price of $225 million, subject to certain adjustments as set forth in the Stratus Purchase Agreement, and (ii) Stratus Seller will have the right to receive, and SGH will be obligated to pay, contingent consideration (if any) of up to $50 million (the “Earn-Out”) based on the gross profit performance of the Stratus Technologies business during the first full 12 fiscal months of Stratus Technologies following the Closing. The Earn-Out, if any, will be payable in cash, ordinary shares or a mix of cash and ordinary shares, at SGH’s election.

The consummation of the Stratus Share Purchase is subject to certain customary conditions to Closing, including the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended. The consummation of the Stratus Share Purchase is not subject to a financing condition.

Share Dividend

On January 3, 2022, our Board of Directors declared a share dividend of one ordinary share, $0.03 par value per share, for every one outstanding ordinary share owned to shareholders of record as of January 25, 2022. The dividend was paid on February 1, 2022. The accompanying consolidated financial statements and notes have been restated and adjusted for the impact of the share dividend.

11

Recently Adopted Accounting Standards

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08 – Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. We adopted ASU 2021-08 in the third quarter of 2022 and the adoption had no impact on our financial statements.

In December 2019, the FASB issued ASU 2019-12 – Income Taxes: Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted ASU 2019-12 in the first quarter of 2022 on a prospective basis. The adoption of this ASU did not have a significant impact on our financial statements.

In June 2016, the FASB issued ASU 2016-13 – Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires a financial asset (or a group of financial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. This ASU requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the increases or decreases of expected credit losses that have taken place during the period. This ASU requires that credit losses of debt securities designated as available-for-sale be recorded through an allowance for credit losses and limits the credit loss to the amount by which fair value is below amortized cost. We adopted ASU 2016-13 in the first quarter of 2021 under the modified retrospective adoption method. The adoption of this ASU did not have a significant impact on our financial statements.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU 2020-06 – Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU is effective for us in the first quarter of 2023 and permits the use of either the modified retrospective or fully retrospective method of transition. We are evaluating the effects of adoption of this ASU on our financial statements.

Business Acquisition

LED Business

On March 1, 2021, pursuant to the previously announced Asset Purchase Agreement, dated October 18, 2020, as amended by the Amendment to Asset Purchase Agreement, dated March 1, 2021 (as amended, the “CreeLED Purchase Agreement”), (i) we acquired the LED business of Cree, Inc., a corporation now known as Wolfspeed, Inc. (“Cree”), including (a) certain equipment, inventory, intellectual property rights, contracts and real estate comprising Cree’s LED products segment, (b) all of the issued and outstanding equity interests of Cree Huizhou Solid State Lighting Company Limited, a limited liability company organized under the laws of the People’s Republic of China and an indirect wholly owned subsidiary of Cree and (c) Cree’s 51% ownership interest in Cree Venture LED Company Limited (“Cree Joint Venture”), Cree’s joint venture with San’an Optoelectronics Co., Ltd. (“San’an”) and (ii) we assumed certain liabilities related to the LED business (collectively, (i) and (ii), the “LED Business”). In connection with the transaction, Cree retained certain assets used in and pre-closing liabilities associated with its LED products segment.

Purchase Price: The purchase price for the LED Business consisted of (i) a payment of $50 million in cash, subject to customary adjustments, (ii) an unsecured promissory note issued to Cree by the Company in the amount of $125 million (“LED Purchase Price Note”), (iii) an earn-out payment of up to $125 million based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing (“Earnout Period”), with a minimum payment of $2.5 million, payable in the form of an unsecured promissory note to be issued by us (“Earnout Note”) and (iv) the assumption of certain liabilities. The LED Purchase Price Note bears interest at LIBOR plus 3.0% and is due on August 15, 2023. The Earnout Note began to bear interest as of March 28, 2022 at LIBOR plus 3.0% and is due on March 27, 2025. In the second quarter of 2022, we repaid the LED Purchase Price Note. See “Debt.”

12

Contingent Consideration: The Earnout Note is accounted for as contingent consideration. The fair value of the Earnout Note was estimated as of the date of acquisition to be $28.1 million and was valued using a Monte Carlo simulation analysis in a risk-neutral framework with assumptions for volatility, market price of risk adjustment, risk-free rate and cost of debt. The fair value measurement was based on significant inputs not observable in the market.

The Earnout Note is revalued each quarter and changes in valuation are reflected in results of operations. In the second half of 2021, we recorded charges of $32.4 million to adjust the value of the Earnout Note to its fair value as of August 27, 2021, and in 2022, through the end of the Earnout Period, we recorded additional aggregate charges of $41.3 million to adjust the value of the Earnout Note to its fair value as of May 27, 2022. The changes in fair value reflected new information about the probability and timing of meeting the conditions of the revenue and gross profit targets of the LED Business.

Based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing, the final calculated value of the contingent consideration was $101.8 million and, subsequent to the end of the third quarter of 2022, we issued the Earnout Note to Cree for this amount.

Unaudited Pro Forma Financial Information: The following unaudited pro forma financial information presents our combined results of operations as if the acquisition of the LED Business had occurred on August 31, 2019. The unaudited pro forma financial information is based on various adjustments and assumptions and is not necessarily indicative of what our results of operations actually would have been had the acquisition been completed as of August 31, 2019 or will be for any future periods. Furthermore, the pro forma financial information does not include adjustments to reflect any potential revenue, synergies or dis-synergies or cost savings that may be achievable in connection with the acquisition, or the associated costs that may be necessary to achieve such revenues, synergies or cost savings.

The unaudited pro forma financial information for the first nine months of 2021 combines our results of operations for the nine months ended May 28, 2021 (which includes the results of the LED Business from the March 1, 2021 acquisition date) and the results of operations of the LED Business for the six months ended December 27, 2020.

Nine months ended	May 28, 2021
Net sales	$	1,237,627
Net loss attributable to SGH	(162,969)
Earnings (loss) per share:
Basic	$	(3.36)
Diluted	$	(3.36)

The unaudited pro forma financial information above reflects the following adjustments:

•Incremental cost of sales related to the estimated fair value of inventories.

•Incremental depreciation expense related to the estimated fair value of property and equipment.

•Incremental amortization expense related to the estimated fair value of identifiable intangible assets.

•Incremental interest expense related to the LED Purchase Price Note and the Earnout Note.

•The impacts to income tax expense as a result of the pro forma adjustments.

Inventories

As of	May 27, 2022		August 27, 2021
Raw materials	$	179,649	$	163,610
Work in process	65,547		92,901
Finished goods	120,062		107,090
	$	365,258	$	363,601

As of May 27, 2022 and August 27, 2021, 8% and 11%, respectively, of total inventories were inventories owned and held under our logistics services.

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Property and Equipment

As of	May 27, 2022		August 27, 2021
Equipment	$	205,379	$	182,493
Buildings and building improvements	59,642		53,502
Furniture, fixtures and software	38,044		32,114
Land	16,126		16,126
	319,191		284,235
Accumulated depreciation	(160,080)		(127,969)
	$	159,111	$	156,266

Depreciation expense for property and equipment was $10.6 million and $30.3 million in the third quarter and first nine months of 2022, respectively, and $9.1 million and $19.5 million in the third quarter and first nine months of 2021, respectively.

Intangible Assets and Goodwill

	May 27, 2022				August 27, 2021
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Technology	$	61,614	$	(16,333)	$	61,307	$	(9,142)
Customer relationships	57,500		(29,777)		57,500		(22,393)
Trademarks/trade names	19,200		(8,985)		19,200		(6,628)
Order backlog	—		—		3,800		(2,571)
	$	138,314	$	(55,095)	$	141,807	$	(40,734)
Goodwill by segment:
Intelligent Platform Solutions	$	40,401			$	40,401
Memory Solutions	34,642				33,854
	$	75,043			$	74,255

In the first nine months of 2022 and 2021, we capitalized $1.1 million and $64.5 million, respectively, for intangible assets with weighted average useful lives of 17.5 years and 6.7 years, respectively. Amortization expense for intangible assets was $5.9 million and $18.2 million in the third quarter and first nine months of 2022, respectively, and $6.2 million and $13.0 million in the third quarter and first nine months of 2021, respectively. Amortization expense is expected to be $5.6 million for the remainder of 2022, $21.8 million in 2023, $17.8 million in 2024, $15.3 million in 2025, $8.5 million in 2026 and $14.1 million thereafter.

Goodwill of our Memory Solutions segment increased by $0.8 million in the first nine months of 2022 and increased in all of 2021 by $0.3 million from translation adjustments.

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Accounts Payable and Accrued Expenses

As of	May 27, 2022		August 27, 2021
Accounts payable (1)	$	384,251	$	429,640
Salaries, wages and benefits	38,626		37,795
Income and other taxes	21,436		14,319
Other	3,699		2,353
	$	448,012	$	484,107

(1) Includes accounts payable for property and equipment of $2.3 million and $3.1million as of May 27, 2022 and August 27, 2021, respectively.

Debt

As of	May 27, 2022		August 27, 2021
Credit Facility Term Loan	$	270,793	$	—
Convertible Senior Notes	210,694		203,992
LED Purchase Price Note	—		125,000
ABL Credit Agreement	—		25,000
Other	12,334		11,846
	493,821		365,838
Less current debt	(8,795)		(25,354)
Long-term debt	$	485,026	$	340,484

Credit Facility

On February 7, 2022, we entered into a credit agreement (the "Credit Agreement") with a syndicate of banks that provides for (i) a term loan credit facility in an aggregate principal amount of $275.0 million (the "2027 TLA") and (ii) a revolving credit facility in an aggregate principal amount of $250.0 million (the "2027 Revolver," and together with the 2027 TLA, the "Credit Facility"), in each case, maturing on February 7, 2027 (subject to certain earlier “springing maturity” dates upon certain conditions specified in the Credit Agreement). The Credit Agreement provides that up to $35.0 million of the 2027 Revolver is available for issuances of letters of credit.

Issuance costs incurred in connection with the Credit Facility were $9.1 million and were allocated to the 2027 TLA and 2027 Revolver on a pro rata basis. Unamortized issuances costs allocated to the 2027 TLA are amortized using the effective interest method and are included as a reduction of the principal amount of the 2027 TLA within debt. Unamortized issuances costs allocated to the 2027 Revolver are amortized using the straight-line method and are included in other current and noncurrent assets.

Principal payments under the 2027 TLA are due quarterly, beginning in May 2022, equal to 2.5% per annum of the initial aggregate principal amount, with such per annum percentage equal to 5.0%, 5.0%, 5.0% and 7.5% per annum in years two through five, respectively, with the balance due at maturity.

Interest and fees: Loans under the Credit Agreement bear interest at a rate per annum equal to either, at our option, a term secured overnight financing rate ("SOFR") or a base rate, in each case plus an applicable margin.

2027 TLA: The applicable margin for 2027 TLA is 2.00% per annum with respect to term SOFR borrowings, and 1.00% per annum with respect to base rate borrowings. As of May 27, 2022, the interest rate applicable to the principal amount outstanding under the 2027 TLA was 2.89% per annum. As of May 27, 2022, there was $275.0 million of 2027 TLA principal

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amount outstanding and unamortized issuance costs were $4.2 million and, as of May 27, 2022, the 2027 TLA had an effective interest rate of 3.33%.

2027 Revolver: The applicable margin for revolving loans varies based on our Total Leverage Ratio (as defined in the Credit Agreement) and ranges from 1.25% to 3.00% per annum with respect to term SOFR borrowings and from 0.25% to 2.00% per annum with respect to base rate borrowings. In addition, we are required to pay a quarterly unused commitment fee at an initial rate of 0.25%, which may increase up to a rate of 0.35% based on certain Total Leverage Ratio levels specified in the Credit Agreement. As of May 27, 2022, there were no amounts outstanding under the 2027 Revolver and unamortized issuance costs were $4.3 million.

Security: The Credit Agreement is jointly and severally guaranteed on a senior basis by certain subsidiaries of SGH organized in the United States and Cayman Islands. In addition, the Credit Agreement is secured by a pledge of the capital stock of, or equity interests in, certain subsidiaries of SGH organized in the United States and the Cayman Islands and by substantially all of the assets of certain subsidiaries of SGH organized in the United States and the Cayman Islands.

Covenants: The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends; make distributions or repurchase capital stock; make investments, loans or advances; repay or repurchase certain subordinated debt (except as scheduled or at maturity); create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing our subordinated debt and fundamentally change our business.

The Credit Agreement also includes the following financial maintenance covenants tested on the final day of each fiscal quarter:

i. a First Lien Leverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00;

ii. a Total Leverage Ratio of 5.00 to 1.00; provided, that commencing after the eighth full fiscal quarter after the Effective Date, such Total Leverage Ratio level will instead be 4.50 to 1.00; provided further, that commencing after the eighth full fiscal quarter after the Effective Date, in connection with any Material Acquisition (as defined in the Credit Agreement), at the election of the Borrowers, the maximum Total Leverage Ratio for the next four testing periods after such Material Acquisition has been consummated will be automatically increased by 0.50 to 1.00 above the otherwise permitted Total Leverage Ratio for the applicable fiscal quarter (not to exceed 5.00 to 1.00 in any event); provided further, that (x) no more than two such elections may be made during the term of the Credit Agreement and (y) following the first such election, no subsequent election may be made unless the Total Leverage Ratio has been less than or equal to 5.00 to 1.00 as of the last day of at least two consecutive Test Periods (as defined in the Credit Agreement) following the expiration of the first increase; and

iii. an Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00.

For purposes of calculating the First Lien Leverage Ratio and the Total Leverage Ratio, the consolidated debt of the Company and its Restricted Subsidiaries (as defined in the Credit Agreement) is reduced by up to $100 million of the aggregate amount of unrestricted cash and Permitted Investments (as defined in the Credit Agreement) of the Company and its Restricted Subsidiaries.

Other: Substantially simultaneously with entering into the Credit Agreement, we used a portion of the proceeds of the Credit Facility to pay in full all borrowings and terminated all commitments under (i) our ABL Credit Agreement, dated as of December 23, 2020, (ii) our Amended Credit Agreement, dated as of March 6, 2020 and (iii) the LED Purchase Price Note, dated as of March 1, 2021. In connection therewith, we used an aggregate of $160.4 million to pay principal and interest outstanding under these agreements and recorded charges of $0.7 million in other non-operating expense to write off certain unamortized issuance costs.

Convertible Senior Notes

In February 2020, we issued $250.0 million in aggregate principal amount of 2.25% convertible senior notes due 2026 (the “2026 Notes”). The 2026 Notes are general unsecured obligations, bear interest at an annual rate of 2.25% per year, payable semi-annually on February 15 and August 15, and mature on February 15, 2026, unless earlier converted, redeemed or repurchased. The 2026 Notes are governed by an indenture (the “Indenture”) between us and U.S. Bank

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National Association, as trustee. After the effect of the share dividend paid in the second quarter of 2022, the conversion rate of the 2026 Notes is 49.2504 ordinary shares per $1,000 principal amount of notes, which represents a conversion price of approximately $20.30 per ordinary share. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture.

Conversion Rights: Holders of the 2026 Notes may convert them under the following circumstances:

i. during any fiscal quarter commencing after the fiscal quarter ended on May 28, 2020 (and only during such fiscal quarter) if the last reported sale price per ordinary share exceeds 130% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter;

ii. during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “Measurement Period”) in which the trading price per $1,000 principal amount of notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the conversion rate on such trading day;

iii. on or after August 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date;

iv. upon the occurrence of certain corporate events or distributions on our ordinary shares, as provided in the Indenture; or

v. the 2026 Notes are called for redemption.

Upon conversion, we will pay or deliver, as applicable, cash, ordinary shares or a combination of cash and ordinary shares at our election. Our intent is to settle in cash the principal amount of our convertible notes upon conversion and may, at our option, settle any excess of the conversion value over the principal amount in cash, ordinary shares or any combination thereof.

If we receive a notice of conversion for our 2026 Notes, and we elect to settle in cash any portion of the conversion obligation, the cash settlement obligation becomes a derivative debt liability subject to mark-to-market accounting treatment based on the volume-weighted-average price of our ordinary shares over a period of 40 consecutive trading days, beginning two business days after the holder gives notice to convert. Accordingly, as of the date of our election to settle any part of a conversion in cash, we would reclassify all or a portion of the fair value of the equity component of the converted 2026 Notes from additional capital to derivative debt liability within current debt in our consolidated balance sheet.

Other: Unamortized debt discount and issuance costs are amortized over the term of the 2026 Notes using the effective interest rate method. As of May 27, 2022, and August 27, 2021, the effective interest rate was 7.06%. Interest expense for the 2026 Notes consisted of 2.25% contractual stated interest and amortization of discount and issuance costs and included of the following:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Contractual stated interest	$	1,438	$	1,438	$	4,219	$	4,219
Amortization of discount and issuance costs	2,242		2,088		6,702		6,247
	$	3,680	$	3,526	$	10,921	$	10,466

As of both May 27, 2022 and August 27, 2021, the carrying amount of the equity components of the 2026 Notes, which is included in additional paid-in-capital, was $50.8 million.

Leases

As of May 27, 2022 and August 27, 2021, we had operating leases through which we utilize facilities, offices and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions.

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Sublease income was not significant in the first nine months of 2022 or 2021. The components of operating lease expense were as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Fixed lease cost	$	3,402	$	2,856	$	9,917	$	6,310
Variable lease cost	370		409		1,192		969
Short-term lease cost	119		106		377		221
	$	3,891	$	3,371	$	11,486	$	7,500

Cash flows used for operating activities for the first nine months of 2022 and 2021 included payments for operating leases of $7.3 million and $6.1 million, respectively. Noncash acquisitions of right-of-use assets were $10.6 million and $16.9 million for the first nine months of 2022 and 2021, respectively.

As of May 27, 2022 and August 27, 2021, the weighted-average remaining lease term for our operating leases was 6.8 years and 6.1 years, respectively. Certain of our operating leases include one or more options to extend the lease term for periods from two to five years. In determining the present value of our operating lease liabilities, we have assumed we will not extend any lease terms. As of May 27, 2022 and August 27, 2021, the weighted-average discount rate for our operating leases was 6.5% and 6.7%, respectively.

Minimum payments of lease liabilities as of May 27, 2022 were as follows:

Remainder of 2022	$	3,099
2023	11,114
2024	8,833
2025	6,241
2026	5,011
2027 and thereafter	23,817
	58,115
Less imputed interest	(12,238)
Present value of total lease liabilities	$	45,877

The table above excludes lease liabilities for leases that have been executed but not yet commenced. As of May 27, 2022, we had such lease commitments relating to operating lease payment obligations of $51.8 million for a building lease with a term of 16 years. We will recognize a right-of-use asset and an associated lease liability at the time such asset becomes available for our use. Such lease is currently expected to commence in the fourth quarter of 2022.

Commitments and Contingencies

Contingencies

From time to time, we are involved in legal matters that arise in the normal course of business. Litigation in general, and intellectual property, employment and shareholder litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Additionally, from time to time, we are a party in the normal course of business to a variety of agreements pursuant to which we may be obligated to indemnify another party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations or financial condition. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made.

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Equity

SGH Shareholders’ Equity

Share Dividend

On January 3, 2022, our Board of Directors declared a share dividend of one ordinary share, $0.03 par value per share, for every one outstanding ordinary share owned to shareholders of record as of January 25, 2022. The dividend was paid on February 1, 2022.

Share Repurchase Authorization

On April 4, 2022, our Board of Directors approved a $75 million share repurchase authorization, under which the Company may repurchase its outstanding ordinary shares from time to time through open market purchases, privately-negotiated transactions or otherwise. The share repurchase authorization has no expiration date but may be suspended or terminated by the Board of Directors at any time. In the third quarter of 2022, we repurchased an aggregate of 448 thousand shares for $10.2 million under the repurchase authorization. As of May 27, 2022, these repurchased shares were held in treasury.

Other Share Repurchases

We repurchased 151 thousand and 206 thousand ordinary shares as payment of withholding taxes for $3.7 million and $6.6 million in the third quarter and first nine months of 2022, respectively, and 6 thousand and 148 thousand ordinary shares for $0.3 million and $4.0 million in the third quarter and first nine months of 2021, respectively. As of May 27, 2022, these repurchased shares were held in treasury.

In addition, in January 2021, we repurchased an aggregate of 1.1 million ordinary shares for $44.3 million from Silver Lake Partners III Cayman (AIV III), L.P., Silver Lake Technology Investors III Cayman, L.P., Silver Lake Sumeru Fund Cayman, L.P. and Silver Lake Technology Investors Sumeru Cayman, L.P. in a privately negotiated transaction. The transaction closed on January 15, 2021. As of May 27, 2022, these repurchased shares were held in treasury.

Noncontrolling Interest in Subsidiary

In connection with our acquisition of the LED Business, we have a 51% ownership interest in the Cree Joint Venture. The remaining 49% ownership interest is held by San’an. The Cree Joint Venture has a five-member board of directors, three of which are designated by us and two of which are designated by San’an. As a result of our majority voting interest, we consolidate the operations of the Cree Joint Venture and report its results of operations within our LED Solutions segment.

The Cree Joint Venture has a manufacturing agreement pursuant to which San’an supplies it with mid-power LED products and we and the Cree Joint Venture have a sales agent agreement pursuant to which we are the independent sales representative of the Cree Joint Venture. The Cree Joint Venture produces and delivers to market high performing, mid-power lighting class LEDs in an exclusive arrangement serving the expanding markets of North and South America, Europe and Japan, and serves China markets and the rest of the world on a non-exclusive basis.

The 49% ownership interest held by San’an is classified as noncontrolling interest. In the second quarter of 2022, the Cree Joint Venture distributed an aggregate of $7.7 million to its partners, including $3.9 million to SGH and $3.8 million to San’an. Noncontrolling interest increased by $0.4 million and $1.6 million in the third quarter and first nine months of 2022, respectively, for San’an’s share of net income from the Cree Joint Venture. Remaining cash and other assets of the Cree Joint Venture are generally not available for use by us in our other operations.

Government Incentives

Brazil Financial Credits

Through our Brazil subsidiaries, we participate in two programs (“Brazil Incentive Programs”), pursuant to which the Brazilian government incentivizes the manufacture and sale of certain information technology and consumer electronics products within Brazil. The programs include 1) Lei da Informática – Processo Produtivo Básico Program (also known as Informatics Law – Basic Productive Process Program) (“IT Law/PPB”) and 2) Programa de Apoio ao Desenvolvimento Tecnológico da Indústria de Semicondutores (also known as Program of Support of the Development of the Semiconductor Industry) (“PADIS”). In January 2022, the Brazilian government approved an extension to PADIS. The financial credits

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available through PADIS are set to expire in December 2026, while the financial credits through IT Law/PPB are set to expire in December 2029. The Brazil Incentive Programs provide for reduced import and other transaction-related taxes for certain procurement, manufacturing and sales activities. In exchange, we must invest in certain research and development activities related to semiconductors and IT solutions in aggregate amounts that exceed a specified percentage of our gross revenues recognized in connection with sales in Brazil, excluding exports and sales to customers located at the Manaus Free Trade Zone. Accordingly, financial credits earned in connection with the Brazil Incentive Programs are reflected as a reduction of research and development expense. Financial credits available under the Brazil Incentive Programs are subject to limitations, which range from approximately 11% to 14% of gross revenues recognized for sales in Brazil.

Under PADIS, we recognized aggregate financial credits, reflected as a reduction of research and development expense, of $3.3 million and $15.2 million in the third quarter and first nine months of 2022, respectively, and $8.2 million and $22.2 million in the third quarter and first nine months of 2021, respectively. Financial credits earned under the Brazil Incentive Programs may be refunded in cash or used to offset liabilities for Brazil federal taxes. As of May 27, 2022 and August 27, 2021, earned under PADIS but unused financial credits of $19.5 million and $19.8 million, respectively, were included in other current assets. Financial credits earned under PADIS but unused as of May 27, 2022 can be utilized through November 2026.

Fair Value Measurements

Cash and cash equivalents as of May 27, 2022 and August 27, 2021 included money market funds of $12.7 million and $2.7 million, respectively, which were valued based on Level 1 measurements using quoted prices in active markets for identical assets.

Fair value measurements of other assets and liabilities were as follows:

	May 27, 2022				August 27, 2021
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Derivative financial instrument assets	$	102	$	102	$	883	$	883
Liabilities:
Derivative financial instrument liabilities	$	22	$	22	$	50	$	50
Credit Facility Term Loan	275,000		270,793		—		—
Convertible Senior Notes	333,125		210,694		335,668		203,992
LED Purchase Price Note	—		—		125,000		125,000
ABL Credit Agreement	—		—		25,000		25,000
Debt – other	11,353		12,334		10,702		11,846
Acquisition-related contingent consideration	101,824		101,824		60,500		60,500

The fair values of our derivative financial instruments, as measured on a recurring basis, were based on Level 2 measurements, including market-based observable inputs of currency exchange spot and forward rates, interest rates and credit-risk spreads.

The fair value of our Convertible Senior Notes (excluding the value of the equity component of our convertible notes), as measured on a non-recurring basis, was determined based on Level 2 measurements, including the trading price of the convertible notes. The fair values of our Credit Facility Term Loan, LED Purchase Price Note, ABL Credit Agreement and other debt, as measured on a non-recurring basis, were estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours.

Acquisition-related contingent consideration relates to our acquisition of the LED Business and is included in noncurrent liabilities. The fair value as of August 27, 2021, as measured on a recurring basis, was based on Level 3 measurements, which included significant inputs not observable in the market. The fair value was estimated using a Monte Carlo simulation analysis in a risk-neutral framework with assumptions for volatility, market price of risk adjustment, risk-free rate and cost of debt. Assumptions used in the determination of fair value also included estimates of future revenue and gross profit of

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the LED Business. Based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing, the final calculated value of the contingent consideration was $101.8 million. The fair value as of May 27, 2022, as measured on a non-recurring basis, was estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours.

Derivative Instruments

We use currency forward contracts to mitigate our exposure of certain monetary assets and liabilities from changes in currency exchange rates. Realized and unrealized gains and losses from derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating (income) expense.

In the third quarter and first nine months of 2022, we recognized net realized losses of $8.8 million and $4.2 million, respectively, and net unrealized gains of $3.3 million and net unrealized losses of $0.2 million, respectively, from changes in the fair value of non-designated forward contracts. In the third quarter and first nine months of 2021, we recognized net realized gains of $4.2 million and $3.5 million, respectively, and net unrealized losses of $5.6 million and $2.5 million, respectively, from changes in the fair value of non-designated forward contracts.

Equity Plans

As of May 27, 2022, 7.7 million of our ordinary shares were available for future awards under our equity plans.

Restricted Share Awards and Restricted Share Units Awards (“Restricted Awards”)

Aggregate Restricted Award activity was as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Awards granted	935		3,079		1,581		4,513
Weighted average grant-date fair value per share	$	24.25	$	19.97	$	25.96	$	17.65
Aggregate vesting-date fair value of shares vested	$	24,099	$	7,281	$	42,326	$	18,689

Restricted Awards include grants with service, performance and/or market conditions with restrictions that generally lapse after a three to four-year service period. Awards with market conditions are based on either the Company’s share price or the Company’s total shareholder return (“TSR”) relative to companies included in a market index. For awards with market conditions, the number of shares that will vest will vary between 0% and 200% of target amounts, depending upon the Company’s achievement level over the specified performance period. The fair value of awards with market conditions were fixed at the grant date using a Monte Carlo simulation analysis and were based on significant inputs not observable in the market.

In May 2020, we granted a performance-based restricted share award to our former CEO that had both service and performance conditions. As of August 28, 2020, we deemed it was probable that the service condition would be met and the attainment of the performance condition for this award was probable. On October 20, 2020, we modified this award, as well as another time-based award previously granted to our former CEO, to accelerate the remaining service-based vesting requirements such that they became fully vested as of the acceleration date. These modifications resulted in additional share-based compensation expense in the first quarter of 2021 of $5.8 million.

As of May 27, 2022, total unrecognized compensation costs for unvested Restricted Awards was $99.2 million, which was expected to be recognized over a weighted average period of 2.76 years.

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Share Options

Share option activity and assumptions were as follows:

Nine Months Ended	May 28, 2021
Share options granted	500
Weighted average grant-date fair value per share	$	6.65
Average expected term in years	6.25
Weighted-average expected volatility	52.07		%
Weighted-average risk-free interest rate	0.49		%
Expected dividend yield	—

As of May 27, 2022, total unrecognized compensation costs for unvested options was $3.6 million, which was expected to be recognized over a weighted average period of 1.88 years.

Employee Share Purchase Plan

Under our employee share purchase plan (“ESPP”), employees purchased 307 thousand ordinary shares for $6.5 million in the first nine months of 2022 and 353 thousand ordinary shares for $3.6 million in the first nine months of 2021.

Share-Based Compensation Expense

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Share-based compensation expense by caption:
Cost of sales	$	1,724	$	1,166	$	5,103	$	2,807
Research and development	1,679		1,468		4,778		3,055
Selling, general and administrative	7,144		5,747		20,414		19,005
	$	10,547	$	8,381	$	30,295	$	24,867

Income tax benefits related to the tax deductions for share-based awards are recognized only upon the settlement of the related share-based awards. Consistent with our treatment of income or loss from our U.S. operations, our income tax provision in 2022 and 2021 reflects de minimis income tax benefits for share-based compensation expense.

Revenue and Customer Contract Balances

We disaggregate revenue by segment and geography and by product and service revenue. See “Segment and Other Information.”

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Net Sales and Gross Billings

Net sales by products and services and gross amounts billed for services, including logistics services in which we act as an agent for our customers, were as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales:
Products and professional services	$	440,012	$	428,882	$	1,330,473	$	1,011,079
Logistics services	22,528		8,846		51,182		22,354
	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Gross billings in connection with logistics services:
Logistics services	$	22,528	$	8,846	$	51,182	$	22,354
Cost of materials (1)	574,034		205,530		1,250,024		481,163
	$	596,562	$	214,376	$	1,301,206	$	503,517

(1) Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our logistics services business, which includes procurement, logistics, inventory management, temporary warehousing, kitting and/or packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory.

Customer Contract Balances

As of	May 27, 2022		August 27, 2021
Contract assets (1)	$	459	$	4,247
Contract liabilities: (2)
Deferred revenue	$	19,288	$	19,271
Customer advances	13,584		15,835
	$	32,872	$	35,106

(1) Contract assets are included in other current assets.

(2) Contract liabilities are included in other current liabilities and noncurrent liabilities based on the timing of when our customer is expected to take control of the asset or receive the benefit of the service.

Deferred revenue related to amounts received from customers in advance of satisfying performance obligations. As of May 27, 2022, we expect to recognize revenue of $16.1 million of the balance of $19.3 million in the next 12 months and the remaining amount thereafter. In the first nine months of 2022, we recognized revenue of $12.9 million from satisfying performance obligations related to amounts included in deferred revenue as of August 27, 2021. Customer advances represent amounts received from customers for advance payments to secure product and services within the next 12 months. In the first nine months of 2022, we recognized revenue of $5.2 million from satisfying performance obligations related to amounts included in customer advances as of August 27, 2021.

As of May 27, 2022 and August 27, 2021, other current liabilities included $19.2 million and $24.9 million, respectively, for estimates of consideration payable to customers, including estimates for pricing adjustments and returns.

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Other Non-operating (Income) Expense

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Foreign currency (gains) losses	$	641	$	994	$	3,516	$	1,195
Other	(91)		(505)		54		(8)
	$	550	$	489	$	3,570	$	1,187

Foreign currency (gains) and losses relate primarily to our Brazil operating subsidiaries.

Income Taxes

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Income before income taxes	$	29,649	$	(2,644)	$	68,660	$	9,702
Income tax provision	5,154		4,010		20,495		8,485

Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for certain discrete items which are fully recognized in the period they occur. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate.

Our provision for income taxes for the nine months ended May 27, 2022 increased by $12.0 million as compared to the same period in the prior year, primarily due to an increase in the amount of earnings subject to non-U.S. tax.

As of May 27, 2022 and August 27, 2021, we had a full valuation allowance for net deferred tax assets associated with our U.S. operations. The amount of the deferred tax asset considered realizable could be adjusted if significant positive evidence increases.

Determining the consolidated provision for income tax expense, income tax liabilities and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which involves estimating current tax exposures, as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from actual results, which may have a significant impact on operating results in future periods.

Earnings Per Share

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net income (loss) attributable to SGH – Basic and Diluted	$	24,113	$	(7,211)	$	46,598	$	660
Weighted-average shares outstanding – Basic	50,095		48,071		49,543		48,542
Dilutive effect of equity plans and convertible notes	4,903		—		6,213		2,625
Weighted-average shares outstanding – Diluted	54,998		48,071		55,756		51,167
Earnings (loss) per share:
Basic	$	0.48	$	(0.15)	$	0.94	$	0.01
Diluted	$	0.44	$	(0.15)	$	0.84	$	0.01

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Below are potentially dilutive shares that were not included in the computation of diluted earnings per share because to do so would have been antidilutive:

	Three Months Ended		Nine Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Equity plans	459	5,283	333	2,790
Convertible notes	—	12,313	—	12,313
	459	17,596	333	15,103

We have the option to pay cash, issue shares or a combination thereof for the aggregate amount due upon any conversion of our 2026 Notes. It is our intent to settle the principal amount of the 2026 Notes in cash upon any conversion. As a result, only the amounts payable in excess of the principal amounts upon conversion of the 2026 Notes are considered in diluted earnings per share under the treasury stock method. The 2026 Notes are dilutive when the average share price of the Company’s ordinary shares for a reporting period exceeds the conversion price of the 2026 Notes of $20.30 per share. See “Debt – Convertible Senior Notes.”

Segment and Other Information

Segment information presented below is consistent with how our chief operating decision maker evaluates operating results to make decisions about allocating resources and assessing performance.

In the fourth quarter of 2021, we reorganized SGH into three business units: Memory Solutions, Intelligent Platforms Solutions and LED Solutions. Two of our previous segments, specialty memory products and Brazil products, were combined to become Memory Solutions. Intelligent Platform Solutions was formerly referred to as specialty compute and storage solutions. All prior period information in the tables below has been revised to reflect the change to our three reportable segments.

•Memory Solutions: Our Memory Solutions group, under our SMART Modular brand, provides high performance and reliable memory solutions through the design, development and advanced packaging of leading-edge to extended lifecycle products. These specialty products are tailored to meet customer-specific requirements across networking and communications, enterprise storage, computing, including desktop, notebook and server applications, smartphones and other vertical markets. These products are marketed to OEMs and to commercial and government customers. The Memory Solutions group also offers SMART Supply Chain Services, which provides customized, integrated supply chain services to enable our customers to better manage supply chain planning and execution, reduce costs and increase productivity.

•Intelligent Platform Solutions (“IPS”): Our IPS group, under our Penguin Solutions brand, consists of two major product lines – Penguin Computing and Penguin Edge. Penguin Computing offers specialized platform solutions for high-performance computing, artificial intelligence, machine learning and advanced modeling for technology research. We provide these leading-edge solutions to customers in the government, hyper-scale, energy, financial services and education markets. Penguin Edge offers solutions for embedded and wireless applications, specializing in high-reliability products for a wide range of customers in government, telecommunications, health care, smart city, network edge and industrial applications.

•LED Solutions: Our LED Solutions group, under our Cree LED brand, offers a broad portfolio of application-optimized LEDs focused on improving on lumen density, intensity, efficacy, optical control and reliability. Backed by expert design assistance and superior sales support, our LED products enable our customers to develop and market LED-based products for general lighting, video screens and specialty lighting applications. Our LED Solutions is comprised of the LED Business we acquired from Cree, Inc. on March 1, 2021.

Segments are determined based on sources of revenue, types of customers and operating performance. There are no differences between the accounting policies for our segment reporting and our consolidated results of operations. Operating expenses directly associated with the activities of a specific segment are charged to that segment. Certain other

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indirect operating income and expenses are generally allocated to segments based on their respective percentage of net sales. We do not allocate interest, other non-operating (income) expense or taxes to segments.

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales:
Memory Solutions	$	265,850	$	240,116	$	765,332	$	684,537
Intelligent Platform Solutions	95,345		95,857		296,256		247,141
LED Solutions	101,345		101,755		320,067		101,755
Total net sales	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Segment operating income:
Memory Solutions	$	30,094	$	26,163	$	99,260	$	65,262
Intelligent Platform Solutions	10,790		5,756		32,672		17,559
LED Solutions	13,388		11,386		48,925		11,386
Total segment operating income	54,272		43,305		180,857		94,207
Unallocated:
Share-based compensation expense	(10,547)		(8,381)		(30,295)		(24,867)
Amortization of acquisition-related intangibles	(5,943)		(6,184)		(18,115)		(13,011)
Flow through of inventory step up	—		(7,090)		—		(7,090)
Change in fair value of contingent consideration	(124)		(16,400)		(41,324)		(16,400)
Out of period import tax expense (1)	—		—		—		(4,345)
Other	(2,349)		(2,356)		(4,215)		(5,037)
Total unallocated	(18,963)		(40,411)		(93,949)		(70,750)
Consolidated operating income	$	35,309	$	2,894	$	86,908	$	23,457

(1) During the second quarter of 2021, we recorded an out-of-period adjustment to correct errors originating in previous periods related to understated import tax costs, which resulted in a $4.3 million increase in cost of sales, $0.8 million increase in interest expense and $1.7 million benefit for income taxes. The adjustment was not considered material to the interim or annual consolidated financial statements for the year ended August 27, 2021 nor to any previously issued interim or annual consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 27, 2021. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this report. See also “Cautionary Note Regarding Forward-Looking Statements.”

Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2022 and 2021 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years end on July 31 of each year. All tabular dollar amounts are in millions.

Overview

Since our inception over 30 years ago, SGH has grown into a diversified group of businesses focused on the design and manufacture of specialty solutions for the computing, memory and LED markets. Our success is based on a customer-focused approach characterized by a commitment to quality, advanced technical expertise, quick time-to-market, build-to-order flexibility and excellence in customer service.

At SGH, we strive to achieve long-term growth by investing in our people, innovation, processes and new opportunities. Since the beginning of fiscal 2018, we have accelerated our growth through the completion of five acquisitions. With our most recent acquisition of the LED Business in 2021, we have organized the Company into three lines of business: Memory Solutions, Intelligent Platform Solutions and LED Solutions.

In addition to driving growth organically and through acquisitions, we use the SGH operating system to support and drive operational efficiency and performance.

Our employees have always played a key role in our success. Today, SGH employs a diverse workforce of approximately 3,800 employees around the world who are focused on innovation and customer satisfaction.

Acquisition of LED Business

In March 2021, we completed the acquisition of the LED Business of Cree, Inc., a corporation now known as Wolfspeed, Inc. (“Cree”). The acquisition of the LED Business, a leader in LED lighting technology, further enhances our growth and diversification strategy and fits well with our other specialty businesses in computing and memory. The purchase price for the LED Business consisted of cash payments of $72.4 million, the issuance of an unsecured promissory note issued in the amount of $125 million and the potential for Cree to receive an earn-out payment of up to $125 million based on the revenue and gross profit performance of the LED Business in the twelve-month period ended in March 2022. Based on the

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revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing, the final calculated value of the contingent consideration was $101.8 million.

COVID-19

The outbreak of coronavirus disease 2019 (“COVID-19”) has resulted in substantial loss of life, economic disruption and government intervention worldwide. While we have not yet experienced significant disruptions of our operations as a result of the COVID-19 pandemic, the pandemic resulted in reduced sales volumes of certain product lines since early calendar 2020. COVID-19 also disrupted our product development, marketing and corporate development activities, and has more recently affected our supply chain. Our recently acquired LED Business experienced similar impacts from the pandemic from early in calendar 2020. If these conditions continue, or if we have an outbreak in any of our facilities, sales volumes may be negatively impacted and we may, among other issues, experience, in any or all product lines, delays in product development, a decreased ability to support our customers, disruptions in sales and manufacturing activities and overall reduced productivity each of which could have a negative impact on our ability to meet customer commitments and on our revenue and profitability. The reduction of investment in new capacity due to the pandemic, coupled with strong demand to expand delivery and logistics, internet and cloud services as well as a rebound in economic conditions and general demand at a pace faster than expected, has resulted in significant supply shortages that may impact our ability to manufacture products for our customers and may result in rising prices of the materials we need to manufacture our products. We may not be able to pass on these rising costs to our customers which could result in a negative impact to our gross margins. Furthermore, if there is a significant outbreak or if travel restrictions or stay-at-home or work remote or from home conditions or other governmental or voluntary restrictions relating to the COVID-19 pandemic significantly impact our suppliers’ ability to manufacture or deliver raw materials or provide key components or services, we could experience more delays or reductions in our ability to manufacture and ship products to our customers. While certain segments of our customer base are experiencing strong demand, the pandemic may negatively impact the demand for other segments for our customer base or those customers’ ability to manufacture their products, which could reduce their demand for our products or services.

Factors Affecting Our Operating Performance

Our operating expenses have grown in recent periods as we drive innovation, expand our products and services portfolio and invest in greater operational capabilities to support our growth. Our total operating expenses grew in 2021, primarily as a result of the addition of the LED Solutions business. We expect to continue to see increased operating expenses in 2022 as we record a full year of operating expenses for the LED Solutions business and continue to increase our investment in new products and services for the IPS business.

Macro-economic Demand Factors. Our business segments each have their own unique set of demand factors. Demand in our Memory Solutions group is driven by end-market demand from OEMs for customer-specific solutions in vertical markets such as industrial, government, networking, high-performance compute and enterprise storage, as well as from OEMs for memory modules used in desktop and notebook computers, smartphones, IoT and SSD products in Brazil. In addition, macro-economic factors specific to the Brazil economy affect this segment, given our sales and operations in that market. Our IPS business is driven by demand for high compute solutions across AI and machine learning initiatives, as well as traditional workload optimization and efficiency applications. Finally, demand for our LED products is derived from targeted end-market applications, such as general high-power and mid-power lighting and specialty lighting, such as video and horticulture applications. We believe our diversified business segments may provide a natural hedge against downturns in any particular industry although broader macro-economic trends, such as the COVID-19 pandemic, can adversely affect all three segments concurrently.

Shifts in the Mix of Our Revenue. Shifts in the mix of revenue from our operating segments, which can vary significantly from period to period, can impact our business and operating results, including gross and operating margins. For example, our Memory Solutions group, while not party to long-term fixed purchasing commitments, has nonetheless historically seen relatively stable demand and margins. By contrast, our IPS group has shown solid growth, but is subject to greater variability in its sales and margin profile from period to period, as recognition of revenue is tied to customer decisions as to the completion of delivery and system go-live events, and margin is driven by the extent to which higher margin software and managed services comprise IPS sales. In addition, while we have experienced favorable demand and overall margin uplift compared to the rest of our businesses from our LED Solutions business to date, this is our newest segment, and it may be subject to unforeseen changes in its business and operating results. Our resource commitments and planning for each segment are relatively fixed in the short term and, as such, variability in expected revenue mix will have direct implications for our operating income and margins.

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Our Ability to Identify, Complete and Successfully Integrate Acquisitions. A substantial portion of our growth over the last several years has been driven by acquisitions, and we intend to continue to use corporate development as an engine for growth. Within our existing segments, we plan to pursue acquisitions to expand features and functionality, expand into adjacent businesses and grow our customer base and geographic footprint. From time to time, we may seek to expand our addressable market by entering new business segments where, as we did with our LED Business, we identify a business opportunity at scale with a path to being accretive to our overall operations in the near term. If we are unable to identify and complete attractive acquisitions, we may not be successful in growing our revenue and/or expanding our margins. Any acquisitions we do complete may require us to raise debt or equity financing or may subject us to unforeseen liabilities or operational challenges that in turn impede our ability to realize the expected returns on our investment.

Disruptions in Our Supply Chain May Adversely Affect Our Businesses. We depend on third-party suppliers for key components of our products, such as commodity DRAM components from offshore foundries that we use in our specialty memory products, third-party wafers that we use in our memory and LED businesses and electronic components and accessories used in our IPS business. We have adopted this “fab-lite” business model to reduce our capital expenditures and operating expenses, while affording greater flexibility in adapting to shifts in demand and other market trends. In recent periods, our fab-lite business model has contributed significantly to margin expansion in our overall business. However, our reliance on third-party manufacturers exposes us to risk of supply chain disruption and lost business. For example, the current global semiconductor shortage has adversely affected our operating results. If such disruptions worsen or are prolonged, or if there is meaningful disruption in our supply arrangement with any of our third-party suppliers, our operating results and financial condition could be adversely affected.

Hostilities in Ukraine may exacerbate certain risks we face. Russia’s invasion of Ukraine and the global response, including the imposition of sanctions by the United States and other countries, could create or exacerbate risks facing our business. We have evaluated our operations, vendor contracts and customer arrangements, and at present we do not expect the outbreak to directly have a material and adverse effect on our financial condition or results of operations. However, if the hostilities persist, escalate or expand, our operating results and financial condition could be adversely affected. For example, if our supply or customer arrangements are disrupted due to expanded sanctions or involvement of countries where we have operations or relationships, our business could be materially disrupted. Further, the use of state-sponsored cyberattacks could expand as part of the conflict, which could adversely affect our ability to maintain or enhance our cyber security and data protection measures.

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Results of Operations

	Three Months Ended								Nine Months Ended
	May 27, 2022				May 28, 2021				May 27, 2022				May 28, 2021
Net sales:
Memory Solutions	$	265,850	57.5	%	$	240,116	54.9	%	$	765,332	55.4	%	$	684,537	66.2	%
Intelligent Platform Solutions	95,345		20.6	%	95,857		21.9	%	296,256		21.4	%	247,141		23.9	%
LED Solutions	101,345		21.9	%	101,755		23.2	%	320,067		23.2	%	101,755		9.8	%
Total net sales	462,540		100.0	%	437,728		100.0	%	1,381,655		100.0	%	1,033,433		100.0	%
Cost of sales	348,077		75.3	%	353,241		80.7	%	1,032,278		74.7	%	842,847		81.6	%
Gross profit	114,463		24.7	%	84,487		19.3	%	349,377		25.3	%	190,586		18.4	%
Operating expenses:
Research and development	20,298		4.4	%	16,718		3.8	%	56,749		4.1	%	32,534		3.1	%
Selling, general and administrative	58,732		12.7	%	48,475		11.1	%	164,396		11.9	%	118,195		11.4	%
Change in fair value of contingent consideration	124		—	%	16,400		3.7	%	41,324		3.0	%	16,400		1.6	%
Total operating expenses	79,154		17.1	%	81,593		18.6	%	262,469		19.0	%	167,129		16.2	%
Operating income	35,309		7.6	%	2,894		0.7	%	86,908		6.3	%	23,457		2.3	%
Non-operating (income) expense:
Interest expense, net	5,110		1.1	%	5,049		1.2	%	14,678		1.1	%	12,568		1.2	%
Other non-operating (income) expense	550		0.1	%	489		0.1	%	3,570		0.3	%	1,187		0.1	%
Total non-operating (income) expense	5,660		1.2	%	5,538		1.3	%	18,248		1.3	%	13,755		1.3	%
Income before taxes	29,649		6.4	%	(2,644)		(0.6)	%	68,660		5.0	%	9,702		0.9	%
Income tax provision	5,154		1.1	%	4,010		0.9	%	20,495		1.5	%	8,485		0.8	%
Net income	24,495		5.3	%	(6,654)		(1.5)	%	48,165		3.5	%	1,217		0.1	%
Net income attributable to noncontrolling interest	382		0.1	%	557		0.1	%	1,567		0.1	%	557		0.1	%
Net income attributable to SGH	$	24,113	5.2	%	$	(7,211)	(1.6)	%	$	46,598	3.4	%	$	660	0.1	%

Percentages represent percentage of total net sales. Summations pf percentages may not compute precisely due to rounding.

Net Sales, Cost of Sales and Gross Profit

Net sales increased by $24.8 million, or 5.7%, in the third quarter of 2022 compared to the same period in the prior year, and by $348.2 million, or 33.7%, for the first nine months of 2022 compared to the same period in the prior year. The quarter-over-quarter increase was mainly due to strong performance in our Memory Solutions business, while the year-over-year increase was primarily due to $218.3 million higher revenue in our LED Solutions business, as 2022 includes nine months of LED Solutions revenue compared to three months in 2021, as well as solid performances in our Memory Solutions and IPS businesses. Memory Solutions sales increased by $25.7 million, or 10.7%, in the third quarter of 2022 compared to the same period in the prior year, primarily due to increases in average selling prices for Brazil DRAM and Brazil mobile products of 32.0% and 29.7%, respectively, as well as higher Specialty Memory sales due to increased demand and product mix. Memory Solutions sales increased by $80.8 million, or 11.8%, for the first nine months of 2022 compared to the same period in the prior year, primarily due to a 20.2% higher volume of Specialty DRAM products, a 44.2% increase in average selling prices for Brazil DRAM products and higher logistics sales. IPS net sales increased by $49.1 million, or 19.9%, in the first nine months of 2022 primarily due to higher sales in our Penguin Computing business.

Cost of sales decreased by $5.2 million, or 1.5%, in the third quarter of 2022 compared to the same period in the prior year. Cost of sales increased by $189.4 million, or 22.5%, for the first nine months of 2022 compared to the same period in the prior year, primarily due to our acquisition of the LED Business and from higher costs of materials and production costs due to higher sales for our IPS and Memory Solutions segments.

Gross margin increased to 24.7% in the third quarter of 2022 compared to 19.3% in the same period in the prior year, and also increased to 25.3% in the first nine months of 2022 compared to 18.4% in the first nine months of 2021, primarily due

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to inclusion of higher margin LED Solutions products in 2022 as well as process and efficiency improvement in the Memory Solutions and IPS segments compared to the prior year.

Non-GAAP Measure of Segment Operating Income

Below is a table of our operating income, measured on a non-GAAP basis, which SGH management uses to supplement SGH's financial results under GAAP to analyze its operations and make decisions as to future operational plans, and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the Company's past and future operating performance. These non-GAAP measures exclude certain items, such as share-based compensation expense, amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships, trademarks/trade names and backlog acquired in connection with business combinations), acquisition-related inventory adjustments, acquisition-related expenses, restructure charges and integration expenses, changes in the fair value of contingent consideration, and other infrequent or unusual items. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies is reflected in our non-GAAP measures and these intangible assets contribute to revenue generation. See “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Segment and Other Information.”

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as they exclude important information about our financial results, as noted above. The presentation of these adjusted amounts varies from amounts presented in accordance with GAAP and therefore may not be comparable to amounts reported by other companies.

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
GAAP operating income	$	35,309	$	2,894	$	86,908	$	23,457
Share-based compensation expense	10,547		8,381		30,295		24,867
Amortization of acquisition-related intangibles	5,943		6,184		18,115		13,011
Flow-through of inventory step up	—		7,090		—		7,090
Change in fair value of contingent consideration	124		16,400		41,324		16,400
Out of period import tax expense	—		—		—		4,345
Other	2,349		2,356		4,215		5,037
Non-GAAP operating income	$	54,272	$	43,305	$	180,857	$	94,207
Non-GAAP operating income by segment:
Memory Solutions	$	30,094	$	26,163	$	99,260	$	65,262
Intelligent Platform Solutions	10,790		5,756		32,672		17,559
LED Solutions	13,388		11,386		48,925		11,386
Total non-GAAP operating income by segment	$	54,272	$	43,305	$	180,857	$	94,207

In the fourth quarter of 2021, we reorganized SGH into three business units: Memory Solutions, Intelligent Platforms Solutions and LED Solutions. Two of our previous segments, specialty memory products and Brazil products, were combined to become Memory Solutions. Intelligent Platform Solutions was formerly referred to as specialty compute and storage solutions. All prior year information in the table above has been revised to reflect the change to our three reportable segments.

Memory Solutions operating income increased by $3.9 million, or 15.0%, in the third quarter of 2022 compared to the same period in the prior year, and by $34.0 million, or 52.1%, in the first nine months of 2022 compared to the same period in the prior year, primarily due to higher sales and gross profit, partially offset by higher operating expenses mainly driven by higher research and development expense due to lower Brazil financial credits.

IPS operating income increased by $5.0 million, or 87.5%, in the third quarter of 2022 compared to the same period in the prior year, and by $15.1 million, or 86.1%, in the first nine months of 2022 compared to same period in the prior year,

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primarily due to higher sales and gross profit, partially offset by higher operating expenses mainly driven by personnel-related expenses due to increased headcount to support IPS's revenue growth.

LED Solutions operating income was $37.5 million higher in the first nine months of 2022 compared to the same period in the prior year as 2022 includes nine months of LED Solutions operations compared to three months in 2021

Operating and Non-operating (Income) Expense

Research and Development

Research and development expense increased by $3.6 million, or 21.4%, in the third quarter of 2022 compared to the same period in the prior year, and by $24.2 million, or 74.4%, for the first nine months of 2022 compared to the same period in the prior year, primarily due to additional costs from the acquisition of the LED Business as well as lower Brazil financial credits. We expect research and development expense to be higher in 2022 as compared to 2021 primarily because we will include the full year of operations for our LED Solutions segment. In addition, we expect to have lower Brazil financial credits in future periods resulting from a shift in sales mix to products sourced from our new Manaus, Brazil facility.

Selling, General and Administrative

Selling, general and administrative expense increased by $10.3 million, or 21.2%, in the third quarter of 2022 compared to the same period in the prior year, and by $46.2 million, or 39.1%, in the first nine months of 2022 compared to the same period in the prior year, primarily due to additional costs from the acquisition of the LED Business as well as higher personnel-related expenses due to increased headcount and higher professional services. We expect selling, general and administrative expense to be higher in 2022 as compared to 2021 as we include the full year of operations for our LED Solutions segment.

Change in Fair Value of Contingent Consideration

Our acquisition of the LED Business included contingent consideration, which we estimated the fair value as of the date of acquisition to be $28.1 million. In 2021, and in the first nine months of 2022, we recorded charges of $32.4 million and $41.3 million, respectively, to adjust the amount of contingent consideration to its fair value. See “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Business Acquisition – LED Business.”

Interest Expense, Net

Interest expense, net increased by $2.1 million in the first nine months of 2022 compared to the same period in the prior year primarily due to interest incurred related to the LED Purchase Price Note from the LED acquisition.

In February 2022, we entered into a Credit Facility with a syndicate of banks pursuant to which we borrowed $275 million under a term loan, which matures in February 2027. In connection therewith, we repaid the $125 million outstanding balance of the LED Purchase Price Note and the outstanding balance under our previous line of credit. In addition, the LED Earnout Note began to bear interest in the third quarter of 2022. See “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Recently Issued Accounting Standards,” “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Business Acquisition,” and “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt.”

Other Non-operating (Income) Expense

Other non-operating (income) expense in the third quarter and first nine months of both 2022 and 2021 primarily reflected foreign currency (gains) and losses related primarily to our Brazil operating subsidiaries.

Income Tax Provision

Our provision for income taxes increased by $12.0 million in the first nine months of 2022 compared to the same period in the prior year, primarily due to higher income in non-U.S. jurisdictions subject to tax.

Liquidity and Capital Resources

As of May 27, 2022, we had cash and cash equivalents of $387.3 million, of which $171.7 million was held outside of the United States. Our principal uses of cash and capital resources have been acquisitions, debt service requirements, capital

32

expenditures, research and development expenditures and working capital requirements. We expect that future capital expenditures will focus on expanding capacity of our operations, expanding our research and development activities, manufacturing equipment upgrades, acquisitions and IT infrastructure and software upgrades. Cash and cash equivalents consist of funds held in demand deposit accounts and money market funds. We do not enter into investments for trading or speculative purposes.

We expect that our existing cash and cash equivalents, borrowings available under our credit facility and cash generated by operating activities will be sufficient to fund our operations for at least the next twelve months. We may from time to time seek additional equity or debt financing. Any future equity financing may be dilutive to our existing investors, and any future debt financing may include debt service requirements and financial and other restrictive covenants that may constrain our operations and growth strategies. In the event that we seek additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued product innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.

On February 7, 2022, we entered into a Credit Facility with a syndicate of banks that provides for (i) a term loan credit facility in an aggregate principal amount of $275.0 million (the "2027 TLA") and (ii) a revolving credit facility in an aggregate principal amount of $250.0 million (the "2027 Revolver"), in each case, maturing on February 7, 2027 (subject to certain earlier “springing maturity” dates upon certain conditions specified in the Credit Agreement). The Credit Agreement provides that up to $35.0 million of the revolving credit facility is available for issuances of letters of credit.

In February 2020, we issued $250.0 million in aggregate principal amount of 2.25% convertible senior notes due 2026 (the “2026 Notes”). The conversion rate of the 2026 Notes is 49.2504 ordinary shares per $1,000 principal amount of notes, which represents a conversion price of approximately $20.30 per ordinary share.

For information regarding our debt obligations, see “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt.” For our operating lease obligations, see “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Leases.” For our purchase obligations, see “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Commitments and Contingencies.”

Cash Flows

Nine Months Ended	May 27, 2022		May 28, 2021
Net cash provided by operating activities	$	84,025	$	105,328
Net cash used for investing activities	(30,044)		(68,408)
Net cash provided by financing activities	108,210		1,295
Effect of changes in currency exchange rates	2,149		(34)
Net increase in cash and cash equivalents	$	164,340	$	38,181

Operating Activities: Cash flows from operating activities reflects net income adjusted for certain items, including depreciation and amortization expense, share-based compensation, adjustments for changes in the fair value of contingent consideration, gains and losses from investing or financing activities and the effects of changes in operating assets and liabilities.

Net cash provided by operating activities in the first nine months of 2022 was $84.0 million, comprised primarily of net income of $48.2 million, adjusted for non-cash items of $136.8 million. Operating cash flows were adversely affected by $100.9 million from changes in our net operating assets and liabilities, consisting primarily of increases of $41.5 million in accounts receivable and $5.9 million in other assets, and decreases of $47.0 million in accounts payable and accrued expenses and $7.2 million in operating lease liabilities. The increase in accounts receivable was primarily due to higher gross sales in our Memory Solutions and IPS segments, and the decrease in accounts payable and accrued expenses was primarily due to lower inventories primarily in the same segments.

Net cash provided by operating activities in the first nine months of 2021 was $105.3 million, comprised primarily of net income of $1.2 million, adjusted for non-cash items of $85.7 million. Operating cash flows were also favorably affected by $18.4 million from changes in our net operating assets and liabilities, consisting primarily of a $122.1 million increase in

33

accounts payable and accrued expenses, partially offset by increases of $66.5 million in inventories, $15.5 million in accounts receivable and $14.2 million in other assets.

Investing Activities: Net cash used for investing activities in the first nine months of 2022 was $30.0 million, consisting primarily for purchases of property and equipment and deposits. Net cash used for investing activities in the first nine months of 2021 was $68.4 million, consisting primarily of $40.0 million for purchases of property and equipment and deposits and $28.6 million for the acquisition of the LED Business, net of cash acquired.

Financing Activities: Net cash provided by financing activities in the first nine months of 2022 was $108.2 million, consisting primarily of $270.8 million in net proceeds from issuance of a term loan and $11.8 million in proceeds from the issuance of ordinary shares from our equity plans, partially offset by $125.0 million in principal repayment of the LED Purchase Price Note, $25.0 million in net repayments of borrowings under our line of credit and $16.8 million of payments to acquire ordinary shares (including our share repurchase program). Net cash provided by financing activities in the first nine months of 2021 was $1.3 million, consisting primarily of $36.4 million in net proceeds from debt and $13.2 million in proceeds from the issuance of ordinary shares from our equity plans, partially offset by $48.3 million for the repurchase of ordinary shares.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Estimates and judgments are based on historical experience, forecasted events and various other assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates and judgments on an ongoing basis. Our management believes these estimates and judgments are critical in the portrayal of our financial condition and results of operations and require management’s most difficult, subjective or complex judgments.

There have been no material changes to our critical accounting estimates from those described in “PART II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended August 27, 2021.

34

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Foreign Exchange Rate Risk

We are subject to inherent risks attributed to operating in a global economy. Our international sales and our operations in foreign countries subject us to risks associated with fluctuating currency values and exchange rates. Because a significant portion of our sales are denominated in U.S. dollars, increases in the value of the U.S. dollar could increase the price of our products so that they become relatively more expensive to customers in a particular country, possibly leading to a reduction in sales and profitability in that country. In addition, we have certain costs that are denominated in foreign currencies, and decreases in the value of the U.S. dollar could result in increases in such costs, which could have a material adverse effect on our results of operations.

As a result of our international operations, we generate a portion of our net sales and incur a portion of our expenses in currencies other than the U.S. dollar, particularly the Brazilian real. We present our consolidated financial statements in U.S. dollars, and we translate the assets, liabilities, net sales and expenses of a substantial portion of our foreign operations into U.S. dollars at applicable exchange rates. Consequently, increases or decreases in the value of the U.S. dollar may affect the value of these items with respect to our non-U.S. dollar businesses in our consolidated financial statements, even if their value has not changed in their local currency. Our customer pricing and material cost of sales are generally based on U.S. dollars. Accordingly, the impact of currency fluctuations to our consolidated statements of operations is primarily to our other costs of sales (i.e., non-material components) and our operating expenses as those items are typically denominated in local currency. Our consolidated statements of operations are also impacted by foreign currency gains and losses arising from transactions denominated in a currency other than the functional currency of the respective subsidiary. These translations could significantly affect the comparability of our results between financial periods or result in significant changes to the carrying value of our assets, liabilities and equity. As a result, changes in foreign currency exchange rates impact our reported results.

Approximately 25% and 32% of our net sales in the first nine months of 2022 and 2021, respectively, originated in Brazilian real. We utilize foreign exchange forward contracts to mitigate foreign currency exchange rate risk associated with foreign currency-denominated assets and liabilities in Brazil. We do not use foreign currency contracts for speculative or trading purposes.

Based on our monetary assets and liabilities denominated in foreign currencies as of May 27, 2022 and August 27, 2021, we estimate that a 10% adverse change in exchange rates versus the U.S. dollar would result in losses recorded in non-operating expense of $11.9 million and $7.7 million, respectively, to revalue these assets and liabilities.

Interest Rate Risk

We are subject to interest rate risk in connection with our variable-rate debt. As of May 27, 2022, we had $275.0 million outstanding under the 2027 TLA. In addition, the Credit Agreement provides for borrowings of up to $250.0 million under the 2027 Revolver. Assuming that we would satisfy the financial covenants required to borrow and that the amounts available under the 2027 Revolver were fully drawn, a 1.0% increase in interest rates would result in an increase in annual interest expense and a decrease in our cash flows of $5.3 million per year.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective to ensure the information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

35

Changes in Internal Control Over Financial Reporting

During the third quarter of 2022, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

PART II. Other Information

Item 1. Legal Proceedings

For a discussion of legal proceedings, see “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Commitments and Contingencies” and “PART II. Other Information – Item 1A. Risk Factors.”

Item 1A. Risk Factors

Except as discussed below, there have been no material changes to the risks described in “PART I – Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 27, 2021 (our “Annual Report”). You should carefully consider the risks and uncertainties and the other information in this Quarterly Report, including “PART I. Financial Information – Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occurs and, as a result, the market price of our ordinary shares could decline and you could lose all or part of your investment.

Recent Developments that May Affect Our Business

Our efforts to adapt our work environment in the aftermath of the COVID-19 pandemic may be unsuccessful.

While the COVID-19 pandemic persists, we have begun to adopt and roll out return to office plans for our workforce. We believe that there are costs to remote work in terms of productivity, innovation and community that have adversely affected our business during the pandemic. At the same time, we also believe that certain of our employees have benefited from the ability to work remotely and may be resistant to calls to return to work. To the extent plans we adopt are more restrictive than those of others in our industry, our ability to attract and retain talent may be materially and adversely affected. In addition, if we do not solidify our plans in a manner that is considered timely by our employees, the resulting uncertainty may also adversely affect retention. For additional information about risks to us from the COVID-19 pandemic, please refer to the risk factor titled, “The effects of the COVID-19 outbreak could adversely affect our business, results of operations and financial condition” in our Annual Report.

Hostilities in Ukraine may exacerbate certain risks we face.

Russia’s invasion of Ukraine and the global response, including the imposition of sanctions by the United States and other countries, could create or exacerbate risks facing our business. We have evaluated our operations, vendor contracts and customer arrangements, and at present we do not expect the hostilities to directly have a material and adverse effect on our financial condition or results of operations. However, if the hostilities persist, escalate or expand, risks we have identified in our Annual Report may be exacerbated. For example, if our supply or customer arrangements are disrupted due to expanded sanctions or involvement of countries where we have operations or relationships, our business could be materially disrupted. Further, the use of state-sponsored cyberattacks could expand as part of the conflict, which could adversely affect our ability to maintain or enhance our cyber security and data protection measures. These and other risks are described more fully in our Annual Report.

This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” for additional information. Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including the risks facing our Company described in this Quarterly Report.

Changing worldwide economic conditions could adversely affect our operating results and financial condition.

The US and global economy are facing growing inflation, higher interest rates and, in the view of some, potential recession. As disclosed in our Annual Report on Form 10-K for the fiscal year ended August 27, 2021 (our “Form 10-K”), adverse changes in economic conditions could harm our operating results and financial conditions in a variety of ways. For example, regional or global economic downturns could adversely affect demand for our products, which could adversely affect our

37

revenue and potentially result in write-offs of excess or obsolete inventory. Inflation could also drive increases in our costs of revenue and operations, which we may not be able to successfully pass along to our customers. Higher interest rates could result in increased cash usage to service our variable rate indebtedness and increase the cost to us of refinancing our indebtedness. For additional information regarding these and other risks related to adverse changes in macro-economic conditions, we refer you to the Risk Factors included in our Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On April 4, 2022, our Board of Directors approved a $75 million share repurchase authorization, under which the Company may repurchase its outstanding ordinary shares from time to time through open market purchases, privately-negotiated transactions or otherwise. The share repurchase authorization has no expiration date but may be suspended or terminated by the Board of Directors at any time.

Period	Total number of shares (or units) purchased	Average price paid per share (or unit)		Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
February 26 2022 through March 25, 2022	—	$	—	—
March 26, 2022 through April 22,2022	62,588	$	23.63	62,588
April 23, 2022 through May 27, 2022	385,906	$	22.66	385,906
	448,494	$	22.79	448,494	$	64,778,000

Ordinary shares withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are not required to be disclosed under Item 703 of Regulation S-K and accordingly are excluded from the amounts in the table above.

Credit Facility

We are subject to certain restrictions with respect to the use of our working capital and our ability to pay dividends under our Credit Facility, as described in “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt,” which information is incorporated herein by reference.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

38

Item 6. Exhibits

INDEX TO EXHIBITS

			Incorporated by Reference
Exhibit No.	Description	Filed Herewith	Form	File No.	Exhibit	Filing Date
3.1	Second Amended and Restated Memorandum and Articles of Association of SMART Global Holdings, Inc.		8-K	001-38102	3.1	03/31/2020
4.1	Description of Securities Registered Under Section 12 of the Exchange Act		10-K	001-38102	4.1	10/25/2021
31.1	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002	X
32.1	Certification of Principal Executive Officer pursuant 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2	Certification of Principal Financial Officer pursuant 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)	X

*Constitutes a management contract or compensatory plan or arrangement.

39

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SMART Global Holdings, Inc.
Date: June 30, 2022	By:	/s/ Mark Adams
		Mark Adams
		President and Chief Executive Officer
Date: June 30, 2022	By:	/s/ Ken Rizvi
		Ken Rizvi
		Senior Vice President and Chief Financial Officer

40

EX-31.1

EXHIBIT 31.1

RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Mark Adams, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of SMART Global Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 30, 2022	By:	/s/ Mark Adams
		Mark Adams
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

RULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Ken Rizvi, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of SMART Global Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 30, 2022	By:	/s/ Ken Rizvi
		Ken Rizvi
		Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. 1350

In connection with the Quarterly Report of SMART Global Holdings, Inc. (the “Company”) on Form 10-Q for the period ending May 27, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark Adams, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: June 30, 2022	By:	/s/ Mark Adams
		Mark Adams
		President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. 1350

In connection with the Quarterly Report of SMART Global Holdings, Inc. (the “Company”) on Form 10-Q for the period ending May 27, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ken Rizvi, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: June 30, 2022	By:	/s/ Ken Rizvi
		Ken Rizvi
		Senior Vice President and Chief Financial Officer

XML

Cover - shares	9 Months Ended
	May 27, 2022	Jun. 21, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	May 27, 2022
Document Transition Report	false
Entity File Number	001-38102
Entity Registrant Name	SMART GLOBAL HOLDINGS, INC.
Entity Incorporation, State or Country Code	E9
Entity Tax Identification Number	98-1013909
Entity Address, Address Line One	c/o Walkers Corporate Limited
Entity Address, Address Line Two	190 Elgin Avenue
Entity Address, City or Town	George Town, Grand Cayman
Entity Address, Country	KY
Entity Address, Postal Zip Code	KY1-9008
City Area Code	510
Local Phone Number	623-1231
Title of 12(b) Security	Ordinary shares, $0.03 par value per share
Trading Symbol	SGH
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		49,991,532
Entity Central Index Key	0001616533
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Current Fiscal Year End Date	--08-26

XML

Consolidated Balance Sheets - USD ($) $ in Thousands		May 27, 2022	Aug. 27, 2021
Assets
Cash and cash equivalents		$ 387,326	$ 222,986
Accounts receivable, net	[1]	357,457	313,393
Inventories		365,258	363,601
Other current assets		57,525	50,838
Total current assets		1,167,566	950,818
Property and equipment, net		159,111	156,266
Operating lease right-of-use assets		43,524	40,869
Intangible assets, net		83,219	101,073
Goodwill		75,043	74,255
Other noncurrent assets		25,589	21,517
Total assets		1,554,052	1,344,798
Liabilities and Equity
Accounts payable and accrued expenses		448,012	484,107
Current debt		8,795	25,354
Other current liabilities		68,089	74,337
Total current liabilities		524,896	583,798
Long-term debt		485,026	340,484
Acquisition-related contingent consideration		101,824	60,500
Noncurrent operating lease liabilities		36,594	32,419
Other noncurrent liabilities		6,643	8,673
Total liabilities		1,154,983	1,025,874
Commitments and contingencies
SMART Global Holdings shareholders’ equity:
Ordinary shares, $0.03 par value; authorized 200,000 shares; 52,432 shares issued and 50,376 outstanding as of May 27, 2022; 50,138 shares issued and 48,736 outstanding as of August 27, 2021		1,573	1,504
Additional paid-in-capital		437,863	396,120
Retained earnings		231,385	184,787
Treasury shares, 2,056 and 1,402 shares held as of May 27, 2022 and August 27, 2021, respectively		(67,345)	(50,545)
Accumulated other comprehensive income (loss)		(210,874)	(221,615)
Total SGH shareholders’ equity		392,602	310,251
Noncontrolling interest in subsidiary		6,467	8,673
Total equity		399,069	318,924
Total liabilities and equity		$ 1,554,052	$ 1,344,798

[1] Receivables from related parties were de minimis and $14,057 as of May 27, 2022 and August 27, 2021, respectively.

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Statement of Financial Position [Abstract]
Ordinary shares, par value (in usd per share)	$ 0.03	$ 0.03
Ordinary shares, authorized (in shares)	200,000,000	200,000,000
Ordinary shares, issued (in shares)	52,432,000	50,138,000
Ordinary shares, outstanding (in shares)	50,376,000	48,736,000
Treasury shares (in shares)	2,056,000	1,402,000
Receivables from related parties	$ 14,057	$ 14,057

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022		May 28, 2021
Income Statement [Abstract]
Net sales	$ 462,540	$ 437,728	$ 1,381,655	[1]	$ 1,033,433	[1]
Cost of sales	348,077	353,241	1,032,278		842,847
Gross profit	114,463	84,487	349,377		190,586
Operating expenses:
Research and development	20,298	16,718	56,749		32,534
Selling, general and administrative	58,732	48,475	164,396		118,195
Change in fair value of contingent consideration	124	16,400	41,324		16,400
Total operating expenses	79,154	81,593	262,469		167,129
Operating income	35,309	2,894	86,908		23,457
Non-operating (income) expense:
Interest expense, net	5,110	5,049	14,678		12,568
Other non-operating (income) expense	550	489	3,570		1,187
Total non-operating (income) expense	5,660	5,538	18,248		13,755
Income (loss) before taxes	29,649	(2,644)	68,660		9,702
Income tax provision	5,154	4,010	20,495		8,485
Net income (loss)	24,495	(6,654)	48,165		1,217
Net income attributable to noncontrolling interest	382	557	1,567		557
Net income (loss) attributable to SGH	$ 24,113	$ (7,211)	$ 46,598		$ 660
Earnings (loss) per share:
Basic (in usd per share)	$ 0.48	$ (0.15)	$ 0.94		$ 0.01
Diluted (in usd per share)	$ 0.44	$ (0.15)	$ 0.84		$ 0.01
Shares used in per share calculations:
Basic (in shares)	50,095	48,071	49,543		48,542
Diluted (in shares)	54,998	48,071	55,756		51,167

[1] Sales to related parties were de minimis in 2022 and were $20,103 and $53,251 in the three and nine months ended May 28, 2021, respectively.

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Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	May 27, 2022	May 27, 2022
Income Statement [Abstract]
Sales to related parties	$ 20,103	$ 53,251

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 24,495	$ (6,654)	$ 48,165	$ 1,217
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	18,802	2,574	10,741	(3,017)
Comprehensive income (loss)	43,297	(4,080)	58,906	(1,800)
Comprehensive income attributable to noncontrolling interest	382	557	1,567	557
Comprehensive income (loss) attributable to SGH	$ 42,915	$ (4,637)	$ 57,339	$ (2,357)

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Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in-capital	Retained Earnings	Treasury Shares	Accumulated Other Comprehensive Income (Loss)	Total SGH Shareholders’ Equity	Non- controlling Interest in Subsidiary
Beginning balance (in shares) at Aug. 28, 2020		48,988
Beginning balance at Aug. 28, 2020	$ 282,102	$ 1,469	$ 347,431	$ 163,475	$ (2,032)	$ (228,241)	$ 282,102	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	2,027			2,027			2,027
Other comprehensive income (loss)	(16,525)					(16,525)	(16,525)
Shares issued under equity plans (in shares)		956
Shares issued under equity plans	3,106	$ 29	3,077				3,106
Repurchase of ordinary shares (in shares)		(139)
Repurchase of ordinary shares	(3,483)	$ (4)	4		(3,483)		(3,483)
Share-based compensation expense	11,088		11,088				11,088
Ending balance (in shares) at Nov. 27, 2020		49,805
Ending balance at Nov. 27, 2020	278,315	$ 1,494	361,600	165,502	(5,515)	(244,766)	278,315	0
Beginning balance (in shares) at Aug. 28, 2020		48,988
Beginning balance at Aug. 28, 2020	282,102	$ 1,469	347,431	163,475	(2,032)	(228,241)	282,102	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	1,217
Ending balance (in shares) at May. 28, 2021		49,872
Ending balance at May. 28, 2021	277,466	$ 1,496	385,391	164,135	(50,333)	(231,258)	269,431	8,035
Beginning balance (in shares) at Nov. 27, 2020		49,805
Beginning balance at Nov. 27, 2020	278,315	$ 1,494	361,600	165,502	(5,515)	(244,766)	278,315	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	5,844			5,844			5,844
Other comprehensive income (loss)	10,934					10,934	10,934
Shares issued under equity plans (in shares)		371
Shares issued under equity plans	2,545	$ 11	2,534				2,545
Repurchase of ordinary shares (in shares)		(1,104)
Repurchase of ordinary shares	(44,481)	$ (33)	33		(44,481)		(44,481)
Share-based compensation expense	5,398		5,398				5,398
Ending balance (in shares) at Feb. 26, 2021		49,072
Ending balance at Feb. 26, 2021	258,555	$ 1,472	369,565	171,346	(49,996)	(233,832)	258,555	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(6,654)			(7,211)			(7,211)	557
Other comprehensive income (loss)	2,574					2,574	2,574
Shares issued under equity plans (in shares)		806
Shares issued under equity plans	7,506	$ 24	7,482				7,506
Repurchase of ordinary shares (in shares)		(6)
Repurchase of ordinary shares	(337)				(337)		(337)
Share-based compensation expense	8,344		8,344				8,344
Acquisition of noncontrolling interest	7,478							7,478
Ending balance (in shares) at May. 28, 2021		49,872
Ending balance at May. 28, 2021	277,466	$ 1,496	385,391	164,135	(50,333)	(231,258)	269,431	8,035
Beginning balance (in shares) at Aug. 27, 2021		50,138
Beginning balance at Aug. 27, 2021	318,924	$ 1,504	396,120	184,787	(50,545)	(221,615)	310,251	8,673
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	20,698			20,027			20,027	671
Other comprehensive income (loss)	(19,440)					(19,440)	(19,440)
Shares issued under equity plans (in shares)		734
Shares issued under equity plans	5,029	$ 22	5,007				5,029
Repurchase of ordinary shares (in shares)		(51)
Repurchase of ordinary shares	(2,666)	$ (2)	2		(2,666)		(2,666)
Share-based compensation expense	9,739		9,739				9,739
Ending balance (in shares) at Nov. 26, 2021		50,821
Ending balance at Nov. 26, 2021	332,284	$ 1,524	410,868	204,814	(53,211)	(241,055)	322,940	9,344
Beginning balance (in shares) at Aug. 27, 2021		50,138
Beginning balance at Aug. 27, 2021	318,924	$ 1,504	396,120	184,787	(50,545)	(221,615)	310,251	8,673
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	48,165
Ending balance (in shares) at May. 27, 2022		52,432
Ending balance at May. 27, 2022	399,069	$ 1,573	437,863	231,385	(67,345)	(210,874)	392,602	6,467
Beginning balance (in shares) at Nov. 26, 2021		50,821
Beginning balance at Nov. 26, 2021	332,284	$ 1,524	410,868	204,814	(53,211)	(241,055)	322,940	9,344
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	2,972			2,458			2,458	514
Other comprehensive income (loss)	11,379					11,379	11,379
Shares issued under equity plans (in shares)		372
Shares issued under equity plans	2,431	$ 11	2,420				2,431
Repurchase of ordinary shares (in shares)		(4)
Repurchase of ordinary shares	(229)				(229)		(229)
Share-based compensation expense	9,848		9,848				9,848
Distribution to noncontrolling interest	(3,773)							(3,773)
Ending balance (in shares) at Feb. 25, 2022		51,189
Ending balance at Feb. 25, 2022	354,912	$ 1,535	423,136	207,272	(53,440)	(229,676)	348,827	6,085
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	24,495			24,113			24,113	382
Other comprehensive income (loss)	18,802					18,802	18,802
Shares issued under equity plans (in shares)		1,243
Shares issued under equity plans	4,389	$ 38	4,351				4,389
Repurchase of ordinary shares	(13,905)				(13,905)		(13,905)
Share-based compensation expense	10,376		10,376				10,376
Ending balance (in shares) at May. 27, 2022		52,432
Ending balance at May. 27, 2022	$ 399,069	$ 1,573	$ 437,863	$ 231,385	$ (67,345)	$ (210,874)	$ 392,602	$ 6,467

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	May 27, 2022	May 28, 2021
Cash flows from operating activities:
Net income (loss)	$ 48,165	$ 1,217
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense and amortization of intangible assets	48,461	32,468
Amortization of debt discount and issuance costs	7,476	6,503
Share-based compensation expense	30,295	24,867
Change in fair value of contingent consideration	41,324	16,400
Amortization of operating lease right-of-use assets	7,953	4,944
Other	1,294	488
Changes in operating assets and liabilities:
Accounts receivable	(41,490)	(15,455)
Inventories	(116)	(66,493)
Other assets	(5,884)	(14,163)
Accounts payable and accrued expenses	(46,969)	122,095
Operating lease liabilities	(7,205)	(4,460)
Deferred income taxes, net	721	(3,083)
Net cash provided by operating activities	84,025	105,328
Cash flows from investing activities:
Capital expenditures and deposits on equipment	(29,298)	(40,017)
Acquisition of business, net of cash acquired	0	(28,613)
Other	(746)	222
Net cash used for investing activities	(30,044)	(68,408)
Cash flows from financing activities:
Proceeds from debt	270,775	11,439
Proceeds from borrowing under line of credit	84,000	122,500
Proceeds from issuance of ordinary shares	11,849	13,157
Repayments of debt	(125,000)	0
Repayments of borrowings under line of credit	(109,000)	(97,500)
Payments to acquire ordinary shares	(16,800)	(48,301)
Distribution to noncontrolling interest	(3,773)	0
Other	(3,841)	0
Net cash provided by financing activities	108,210	1,295
Effect of changes in currency exchange rates on cash and cash equivalents	2,149	(34)
Net increase in cash and cash equivalents	164,340	38,181
Cash and cash equivalents at beginning of period	222,986	150,811
Cash and cash equivalents at end of period	$ 387,326	$ 188,992

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Significant Accounting Policies

9 Months Ended

May 27, 2022

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include SGH and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended August 27, 2021. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. These consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 27, 2021. Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Fiscal Year: Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2022 and 2021 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years end on July 31 of each year.

Subsequent Event

On June 28, 2022, SGH entered into a Share Purchase Agreement (the “Stratus Purchase Agreement”) with Storm Private Holdings I Ltd., a Cayman Islands exempted company (“Stratus Holding Company” and together with its subsidiaries, “Stratus Technologies”), and Storm Private Investments LP, a Cayman Islands exempted limited partnership (“Stratus Seller”). The transaction, which was approved by our Board of Directors, is expected to close by the end of calendar year 2022.

Pursuant to the Stratus Purchase Agreement, among other matters, and subject to the satisfaction or waiver of the conditions set forth therein, Stratus Seller will sell to SGH, and SGH will purchase from Stratus Seller, all of Stratus Seller’s right, title and interest in and to the outstanding equity securities of Stratus Holding Company (the “Stratus Share Purchase”).

Pursuant to the terms of, and subject to the conditions specified in, the Stratus Purchase Agreement, upon consummation of the Stratus Share Purchase (the “Closing”), (i) SGH will pay to Stratus Seller a cash purchase price of $225 million, subject to certain adjustments as set forth in the Stratus Purchase Agreement, and (ii) Stratus Seller will have the right to receive, and SGH will be obligated to pay, contingent consideration (if any) of up to $50 million (the “Earn-Out”) based on the gross profit performance of the Stratus Technologies business during the first full 12 fiscal months of Stratus Technologies following the Closing. The Earn-Out, if any, will be payable in cash, ordinary shares or a mix of cash and ordinary shares, at SGH’s election.

The consummation of the Stratus Share Purchase is subject to certain customary conditions to Closing, including the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended. The consummation of the Stratus Share Purchase is not subject to a financing condition.

Share Dividend

On January 3, 2022, our Board of Directors declared a share dividend of one ordinary share, $0.03 par value per share, for every one outstanding ordinary share owned to shareholders of record as of January 25, 2022. The dividend was paid on February 1, 2022. The accompanying consolidated financial statements and notes have been restated and adjusted for the impact of the share dividend.

Recently Adopted Accounting Standards

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08 – Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. We adopted ASU 2021-08 in the third quarter of 2022 and the adoption had no impact on our financial statements.

In December 2019, the FASB issued ASU 2019-12 – Income Taxes: Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted ASU 2019-12 in the first quarter of 2022 on a prospective basis. The adoption of this ASU did not have a significant impact on our financial statements.

In June 2016, the FASB issued ASU 2016-13 – Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires a financial asset (or a group of financial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. This ASU requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the increases or decreases of expected credit losses that have taken place during the period. This ASU requires that credit losses of debt securities designated as available-for-sale be recorded through an allowance for credit losses and limits the credit loss to the amount by which fair value is below amortized cost. We adopted ASU 2016-13 in the first quarter of 2021 under the modified retrospective adoption method. The adoption of this ASU did not have a significant impact on our financial statements.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU 2020-06 – Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU is effective for us in the first quarter of 2023 and permits the use of either the modified retrospective or fully retrospective method of transition. We are evaluating the effects of adoption of this ASU on our financial statements.

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Business Acquisition

9 Months Ended

May 27, 2022

Business Combinations [Abstract]

Business Acquisition

Business Acquisition

LED Business

On March 1, 2021, pursuant to the previously announced Asset Purchase Agreement, dated October 18, 2020, as amended by the Amendment to Asset Purchase Agreement, dated March 1, 2021 (as amended, the “CreeLED Purchase Agreement”), (i) we acquired the LED business of Cree, Inc., a corporation now known as Wolfspeed, Inc. (“Cree”), including (a) certain equipment, inventory, intellectual property rights, contracts and real estate comprising Cree’s LED products segment, (b) all of the issued and outstanding equity interests of Cree Huizhou Solid State Lighting Company Limited, a limited liability company organized under the laws of the People’s Republic of China and an indirect wholly owned subsidiary of Cree and (c) Cree’s 51% ownership interest in Cree Venture LED Company Limited (“Cree Joint Venture”), Cree’s joint venture with San’an Optoelectronics Co., Ltd. (“San’an”) and (ii) we assumed certain liabilities related to the LED business (collectively, (i) and (ii), the “LED Business”). In connection with the transaction, Cree retained certain assets used in and pre-closing liabilities associated with its LED products segment.

Purchase Price: The purchase price for the LED Business consisted of (i) a payment of $50 million in cash, subject to customary adjustments, (ii) an unsecured promissory note issued to Cree by the Company in the amount of $125 million (“LED Purchase Price Note”), (iii) an earn-out payment of up to $125 million based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing (“Earnout Period”), with a minimum payment of $2.5 million, payable in the form of an unsecured promissory note to be issued by us (“Earnout Note”) and (iv) the assumption of certain liabilities. The LED Purchase Price Note bears interest at LIBOR plus 3.0% and is due on August 15, 2023. The Earnout Note began to bear interest as of March 28, 2022 at LIBOR plus 3.0% and is due on March 27, 2025. In the second quarter of 2022, we repaid the LED Purchase Price Note. See “Debt.”

Contingent Consideration: The Earnout Note is accounted for as contingent consideration. The fair value of the Earnout Note was estimated as of the date of acquisition to be $28.1 million and was valued using a Monte Carlo simulation analysis in a risk-neutral framework with assumptions for volatility, market price of risk adjustment, risk-free rate and cost of debt. The fair value measurement was based on significant inputs not observable in the market.

The Earnout Note is revalued each quarter and changes in valuation are reflected in results of operations. In the second half of 2021, we recorded charges of $32.4 million to adjust the value of the Earnout Note to its fair value as of August 27, 2021, and in 2022, through the end of the Earnout Period, we recorded additional aggregate charges of $41.3 million to adjust the value of the Earnout Note to its fair value as of May 27, 2022. The changes in fair value reflected new information about the probability and timing of meeting the conditions of the revenue and gross profit targets of the LED Business.

Based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing, the final calculated value of the contingent consideration was $101.8 million and, subsequent to the end of the third quarter of 2022, we issued the Earnout Note to Cree for this amount.

Unaudited Pro Forma Financial Information: The following unaudited pro forma financial information presents our combined results of operations as if the acquisition of the LED Business had occurred on August 31, 2019. The unaudited pro forma financial information is based on various adjustments and assumptions and is not necessarily indicative of what our results of operations actually would have been had the acquisition been completed as of August 31, 2019 or will be for any future periods. Furthermore, the pro forma financial information does not include adjustments to reflect any potential revenue, synergies or dis-synergies or cost savings that may be achievable in connection with the acquisition, or the associated costs that may be necessary to achieve such revenues, synergies or cost savings.

The unaudited pro forma financial information for the first nine months of 2021 combines our results of operations for the nine months ended May 28, 2021 (which includes the results of the LED Business from the March 1, 2021 acquisition date) and the results of operations of the LED Business for the six months ended December 27, 2020.

Nine months ended	May 28, 2021
Net sales	$	1,237,627
Net loss attributable to SGH	(162,969)
Earnings (loss) per share:
Basic	$	(3.36)
Diluted	$	(3.36)

The unaudited pro forma financial information above reflects the following adjustments:

•Incremental cost of sales related to the estimated fair value of inventories.

•Incremental depreciation expense related to the estimated fair value of property and equipment.

•Incremental amortization expense related to the estimated fair value of identifiable intangible assets.

•Incremental interest expense related to the LED Purchase Price Note and the Earnout Note.

•The impacts to income tax expense as a result of the pro forma adjustments.

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Inventories

9 Months Ended

May 27, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories

As of	May 27, 2022		August 27, 2021
Raw materials	$	179,649	$	163,610
Work in process	65,547		92,901
Finished goods	120,062		107,090
	$	365,258	$	363,601

As of May 27, 2022 and August 27, 2021, 8% and 11%, respectively, of total inventories were inventories owned and held under our logistics services.

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Property and Equipment

9 Months Ended

May 27, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

As of	May 27, 2022		August 27, 2021
Equipment	$	205,379	$	182,493
Buildings and building improvements	59,642		53,502
Furniture, fixtures and software	38,044		32,114
Land	16,126		16,126
	319,191		284,235
Accumulated depreciation	(160,080)		(127,969)
	$	159,111	$	156,266

Depreciation expense for property and equipment was $10.6 million and $30.3 million in the third quarter and first nine months of 2022, respectively, and $9.1 million and $19.5 million in the third quarter and first nine months of 2021, respectively.

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Intangible Assets and Goodwill

9 Months Ended

May 27, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

	May 27, 2022				August 27, 2021
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Technology	$	61,614	$	(16,333)	$	61,307	$	(9,142)
Customer relationships	57,500		(29,777)		57,500		(22,393)
Trademarks/trade names	19,200		(8,985)		19,200		(6,628)
Order backlog	—		—		3,800		(2,571)
	$	138,314	$	(55,095)	$	141,807	$	(40,734)
Goodwill by segment:
Intelligent Platform Solutions	$	40,401			$	40,401
Memory Solutions	34,642				33,854
	$	75,043			$	74,255

In the first nine months of 2022 and 2021, we capitalized $1.1 million and $64.5 million, respectively, for intangible assets with weighted average useful lives of 17.5 years and 6.7 years, respectively. Amortization expense for intangible assets was $5.9 million and $18.2 million in the third quarter and first nine months of 2022, respectively, and $6.2 million and $13.0 million in the third quarter and first nine months of 2021, respectively. Amortization expense is expected to be $5.6 million for the remainder of 2022, $21.8 million in 2023, $17.8 million in 2024, $15.3 million in 2025, $8.5 million in 2026 and $14.1 million thereafter.

Goodwill of our Memory Solutions segment increased by $0.8 million in the first nine months of 2022 and increased in all of 2021 by $0.3 million from translation adjustments.

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Accounts Payable and Accrued Expenses

9 Months Ended

May 27, 2022

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

As of	May 27, 2022		August 27, 2021
Accounts payable (1)	$	384,251	$	429,640
Salaries, wages and benefits	38,626		37,795
Income and other taxes	21,436		14,319
Other	3,699		2,353
	$	448,012	$	484,107

(1) Includes accounts payable for property and equipment of $2.3 million and $3.1million as of May 27, 2022 and August 27, 2021, respectively.

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Debt

9 Months Ended

May 27, 2022

Debt Disclosure [Abstract]

Debt

Debt

As of	May 27, 2022		August 27, 2021
Credit Facility Term Loan	$	270,793	$	—
Convertible Senior Notes	210,694		203,992
LED Purchase Price Note	—		125,000
ABL Credit Agreement	—		25,000
Other	12,334		11,846
	493,821		365,838
Less current debt	(8,795)		(25,354)
Long-term debt	$	485,026	$	340,484

Credit Facility

On February 7, 2022, we entered into a credit agreement (the "Credit Agreement") with a syndicate of banks that provides for (i) a term loan credit facility in an aggregate principal amount of $275.0 million (the "2027 TLA") and (ii) a revolving credit facility in an aggregate principal amount of $250.0 million (the "2027 Revolver," and together with the 2027 TLA, the "Credit Facility"), in each case, maturing on February 7, 2027 (subject to certain earlier “springing maturity” dates upon certain conditions specified in the Credit Agreement). The Credit Agreement provides that up to $35.0 million of the 2027 Revolver is available for issuances of letters of credit.

Issuance costs incurred in connection with the Credit Facility were $9.1 million and were allocated to the 2027 TLA and 2027 Revolver on a pro rata basis. Unamortized issuances costs allocated to the 2027 TLA are amortized using the effective interest method and are included as a reduction of the principal amount of the 2027 TLA within debt. Unamortized issuances costs allocated to the 2027 Revolver are amortized using the straight-line method and are included in other current and noncurrent assets.

Principal payments under the 2027 TLA are due quarterly, beginning in May 2022, equal to 2.5% per annum of the initial aggregate principal amount, with such per annum percentage equal to 5.0%, 5.0%, 5.0% and 7.5% per annum in years two through five, respectively, with the balance due at maturity.

Interest and fees: Loans under the Credit Agreement bear interest at a rate per annum equal to either, at our option, a term secured overnight financing rate ("SOFR") or a base rate, in each case plus an applicable margin.

2027 TLA: The applicable margin for 2027 TLA is 2.00% per annum with respect to term SOFR borrowings, and 1.00% per annum with respect to base rate borrowings. As of May 27, 2022, the interest rate applicable to the principal amount outstanding under the 2027 TLA was 2.89% per annum. As of May 27, 2022, there was $275.0 million of 2027 TLA principal

amount outstanding and unamortized issuance costs were $4.2 million and, as of May 27, 2022, the 2027 TLA had an effective interest rate of 3.33%.

2027 Revolver: The applicable margin for revolving loans varies based on our Total Leverage Ratio (as defined in the Credit Agreement) and ranges from 1.25% to 3.00% per annum with respect to term SOFR borrowings and from 0.25% to 2.00% per annum with respect to base rate borrowings. In addition, we are required to pay a quarterly unused commitment fee at an initial rate of 0.25%, which may increase up to a rate of 0.35% based on certain Total Leverage Ratio levels specified in the Credit Agreement. As of May 27, 2022, there were no amounts outstanding under the 2027 Revolver and unamortized issuance costs were $4.3 million.

Security: The Credit Agreement is jointly and severally guaranteed on a senior basis by certain subsidiaries of SGH organized in the United States and Cayman Islands. In addition, the Credit Agreement is secured by a pledge of the capital stock of, or equity interests in, certain subsidiaries of SGH organized in the United States and the Cayman Islands and by substantially all of the assets of certain subsidiaries of SGH organized in the United States and the Cayman Islands.

Covenants: The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends; make distributions or repurchase capital stock; make investments, loans or advances; repay or repurchase certain subordinated debt (except as scheduled or at maturity); create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing our subordinated debt and fundamentally change our business.

The Credit Agreement also includes the following financial maintenance covenants tested on the final day of each fiscal quarter:

i. a First Lien Leverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00;

ii. a Total Leverage Ratio of 5.00 to 1.00; provided, that commencing after the eighth full fiscal quarter after the Effective Date, such Total Leverage Ratio level will instead be 4.50 to 1.00; provided further, that commencing after the eighth full fiscal quarter after the Effective Date, in connection with any Material Acquisition (as defined in the Credit Agreement), at the election of the Borrowers, the maximum Total Leverage Ratio for the next four testing periods after such Material Acquisition has been consummated will be automatically increased by 0.50 to 1.00 above the otherwise permitted Total Leverage Ratio for the applicable fiscal quarter (not to exceed 5.00 to 1.00 in any event); provided further, that (x) no more than two such elections may be made during the term of the Credit Agreement and (y) following the first such election, no subsequent election may be made unless the Total Leverage Ratio has been less than or equal to 5.00 to 1.00 as of the last day of at least two consecutive Test Periods (as defined in the Credit Agreement) following the expiration of the first increase; and

iii. an Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00.

For purposes of calculating the First Lien Leverage Ratio and the Total Leverage Ratio, the consolidated debt of the Company and its Restricted Subsidiaries (as defined in the Credit Agreement) is reduced by up to $100 million of the aggregate amount of unrestricted cash and Permitted Investments (as defined in the Credit Agreement) of the Company and its Restricted Subsidiaries.

Other: Substantially simultaneously with entering into the Credit Agreement, we used a portion of the proceeds of the Credit Facility to pay in full all borrowings and terminated all commitments under (i) our ABL Credit Agreement, dated as of December 23, 2020, (ii) our Amended Credit Agreement, dated as of March 6, 2020 and (iii) the LED Purchase Price Note, dated as of March 1, 2021. In connection therewith, we used an aggregate of $160.4 million to pay principal and interest outstanding under these agreements and recorded charges of $0.7 million in other non-operating expense to write off certain unamortized issuance costs.

Convertible Senior Notes

In February 2020, we issued $250.0 million in aggregate principal amount of 2.25% convertible senior notes due 2026 (the “2026 Notes”). The 2026 Notes are general unsecured obligations, bear interest at an annual rate of 2.25% per year, payable semi-annually on February 15 and August 15, and mature on February 15, 2026, unless earlier converted, redeemed or repurchased. The 2026 Notes are governed by an indenture (the “Indenture”) between us and U.S. Bank

National Association, as trustee. After the effect of the share dividend paid in the second quarter of 2022, the conversion rate of the 2026 Notes is 49.2504 ordinary shares per $1,000 principal amount of notes, which represents a conversion price of approximately $20.30 per ordinary share. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture.

Conversion Rights: Holders of the 2026 Notes may convert them under the following circumstances:

i. during any fiscal quarter commencing after the fiscal quarter ended on May 28, 2020 (and only during such fiscal quarter) if the last reported sale price per ordinary share exceeds 130% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter;

ii. during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “Measurement Period”) in which the trading price per $1,000 principal amount of notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per ordinary share on such trading day and the conversion rate on such trading day;

iii. on or after August 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date;

iv. upon the occurrence of certain corporate events or distributions on our ordinary shares, as provided in the Indenture; or

v. the 2026 Notes are called for redemption.

Upon conversion, we will pay or deliver, as applicable, cash, ordinary shares or a combination of cash and ordinary shares at our election. Our intent is to settle in cash the principal amount of our convertible notes upon conversion and may, at our option, settle any excess of the conversion value over the principal amount in cash, ordinary shares or any combination thereof.

If we receive a notice of conversion for our 2026 Notes, and we elect to settle in cash any portion of the conversion obligation, the cash settlement obligation becomes a derivative debt liability subject to mark-to-market accounting treatment based on the volume-weighted-average price of our ordinary shares over a period of 40 consecutive trading days, beginning two business days after the holder gives notice to convert. Accordingly, as of the date of our election to settle any part of a conversion in cash, we would reclassify all or a portion of the fair value of the equity component of the converted 2026 Notes from additional capital to derivative debt liability within current debt in our consolidated balance sheet.

Other: Unamortized debt discount and issuance costs are amortized over the term of the 2026 Notes using the effective interest rate method. As of May 27, 2022, and August 27, 2021, the effective interest rate was 7.06%. Interest expense for the 2026 Notes consisted of 2.25% contractual stated interest and amortization of discount and issuance costs and included of the following:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Contractual stated interest	$	1,438	$	1,438	$	4,219	$	4,219
Amortization of discount and issuance costs	2,242		2,088		6,702		6,247
	$	3,680	$	3,526	$	10,921	$	10,466

As of both May 27, 2022 and August 27, 2021, the carrying amount of the equity components of the 2026 Notes, which is included in additional paid-in-capital, was $50.8 million.

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Leases

9 Months Ended

May 27, 2022

Leases [Abstract]

Leases

Leases

As of May 27, 2022 and August 27, 2021, we had operating leases through which we utilize facilities, offices and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions.

Sublease income was not significant in the first nine months of 2022 or 2021. The components of operating lease expense were as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Fixed lease cost	$	3,402	$	2,856	$	9,917	$	6,310
Variable lease cost	370		409		1,192		969
Short-term lease cost	119		106		377		221
	$	3,891	$	3,371	$	11,486	$	7,500

Cash flows used for operating activities for the first nine months of 2022 and 2021 included payments for operating leases of $7.3 million and $6.1 million, respectively. Noncash acquisitions of right-of-use assets were $10.6 million and $16.9 million for the first nine months of 2022 and 2021, respectively.

As of May 27, 2022 and August 27, 2021, the weighted-average remaining lease term for our operating leases was 6.8 years and 6.1 years, respectively. Certain of our operating leases include one or more options to extend the lease term for periods from two to five years. In determining the present value of our operating lease liabilities, we have assumed we will not extend any lease terms. As of May 27, 2022 and August 27, 2021, the weighted-average discount rate for our operating leases was 6.5% and 6.7%, respectively.

Minimum payments of lease liabilities as of May 27, 2022 were as follows:

Remainder of 2022	$	3,099
2023	11,114
2024	8,833
2025	6,241
2026	5,011
2027 and thereafter	23,817
	58,115
Less imputed interest	(12,238)
Present value of total lease liabilities	$	45,877

The table above excludes lease liabilities for leases that have been executed but not yet commenced. As of May 27, 2022, we had such lease commitments relating to operating lease payment obligations of $51.8 million for a building lease with a term of 16 years. We will recognize a right-of-use asset and an associated lease liability at the time such asset becomes available for our use. Such lease is currently expected to commence in the fourth quarter of 2022.

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Commitments and Contingencies

9 Months Ended

May 27, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Contingencies

From time to time, we are involved in legal matters that arise in the normal course of business. Litigation in general, and intellectual property, employment and shareholder litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Additionally, from time to time, we are a party in the normal course of business to a variety of agreements pursuant to which we may be obligated to indemnify another party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations or financial condition. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made.

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Equity

9 Months Ended

May 27, 2022

Equity [Abstract]

Equity

Equity

SGH Shareholders’ Equity

Share Dividend

On January 3, 2022, our Board of Directors declared a share dividend of one ordinary share, $0.03 par value per share, for every one outstanding ordinary share owned to shareholders of record as of January 25, 2022. The dividend was paid on February 1, 2022.

Share Repurchase Authorization

On April 4, 2022, our Board of Directors approved a $75 million share repurchase authorization, under which the Company may repurchase its outstanding ordinary shares from time to time through open market purchases, privately-negotiated transactions or otherwise. The share repurchase authorization has no expiration date but may be suspended or terminated by the Board of Directors at any time. In the third quarter of 2022, we repurchased an aggregate of 448 thousand shares for $10.2 million under the repurchase authorization. As of May 27, 2022, these repurchased shares were held in treasury.

Other Share Repurchases

We repurchased 151 thousand and 206 thousand ordinary shares as payment of withholding taxes for $3.7 million and $6.6 million in the third quarter and first nine months of 2022, respectively, and 6 thousand and 148 thousand ordinary shares for $0.3 million and $4.0 million in the third quarter and first nine months of 2021, respectively. As of May 27, 2022, these repurchased shares were held in treasury.

In addition, in January 2021, we repurchased an aggregate of 1.1 million ordinary shares for $44.3 million from Silver Lake Partners III Cayman (AIV III), L.P., Silver Lake Technology Investors III Cayman, L.P., Silver Lake Sumeru Fund Cayman, L.P. and Silver Lake Technology Investors Sumeru Cayman, L.P. in a privately negotiated transaction. The transaction closed on January 15, 2021. As of May 27, 2022, these repurchased shares were held in treasury.

Noncontrolling Interest in Subsidiary

In connection with our acquisition of the LED Business, we have a 51% ownership interest in the Cree Joint Venture. The remaining 49% ownership interest is held by San’an. The Cree Joint Venture has a five-member board of directors, three of which are designated by us and two of which are designated by San’an. As a result of our majority voting interest, we consolidate the operations of the Cree Joint Venture and report its results of operations within our LED Solutions segment.

The Cree Joint Venture has a manufacturing agreement pursuant to which San’an supplies it with mid-power LED products and we and the Cree Joint Venture have a sales agent agreement pursuant to which we are the independent sales representative of the Cree Joint Venture. The Cree Joint Venture produces and delivers to market high performing, mid-power lighting class LEDs in an exclusive arrangement serving the expanding markets of North and South America, Europe and Japan, and serves China markets and the rest of the world on a non-exclusive basis.

The 49% ownership interest held by San’an is classified as noncontrolling interest. In the second quarter of 2022, the Cree Joint Venture distributed an aggregate of $7.7 million to its partners, including $3.9 million to SGH and $3.8 million to San’an. Noncontrolling interest increased by $0.4 million and $1.6 million in the third quarter and first nine months of 2022, respectively, for San’an’s share of net income from the Cree Joint Venture. Remaining cash and other assets of the Cree Joint Venture are generally not available for use by us in our other operations.

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Government Incentives

9 Months Ended

May 27, 2022

Receivables [Abstract]

Government Incentives

Government Incentives

Brazil Financial Credits

Through our Brazil subsidiaries, we participate in two programs (“Brazil Incentive Programs”), pursuant to which the Brazilian government incentivizes the manufacture and sale of certain information technology and consumer electronics products within Brazil. The programs include 1) Lei da Informática – Processo Produtivo Básico Program (also known as Informatics Law – Basic Productive Process Program) (“IT Law/PPB”) and 2) Programa de Apoio ao Desenvolvimento Tecnológico da Indústria de Semicondutores (also known as Program of Support of the Development of the Semiconductor Industry) (“PADIS”). In January 2022, the Brazilian government approved an extension to PADIS. The financial credits

available through PADIS are set to expire in December 2026, while the financial credits through IT Law/PPB are set to expire in December 2029. The Brazil Incentive Programs provide for reduced import and other transaction-related taxes for certain procurement, manufacturing and sales activities. In exchange, we must invest in certain research and development activities related to semiconductors and IT solutions in aggregate amounts that exceed a specified percentage of our gross revenues recognized in connection with sales in Brazil, excluding exports and sales to customers located at the Manaus Free Trade Zone. Accordingly, financial credits earned in connection with the Brazil Incentive Programs are reflected as a reduction of research and development expense. Financial credits available under the Brazil Incentive Programs are subject to limitations, which range from approximately 11% to 14% of gross revenues recognized for sales in Brazil.

Under PADIS, we recognized aggregate financial credits, reflected as a reduction of research and development expense, of $3.3 million and $15.2 million in the third quarter and first nine months of 2022, respectively, and $8.2 million and $22.2 million in the third quarter and first nine months of 2021, respectively. Financial credits earned under the Brazil Incentive Programs may be refunded in cash or used to offset liabilities for Brazil federal taxes. As of May 27, 2022 and August 27, 2021, earned under PADIS but unused financial credits of $19.5 million and $19.8 million, respectively, were included in other current assets. Financial credits earned under PADIS but unused as of May 27, 2022 can be utilized through November 2026.

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Fair Value Measurements

9 Months Ended

May 27, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Cash and cash equivalents as of May 27, 2022 and August 27, 2021 included money market funds of $12.7 million and $2.7 million, respectively, which were valued based on Level 1 measurements using quoted prices in active markets for identical assets.

Fair value measurements of other assets and liabilities were as follows:

	May 27, 2022				August 27, 2021
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Derivative financial instrument assets	$	102	$	102	$	883	$	883
Liabilities:
Derivative financial instrument liabilities	$	22	$	22	$	50	$	50
Credit Facility Term Loan	275,000		270,793		—		—
Convertible Senior Notes	333,125		210,694		335,668		203,992
LED Purchase Price Note	—		—		125,000		125,000
ABL Credit Agreement	—		—		25,000		25,000
Debt – other	11,353		12,334		10,702		11,846
Acquisition-related contingent consideration	101,824		101,824		60,500		60,500

The fair values of our derivative financial instruments, as measured on a recurring basis, were based on Level 2 measurements, including market-based observable inputs of currency exchange spot and forward rates, interest rates and credit-risk spreads.

The fair value of our Convertible Senior Notes (excluding the value of the equity component of our convertible notes), as measured on a non-recurring basis, was determined based on Level 2 measurements, including the trading price of the convertible notes. The fair values of our Credit Facility Term Loan, LED Purchase Price Note, ABL Credit Agreement and other debt, as measured on a non-recurring basis, were estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours.

Acquisition-related contingent consideration relates to our acquisition of the LED Business and is included in noncurrent liabilities. The fair value as of August 27, 2021, as measured on a recurring basis, was based on Level 3 measurements, which included significant inputs not observable in the market. The fair value was estimated using a Monte Carlo simulation analysis in a risk-neutral framework with assumptions for volatility, market price of risk adjustment, risk-free rate and cost of debt. Assumptions used in the determination of fair value also included estimates of future revenue and gross profit of

the LED Business. Based on the revenue and gross profit performance of the LED Business in Cree’s first four full fiscal quarters following the closing, the final calculated value of the contingent consideration was $101.8 million. The fair value as of May 27, 2022, as measured on a non-recurring basis, was estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours.

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Derivative Instruments

9 Months Ended

May 27, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

We use currency forward contracts to mitigate our exposure of certain monetary assets and liabilities from changes in currency exchange rates. Realized and unrealized gains and losses from derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating (income) expense.

In the third quarter and first nine months of 2022, we recognized net realized losses of $8.8 million and $4.2 million, respectively, and net unrealized gains of $3.3 million and net unrealized losses of $0.2 million, respectively, from changes in the fair value of non-designated forward contracts. In the third quarter and first nine months of 2021, we recognized net realized gains of $4.2 million and $3.5 million, respectively, and net unrealized losses of $5.6 million and $2.5 million, respectively, from changes in the fair value of non-designated forward contracts.

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Equity Plans

9 Months Ended

May 27, 2022

Share-based Payment Arrangement [Abstract]

Equity Plans

Equity Plans

As of May 27, 2022, 7.7 million of our ordinary shares were available for future awards under our equity plans.

Restricted Share Awards and Restricted Share Units Awards (“Restricted Awards”)

Aggregate Restricted Award activity was as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Awards granted	935		3,079		1,581		4,513
Weighted average grant-date fair value per share	$	24.25	$	19.97	$	25.96	$	17.65
Aggregate vesting-date fair value of shares vested	$	24,099	$	7,281	$	42,326	$	18,689

Restricted Awards include grants with service, performance and/or market conditions with restrictions that generally lapse after a three to four-year service period. Awards with market conditions are based on either the Company’s share price or the Company’s total shareholder return (“TSR”) relative to companies included in a market index. For awards with market conditions, the number of shares that will vest will vary between 0% and 200% of target amounts, depending upon the Company’s achievement level over the specified performance period. The fair value of awards with market conditions were fixed at the grant date using a Monte Carlo simulation analysis and were based on significant inputs not observable in the market.

In May 2020, we granted a performance-based restricted share award to our former CEO that had both service and performance conditions. As of August 28, 2020, we deemed it was probable that the service condition would be met and the attainment of the performance condition for this award was probable. On October 20, 2020, we modified this award, as well as another time-based award previously granted to our former CEO, to accelerate the remaining service-based vesting requirements such that they became fully vested as of the acceleration date. These modifications resulted in additional share-based compensation expense in the first quarter of 2021 of $5.8 million.

As of May 27, 2022, total unrecognized compensation costs for unvested Restricted Awards was $99.2 million, which was expected to be recognized over a weighted average period of 2.76 years.

Share Options

Share option activity and assumptions were as follows:

Nine Months Ended	May 28, 2021
Share options granted	500
Weighted average grant-date fair value per share	$	6.65
Average expected term in years	6.25
Weighted-average expected volatility	52.07		%
Weighted-average risk-free interest rate	0.49		%
Expected dividend yield	—

As of May 27, 2022, total unrecognized compensation costs for unvested options was $3.6 million, which was expected to be recognized over a weighted average period of 1.88 years.

Employee Share Purchase Plan

Under our employee share purchase plan (“ESPP”), employees purchased 307 thousand ordinary shares for $6.5 million in the first nine months of 2022 and 353 thousand ordinary shares for $3.6 million in the first nine months of 2021.

Share-Based Compensation Expense

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Share-based compensation expense by caption:
Cost of sales	$	1,724	$	1,166	$	5,103	$	2,807
Research and development	1,679		1,468		4,778		3,055
Selling, general and administrative	7,144		5,747		20,414		19,005
	$	10,547	$	8,381	$	30,295	$	24,867

Income tax benefits related to the tax deductions for share-based awards are recognized only upon the settlement of the related share-based awards. Consistent with our treatment of income or loss from our U.S. operations, our income tax provision in 2022 and 2021 reflects de minimis income tax benefits for share-based compensation expense.

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Revenue and Customer Contract Balances

9 Months Ended

May 27, 2022

Revenue from Contract with Customer [Abstract]

Revenue and Customer Contract Balances

Revenue and Customer Contract Balances

We disaggregate revenue by segment and geography and by product and service revenue. See “Segment and Other Information.”

Net Sales and Gross Billings

Net sales by products and services and gross amounts billed for services, including logistics services in which we act as an agent for our customers, were as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales:
Products and professional services	$	440,012	$	428,882	$	1,330,473	$	1,011,079
Logistics services	22,528		8,846		51,182		22,354
	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Gross billings in connection with logistics services:
Logistics services	$	22,528	$	8,846	$	51,182	$	22,354
Cost of materials (1)	574,034		205,530		1,250,024		481,163
	$	596,562	$	214,376	$	1,301,206	$	503,517

(1) Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our logistics services business, which includes procurement, logistics, inventory management, temporary warehousing, kitting and/or packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory.

Customer Contract Balances

As of	May 27, 2022		August 27, 2021
Contract assets (1)	$	459	$	4,247
Contract liabilities: (2)
Deferred revenue	$	19,288	$	19,271
Customer advances	13,584		15,835
	$	32,872	$	35,106

(1) Contract assets are included in other current assets.

(2) Contract liabilities are included in other current liabilities and noncurrent liabilities based on the timing of when our customer is expected to take control of the asset or receive the benefit of the service.

Deferred revenue related to amounts received from customers in advance of satisfying performance obligations. As of May 27, 2022, we expect to recognize revenue of $16.1 million of the balance of $19.3 million in the next 12 months and the remaining amount thereafter. In the first nine months of 2022, we recognized revenue of $12.9 million from satisfying performance obligations related to amounts included in deferred revenue as of August 27, 2021. Customer advances represent amounts received from customers for advance payments to secure product and services within the next 12 months. In the first nine months of 2022, we recognized revenue of $5.2 million from satisfying performance obligations related to amounts included in customer advances as of August 27, 2021.

As of May 27, 2022 and August 27, 2021, other current liabilities included $19.2 million and $24.9 million, respectively, for estimates of consideration payable to customers, including estimates for pricing adjustments and returns.

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Other Non-operating (Income) Expense

9 Months Ended

May 27, 2022

Nonoperating Income (Expense) [Abstract]

Other Non-operating (Income) Expense

Other Non-operating (Income) Expense

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Foreign currency (gains) losses	$	641	$	994	$	3,516	$	1,195
Other	(91)		(505)		54		(8)
	$	550	$	489	$	3,570	$	1,187

Foreign currency (gains) and losses relate primarily to our Brazil operating subsidiaries.

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Income Taxes

9 Months Ended

May 27, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Income before income taxes	$	29,649	$	(2,644)	$	68,660	$	9,702
Income tax provision	5,154		4,010		20,495		8,485

Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for certain discrete items which are fully recognized in the period they occur. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate.

Our provision for income taxes for the nine months ended May 27, 2022 increased by $12.0 million as compared to the same period in the prior year, primarily due to an increase in the amount of earnings subject to non-U.S. tax.

As of May 27, 2022 and August 27, 2021, we had a full valuation allowance for net deferred tax assets associated with our U.S. operations. The amount of the deferred tax asset considered realizable could be adjusted if significant positive evidence increases.

Determining the consolidated provision for income tax expense, income tax liabilities and deferred tax assets and liabilities involves judgment. The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates, which involves estimating current tax exposures, as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from actual results, which may have a significant impact on operating results in future periods.

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Earnings Per Share

9 Months Ended

May 27, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net income (loss) attributable to SGH – Basic and Diluted	$	24,113	$	(7,211)	$	46,598	$	660
Weighted-average shares outstanding – Basic	50,095		48,071		49,543		48,542
Dilutive effect of equity plans and convertible notes	4,903		—		6,213		2,625
Weighted-average shares outstanding – Diluted	54,998		48,071		55,756		51,167
Earnings (loss) per share:
Basic	$	0.48	$	(0.15)	$	0.94	$	0.01
Diluted	$	0.44	$	(0.15)	$	0.84	$	0.01

Below are potentially dilutive shares that were not included in the computation of diluted earnings per share because to do so would have been antidilutive:

	Three Months Ended		Nine Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Equity plans	459	5,283	333	2,790
Convertible notes	—	12,313	—	12,313
	459	17,596	333	15,103

We have the option to pay cash, issue shares or a combination thereof for the aggregate amount due upon any conversion of our 2026 Notes. It is our intent to settle the principal amount of the 2026 Notes in cash upon any conversion. As a result, only the amounts payable in excess of the principal amounts upon conversion of the 2026 Notes are considered in diluted earnings per share under the treasury stock method. The 2026 Notes are dilutive when the average share price of the Company’s ordinary shares for a reporting period exceeds the conversion price of the 2026 Notes of $20.30 per share. See “Debt – Convertible Senior Notes.”

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Segment and Other Information

9 Months Ended

May 27, 2022

Segment Reporting [Abstract]

Segment and Other Information

Segment and Other Information

Segment information presented below is consistent with how our chief operating decision maker evaluates operating results to make decisions about allocating resources and assessing performance.

In the fourth quarter of 2021, we reorganized SGH into three business units: Memory Solutions, Intelligent Platforms Solutions and LED Solutions. Two of our previous segments, specialty memory products and Brazil products, were combined to become Memory Solutions. Intelligent Platform Solutions was formerly referred to as specialty compute and storage solutions. All prior period information in the tables below has been revised to reflect the change to our three reportable segments.

•Memory Solutions: Our Memory Solutions group, under our SMART Modular brand, provides high performance and reliable memory solutions through the design, development and advanced packaging of leading-edge to extended lifecycle products. These specialty products are tailored to meet customer-specific requirements across networking and communications, enterprise storage, computing, including desktop, notebook and server applications, smartphones and other vertical markets. These products are marketed to OEMs and to commercial and government customers. The Memory Solutions group also offers SMART Supply Chain Services, which provides customized, integrated supply chain services to enable our customers to better manage supply chain planning and execution, reduce costs and increase productivity.

•Intelligent Platform Solutions (“IPS”): Our IPS group, under our Penguin Solutions brand, consists of two major product lines – Penguin Computing and Penguin Edge. Penguin Computing offers specialized platform solutions for high-performance computing, artificial intelligence, machine learning and advanced modeling for technology research. We provide these leading-edge solutions to customers in the government, hyper-scale, energy, financial services and education markets. Penguin Edge offers solutions for embedded and wireless applications, specializing in high-reliability products for a wide range of customers in government, telecommunications, health care, smart city, network edge and industrial applications.

•LED Solutions: Our LED Solutions group, under our Cree LED brand, offers a broad portfolio of application-optimized LEDs focused on improving on lumen density, intensity, efficacy, optical control and reliability. Backed by expert design assistance and superior sales support, our LED products enable our customers to develop and market LED-based products for general lighting, video screens and specialty lighting applications. Our LED Solutions is comprised of the LED Business we acquired from Cree, Inc. on March 1, 2021.

Segments are determined based on sources of revenue, types of customers and operating performance. There are no differences between the accounting policies for our segment reporting and our consolidated results of operations. Operating expenses directly associated with the activities of a specific segment are charged to that segment. Certain other

indirect operating income and expenses are generally allocated to segments based on their respective percentage of net sales. We do not allocate interest, other non-operating (income) expense or taxes to segments.

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales:
Memory Solutions	$	265,850	$	240,116	$	765,332	$	684,537
Intelligent Platform Solutions	95,345		95,857		296,256		247,141
LED Solutions	101,345		101,755		320,067		101,755
Total net sales	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Segment operating income:
Memory Solutions	$	30,094	$	26,163	$	99,260	$	65,262
Intelligent Platform Solutions	10,790		5,756		32,672		17,559
LED Solutions	13,388		11,386		48,925		11,386
Total segment operating income	54,272		43,305		180,857		94,207
Unallocated:
Share-based compensation expense	(10,547)		(8,381)		(30,295)		(24,867)
Amortization of acquisition-related intangibles	(5,943)		(6,184)		(18,115)		(13,011)
Flow through of inventory step up	—		(7,090)		—		(7,090)
Change in fair value of contingent consideration	(124)		(16,400)		(41,324)		(16,400)
Out of period import tax expense (1)	—		—		—		(4,345)
Other	(2,349)		(2,356)		(4,215)		(5,037)
Total unallocated	(18,963)		(40,411)		(93,949)		(70,750)
Consolidated operating income	$	35,309	$	2,894	$	86,908	$	23,457

(1) During the second quarter of 2021, we recorded an out-of-period adjustment to correct errors originating in previous periods related to understated import tax costs, which resulted in a $4.3 million increase in cost of sales, $0.8 million increase in interest expense and $1.7 million benefit for income taxes. The adjustment was not considered material to the interim or annual consolidated financial statements for the year ended August 27, 2021 nor to any previously issued interim or annual consolidated financial statements.

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Significant Accounting Policies (Policies)

9 Months Ended

May 27, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements include SGH and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended August 27, 2021. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. These consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 27, 2021. Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Fiscal Year: Our fiscal year is the 52 or 53-week period ending on the last Friday in August. Fiscal 2022 and 2021 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years end on July 31 of each year.

Recently Adopted Accounting Standards and Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08 – Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. We adopted ASU 2021-08 in the third quarter of 2022 and the adoption had no impact on our financial statements.

In December 2019, the FASB issued ASU 2019-12 – Income Taxes: Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted ASU 2019-12 in the first quarter of 2022 on a prospective basis. The adoption of this ASU did not have a significant impact on our financial statements.

In June 2016, the FASB issued ASU 2016-13 – Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires a financial asset (or a group of financial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. This ASU requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the increases or decreases of expected credit losses that have taken place during the period. This ASU requires that credit losses of debt securities designated as available-for-sale be recorded through an allowance for credit losses and limits the credit loss to the amount by which fair value is below amortized cost. We adopted ASU 2016-13 in the first quarter of 2021 under the modified retrospective adoption method. The adoption of this ASU did not have a significant impact on our financial statements.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU 2020-06 – Debt – Debt with Conversion and Other Options and Derivatives and Hedging – Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU is effective for us in the first quarter of 2023 and permits the use of either the modified retrospective or fully retrospective method of transition. We are evaluating the effects of adoption of this ASU on our financial statements.

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Business Acquisition (Tables)

9 Months Ended

May 27, 2022

Business Combinations [Abstract]

Summary of Unaudited Pro Forma Information

The unaudited pro forma financial information for the first nine months of 2021 combines our results of operations for the nine months ended May 28, 2021 (which includes the results of the LED Business from the March 1, 2021 acquisition date) and the results of operations of the LED Business for the six months ended December 27, 2020.

Nine months ended	May 28, 2021
Net sales	$	1,237,627
Net loss attributable to SGH	(162,969)
Earnings (loss) per share:
Basic	$	(3.36)
Diluted	$	(3.36)

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Inventories (Tables)

9 Months Ended

May 27, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

As of	May 27, 2022		August 27, 2021
Raw materials	$	179,649	$	163,610
Work in process	65,547		92,901
Finished goods	120,062		107,090
	$	365,258	$	363,601

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Property and Equipment (Tables)

9 Months Ended

May 27, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

As of	May 27, 2022		August 27, 2021
Equipment	$	205,379	$	182,493
Buildings and building improvements	59,642		53,502
Furniture, fixtures and software	38,044		32,114
Land	16,126		16,126
	319,191		284,235
Accumulated depreciation	(160,080)		(127,969)
	$	159,111	$	156,266

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Intangible Assets and Goodwill (Tables)

9 Months Ended

May 27, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill by Segment

	May 27, 2022				August 27, 2021
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Technology	$	61,614	$	(16,333)	$	61,307	$	(9,142)
Customer relationships	57,500		(29,777)		57,500		(22,393)
Trademarks/trade names	19,200		(8,985)		19,200		(6,628)
Order backlog	—		—		3,800		(2,571)
	$	138,314	$	(55,095)	$	141,807	$	(40,734)
Goodwill by segment:
Intelligent Platform Solutions	$	40,401			$	40,401
Memory Solutions	34,642				33,854
	$	75,043			$	74,255

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Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

May 27, 2022

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Expenses

As of	May 27, 2022		August 27, 2021
Accounts payable (1)	$	384,251	$	429,640
Salaries, wages and benefits	38,626		37,795
Income and other taxes	21,436		14,319
Other	3,699		2,353
	$	448,012	$	484,107

(1) Includes accounts payable for property and equipment of $2.3 million and $3.1million as of May 27, 2022 and August 27, 2021, respectively.

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Debt (Tables)

9 Months Ended

May 27, 2022

Debt Disclosure [Abstract]

Summary of Long-Term Debt

As of	May 27, 2022		August 27, 2021
Credit Facility Term Loan	$	270,793	$	—
Convertible Senior Notes	210,694		203,992
LED Purchase Price Note	—		125,000
ABL Credit Agreement	—		25,000
Other	12,334		11,846
	493,821		365,838
Less current debt	(8,795)		(25,354)
Long-term debt	$	485,026	$	340,484

Interest Expense Disclosure

Interest expense for the 2026 Notes consisted of 2.25% contractual stated interest and amortization of discount and issuance costs and included of the following:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Contractual stated interest	$	1,438	$	1,438	$	4,219	$	4,219
Amortization of discount and issuance costs	2,242		2,088		6,702		6,247
	$	3,680	$	3,526	$	10,921	$	10,466

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Leases (Tables)

9 Months Ended

May 27, 2022

Leases [Abstract]

Summary of Components of Operating Lease Expense

The components of operating lease expense were as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Fixed lease cost	$	3,402	$	2,856	$	9,917	$	6,310
Variable lease cost	370		409		1,192		969
Short-term lease cost	119		106		377		221
	$	3,891	$	3,371	$	11,486	$	7,500

Schedule of Minimum Payments of Lease Liabilities

Minimum payments of lease liabilities as of May 27, 2022 were as follows:

Remainder of 2022	$	3,099
2023	11,114
2024	8,833
2025	6,241
2026	5,011
2027 and thereafter	23,817
	58,115
Less imputed interest	(12,238)
Present value of total lease liabilities	$	45,877

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Fair Value Measurements (Tables)

9 Months Ended

May 27, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements of Other Assets and Liabilities

Fair value measurements of other assets and liabilities were as follows:

	May 27, 2022				August 27, 2021
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Derivative financial instrument assets	$	102	$	102	$	883	$	883
Liabilities:
Derivative financial instrument liabilities	$	22	$	22	$	50	$	50
Credit Facility Term Loan	275,000		270,793		—		—
Convertible Senior Notes	333,125		210,694		335,668		203,992
LED Purchase Price Note	—		—		125,000		125,000
ABL Credit Agreement	—		—		25,000		25,000
Debt – other	11,353		12,334		10,702		11,846
Acquisition-related contingent consideration	101,824		101,824		60,500		60,500

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Equity Plans (Tables)

9 Months Ended

May 27, 2022

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Assumptions Used to Value Stock Options

Share option activity and assumptions were as follows:

Nine Months Ended	May 28, 2021
Share options granted	500
Weighted average grant-date fair value per share	$	6.65
Average expected term in years	6.25
Weighted-average expected volatility	52.07		%
Weighted-average risk-free interest rate	0.49		%
Expected dividend yield	—

Schedule of Share Based Compensation Expense Allocation

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Share-based compensation expense by caption:
Cost of sales	$	1,724	$	1,166	$	5,103	$	2,807
Research and development	1,679		1,468		4,778		3,055
Selling, general and administrative	7,144		5,747		20,414		19,005
	$	10,547	$	8,381	$	30,295	$	24,867

Restricted Awards

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Aggregate Restricted Award Activity and Assumptions

Aggregate Restricted Award activity was as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Awards granted	935		3,079		1,581		4,513
Weighted average grant-date fair value per share	$	24.25	$	19.97	$	25.96	$	17.65
Aggregate vesting-date fair value of shares vested	$	24,099	$	7,281	$	42,326	$	18,689

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Revenue and Customer Contract Balances (Tables)

9 Months Ended

May 27, 2022

Revenue from Contract with Customer [Abstract]

Summary of Net Sales by Products and Services and Gross Amounts Billed for Services

Net sales by products and services and gross amounts billed for services, including logistics services in which we act as an agent for our customers, were as follows:

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales:
Products and professional services	$	440,012	$	428,882	$	1,330,473	$	1,011,079
Logistics services	22,528		8,846		51,182		22,354
	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Gross billings in connection with logistics services:
Logistics services	$	22,528	$	8,846	$	51,182	$	22,354
Cost of materials (1)	574,034		205,530		1,250,024		481,163
	$	596,562	$	214,376	$	1,301,206	$	503,517

(1) Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our logistics services business, which includes procurement, logistics, inventory management, temporary warehousing, kitting and/or packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory.

Summary of Customer Contract Balances

As of	May 27, 2022		August 27, 2021
Contract assets (1)	$	459	$	4,247
Contract liabilities: (2)
Deferred revenue	$	19,288	$	19,271
Customer advances	13,584		15,835
	$	32,872	$	35,106

(1) Contract assets are included in other current assets.

(2) Contract liabilities are included in other current liabilities and noncurrent liabilities based on the timing of when our customer is expected to take control of the asset or receive the benefit of the service.

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Other Non-operating (Income) Expense (Tables)

9 Months Ended

May 27, 2022

Nonoperating Income (Expense) [Abstract]

Schedule of Other Non-operating (Income) Expense

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Foreign currency (gains) losses	$	641	$	994	$	3,516	$	1,195
Other	(91)		(505)		54		(8)
	$	550	$	489	$	3,570	$	1,187

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Income Taxes (Tables)

9 Months Ended

May 27, 2022

Income Tax Disclosure [Abstract]

Schedule of Income before Income Taxes and Income Tax Provision

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Income before income taxes	$	29,649	$	(2,644)	$	68,660	$	9,702
Income tax provision	5,154		4,010		20,495		8,485

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Earnings Per Share (Tables)

9 Months Ended

May 27, 2022

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net income (loss) attributable to SGH – Basic and Diluted	$	24,113	$	(7,211)	$	46,598	$	660
Weighted-average shares outstanding – Basic	50,095		48,071		49,543		48,542
Dilutive effect of equity plans and convertible notes	4,903		—		6,213		2,625
Weighted-average shares outstanding – Diluted	54,998		48,071		55,756		51,167
Earnings (loss) per share:
Basic	$	0.48	$	(0.15)	$	0.94	$	0.01
Diluted	$	0.44	$	(0.15)	$	0.84	$	0.01

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Below are potentially dilutive shares that were not included in the computation of diluted earnings per share because to do so would have been antidilutive:

	Three Months Ended		Nine Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Equity plans	459	5,283	333	2,790
Convertible notes	—	12,313	—	12,313
	459	17,596	333	15,103

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Segment and Other Information (Tables)

9 Months Ended

May 27, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Segments are determined based on sources of revenue, types of customers and operating performance. There are no differences between the accounting policies for our segment reporting and our consolidated results of operations. Operating expenses directly associated with the activities of a specific segment are charged to that segment. Certain other

indirect operating income and expenses are generally allocated to segments based on their respective percentage of net sales. We do not allocate interest, other non-operating (income) expense or taxes to segments.

	Three Months Ended				Nine Months Ended
	May 27, 2022		May 28, 2021		May 27, 2022		May 28, 2021
Net sales:
Memory Solutions	$	265,850	$	240,116	$	765,332	$	684,537
Intelligent Platform Solutions	95,345		95,857		296,256		247,141
LED Solutions	101,345		101,755		320,067		101,755
Total net sales	$	462,540	$	437,728	$	1,381,655	$	1,033,433
Segment operating income:
Memory Solutions	$	30,094	$	26,163	$	99,260	$	65,262
Intelligent Platform Solutions	10,790		5,756		32,672		17,559
LED Solutions	13,388		11,386		48,925		11,386
Total segment operating income	54,272		43,305		180,857		94,207
Unallocated:
Share-based compensation expense	(10,547)		(8,381)		(30,295)		(24,867)
Amortization of acquisition-related intangibles	(5,943)		(6,184)		(18,115)		(13,011)
Flow through of inventory step up	—		(7,090)		—		(7,090)
Change in fair value of contingent consideration	(124)		(16,400)		(41,324)		(16,400)
Out of period import tax expense (1)	—		—		—		(4,345)
Other	(2,349)		(2,356)		(4,215)		(5,037)
Total unallocated	(18,963)		(40,411)		(93,949)		(70,750)
Consolidated operating income	$	35,309	$	2,894	$	86,908	$	23,457

(1) During the second quarter of 2021, we recorded an out-of-period adjustment to correct errors originating in previous periods related to understated import tax costs, which resulted in a $4.3 million increase in cost of sales, $0.8 million increase in interest expense and $1.7 million benefit for income taxes. The adjustment was not considered material to the interim or annual consolidated financial statements for the year ended August 27, 2021 nor to any previously issued interim or annual consolidated financial statements.

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Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 28, 2022	Jan. 03, 2022	May 27, 2022	Aug. 27, 2021
Business Acquisition [Line Items]
Share dividend declared for each ordinary share owned		1
Ordinary shares, par value (in usd per share)		$ 0.03	$ 0.03	$ 0.03
Stratus Holding Company | Subsequent Event
Business Acquisition [Line Items]
Payments to acquire business, in cash	$ 225
Business combination maximum earn out payment based on specific revenue achievement	$ 50

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Business Acquisition - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended	9 Months Ended
	Mar. 01, 2021	May 27, 2022	May 28, 2021	Aug. 27, 2021	May 27, 2022	May 28, 2021	Mar. 28, 2022
Business Acquisition [Line Items]
Change in fair value of contingent consideration		$ 124	$ 16,400		$ 41,324	$ 16,400
Acquisition-related contingent consideration		101,824		$ 60,500	101,824
CreeLED Inc.
Business Acquisition [Line Items]
Ownership interest	51.00%
Payments to acquire business, in cash	$ 50,000
Business combination, consideration transferred, equity interests issued and issuable	125,000
Business combination maximum earn out payment based on specific revenue achievement	125,000
Business combination, minimum earn out payable in unsecured promissory note	2,500
Estimated initial fair value of contingent consideration	$ 28,100
CreeLED Inc. | Earnout Note
Business Acquisition [Line Items]
Change in fair value of contingent consideration				$ 32,400	41,300
Acquisition-related contingent consideration		$ 101,800			$ 101,800
CreeLED Inc. | LIBOR | Purchase Price Note
Business Acquisition [Line Items]
Note interest rate	3.00%
CreeLED Inc. | LIBOR | Earnout Note
Business Acquisition [Line Items]
Note interest rate							3.00%

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Business Acquisition - Summary of Unaudited Pro Forma Information (Details) - CreeLED Inc. $ / shares in Units, $ in Thousands	9 Months Ended
	May 28, 2021 USD ($) $ / shares
Business Acquisition [Line Items]
Net sales | $	$ 1,237,627
Net loss attributable to SGH | $	$ (162,969)
Earnings (loss) per share:
Basic (in usd per share) | $ / shares	$ (3.36)
Diluted (in usd per share) | $ / shares	$ (3.36)

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 179,649	$ 163,610
Work in process	65,547	92,901
Finished goods	120,062	107,090
Total inventories	$ 365,258	$ 363,601

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Inventories - Additional Information (Details)	May 27, 2022	Aug. 27, 2021
Inventory Disclosure [Abstract]
Percentage of inventories	8.00%	11.00%

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 319,191	$ 284,235
Accumulated depreciation	(160,080)	(127,969)
Net property and equipment	159,111	156,266
Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	205,379	182,493
Buildings and building improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	59,642	53,502
Furniture, fixtures and software
Property Plant And Equipment [Line Items]
Property and equipment, gross	38,044	32,114
Land
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 16,126	$ 16,126

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Property and Equipment - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 10.6	$ 9.1	$ 30.3	$ 19.5

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Intangible Assets and Goodwill - Schedule of Intangible Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross amount	$ 138,314	$ 141,807
Intangible assets, accumulated amortization	(55,095)	(40,734)
Goodwill by segment, gross amount	75,043	74,255
Intelligent Platform Solutions
Finite Lived Intangible Assets [Line Items]
Goodwill by segment, gross amount	40,401	40,401
Memory Solutions
Finite Lived Intangible Assets [Line Items]
Goodwill by segment, gross amount	34,642	33,854
Technology
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross amount	61,614	61,307
Intangible assets, accumulated amortization	(16,333)	(9,142)
Customer relationships
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross amount	57,500	57,500
Intangible assets, accumulated amortization	(29,777)	(22,393)
Trademarks/trade names
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross amount	19,200	19,200
Intangible assets, accumulated amortization	(8,985)	(6,628)
Order backlog
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross amount	0	3,800
Intangible assets, accumulated amortization	$ 0	$ (2,571)

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Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021	Aug. 27, 2021
Finite Lived Intangible Assets [Line Items]
Intangible assets	$ 1.1	$ 64.5	$ 1.1	$ 64.5
Intangible assets estimated useful lives			17 years 6 months	6 years 8 months 12 days
Amortization of intangible assets	5.9	$ 6.2	$ 18.2	$ 13.0
Finite-lived intangible assets, expected amortization for remainder of 2022	5.6		5.6
Finite-lived intangible assets, expected amortization for 2023	21.8		21.8
Finite-lived intangible assets, expected amortization for 2024	17.8		17.8
Finite-lived intangible assets, expected amortization for 2025	15.3		15.3
Finite-lived intangible assets, expected amortization for 2026	8.5		8.5
Finite-lived intangible assets, expected amortization, thereafter	$ 14.1		14.1
Memory Solutions
Finite Lived Intangible Assets [Line Items]
Goodwill, increase (decrease)			$ 0.8		$ 0.3

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Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands		May 27, 2022	Aug. 27, 2021
Payables and Accruals [Abstract]
Accounts payable	[1]	$ 384,251	$ 429,640
Salaries, wages and benefits		38,626	37,795
Income and other taxes		21,436	14,319
Other		3,699	2,353
Total		448,012	484,107
Accounts payable for property and equipment		$ 2,300	$ 3,100

[1] Includes accounts payable for property and equipment of $2.3 million and $3.1million as of May 27, 2022 and August 27, 2021, respectively.

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Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Debt Instrument [Line Items]
Debt	$ 493,821	$ 365,838
Less current debt	(8,795)	(25,354)
Long-term debt	485,026	340,484
Credit Facility Term Loan
Debt Instrument [Line Items]
Debt	270,793	0
Convertible Senior Notes
Debt Instrument [Line Items]
Debt	210,694	203,992
LED Purchase Price Note
Debt Instrument [Line Items]
Debt	0	125,000
ABL Credit Agreement
Debt Instrument [Line Items]
Debt	0	25,000
Other
Debt Instrument [Line Items]
Debt	$ 12,334	$ 11,846

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Debt - Credit Facility (Details) - USD ($)	Feb. 07, 2022	May 27, 2022
Debt Instrument [Line Items]
Extinguishment of debt	$ 160,400,000
Other Nonoperating Expense
Debt Instrument [Line Items]
Write off of unamortized debt issuance cost	700,000
The Credit Facility Agreement
Debt Instrument [Line Items]
Debt issuance costs	$ 9,100,000
Debt covenant, first lien leverage ratio	300.00%
Debt covenant, total leverage ratio, scenario one	450.00%
Debt covenant, total leverage ratio, scenario two	50.00%
Debt covenant, interest coverage ratio	300.00%
Debt covenant, reduction of debt amount used for the purposes of calculating debt covenant ratios	$ 100,000,000
The Credit Facility Agreement | Maximum
Debt Instrument [Line Items]
Debt covenant, total leverage ratio	500.00%
Credit Facility Term Loan | The Credit Facility Agreement
Debt Instrument [Line Items]
Debt instrument, face amount	$ 275,000,000
Line of credit facility, annual principal payment, percentage, year one	2.50%
Line of credit facility, annual principal payment, percentage, year two	5.00%
Line of credit facility, annual principal payment, percentage, year three	5.00%
Line of credit facility, annual principal payment, percentage, year four	5.00%
Line of credit facility, annual principal payment, percentage, year five	7.50%
Interest rate at period end		2.89%
Principal amount outstanding		$ 275,000,000
Unamortized debt issuance costs		$ 4,200,000
Debt instrument, effective interest rate		3.33%
Credit Facility Term Loan | The Credit Facility Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum
Debt Instrument [Line Items]
Debt instrument variable rate	2.00%
Credit Facility Term Loan | The Credit Facility Agreement | Base Rate | Minimum
Debt Instrument [Line Items]
Debt instrument variable rate	1.00%
Revolving Credit Facility | The Credit Facility Agreement
Debt Instrument [Line Items]
Debt instrument, face amount	$ 250,000,000
Line of credit facility, maximum borrowing capacity	$ 35,000,000
Principal amount outstanding		$ 0
Unamortized debt issuance costs		$ 4,300,000
Revolving Credit Facility | The Credit Facility Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum
Debt Instrument [Line Items]
Debt instrument variable rate	1.25%
Revolving Credit Facility | The Credit Facility Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum
Debt Instrument [Line Items]
Debt instrument variable rate	3.00%
Revolving Credit Facility | The Credit Facility Agreement | Base Rate | Minimum
Debt Instrument [Line Items]
Debt instrument variable rate	0.25%
Line of credit facility unused capacity commitment fee percentage	0.25%
Revolving Credit Facility | The Credit Facility Agreement | Base Rate | Maximum
Debt Instrument [Line Items]
Debt instrument variable rate	2.00%
Line of credit facility unused capacity commitment fee percentage	0.35%

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Debt - Convertible Senior Notes (Details) - 2.25% Convertible Senior Notes Due 2026	1 Months Ended	9 Months Ended
	Feb. 29, 2020 USD ($) businessDay tradingDay $ / shares	May 27, 2022 USD ($) tradingDay businessDay	Aug. 27, 2021 USD ($)
Debt Instrument [Line Items]
Debt instrument, face amount	$ 250,000,000
Note interest rate	2.25%
Debt instrument, convertible, initial conversion rate (in shares)	49.2504
Debt instrument, convertible, principal amount considered for conversion rate	$ 1,000
Debt instrument, convertible, initial conversion price per ordinary share (in usd per share) | $ / shares	$ 20.30
Debt instrument, convertible, threshold consecutive trading days | tradingDay	30	40
Debt instrument, convertible, threshold consecutive business days | businessDay	5	2
Debt instrument, convertible, measurement period for conversion option	10 days
Debt instrument, effective interest rate		7.06%	7.06%
Additional Paid-in-capital
Debt Instrument [Line Items]
Debt instrument, carrying amount of equity component		$ 50,800,000	$ 50,800,000
Minimum
Debt Instrument [Line Items]
Debt instrument, convertible, threshold percentage of stock price trigger	130.00%
Debt instrument, convertible, threshold trading days | tradingDay	20
Maximum
Debt Instrument [Line Items]
Debt instrument, convertible, product percentage of last reported sale price per ordinary share and conversion rate	98.00%

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Debt - Interest Expense Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Debt Instrument [Line Items]
Amortization of debt discount and issuance costs			$ 7,476	$ 6,503
2.25% Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Contractual stated interest	$ 1,438	$ 1,438	4,219	4,219
Amortization of debt discount and issuance costs	2,242	2,088	6,702	6,247
Total interest cost recognized	$ 3,680	$ 3,526	$ 10,921	$ 10,466

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Leases - Summary of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Leases [Abstract]
Fixed lease cost	$ 3,402	$ 2,856	$ 9,917	$ 6,310
Variable lease cost	370	409	1,192	969
Short-term lease cost	119	106	377	221
Total lease cost	$ 3,891	$ 3,371	$ 11,486	$ 7,500

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Leases - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	May 27, 2022	May 28, 2021	Aug. 27, 2021
Lessee Lease Description [Line Items]
Operating lease payments	$ 7.3	$ 6.1
Right-of-use assets obtained in exchange for operating lease liabilities	$ 10.6	$ 16.9
Weighted-average remaining lease term for operating leases	6 years 9 months 18 days		6 years 1 month 6 days
Weighted-average discount rate for operating leases	6.50%		6.70%
Office Leases
Lessee Lease Description [Line Items]
Operating lease term	16 years
Additional operating lease commitments	$ 51.8
Minimum
Lessee Lease Description [Line Items]
Operating lease term	2 years
Maximum
Lessee Lease Description [Line Items]
Operating lease term	5 years

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Leases - Schedule of Minimum Payments of Lease Liabilities (Details) $ in Thousands	May 27, 2022 USD ($)
Leases [Abstract]
Remainder of 2022	$ 3,099
2023	11,114
2024	8,833
2025	6,241
2026	5,011
2027 and thereafter	23,817
Total	58,115
Less imputed interest	(12,238)
Present value of total lease liabilities	$ 45,877

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Equity - Additional Information (Details)		1 Months Ended	2 Months Ended	3 Months Ended						9 Months Ended
	Jan. 03, 2022 $ / shares shares	Jan. 31, 2021 USD ($) shares	May 27, 2022 USD ($) $ / shares shares	May 27, 2022 USD ($) $ / shares shares	Feb. 25, 2022 USD ($)	Nov. 26, 2021 USD ($)	May 28, 2021 USD ($) shares	Feb. 26, 2021 USD ($)	Nov. 27, 2020 USD ($)	May 27, 2022 USD ($) director $ / shares shares	May 28, 2021 USD ($) shares	Apr. 04, 2022 USD ($)	Aug. 27, 2021 $ / shares
Class Of Stock [Line Items]
Share dividend declared for each ordinary share owned | shares	1
Ordinary shares, par value (in usd per share) | $ / shares	$ 0.03		$ 0.03	$ 0.03						$ 0.03			$ 0.03
Stock repurchase authorized amount												$ 75,000,000
Shares acquired (in shares) | shares			448,000
Shares acquired, value			$ 10,200,000	$ 13,905,000	$ 229,000	$ 2,666,000	$ 337,000	$ 44,481,000	$ 3,483,000
Distributions to noncontrolling interest holders					3,773,000
Acquisition of noncontrolling interest							7,478,000
Cree Joint Venture
Class Of Stock [Line Items]
Distributions to noncontrolling interest holders					7,700,000
Total SGH Shareholders’ Equity
Class Of Stock [Line Items]
Shares acquired, value				13,905,000	229,000	$ 2,666,000	337,000	$ 44,481,000	$ 3,483,000
Non- controlling Interest in Subsidiary
Class Of Stock [Line Items]
Distributions to noncontrolling interest holders					3,773,000
Acquisition of noncontrolling interest							$ 7,478,000
LED Business
Class Of Stock [Line Items]
Acquisition of noncontrolling interest				$ 400,000						$ 1,600,000
LED Business | Cree Joint Venture
Class Of Stock [Line Items]
Number of board of directors | director										5
LED Business | Cree Joint Venture | Total SGH Shareholders’ Equity
Class Of Stock [Line Items]
Ownership interest percentage			51.00%	51.00%						51.00%
Distributions to noncontrolling interest holders					3,900,000
LED Business | San’an | Non- controlling Interest in Subsidiary
Class Of Stock [Line Items]
Ownership interest percentage			49.00%	49.00%						49.00%
Distributions to noncontrolling interest holders					$ 3,800,000
Silver Lake Partners III Cayman (AIV III), L.P., Silver Lake Technology Investors III Cayman, L.P., Silver Lake Sumeru Fund Cayman, L.P. and Silver Lake Technology Investors Sumeru Cayman, L.P. | Silver Lake Partners, Repurchase 1
Class Of Stock [Line Items]
Shares acquired (in shares) | shares				151,000			6,000			206,000	148,000
Shares acquired, value				$ 3,700,000			$ 300,000			$ 6,600,000	$ 4,000,000
Silver Lake Partners III Cayman (AIV III), L.P., Silver Lake Technology Investors III Cayman, L.P., Silver Lake Sumeru Fund Cayman, L.P. and Silver Lake Technology Investors Sumeru Cayman, L.P. | Silver Lake Partners, Repurchase 2
Class Of Stock [Line Items]
Shares acquired (in shares) | shares		1,100,000
Shares acquired, value		$ 44,300,000

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Government Incentives - Additional Information (Details) $ in Millions	3 Months Ended			9 Months Ended
	May 27, 2022 USD ($) program	Nov. 26, 2021 USD ($)	May 28, 2021 USD ($)	May 27, 2022 USD ($) program	May 28, 2021 USD ($)
Other Current Assets
Government Incentives [Line Items]
Unused financial credits		$ 19.8		$ 19.5
Research and development
Government Incentives [Line Items]
Financial credits	$ 3.3		$ 8.2	$ 15.2	$ 22.2
Minimum
Government Incentives [Line Items]
Percentage of gross sales revenues				11.00%
Maximum
Government Incentives [Line Items]
Percentage of gross sales revenues				14.00%
Brazilian Operating Subsidiaries
Government Incentives [Line Items]
Number of incentive programs | program	2			2

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Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Acquisition-related contingent consideration	$ 101,824	$ 60,500
CreeLED Inc. | Earnout Note
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Acquisition-related contingent consideration	101,800
Level 1
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Money market funds	$ 12,700	$ 2,700

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Fair Value Measurements - Schedule of Fair Value Measurements of Other Assets and Liabilities (Details) - USD ($) $ in Thousands	May 27, 2022	Aug. 27, 2021
Liabilities:
Acquisition-related contingent consideration	$ 101,824	$ 60,500
Fair Value | Level 2
Assets:
Derivative financial instrument assets	102	883
Liabilities:
Derivative financial instrument liabilities	22	50
Fair Value | Level 2 | Credit Facility Term Loan
Liabilities:
Debt instrument, fair value	275,000	0
Fair Value | Level 2 | Convertible Senior Notes
Liabilities:
Debt instrument, fair value	333,125	335,668
Fair Value | Level 2 | LED Purchase Price Note
Liabilities:
Debt instrument, fair value	0	125,000
Fair Value | Level 2 | ABL Credit Agreement
Liabilities:
Debt instrument, fair value	0	25,000
Fair Value | Level 2 | Other
Liabilities:
Debt instrument, fair value	11,353	10,702
Fair Value | Level 3
Liabilities:
Acquisition-related contingent consideration	101,824	60,500
Carrying Value | Level 2
Assets:
Derivative financial instrument assets	102	883
Liabilities:
Derivative financial instrument liabilities	22	50
Carrying Value | Level 2 | Credit Facility Term Loan
Liabilities:
Debt instrument, fair value	270,793	0
Carrying Value | Level 2 | Convertible Senior Notes
Liabilities:
Debt instrument, fair value	210,694	203,992
Carrying Value | Level 2 | LED Purchase Price Note
Liabilities:
Debt instrument, fair value	0	125,000
Carrying Value | Level 2 | ABL Credit Agreement
Liabilities:
Debt instrument, fair value	0	25,000
Carrying Value | Level 2 | Other
Liabilities:
Debt instrument, fair value	12,334	11,846
Carrying Value | Level 3
Liabilities:
Acquisition-related contingent consideration	$ 101,824	$ 60,500

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Derivative Instruments - Additional Information (Details) - Forward Contracts - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Derivative Instruments Gain Loss [Line Items]
Net realized gains (losses)	$ 8.8	$ (4.2)	$ 4.2	$ (3.5)
Non-designated
Derivative Instruments Gain Loss [Line Items]
Net unrealized gains (losses) on change in fair value	$ (3.3)	$ 5.6	$ 0.2	$ 2.5

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Equity Plans - Additional Information (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended	9 Months Ended
	Nov. 26, 2021	May 27, 2022	May 28, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Ordinary shares available for future awards (in shares)		7,700
Unrecognized compensation costs related to awards		$ 3.6
Unrecognized compensation costs recognition period		1 year 10 months 17 days
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share issued under purchase plan (in shares)		307	353
Stock issued during period, value, employee stock purchase plan		$ 6.5	$ 3.6
Restricted Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation costs related to awards		$ 99.2
Unrecognized compensation costs recognition period		2 years 9 months 3 days
Performance-based Restricted Share Award
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Additional share-based compensation expense	$ 5.8
Minimum | Restricted Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted awards, service period		3 years
Minimum | Restricted Awards with Market Conditions
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of number of shares that will vest		0.00%
Maximum | Restricted Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted awards, service period		4 years
Maximum | Restricted Awards with Market Conditions
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of number of shares that will vest		200.00%

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Equity Plans - Summary of Aggregate Restricted Award Activity and Assumptions (Details) - Restricted Award Activity - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards granted (in shares)	935	3,079	1,581	4,513
Weighted average grant-date fair value per share (in usd per share)	$ 24.25	$ 19.97	$ 25.96	$ 17.65
Aggregate vesting-date fair value of shares vested	$ 24,099	$ 7,281	$ 42,326	$ 18,689

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Equity Plans - Assumptions Used to Value Stock Options (Details)	9 Months Ended
	May 28, 2021 $ / shares shares
Share-based Payment Arrangement [Abstract]
Share options granted (in shares) | shares	500,000
Weighted average grant-date fair value per share (in usd per share) | $ / shares	$ 6.65
Average expected term in years	6 years 3 months
Weighted-average expected volatility	52.07%
Weighted-average risk-free interest rate	0.49%
Expected dividend yield	0.00%

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Equity Plans - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 10,547	$ 8,381	$ 30,295	$ 24,867
Cost of sales
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	1,724	1,166	5,103	2,807
Research and development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	1,679	1,468	4,778	3,055
Selling, general and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 7,144	$ 5,747	$ 20,414	$ 19,005

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Revenue and Customer Contract Balances - Summary of Net Sales by Products and Services and Gross Amounts Billed for Services (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		May 27, 2022	May 28, 2021	May 27, 2022		May 28, 2021
Disaggregation Of Revenue [Line Items]
Net sales		$ 462,540	$ 437,728	$ 1,381,655	[1]	$ 1,033,433	[1]
Cost of materials		574,034	205,530	1,250,024		481,163
Gross billings in connection with services	[2]	596,562	214,376	1,301,206		503,517
Products and professional services
Disaggregation Of Revenue [Line Items]
Net sales		440,012	428,882	1,330,473		1,011,079
Logistics services
Disaggregation Of Revenue [Line Items]
Net sales		$ 22,528	$ 8,846	$ 51,182		$ 22,354

[1] Sales to related parties were de minimis in 2022 and were $20,103 and $53,251 in the three and nine months ended May 28, 2021, respectively.

[2] Included in gross billings in connection with services are amounts billed to customers for the cost of materials procured in an agent capacity in connection with our logistics services business, which includes procurement, logistics, inventory management, temporary warehousing, kitting and/or packaging services. While we take title to inventory under such arrangements, control of such inventory does not transfer to us as we do not, at any point, have the ability to direct the use, and thereby obtain the benefits of, the inventory.

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Revenue and Customer Contract Balances - Summary of Customer Contract Balances (Details) - USD ($) $ in Thousands		May 27, 2022	Aug. 27, 2021
Revenue from Contract with Customer [Abstract]
Contract assets	[1]	$ 459	$ 4,247
Contract liabilities:
Deferred revenue	[2]	19,288	19,271
Customer advances	[2]	13,584	15,835
Contract liabilities	[2]	$ 32,872	$ 35,106

[1] Contract assets are included in other current assets.

[2] Contract liabilities are included in other current liabilities and noncurrent liabilities based on the timing of when our customer is expected to take control of the asset or receive the benefit of the service.

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Revenue and Customer Contract Balances - Additional information (Details) - USD ($) $ in Millions	9 Months Ended
	May 27, 2022	Aug. 27, 2021
Disaggregation Of Revenue [Line Items]
Expected revenue recognized on remaining performance obligations	$ 19.3
Revenue recognized	12.9
Estimates of consideration payable to customers, including estimates for pricing adjustments and returns	19.2	$ 24.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-05-28
Disaggregation Of Revenue [Line Items]
Expected revenue recognized on remaining performance obligations	$ 16.1
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months
Customer Advances
Disaggregation Of Revenue [Line Items]
Revenue recognized	$ 5.2

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Other Non-operating (Income) Expense - Schedule of Other Non-operating (Income) Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Nonoperating Income (Expense) [Abstract]
Foreign currency (gains) losses	$ 641	$ 994	$ 3,516	$ 1,195
Other	(91)	(505)	54	(8)
Other non-operating (income) expense	$ 550	$ 489	$ 3,570	$ 1,187

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Income Taxes - Schedule of Income before Income Taxes and Income Tax Provision (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Income Tax Disclosure [Abstract]
Income before income taxes	$ 29,649	$ (2,644)	$ 68,660	$ 9,702
Income tax provision	$ 5,154	$ 4,010	$ 20,495	$ 8,485

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Income Taxes - Additional Information (Details) $ in Millions	9 Months Ended
	May 27, 2022 USD ($)
Income Tax Disclosure [Abstract]
Increase (decrease) in provision for income taxes	$ 12.0

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Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Earnings Per Share [Abstract]
Net income (loss) attributable to SGH – Basic and Diluted	$ 24,113	$ (7,211)	$ 46,598	$ 660
Weighted-average shares outstanding – Basic (in shares)	50,095	48,071	49,543	48,542
Dilutive effect of equity plans and convertible notes (in shares)	4,903	0	6,213	2,625
Weighted-average shares outstanding – Diluted (in shares)	54,998	48,071	55,756	51,167
Earnings (loss) per share:
Basic (in usd per share)	$ 0.48	$ (0.15)	$ 0.94	$ 0.01
Diluted (in usd per share)	$ 0.44	$ (0.15)	$ 0.84	$ 0.01

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Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	May 27, 2022	May 28, 2021	May 27, 2022	May 28, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	459	17,596	333	15,103
Equity plans
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	459	5,283	333	2,790
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	12,313	0	12,313

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Earnings Per Share - Additional Information (Details)	9 Months Ended
	May 27, 2022 $ / shares
Earnings Per Share [Abstract]
Dilutive impact of conversion price per share (in usd per share)	$ 20.30

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Segment and Other Information - Additional Information (Details)	9 Months Ended
	May 27, 2022 segment productLine businessUnit
Segment Reporting [Abstract]
Number of business units | businessUnit	3
Number of reportable segments | segment	3
Number of product lines | productLine	2

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Segment and Other Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	May 27, 2022	May 28, 2021	Feb. 26, 2021	May 27, 2022		May 28, 2021
Segment Reporting Information [Line Items]
Net sales	$ 462,540	$ 437,728		$ 1,381,655	[1]	$ 1,033,433	[1]
Operating income	35,309	2,894		86,908		23,457
Share-based compensation expense				(30,295)		(24,867)
Amortization of acquisition-related intangibles	(5,900)	(6,200)		(18,200)		(13,000)
Change in fair value of contingent consideration	(124)	(16,400)		(41,324)		(16,400)
Total unallocated	(79,154)	(81,593)		(262,469)		(167,129)
Cost of sales	348,077	353,241		1,032,278		842,847
Interest expense, net	5,110	5,049		14,678		12,568
Income tax provision	(5,154)	(4,010)		(20,495)		(8,485)
Revision of Prior Period, Adjustment
Segment Reporting Information [Line Items]
Cost of sales			$ 4,300
Interest expense, net			800
Income tax provision			$ 1,700
Unallocated
Segment Reporting Information [Line Items]
Share-based compensation expense	(10,547)	(8,381)		(30,295)		(24,867)
Amortization of acquisition-related intangibles	(5,943)	(6,184)		(18,115)		(13,011)
Flow through of inventory step up	0	(7,090)		0		(7,090)
Change in fair value of contingent consideration	(124)	(16,400)		(41,324)		(16,400)
Out of period import tax expense	0	0		0		(4,345)
Other	(2,349)	(2,356)		(4,215)		(5,037)
Total unallocated	(18,963)	(40,411)		(93,949)		(70,750)
Operating Segments
Segment Reporting Information [Line Items]
Net sales	462,540	437,728		1,381,655		1,033,433
Operating income	54,272	43,305		180,857		94,207
Operating Segments | Memory Solutions
Segment Reporting Information [Line Items]
Net sales	265,850	240,116		765,332		684,537
Operating income	30,094	26,163		99,260		65,262
Operating Segments | Intelligent Platform Solutions
Segment Reporting Information [Line Items]
Net sales	95,345	95,857		296,256		247,141
Operating income	10,790	5,756		32,672		17,559
Operating Segments | LED Solutions
Segment Reporting Information [Line Items]
Net sales	101,345	101,755		320,067		101,755
Operating income	$ 13,388	$ 11,386		$ 48,925		$ 11,386

[1] Sales to related parties were de minimis in 2022 and were $20,103 and $53,251 in the three and nine months ended May 28, 2021, respectively.