10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 1, 2023

OR

☐ 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 Exchange Act). Yes ☐ No ☒

As of January 2, 2024, the registrant had 51,830,117 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	28
Item 3	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4	Controls and Procedures	35
PART II. Other Information
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	36
Item 3	Defaults Upon Senior Securities	36
Item 4	Mine Safety Disclosures	37
Item 5	Other Information	37
Item 6	Exhibits	37
Signatures		39

2

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 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. These forward-looking statements are based on our current expectations or forecasts of future events, circumstances, results or aspirations and are subject to a number of significant risks, uncertainties and other factors, many of which are outside of our control, including but not limited to, global business and economic conditions and growth trends in technology industries, our customer markets and various geographic regions; uncertainties in the geopolitical environment; the ability to manage our cost structure; disruptions in our operations or supply chain; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of our strategic initiatives including additional investments in new products and additional capacity; acquisitions of companies or technologies and the failure to successfully integrate and operate them or customers’ negative reactions to them; incurring unanticipated costs following the completion of the sale of our SMART Brazil business; issues, delays or complications in integrating the operations of Stratus Technologies; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or volatile nature of pricing trends in memory or elsewhere; deterioration in customer relationships; our dependence on a select number of customers and the timing and volume of customer orders; production or manufacturing difficulties; competitive factors; technological changes; difficulties with, or delays in, the introduction of new products; slowing or contraction of growth in the LED market; changes to applicable tax regimes or rates; prices for the end products of our customers; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; the inability to maintain or expand government business; and the continuing availability of borrowings under term loans and revolving lines of credit and our ability to raise capital through debt or equity financings. These and other risks, uncertainties and factors are described in greater detail under the sections titled “Risk Factors,” “Critical Accounting Estimates,” “Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and “Liquidity and Capital Resources” contained in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023, this Quarterly Report and the risks discussed in our other Securities and Exchange Commission (“SEC”) filings. Such risks, uncertainties and factors as outlined above and in such filings do not constitute all risks, uncertainties and factors that could cause actual results of our Company to be materially different from such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on any forward-looking 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 have 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 its 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 years 2024 and 2023 contain 53 weeks and 52 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated.

SGH, SMART Global Holdings, SMART Modular Technologies, SMART, the SMART logo, Intelligent Platform Solutions, Penguin Computing, Penguin Edge, Penguin Solutions, the Penguin Computing logo, CreeLED, J Series, XLamp, Stratus, Stratus Technologies, the Stratus Logo and our other trademarks or service marks appearing in this Quarterly Report are our trademarks or registered trademarks. Trade names, trademarks and service marks of other companies appearing in this Quarterly Report are the property of their respective holders.

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	9
Notes to Consolidated Financial Statements	10

4

SMART Global Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except par value amount)

(Unaudited)

As of	December 1, 2023		August 25, 2023
Assets
Cash and cash equivalents	$	529,059	$	365,563
Short-term investments	24,385		25,251
Accounts receivable, net	170,590		219,247
Inventories	208,441		174,977
Other current assets	54,373		51,790
Current assets of discontinued operations	—		70,574
Total current assets	986,848		907,402
Property and equipment, net	112,328		118,734
Operating lease right-of-use assets	64,637		68,444
Intangible assets, net	150,283		160,185
Goodwill	161,958		161,958
Deferred tax assets	74,365		74,085
Other noncurrent assets	80,446		15,150
Total assets	$	1,630,865	$	1,505,958
Liabilities and Equity
Accounts payable and accrued expenses	$	219,082	$	182,035
Current debt	28,511		35,618
Deferred revenue	39,096		48,096
Acquisition-related contingent consideration	50,000		50,000
Other current liabilities	32,115		32,731
Current liabilities of discontinued operations	—		77,770
Total current liabilities	368,804		426,250
Long-term debt	748,299		754,820
Noncurrent operating lease liabilities	64,407		66,407
Other noncurrent liabilities	33,346		29,248
Total liabilities	1,214,856		1,276,725
Commitments and contingencies
SMART Global Holdings shareholders’ equity:
Ordinary shares, $0.03 par value; authorized 200,000 shares; 58,447 shares issued and 51,906 outstanding as of December 1, 2023; 57,542 shares issued and 51,901 outstanding as of August 25, 2023	1,753		1,726
Additional paid-in capital	491,145		476,703
Retained earnings	62,536		82,457
Treasury shares, 6,541 and 5,641 shares held as of December 1, 2023 and August 25, 2023, respectively	(145,577)		(132,447)
Accumulated other comprehensive income (loss)	303		(205,964)
Total SGH shareholders’ equity	410,160		222,475
Noncontrolling interest in subsidiary	5,849		6,758
Total equity	416,009		229,233
Total liabilities and equity	$	1,630,865	$	1,505,958

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
	December 1, 2023		November 25, 2022
Net sales:
Products	$	206,430	$	316,508
Services	67,817		75,289
Total net sales	274,247		391,797
Cost of sales:
Products	163,413		251,291
Services	27,984		28,408
Total cost of sales	191,397		279,699
Gross profit	82,850		112,098
Operating expenses:
Research and development	21,389		24,072
Selling, general and administrative	57,217		67,708
Change in fair value of contingent consideration	—		3,700
Other operating (income) expense	2,939		1,771
Total operating expenses	81,545		97,251
Operating income (loss)	1,305		14,847
Non-operating (income) expense:
Interest expense, net	9,559		8,494
Other non-operating (income) expense	(576)		(1,362)
Total non-operating (income) expense	8,983		7,132
Income (loss) before taxes	(7,678)		7,715
Income tax provision (benefit)	3,534		11,322
Net income (loss) from continuing operations	(11,212)		(3,607)
Net income (loss) from discontinued operations	(8,148)		8,931
Net income (loss)	(19,360)		5,324
Net income attributable to noncontrolling interest	561		332
Net income (loss) attributable to SGH	$	(19,921)	$	4,992
Basic earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10
Diluted earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10
Shares used in per share calculations:
Basic	52,068		48,962
Diluted	52,068		48,962

    

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
	December 1, 2023		November 25, 2022
Net income (loss)	$	(19,360)	$	5,324
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(6,142)		(2,008)
Cumulative translation adjustment reclassified to net income	212,397		—
Gains (losses) on derivative instruments	—		20
Gains (losses) on investments	12		(7)
Comprehensive income (loss)	186,907		3,329
Comprehensive income attributable to noncontrolling interest	561		332
Comprehensive income (loss) attributable to SGH	$	186,346	$	2,997

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 25, 2023	57,542	$	1,726	$	476,703	$	82,457	$	(132,447)	$	(205,964)	$	222,475	$	6,758	$	229,233
Net income (loss)	—	—		—		(19,921)		—		—		(19,921)		561		(19,360)
Other comprehensive income (loss)	—	—		—		—		—		206,267		206,267		—		206,267
Shares issued under equity plans	905	27		3,428		—		—		—		3,455		—		3,455
Repurchase of ordinary shares	—	—		—		—		(13,130)		—		(13,130)		—		(13,130)
Share-based compensation expense	—	—		11,014		—		—		—		11,014		—		11,014
Distribution to noncontrolling interest	—	—		—		—		—		—		—		(1,470)		(1,470)
As of December 1, 2023	58,447	$	1,753	$	491,145	$	62,536	$	(145,577)	$	303	$	410,160	$	5,849	$	416,009
	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 26, 2022	52,880	$	1,586	$	448,112	$	251,344	$	(107,776)	$	(221,655)	$	371,611	$	6,935	$	378,546
Net income	—	—		—		4,992		—		—		4,992		332		5,324
Other comprehensive income (loss)	—	—		—		—		—		(1,995)		(1,995)		—		(1,995)
Shares issued under equity plans	1,060	32		3,910		—		—		—		3,942		—		3,942
Repurchase of ordinary shares	—	—		—		—		(4,659)		—		(4,659)		—		(4,659)
Share-based compensation expense	—	—		10,412		—		—		—		10,412		—		10,412
Adoption of ASU 2020-06	—	—		(50,822)		18,639		—		—		(32,183)		—		(32,183)
As of November 25, 2022	53,940	$	1,618	$	411,612	$	274,975	$	(112,435)	$	(223,650)	$	352,120	$	7,267	$	359,387

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

8

SMART Global Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended	December 1, 2023		November 25, 2022
Cash flows from operating activities
Net income (loss)	$	(19,360)	$	5,324
Net income (loss) from discontinued operations	(8,148)		8,931
Net loss from continuing operations	(11,212)		(3,607)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used for) operating activities:
Depreciation expense and amortization of intangible assets	17,654		17,049
Amortization of debt discount and issuance costs	1,042		1,069
Share-based compensation expense	10,970		9,981
Change in fair value of contingent consideration	—		3,700
Loss on extinguishment of debt	—		(767)
Deferred income taxes, net	(282)		1,718
Other	664		357
Changes in operating assets and liabilities:
Accounts receivable	48,658		123,097
Inventories	(33,464)		(102,047)
Other assets	2,102		(6,828)
Accounts payable and accrued expenses and other liabilities	23,581		(54,749)
Payment of acquisition-related contingent consideration	—		(73,724)
Net cash provided by (used for) operating activities from continuing operations	59,713		(84,751)
Net cash provided by (used for) operating activities from discontinued operations	(28,235)		10,766
Net cash provided by (used for) operating activities	31,478		(73,985)
Cash flows from investing activities
Capital expenditures and deposits on equipment	(4,648)		(7,991)
Proceeds from maturities of investment securities	9,665		—
Purchases of held-to-maturity investment securities	(8,469)		—
Acquisition of business, net of cash acquired	—		(210,273)
Other	(188)		(1,759)
Net cash used for investing activities from continuing operations	(3,640)		(220,023)
Net cash provided by (used for) investing activities from discontinued operations	118,938		(3,620)
Net cash provided by (used for) investing activities	115,298		(223,643)
Cash flows from financing activities
Proceeds from debt	—		295,287
Proceeds from issuance of ordinary shares	3,455		3,942
Payment of acquisition-related contingent consideration	—		(28,100)
Payments to acquire ordinary shares	(13,130)		(4,659)
Repayments of debt	(14,423)		(3,606)
Distribution to noncontrolling interest	(1,470)		—
Other	(582)		(788)
Net cash provided by (used for) financing activities from continuing operations	(26,150)		262,076
Net cash used for financing activities from discontinued operations	(606)		(97)
Net cash provided by (used for) financing activities	(26,756)		261,979
Effect of changes in currency exchange rates	(1,025)		205
Net increase (decrease) in cash and cash equivalents	118,995		(35,444)
Cash and cash equivalents at beginning of period	410,064		363,065
Cash and cash equivalents at end of period	$	529,059	$	327,621
Cash and cash equivalents at end of period:
Continuing operations	$	529,059	$	284,398
Discontinued operations	—		43,223
	$	529,059	$	327,621

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

9

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 the accounts of SMART Global Holdings, Inc. and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023 and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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 fiscal year ended August 25, 2023.

Presentation of SMART Brazil as Discontinued Operations: On June 13, 2023, we entered into an agreement to divest of an 81% interest in SMART Modular Technologies do Brasil – Indústria e Comercio de Componentes Ltda. (“SMART Brazil”). We concluded that, as of August 25, 2023, (i) the net assets of SMART Brazil met the criteria for classification as held for sale and (ii) the proposed sale represented a strategic shift that was expected to have a major effect on our operations and financial results. On November 29, 2023, we completed the divestiture. The balance sheets, results of operations and cash flows of SMART Brazil have been presented as discontinued operations for all periods presented. SMART Brazil was previously included within our Memory Solutions segment. See “Divestiture of SMART Brazil.”

Unless otherwise noted, amounts and discussion within these notes to the consolidated financial statements relate to our continuing operations. Prior period comparative information has been conformed to current period presentation for continuing operations.

Reclassifications: 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 year 2024 and 2023 contain 53 weeks and 52 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated.

Financial information for our subsidiaries in Brazil was included in our consolidated financial statements on a one-month lag because their fiscal years ended on July 31 of each year. In connection with the completion of the divestiture of an 81% interest in SMART Brazil, we ceased consolidating the operations of SMART Brazil in our financial statements as of the November 29, 2023 disposal date. As a result, financial information for SMART Brazil in the first quarter of 2024 includes the four-month period from August 1, 2023 to November 29, 2023.

Divestiture of SMART Brazil

Overview of Transaction

On November 29, 2023, we completed the previously announced divestiture of SMART Brazil pursuant to the terms of that certain Stock Purchase Agreement (the “Brazil Purchase Agreement”), by and among SMART Modular Technologies (LX) S.à r.l., a société à responsabilité limitée governed by the laws of Grand Duchy of Luxembourg and a wholly owned subsidiary of SGH (the “Brazil Seller”), Lexar Europe B.V., a company organized under the laws of The Netherlands (the “Brazil Purchaser”), Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People’s Republic of China (“Longsys”), solely with respect to certain provisions therein, Shanghai Intelligent Memory Semiconductor Co., Ltd., a limited liability company governed by the laws of the People’s Republic of China and, solely with respect to certain provisions therein, SGH.

10

Pursuant to the Brazil Purchase Agreement, Brazil Seller sold to Brazil Purchaser, and Brazil Purchaser purchased from Brazil Seller, 81% of Brazil Seller’s right, title and interest in and to the outstanding quotas of SMART Brazil, with Brazil Seller retaining a 19% interest in SMART Brazil (the “Retained Interest”) (the “Brazil Divestiture”).

At the closing of the Brazil Divestiture, Brazil Purchaser paid to Brazil Seller (based on a total enterprise value of $205 million for SMART Brazil) an upfront cash purchase price, subject to certain customary adjustments as set forth in the Brazil Purchase Agreement. In addition, pursuant to the Brazil Purchase Agreement, we have a right to receive, and Brazil Purchaser is obligated to pay, (i) a deferred payment due eighteen months following the closing and (ii) subject to and at the time of exercise of the Put/Call Option (as defined below), an additional deferred cash adjustment equal to 19% of the amount of SMART Brazil’s net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement).

Put/Call Option: Pursuant to the Brazil Purchase Agreement, at the closing, SMART Brazil, Brazil Seller, Brazil Purchaser and Longsys entered into a Quotaholders Agreement, which provides Brazil Seller with a put option to sell the Retained Interest in SMART Brazil to Brazil Purchaser (the “Put Option”) during three exercise windows following its fiscal years ending December 31, 2026, December 31, 2027 or December 31, 2028 (the “Exercise Windows”), with such Exercise Windows beginning on June 15, 2027 and ending on July 15, 2027, beginning on June 15, 2028 and ending on July 15, 2028 and beginning on June 15, 2029 and ending on July 15, 2029, respectively. A call option has also been granted to Brazil Purchaser to require Brazil Seller to sell the Retained Interest to Brazil Purchaser during the Exercise Windows (together with the Put Option, the “Put/Call Option”). The price for the Put/Call Option is based on a 100% enterprise value of 7.5x net income for SMART Brazil for the preceding fiscal year at the time of exercise.

Consideration: The following is a summary of total consideration in exchange for the sale of an 81% interest in SMART Brazil:

Cash received at closing (1)	$	164,487
Post-closing adjustment for net cash and net working capital (2)	451
Deferred payment (3)	25,433
Deferred cash adjustment (4)	3,721
Total consideration	$	194,092

(1)Includes $26.8 million of cash received at closing for an estimated amount of net cash and an estimated net working capital amount (in excess of a minimum target amount) as of the closing.

(2)Represents the post-closing adjustment for net cash and net working capital, which is expected to be received in the second or third quarter of 2024 upon completion of the review of the final net cash and final working capital amounts. The post closing adjustment is included in other current assets in the accompanying consolidated balance sheet.

(3)Represents the fair value of the deferred payment, comprised of a notional amount of $28.4 million, discounted at 7.5% and due May 2025. The deferred payment is included in other noncurrent assets in the accompanying consolidated balance sheet.

(4)Represents the fair value of the deferred cash adjustment, comprised of a notional amount of $4.8 million, discounted at 7.5%, equal to 19% of the amount of SMART Brazil’s net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement). The deferred cash adjustment is accounted for as a derivative financial instrument, is due at the time of exercise of the Put/Call Option and is included in other noncurrent assets in the accompanying consolidated balance sheet.

Presentation of SMART Brazil Operations

As of August 25, 2023, we concluded that the net assets of SMART Brazil met the criteria for classification as held for sale. In addition, the divestiture of SMART Brazil is expected to have a major effect on our operations and financial results. As a result, we have presented the results of operations, cash flows and financial position of SMART Brazil as discontinued operations in the accompanying consolidated financial statements and notes for all periods presented.

A disposal group classified as held for sale is measured at the lower of its carrying amount or fair value less costs to sell. Accordingly, we evaluated the carrying value of the net assets of SMART Brazil (including $206.3 million recognized within shareholders’ equity related to the cumulative translation adjustment from SMART Brazil), estimated costs to sell and expected proceeds and concluded the net assets were impaired as of August 25, 2023. As a result, we recognized an impairment charge of $153.0 million in the fourth quarter of 2023 to write down the carrying value of the net assets of SMART Brazil. In addition, we concluded that the outside basis of SMART Brazil inclusive of any withholding taxes should be recognized upon the classification as held for sale as of August 25, 2023. Accordingly, we recognized withholding taxes on the expected capital gain and deferred tax liabilities of $28.6 million in 2023.

11

Assets and liabilities of SMART Brazil as of the November 29, 2023 disposal date and as of August 25, 2023 were as follows:

As of	November 29, 2023		August 25, 2023
Cash and cash equivalents	$	40,927	$	44,501
Accounts receivable, net	16,482		17,055
Inventories	26,103		25,877
Other current assets	17,800		17,732
Total current assets	101,312		105,165
Property and equipment, net	66,870		58,321
Operating lease right-of-use assets	6,912		5,213
Goodwill	19,856		20,668
Other noncurrent assets	27,490		34,243
Total assets	222,440		223,610
Impairment of SMART Brazil assets	(153,036)		(153,036)
Total assets, net of impairment	$	69,404	$	70,574
Accounts payable and accrued expenses	$	20,576	$	25,867
Current debt	3,872		4,006
Other current liabilities	1,023		1,030
Total current liabilities	25,471		30,903
Long-term debt	11,938		13,689
Noncurrent operating lease liabilities	5,686		4,614
Noncurrent deferred tax liabilities	28,564		28,564
Other noncurrent liabilities	93		$	—
Total liabilities	$	71,752	$	77,770
Net assets of discontinued operations	$	(2,348)	$	(7,196)
Reported as:
Current assets of discontinued operations			$	70,574
Current liabilities of discontinued operations			77,770
Net assets of discontinued operations			$	(7,196)

12

The following table presents the results of operations for SMART Brazil:

	Three Months Ended
	December 1, 2023		November 25, 2022
Net sales	$	55,159	$	73,681
Cost of sales	50,560		67,369
Gross profit	4,599		6,312
Operating expenses:
Research and development	157		(16)
Selling, general and administrative	5,421		3,314
Other operating (income) expense	64		270
Total operating expenses	5,642		3,568
Operating income (loss)	(1,043)		2,744
Non-operating (income) expense:
Loss from divestiture of 81% interest in SMART Brazil	10,888		—
Interest (income) expense, net	(1,262)		(457)
Other non-operating (income) expense	138		702
Total non-operating (income) expense	9,764		245
Income (loss) before taxes	(10,807)		2,499
Income tax provision (benefit)	(2,659)		(6,432)
Net income (loss) from discontinued operations	$	(8,148)	$	8,931

Loss from Divestiture of SMART Brazil

The following table presents the calculation of the loss from the divestiture of an 81% interest in SMART Brazil:

Proceeds, less costs to sell and other expenses:
Consideration	$	194,092
Costs to sell and other expenses	(4,150)
	189,942
Basis in 81% interest in SMART Brazil:
Net assets of SMART Brazil	145,194
Cumulative translation adjustment (1)	212,397
	357,591
Gain on revalue of 19% Retained Interest in SMART Brazil (2)	3,725
Pre-tax loss on divestiture of 81% interest in SMART Brazil	163,924
Income tax provision	26,580
Loss on divestiture of 81% interest in SMART Brazil	$	190,504

(1)The sale of an 81% interest in SMART Brazil resulted in the de-consolidation of SMART Brazil and, accordingly, the release of the related cumulative translation adjustment. Included in the basis calculation above is the balance of cumulative translation adjustment for SMART Brazil as of the closing. The release of the cumulative translation adjustment is included in net income (loss) from discontinued operations in the accompanying consolidated statement of operations.

(2)In connection with the transaction, we revalued our 19% Retained Interest in SMART Brazil based on the implied value for 100% of SMART Brazil, adjusted for lack of control premium. As of the end of the first quarter of 2024, the carrying value of our remaining 19% interest in SMART Brazil was $37.8 million.

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Recognition Periods: The loss from the divestiture of an 81% interest in SMART Brazil was recognized as follows:

	Three Months Ended
	December 1, 2023		August 25, 2023		Total
Pre-tax loss on divestiture of 81% interest in SMART Brazil	$	10,888	$	153,036	$	163,924
Income tax provision (benefit)	(1,984)		28,564		26,580
Loss on divestiture of 81% interest in SMART Brazil	$	8,904	$	181,600	$	190,504

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, and requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU was effective for us in the first quarter of 2023 and permitted the use of either the modified retrospective or fully retrospective method of transition.

We adopted ASU 2020-06 in the first quarter of 2023 under the modified retrospective method. Upon adoption, the previously separated equity component and associated issuance costs for our 2.25% convertible senior notes due 2026 were reclassified from additional paid-in capital to long-term debt, thereby eliminating future amortization of the debt discount as interest expense. The following table summarizes the effects of adopting ASU 2020-06:

	Ending Balance as of August 26, 2022		Adoption of ASU 2020-06		Beginning Balance as of August 27, 2022
Long-term debt	$	575,682	$	32,183	$	607,865
Additional paid-in capital	448,112		(50,822)		397,290
Retained earnings	251,344		18,639		269,983

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Segment Reporting Disclosures, which will require an entity to provide more detailed information about its reportable segment expenses that are included within management’s measurement of profit and loss and will require certain annual disclosures to be provided on an interim basis. The amendments in this ASU are effective for us in 2025 for annual reporting and in 2026 for interim reporting, with early adoption permitted beginning in 2024, and is required to be applied using the full retrospective method of transition. We are evaluating the timing and effects of adoption of this ASU on the Company’s segment disclosures.

Business Acquisition

Stratus Technologies

On August 29, 2022 (the “Stratus Acquisition Date”), we completed the acquisition of Storm Private Holdings I Ltd., a Cayman Islands exempted company (“Stratus Holding Company” and together with its subsidiaries, “Stratus Technologies”), pursuant to the terms of that certain Share Purchase Agreement (the “Stratus Purchase Agreement”), dated as of June 28, 2022, by and among SGH, Stratus Holding Company and Storm Private Investments LP, a Cayman Islands exempted limited partnership (the “Stratus Seller”). Pursuant to the Stratus Purchase Agreement, among other matters, the Stratus Seller sold to SGH, and SGH purchased from the Stratus Seller, all of the Stratus Seller’s right, title and interest in and to the outstanding equity securities of Stratus Holding Company.

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Stratus Technologies is a global leader in simplified, protected and autonomous computing platforms and services in the data center and at the Edge. For more than 40 years, Stratus Technologies has provided high-availability fault-tolerant computing, allowing Fortune 500 companies and small-to-medium sized businesses to securely and remotely turn data into actionable intelligence at the Edge, data center and cloud - driving uptime and efficiency. Stratus Technologies operates as part of SGH’s Intelligent Platform Solutions (“IPS”) segment and further enhances SGH’s growth and diversification strategy and complements and expands SGH’s IPS business in data center and edge environments.

Purchase Price: At the closing of the transaction, we paid the Stratus Seller a cash purchase price of $225 million, subject to certain adjustments. In addition, the Stratus Seller has the right to receive, and we are obligated to pay, contingent consideration of up to $50 million (the “Stratus Earnout”) based on the gross profit performance of Stratus Technologies during the first full 12 fiscal months following the closing of the acquisition. Pursuant to the terms of the Stratus Purchase Agreement, we had the option to settle the Stratus Earnout amount owed to the Stratus Seller in cash, ordinary shares of SGH, or a mix of cash and ordinary shares of SGH. On June 28, 2023, we provided notice to the Stratus Seller of our election to settle the Stratus Earnout in cash.

Based on the gross profit achieved by Stratus Technologies during the 12 fiscal months following the closing of the acquisition, as of December 1, 2023, current liabilities included $50.0 million for the amount payable in connection with the Stratus Earnout. In December 2023, subsequent to the end of our first quarter of 2024, we paid in full the $50.0 million related to the Stratus Earnout.

Cash paid at closing was utilized, in part, to settle the outstanding debt of Stratus Technologies as of the closing of the transaction and was recognized as a component of consideration transferred. As a result, the assets acquired and liabilities assumed do not include an assumed liability for the outstanding debt of Stratus Technologies. The purchase price for Stratus Technologies was as follows:

Cash	$	225,000
Additional payment for net working capital adjustment (1)	17,246
Fair value of Stratus Earnout	20,800
	$	263,046

(1)Includes $14.4 million paid at closing and $2.8 million paid in the second quarter of 2023 upon completion of the review of the working capital assets acquired and liabilities assumed.

Contingent Consideration: The Stratus Earnout was accounted for as contingent consideration. As of the Stratus Acquisition Date, the fair value of the Stratus Earnout was estimated to be $20.8 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, including forecasted gross profit, comparable company volatility, discount rate and cost of debt. The fair value of the Stratus Earnout was estimated based on the Company’s evaluation of the probability and amount of the Stratus Earnout to be achieved based on the expected gross profit of Stratus Technologies, using an estimated gross profit volatility of 33.4% and a discount rate of 7.3% as of the Stratus Acquisition Date.

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Valuation: The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed as follows:

Cash and cash equivalents	$	29,174
Accounts receivable	26,685
Inventories	10,890
Other current assets	6,536
Property and equipment	7,292
Operating lease right-of-use assets	9,216
Intangible assets	123,700
Goodwill	125,929
Other noncurrent assets	11,661
Accounts payable and accrued expenses	(32,656)
Other current liabilities	(36,723)
Noncurrent operating lease liabilities	(7,067)
Other noncurrent liabilities	(11,591)
Total net assets acquired	$	263,046

The goodwill arising from the acquisition of Stratus Technologies was assigned to our IPS segment. None of the goodwill recognized is deductible for income tax purposes.

The fair values and useful lives of identifiable intangible assets were as follows:

	Amount		Estimated useful life (in years)
Technology	$	82,000	5
Customer relationships	27,800		8
Trademarks/trade names	10,000		9
In-process research and development	3,900		N/A
	$	123,700

•Technology intangible assets were valued using the multi-period excess earnings method based on the discounted cash flow and technology obsolescence rate. Discounted cash flow requires the use of significant unobservable inputs, including projected revenue, expenses, capital expenditures and other costs and discount rates calculated based on the cost of equity adjusted for various risks, including the size of the acquiree, industry risk and other risk factors.

•Customer relationship intangible assets were valued using the multi-period excess earnings method, which is the present value of the projected cash flows that are expected to be generated by the existing intangible assets after reduction by an estimated fair rate of return on contributory assets required to generate the customer relationship revenues. Key assumptions included discounted cash flow, estimated life cycle and customer attrition rates.

•Trademark/trade name intangible assets were valued using the relief from royalty method, which is the discounted cash flow savings accruing to the owner by virtue of the fact that the owner is not required to license the trademarks/trade names from a third party. Key assumptions included attributable revenue expected from the trademarks/trade names, royalty rates and assumed asset life.

•In-process research and development (“IPR&D”) relates to next generation fault tolerant architecture. IPR&D is indefinite-lived and will be reviewed for impairment at least annually. Amortization will commence upon completion of research and development efforts. IPR&D was valued based on discounted cash flow, which requires the use of significant unobservable inputs, including projected revenue, expenses, capital expenditures and other costs.

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Cash and Investments

As of December 1, 2023 and August 25, 2023, all of our debt securities, the fair values of which approximated their carrying values, were classified as held to maturity. Cash, cash equivalents and investments were as follows:

	As of December 1, 2023				As of August 25, 2023
	Cash and Cash Equivalents		Short-term Investments		Cash and Cash Equivalents		Short-term Investments
Cash and cash equivalents	$	443,245	$	—	$	321,937	$	—
Level 1:
Money market funds	70,814		—		43,626		—
U.S. Treasury securities	—		24,385		—		25,251
Level 2:
Time deposits	15,000		—		—		—
	$	529,059	$	24,385	$	365,563	$	25,251

Accounts Receivable

In the third quarter of 2023, we entered into a trade accounts receivable sale program with a third-party financial institution to sell certain of our trade accounts receivable on a non-recourse basis pursuant to a factoring arrangement. This program allows us to sell certain of our trade accounts receivables up to $60 million. There were no trade accounts receivable sold during the first quarter of 2024.

Inventories

As of	December 1, 2023		August 25, 2023
Raw materials	$	97,853	$	90,085
Work in process	57,192		24,485
Finished goods	53,396		60,407
	$	208,441	$	174,977

As of December 1, 2023 and August 25, 2023, 8% of total inventories were owned and held under our logistics services.

Property and Equipment

As of	December 1, 2023		August 25, 2023
Equipment	$	87,528	$	86,429
Buildings and building improvements	67,683		69,325
Furniture, fixtures and software	43,082		44,121
Land	16,126		16,126
	214,419		216,001
Accumulated depreciation	(102,091)		(97,267)
	$	112,328	$	118,734

Depreciation expense for property and equipment was $7.5 million and $6.1 million in the first quarter of 2024 and 2023, respectively.

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Intangible Assets and Goodwill

	As of December 1, 2023				As of August 25, 2023
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Technology	$	141,491	$	(40,698)	$	141,201	$	(34,569)
Customer relationships	72,500		(36,996)		72,500		(33,990)
Trademarks/trade names	28,300		(14,314)		28,300		(13,257)
	$	242,291	$	(92,008)	$	242,001	$	(81,816)
Goodwill by segment:
Intelligent Platform Solutions	$	147,238			$	147,238
Memory Solutions	14,720				14,720
	$	161,958			$	161,958

In the first quarter of 2024 and 2023, we capitalized $0.3 million and $126.4 million, respectively, for intangible assets with weighted-average useful lives of 19.0 years and 6.0 years, respectively. Amortization expense for intangible assets was $10.2 million and $10.9 million in the first quarter of 2024 and 2023, respectively. Amortization expense is expected to be $29.8 million for the remainder of 2024, $35.6 million for 2025, $30.2 million for 2026, $29.5 million for 2027, $13.9 million for 2028 and $11.2 million for 2029 and thereafter.

Impairment of Penguin Edge Goodwill

During the second quarter of 2023, we initiated a plan within our IPS segment pursuant to which we intend to wind down manufacturing and discontinue the sale of legacy products offered through our Penguin Edge business by approximately the end of calendar 2024. In connection therewith, we performed a quantitative assessment of the fair value of goodwill using an income approach with assumptions that are considered Level 3 measurements and concluded that the carrying value of the Penguin Edge reporting unit goodwill exceeded its fair value. The fair value of the Penguin Edge reporting unit was determined primarily by discounting estimated future cash flows, which were determined based on revenue and expense assumptions over the next two years, at a weighted-average cost of capital of 14.5%. As a result, we recorded aggregate charges of $19.1 million in 2023 to impair the carrying value of Penguin Edge goodwill.

We concluded that long-lived assets other than goodwill, primarily consisting of customer relationship intangible assets, had fair values in excess of their carrying amounts and, accordingly, recorded no impairments of such assets. These assets will continue to be amortized over their remaining useful lives through the date of our anticipated completion of wind-down activities.

At each reporting date through the end of the wind-down period, we will reassess the estimated remaining cash flows of the Penguin Edge business. We currently anticipate that the remaining goodwill of the Penguin Edge reporting unit of $16.1 million as of the end of the first quarter of 2024 may become further impaired in future periods.

Accounts Payable and Accrued Expenses

As of	December 1, 2023		August 25, 2023
Accounts payable (1)	$	181,791	$	134,980
Salaries, wages and benefits	19,666		27,665
Income and other taxes	13,317		13,370
Other	4,308		6,020
	$	219,082	$	182,035

(1)Includes accounts payable for property and equipment of $1.7 million and $5.2 million as of December 1, 2023 and August 25, 2023, respectively.

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Debt

As of	December 1, 2023		August 25, 2023
Amended 2027 TLA	$	531,019	$	544,943
2029 Notes	147,034		146,886
2026 Notes	98,757		98,609
	776,810		790,438
Less current debt	(28,511)		(35,618)
Long-term debt	$	748,299	$	754,820

Credit Facility

As of December 1, 2023, there was $537.2 million of principal amount outstanding under the Amended 2027 TLA, unamortized issuance costs were $6.2 million and the effective interest rate was 8.51%. As of December 1, 2023, there were no amounts outstanding under the 2027 Revolver and unamortized issuance costs were $2.9 million.

Convertible Senior Notes

Convertible Senior Notes Exchange

On January 18, 2023, SGH entered into separate, privately negotiated exchange agreements with a limited number of holders of its 2.25% Convertible Senior Notes due 2026 (the “2026 Notes”) to exchange $150.0 million principal amount of the 2026 Notes for (i) $150.0 million in aggregate principal amount of new 2.00% Convertible Senior Notes due 2029 (the “2029 Notes”) and (ii) an aggregate of $15.6 million in cash, with such cash payment representing $14.1 million of premium paid for the 2026 Notes in excess of par value and $1.5 million of accrued and unpaid interest on the 2026 Notes (collectively, the “Exchange Transactions”). The 2029 Notes were issued pursuant to, and are governed by, an indenture (the “2029 Indenture”), dated as of January 23, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee.

Transactions involving contemporaneous exchanges between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation are accounted for as debt extinguishments if the debt instruments have substantially different terms. An exchange is deemed to have substantially different terms if:

•The present value of the remaining cash flows of the old instrument differs by more than 10% of the present value of the cash flows of the new instrument, or

•The change in the fair value of the conversion option immediately before and after the exchange is greater than 10% of the carrying value of the debt instrument immediately prior to the exchange.

We concluded that the exchanged 2026 Notes and the 2029 Notes had substantially different terms and, accordingly, accounted for the Exchange Transactions as the extinguishment of the 2026 Notes and the issuance of the 2029 Notes. As a result, we recognized an extinguishment loss in the second quarter of 2023, included in other non-operating expense, of $16.7 million consisting of $14.1 million of premium paid to extinguish the 2026 Notes and $2.5 million for the write-off of unamortized issuance costs.

Convertible Senior Notes Interest

Unamortized debt discount and issuance costs are amortized over the terms of our 2026 Notes and 2029 Notes using the effective interest method. As of December 1, 2023 and August 25, 2023, the effective interest rate for our 2026 Notes was 2.83%. As of December 1, 2023 and August 25, 2023, the effective interest rate for our 2029 Notes was 2.40%. Aggregate

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interest expense for our convertible notes consisted of contractual stated interest and amortization of discount and issuance costs and included the following:

	Three Months Ended
	December 1, 2023		November 25, 2022
Contractual stated interest	$	1,400	$	1,391
Amortization of discount and issuance costs	297		337
	$	1,697	$	1,728

As of August 26, 2022, the carrying amount of the equity components of the 2026 Notes, which was included in additional paid-in capital, was $50.8 million. As of the beginning of 2023, we adopted ASU 2020-06. In connection therewith, we reclassified $32.2 million from additional paid-in-capital to long-term debt and $18.6 million from additional paid-in-capital to retained earnings. See “Recently Adopted Accounting Standards.”

Maturities of Debt

As of December 1, 2023, maturities of debt were as follows:

Remainder of 2024	$	21,633
2025	28,844
2026	128,844
2027	457,904
2028	—
2029 and thereafter	150,000
Less unamortized discount and issuance costs	(10,415)
	$	776,810

Leases

We have 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 any period presented. The components of operating lease expense were as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Fixed lease cost	$	3,505	$	4,611
Variable lease cost	449		384
Short-term lease cost	639		499
	$	4,593	$	5,494

Cash flows used for operating activities in the first quarter of 2024 and 2023 included payments for operating leases of $2.5 million and $2.5 million, respectively. Acquisitions of right-of-use assets were $9.4 million in the first quarter of 2023.

As of December 1, 2023 and August 25, 2023, the weighted-average remaining lease term for our operating leases was 10.5 years and the weighted-average discount rate was 6.0%. 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.

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As of December 1, 2023, minimum payments of lease liabilities were as follows:

Remainder of 2024	$	9,994
2025	11,252
2026	9,921
2027	7,678
2028	7,901
2029 and thereafter	54,395
	101,141
Less imputed interest	(27,586)
Present value of total lease liabilities	$	73,555

Commitments and Contingencies

Product Warranty and Indemnities

We generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective items or return of amounts paid for such items. Our warranty obligations are not material.

We are party to a number of agreements in which we have agreed to defend, indemnify and hold harmless our customers and suppliers from damages and costs, which may arise from product defects as well as from any alleged infringement by our products of third-party patents, trademarks or other proprietary rights. We believe our internal development processes and other policies and practices limit our exposure related to such indemnities. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. However, to date, we have not had to reimburse any of our customers or suppliers for any losses related to these indemnities. We have not recorded any liability for such indemnities.

Contingencies

From time to time, we may be 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. 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.

Equity

SGH Shareholders’ Equity

Share Repurchase Authorization

On April 4, 2022, our Board of Directors approved a $75.0 million share repurchase authorization, under which we may repurchase our 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 first quarter of 2024 and 2023, we repurchased 825 thousand and 182 thousand shares for $12.1 million and $2.8 million, respectively, under the repurchase authorization. As of December 1, 2023, $4.5 million of this authorization remained available for the repurchase of our ordinary shares.

On January 8, 2024, the Audit Committee of the Board of Directors approved an additional $75.0 million share repurchase authorization, under which we may repurchase our 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 Audit Committee at any time and does not obligate the Company to acquire any amount of ordinary shares.

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Other Share Repurchases

Ordinary shares withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are treated as ordinary share repurchases. In the first quarter of 2024 and 2023, we repurchased 75 thousand and 143 thousand ordinary shares as payment of withholding taxes for $1.1 million and $1.9 million, respectively.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component in the first quarter of 2024 were as follows:

	Cumulative Translation Adjustment		Gains (Losses) on Investments		Total
As of August 25, 2023	$	(205,969)	$	5	$	(205,964)
Other comprehensive income (loss) before reclassifications	(6,142)		12		(6,130)
Reclassifications out of accumulated other comprehensive income	212,397		—		212,397
Other comprehensive income (loss)	206,255		12		206,267
As of December 1, 2023	$	286	$	17	$	303

In connection with our divestiture of an 81% interest in SMART Brazil, we reclassified $212.4 million of cumulative translation adjustment related to SMART Brazil from other accumulated comprehensive income to results of operations in the first quarter of 2024. See “Divestiture of SMART Brazil.”

Fair Value Measurements

	As of December 1, 2023				As of August 25, 2023
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Derivative financial instruments	$	3,721	$	3,721	$	—	$	—
Liabilities:
Amended 2027 TLA	$	537,226	$	531,019	$	551,648	$	544,943
2029 Notes	148,649		147,034		195,426		146,886
2026 Notes	105,714		98,757		131,864		98,609

The deferred cash adjustment resulting from the divestiture of an 81% interest in SMART Brazil is accounted for as a derivative financial instrument and is revalued at the end of each reporting period. The fair value as of December 1, 2023, as measured on a recurring basis, was based on Level 2 measurements, including market-based observable inputs of interest rates and credit-risk spreads.

The fair value of the Amended 2027 TLA, 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. The fair values of the 2029 Notes and the 2026 Notes, as measured on a non-recurring basis, was determined based on Level 2 measurements, including the trading prices of the 2029 Notes and the 2026 Notes.

Equity Plans

As of December 1, 2023, 7.3 million of our ordinary shares were available for future awards under our equity plans.

The disclosures related to our restricted awards, share options and employee share purchase plan include both our continuing and discontinued operations.

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

Aggregate Restricted Award activity was as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Awards granted	419		1,010
Weighted-average grant date fair value per share	$	30.49	$	19.51
Aggregate vesting date fair value of shares vested	$	8,733	$	8,949

As of December 1, 2023, total unrecognized compensation costs for unvested Restricted Awards was $79.0 million, which was expected to be recognized over a weighted-average period of 2.3 years.

Share Options

As of December 1, 2023, total aggregate unrecognized compensation costs for unvested options was $0.8 million, which was expected to be recognized over a weighted-average period of 0.7 years.

Employee Share Purchase Plan (“ESPP”)

Under our ESPP, employees purchased 298 thousand ordinary shares for $3.3 million in the first quarter of 2024 and 265 thousand shares for $2.9 million in the first quarter of 2023.

Share-Based Compensation Expense

Share-based compensation expense for our continuing operations was as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Share-based compensation expense by caption:
Cost of sales	$	1,815	$	1,642
Research and development	1,597		1,556
Selling, general and administrative	7,558		6,783
	$	10,970	$	9,981

Income tax benefits for share-based awards were $1.8 million in the first quarter of 2024 and 2023.

Revenue and Customer Contract Balances

Net Sales and Gross Billings

We provide certain logistics services on an agent basis, whereby we procure materials and services on behalf of our customers and then resell such materials and services to our customers. Our materials logistics business 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.

Gross amounts invoiced to customers in connection with these agent services include amounts related to the services performed by us in addition to the cost of the materials and services procured. However, only the amount related to the agent component is recognized as revenue in our results of operations. We generally recognize revenue for these procurement, logistics and inventory management services upon the completion of such services, which typically occurs at

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the time of shipment of product to the customer. The cost of materials and services invoiced to our customers under these arrangements, but not recognized as revenue or cost of sales in our results of operations, were as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Cost of materials and services invoiced in connection with logistics services	$	108,969	$	377,751

Customer Contract Balances

As of	December 1, 2023		August 25, 2023
Contract assets (1)	$	2,391	$	—
Contract liabilities: (2)
Deferred revenue	$	59,082	$	69,326
Customer advances	4,124		5,565
	$	63,206	$	74,891

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

(2)Contract liabilities are included in other current 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.

Contract assets represent amounts recognized as revenue for which we do not have the unconditional right to consideration.

Deferred revenue represents amounts received from customers in advance of satisfying performance obligations. As of December 1, 2023, we expect to recognize revenue of $39.1 million of the $59.1 million balance in the next 12 months and the remaining amount thereafter. In the first quarter of 2024, we recognized revenue of $23.9 million from satisfying performance obligations related to amounts included in deferred revenue as of August 25, 2023. Deferred revenue includes $7.3 million and $10.9 million as of December 1, 2023 and August 25, 2023, respectively, related to contracts that contain termination rights.

Customer advances represent amounts received from customers for advance payments to secure product. In the first quarter of 2024, we recognized revenue of $1.0 million from satisfying performance obligations related to amounts included in customer advances as of August 25, 2023.

As of December 1, 2023 and August 25, 2023, other current liabilities included $14.2 million and $12.5 million, respectively, for estimates of consideration payable to customers, including estimates for pricing adjustments and returns.

Other Operating (Income) Expense

In 2024 and 2023, we initiated plans that included workforce reductions and the elimination of certain projects across our businesses. In connection therewith, we recorded restructure charges of $2.9 million and $1.8 million in the first quarter of 2024 and 2023, respectively, primarily for employee severance costs and other benefits. We anticipate that these activities will continue into future quarters and anticipate recording additional restructure charges. As of December 1, 2023, $2.3 million remained unpaid, which is expected to be paid in 2024.

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Other Non-operating (Income) Expense

	Three Months Ended
	December 1, 2023		November 25, 2022
Loss (gain) on extinguishment of debt	$	—	$	(767)
Loss (gain) from changes in foreign currency exchange rates	(546)		(520)
Loss (gain) on disposition of assets	45		(41)
Other	(75)		(34)
	$	(576)	$	(1,362)

Income Taxes

	Three Months Ended
	December 1, 2023		November 25, 2022
Income (loss) before taxes	$	(7,678)	$	7,715
Income tax provision (benefit)	3,534		11,322

Income taxes include 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. We have historically determined our interim income tax provision (benefit) by applying the annual estimated effective income tax rate expected to be applicable for the full fiscal year to the income (loss) before taxes for jurisdictions which are subject to income tax. In determining the full year estimate, we do not include the impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax provision (benefit) and income (loss) before taxes. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate. Additionally, our income tax provision (benefit) is subject to volatility and could be impacted by changes in our geographic earnings, non-deductible share-based compensation and certain tax credits.

Determining the consolidated income tax provision (benefit), income tax liabilities and deferred tax assets and liabilities involves judgment. We calculate and provide for income taxes in each of the tax jurisdictions in which we operate, 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

	Three Months Ended
	December 1, 2023		November 25, 2022
Net income (loss) from continuing operations	$	(11,773)	$	(3,939)
Net income (loss) from discontinued operations	(8,148)		8,931
Net income (loss) attributable to SGH – Basic and Diluted	$	(19,921)	$	4,992
Weighted-average shares outstanding – Basic	52,068		48,962
Dilutive effect of equity plans and convertible notes	—		—
Weighted-average shares outstanding – Diluted	52,068		48,962
Basic earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10
Diluted earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10

Below are unweighted 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
	December 1, 2023	November 25, 2022
Equity plans	6,060	8,432
Stratus Technologies contingently issuable shares	—	1,715
	6,060	10,147

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. We have the following three business units, which are our 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 and computing, including server applications and other vertical markets. These products are marketed to original equipment manufacturers 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: Our IPS group, under our Penguin Solutions and Stratus Technologies brands, offers specialized platform solutions and services for high-performance computing, artificial intelligence, machine learning, advanced modeling and the internet of things that span the continuum of edge, core and cloud. Our solutions are designed specifically for customers across multiple markets, including government, hyperscale, energy, financial services, health care, education and others.

•LED Solutions: Our LED Solutions group, under our CreeLED brand, offers a broad portfolio of application-optimized LEDs focused on improving lumen density, intensity, efficacy, optical control and/or 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.

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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 identify (other than goodwill) or report internally our assets nor allocate certain expenses and amortization, interest, other non-operating (income) expense or taxes to segments.

	Three Months Ended
	December 1, 2023		November 25, 2022
Net sales:
Memory Solutions	$	85,668	$	118,286
Intelligent Platform Solutions	118,824		210,971
LED Solutions	69,755		62,540
Total net sales	$	274,247	$	391,797
Segment operating income:
Memory Solutions	$	7,195	$	19,039
Intelligent Platform Solutions	17,901		32,985
LED Solutions	1,583		(636)
Total segment operating income	26,679		51,388
Unallocated:
Share-based compensation expense	(10,970)		(9,981)
Amortization of acquisition-related intangibles	(10,008)		(10,858)
Flow through of inventory step up	—		(2,599)
Cost of sales-related restructure	(668)		—
Acquisition and integration expenses	(789)		(6,732)
Change in fair value of contingent consideration	—		(3,700)
Restructure charge	(2,939)		(1,771)
Other	—		(900)
Total unallocated	(25,374)		(36,541)
Consolidated operating income (loss)	$	1,305	$	14,847

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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 elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023. This discussion contains forward looking statements that involve risks, uncertainties and other factors. Our actual results could differ materially from those contained in these forward-looking statements due to a number of risks, uncertainties and other factors, including those discussed below and elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023. 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 year 2024 and 2023 contain 53 weeks and 52 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated. All tabular amounts are in thousands. Financial information for our subsidiaries in Brazil was included in our consolidated financial statements on a one-month lag because their fiscal years ended on July 31 of each year. In connection with the completion of the divestiture of an 81% interest in SMART Brazil, we ceased consolidating the operations of SMART Brazil in our financial statements as of the November 29, 2023 disposal date. As a result, financial information for our SMART Brazil operations in the first quarter of 2024 includes the four-month period from August 1, 2023 to November 30, 2023.

Overview

For an overview of our business, see “PART I – Item 1. Business” of our Annual Report on Form 10-K for the fiscal year ended August 25, 2023.

Divestiture of SMART Brazil

On November 29, 2023, we completed our previously announced divestiture of SMART Modular Technologies Brasil – Indústria e Comercio de Componentes Ltda. (“SMART Brazil”) to Lexar Europe B.V., an affiliate of Shenzhen Longsys Electronics Co. Ltd.

SMART Brazil operates as a stand-alone business which assembles and tests modules for electronics manufacturers that sell devices to Brazilian consumers. In line with our strategic priorities, the majority divestiture of our standards-based, commodity module business in Brazil will enable us to focus on our strategy of delivering high-performance, high availability solutions to our enterprise customers. This transaction also strengthens our financial position, enabling us to increase our strategic investments into domestic research and development and U.S.-based production of advanced technologies.

Presentation of SMART Brazil as Discontinued Operations: On June 13, 2023, we entered into an agreement to divest of an 81% interest in SMART Brazil. We concluded that, as of August 25, 2023, (i) the net assets of SMART Brazil met the criteria for classification as held for sale and (ii) the proposed sale represented a strategic shift that was expected to have a major effect on our operations and financial results. On November 29, 2023, we completed the divestiture. The balance sheets, results of operations and cash flows of SMART Brazil have been presented as discontinued operations for all periods presented. SMART Brazil was previously included within our Memory Solutions segment.

See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Divestiture of SMART Brazil.”

Acquisition of Stratus Technologies

On August 29, 2022, we completed the acquisition of Storm Private Holdings I Ltd., a Cayman Islands exempted company (together with its subsidiaries, “Stratus Technologies”). At the closing, SGH paid a cash purchase price of $225 million, subject to certain adjustments. In addition, the seller has the right to receive, and SGH is obligated to pay, contingent consideration of up to $50 million (the “Stratus Earnout”) based on the gross profit performance of the Stratus Technologies business during the first full 12 fiscal months of Stratus Technologies following the closing of the acquisition. The Stratus Earnout is payable in cash, ordinary shares of SGH, or a mix of cash and SGH Shares, at SGH’s election. On June 28, 2023, we provided notice to Storm Private Investments LP, a Cayman Islands exempted limited partnership (the “Stratus Seller”), of our election to settle the Stratus Earnout in cash. Throughout 2023, we adjusted the fair value of the Stratus Earnout by an aggregate of $29.0 million and, as of August 25, 2023, current liabilities included $50.0 million for the amount payable in connection with the Stratus Earnout. In December 2023, subsequent to the end of our first quarter of 2024, we paid in full $50.0 million related to the Stratus Earnout.

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Stratus Technologies is a global leader in simplified, protected and autonomous computing platforms and services in the data center and at the Edge. For more than 40 years, Stratus Technologies has provided high-availability fault-tolerant computing, allowing Fortune 500 companies and small-to-medium sized businesses to securely and remotely turn data into actionable intelligence at the Edge, data center and cloud - driving uptime and efficiency. Stratus Technologies operates as part of SGH’s IPS segment.

See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Business Acquisition – Stratus Technologies.”

Factors Affecting Our Operating Performance

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. 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. 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.

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 and Stratus Technologies 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 incur debt or raise capital through equity financings 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 and third-party wafers that we use in our memory and LED businesses. We have adopted this “Fab-Light” business model to reduce our capital expenditures and operating expenses, while affording greater flexibility in adapting to shifts in demand and other market trends. Our Fab-Light 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. In addition, the recent high demand for, and limited supply of, AI components globally, is affecting our sourcing of these components. 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.

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Results of Operations

	Three Months Ended
	December 1, 2023		% of net sales		November 25, 2022		% of net sales
Net sales:
Memory Solutions	$	85,668	31.2	%	$	118,286	30.2	%
Intelligent Platform Solutions	118,824		43.3	%	210,971		53.8	%
LED Solutions	69,755		25.4	%	62,540		16.0	%
Total net sales	274,247		100.0	%	391,797		100.0	%
Cost of sales	191,397		69.8	%	279,699		71.4	%
Gross profit	82,850		30.2	%	112,098		28.6	%
Operating expenses:
Research and development	21,389		7.8	%	24,072		6.1	%
Selling, general and administrative	57,217		20.9	%	67,708		17.3	%
Change in fair value of contingent consideration	—		—	%	3,700		0.9	%
Other operating (income) expense	2,939		1.1	%	1,771		0.5	%
Total operating expenses	81,545		29.7	%	97,251		24.8	%
Operating income (loss)	1,305		0.5	%	14,847		3.8	%
Non-operating (income) expense:
Interest expense, net	9,559		3.5	%	8,494		2.2	%
Other non-operating (income) expense	(576)		(0.2)	%	(1,362)		(0.3)	%
Total non-operating (income) expense	8,983		3.3	%	7,132		1.8	%
Income (loss) before taxes	(7,678)		(2.8)	%	7,715		2.0	%
Income tax provision (benefit)	3,534		1.3	%	11,322		2.9	%
Net income (loss) from continuing operations	(11,212)		(4.1)	%	(3,607)		(0.9)	%
Net income (loss) from discontinued operations	(8,148)		(3.0)	%	8,931		2.3	%
Net income (loss)	(19,360)		(7.1)	%	5,324		1.4	%
Net income attributable to noncontrolling interest	561		0.2	%	332		0.1	%
Net income (loss) attributable to SGH	$	(19,921)	(7.3)	%	$	4,992	1.3	%

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

Net Sales, Cost of Sales and Gross Profit

Net sales decreased by $117.6 million, or 30.0%, in the first quarter of 2024 compared to the same period in the prior year, primarily due to lower sales in both our IPS and Memory Solutions businesses, partially offset by higher LED Solutions sales. IPS net sales decreased by $92.1 million, or 43.7%, primarily due to lower hardware sales. Memory Solutions sales decreased by $32.6 million, or 27.6%, primarily due to lower sales volumes of Flash products. LED Solutions sales increased by $7.2 million, or 11.5%, primarily due to higher customer demand.

Cost of sales decreased by $88.3 million, or 31.6%, in the first quarter of 2024, compared to the same period in the prior year. IPS and Memory Solutions segments had lower material cost from lower sales and cost initiatives resulted in additional savings.

Gross margin increased to 30.2% in the first quarter of 2024 compared to 28.6% in the same period in 2023, primarily due to favorable mix from higher service revenue in our IPS business.

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,

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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 “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
	December 1, 2023		November 25, 2022
GAAP operating income (loss)	$	1,305	$	14,847
Share-based compensation expense	10,970		9,981
Amortization of acquisition-related intangibles	10,008		10,858
Flow-through of inventory step up	—		2,599
Cost of sales-related restructure	668		—
Acquisition and integration expenses	789		6,732
Change in fair value of contingent consideration	—		3,700
Restructure charge	2,939		1,771
Other	—		900
Non-GAAP operating income	$	26,679	$	51,388
Non-GAAP operating income (loss) by segment:
Memory Solutions	$	7,195	$	19,039
Intelligent Platform Solutions	17,901		32,985
LED Solutions	1,583		(636)
Total non-GAAP operating income (loss) by segment	$	26,679	$	51,388

Memory Solutions operating income decreased by $11.8 million, or 62.2%, in the first quarter of 2024 compared to same period in the prior year, primarily due to lower sales and gross profit.

IPS operating income decreased by $15.1 million, or 45.7%, in the first quarter of 2024 compared to same period in the prior year, primarily due to lower sales from our Penguin Solutions business, partially offset by lower operating expenses mainly driven by personnel-related expenses due to lower headcount.

LED Solutions operating income increased by $2.2 million, or 348.9%, in the first quarter of 2024 compared to the prior year, primarily due to higher sales and gross profit from higher sales volumes.

Operating and Non-operating (Income) Expense

Research and Development

Research and development expense decreased by $2.7 million, or 11.1%, in the first quarter of 2024 compared to the same period in the prior year, primarily due to lower personnel-related expenses mainly driven by headcount reductions.

Selling, General and Administrative

Selling, general and administrative expense decreased by $10.5 million, or 15.5%, in the first quarter of 2024 compared to the same period in the prior year, primarily due to lower acquisition and personnel-related expenses.

Change in Fair Value of Contingent Consideration

Our acquisition of Stratus Technologies in the first quarter of 2023 included contingent consideration. We estimated the fair value of the contingent consideration as of the date of acquisition and subsequently recognized changes in the fair value in results of operations. In the first quarter of 2023, we recorded a charge of $3.7 million to adjust the fair value of the contingent consideration from our acquisition of Stratus Technologies. As of December 1, 2023, current liabilities included

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$50.0 million for the amount payable for the Stratus Earnout. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Business Acquisition – Stratus Technologies.”

Other Operating (Income) Expense

Other operating expense in the first quarter of 2024 and 2023 included restructure charges of $2.9 million and $1.8 million, respectively, primarily for employee severance costs and other benefits resulting from workforce reductions, the elimination of certain projects across our businesses and other costs associated with the wind down of our Penguin Edge business. We anticipate that these activities will continue into future quarters and anticipate recording additional restructure charges.

Interest Expense, Net

Net interest expense increased by $1.1 million in the first quarter of 2024, compared to the same period in the prior year, primarily due to interest expense from the Amended 2027 TLA Credit Facility. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt.”

Other Non-operating (Income) Expense

Other non-operating (income) expense in the first quarter of 2024 and 2023 primarily reflected foreign currency gains and, in the first quarter of 2023, a gain from the prepayment of the LED Earnout Note. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Other Non-operating (Income) Expense.”

Income Tax Provision (Benefit)

Income tax provision in the first quarter of 2024 decreased by $7.8 million as compared to the same period in the prior year, primarily due to a decrease in profit before tax.

In the first quarter of 2024, our income tax provision of $3.5 million and effective tax rate of (46.0)% was different from the U.S. statutory tax rate, primarily due to losses generated in a jurisdiction where no tax benefit can be recognized, withholding taxes and state income taxes. In the first quarter of 2023, our income tax provision of $11.3 million and effective tax rate of 146.8% was different from the U.S. statutory tax rate, primarily due to losses generated in a jurisdiction where no tax benefit can be recognized.

See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Income Taxes.”

Net Income (Loss) From Discontinued Operations

As discussed above, we have presented the results of SMART Brazil as discontinued operations in our consolidated statements of operations for all periods presented. As of August 25, 2023, SMART Brazil was classified as held for sale. Accordingly, in 2023 we evaluated the carrying value of the net assets of SMART Brazil (including $206.3 million recognized within shareholders’ equity related to the cumulative translation adjustment from SMART Brazil), estimated costs to sell and expected proceeds and concluded the net assets were impaired. As a result, we recognized an impairment charge of $153.0 million in 2023 to write down the carrying value of the net assets of SMART Brazil. In addition, we concluded that the outside basis of SMART Brazil inclusive of any withholding taxes should be recognized upon the classification as held for sale as of August 25, 2023. Accordingly, we recognized withholding taxes on the expected capital gain and deferred tax liabilities of $28.6 million in 2023. In the first quarter of 2024, we completed the divestiture, and in connection therewith, recognized an additional loss of $8.9 million.

See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Divestiture of SMART Brazil.”

Liquidity and Capital Resources

As of December 1, 2023, we had cash, cash equivalents and short-term investments of $553.4 million, of which $351.4 million was held by subsidiaries outside of the United States. Our principal uses of cash and capital resources have been acquisitions, debt service requirements, capital expenditures, research and development expenditures and working capital requirements. We expect that future capital expenditures will focus on expanding our research and development activities, manufacturing equipment upgrades, acquisitions and IT infrastructure and software upgrades. Cash and cash equivalents generally consist of funds held in demand deposit accounts, money market funds and time deposits. We do not acquire investments for trading or speculative purposes.

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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.

We expect that our existing cash and cash equivalents, short-term investment, borrowings available under our credit facilities and cash generated by operating activities will be sufficient to fund our operations for at least the next twelve months.

Divestiture of SMART Brazil: On November 29, 2023, we completed the previously announced divestiture of SMART Brazil. In connection with the divestiture, we sold an 81% interest and retained a 19% interest in SMART Brazil. At the closing of the transaction, we received $143.0 million in cash from the sale (which includes gross proceeds of $164.5 million less withholding taxes of $21.5 million). In addition, we have the right to receive a deferred payment of $28.4 million eighteen months following the closing. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Divestiture of SMART Brazil.”

Stratus Technologies Earnout: On August 29, 2022, we completed the acquisition of Stratus Technologies. At the closing of the transaction (including in connection with the completion of the review of the working capital assets acquired and liabilities assumed), we paid the Stratus Seller a cash purchase price of $242.2 million. In addition, the Stratus Seller had the right to receive contingent consideration of up to $50.0 million, based on the gross profit performance of Stratus Technologies during the first full 12 fiscal months following the closing. In December 2023, subsequent to the end of our first quarter of 2024, we paid in full $50.0 million related to the Stratus Earnout.

Cash Flows

	Three Months Ended
	December 1, 2023		November 25, 2022
Net cash provided by (used for) operating activities from continuing operations	$	59,713	$	(84,751)
Net cash used for investing activities from continuing operations	(3,640)		(220,023)
Net cash provided by (used for) financing activities from continuing operations	(26,150)		262,076
Net increase (decrease) in cash and cash equivalents from discontinued operations	90,097		7,049
Effect of changes in currency exchange rates	(1,025)		205
Net increase (decrease) in cash and cash equivalents	$	118,995	$	(35,444)

Operating Activities: Cash flows from operating activities reflects net income, adjusted for certain non-cash 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 from the effects of changes in operating assets and liabilities.

Net cash provided by operating activities from continuing operations in the first quarter of 2024 resulted primarily from net loss of $11.2 million, adjusted for non-cash items of $30.0 million. Operating cash flows were favorably affected by a $40.9 million net change in our operating assets and liabilities primarily from the effects of a decrease of $48.7 million in accounts receivable and an increase of $23.6 million in accounts payable and accrued expenses and other liabilities, partially offset by the effect of an increase of $33.5 million in inventories. The decrease in accounts receivable was primarily due to lower gross sales in our IPS and Memory Solutions segments. Inventories and accounts payable and accrued expenses and other liabilities increased primarily to support our IPS business.

Net cash used for operating activities from continuing operations in the first quarter of 2023 resulted primarily from net loss of $3.6 million, adjusted for non-cash items of $33.1 million. Operating cash flows were adversely affected by a $114.3 million net change in our operating assets and liabilities primarily from the effects of an increase of $102.0 million in inventories and decreases of $54.7 million in accounts payable and accrued expenses and other liabilities and the payment of $73.7 million of contingent consideration related to our 2021 acquisition of the LED business, partially offset by the effect of a decrease of $123.1 million in accounts receivable. The decreases in accounts receivable and accounts payable and accrued expenses and other liabilities were primarily due to timing of receipts and payments. Inventories increased primarily to support our IPS business.

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Investing Activities: Net cash used for investing activities from continuing operations in the first quarter of 2024 consisted of capital expenditures and deposits on equipment. Net cash used for investing activities from continuing operations in the first quarter of 2023 consisted primarily of $210.3 million for the acquisition of Stratus Technologies and $8.0 million for capital expenditures and deposits on equipment.

Financing Activities: Net cash used for financing activities from continuing operations in the first quarter of 2024 consisted primarily of $14.4 million in repayments of debt and $13.1 million of payments to acquire our ordinary shares, partially offset by $3.5 million in proceeds from the issuance of ordinary shares from our equity plans. Net cash provided by financing activities from continuing operations in the first quarter of 2023 consisted primarily of $295.3 million in net proceeds from the issuance of a term loan and $3.9 million in proceeds from the issuance of ordinary shares, partially offset by a $28.1 million payment of contingent consideration related to our 2021 acquisition of the LED business, $4.7 million of payments to acquire our ordinary shares and a $3.6 million in principal repayment of the LED Purchase Price Note.

Critical Accounting Estimates

The preparation of these financial statements and related disclosures in conformity with U.S. GAAP 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; however, actual results could differ from those estimates. Our management believes our critical accounting estimates require management’s most difficult, subjective or complex judgments and are critical in the portrayal of our financial condition and results of operations.

Our discussion of critical accounting estimates is intended to supplement our summary of significant accounting policies so that readers will have greater insight into the uncertainties involved in applying our critical accounting policies and estimates. For a summary of our significant accounting policies, see “PART II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Significant Accounting Policies” of our Annual Report on Form 10-K for the fiscal year ended August 25, 2023. There have been no material changes to our significant accounting policies from those described in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023.

For a discussion of our critical accounting estimates, see “PART II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of our Annual Report on Form 10-K for the fiscal year ended August 25, 2023. There have been no material changes to our critical accounting estimates from those described in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Foreign Exchange 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, such as the Japanese Yen, Malaysian Ringgit and Chinese Renminbi. 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

34

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.

Based on our monetary assets and liabilities denominated in foreign currencies as of December 1, 2023 and August 25, 2023, 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 $2.7 million and $1.6 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 December 1, 2023, we had $537.2 million outstanding under the 2027 TLA. In addition, our Amended 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 $7.9 million per year.

We had cash, cash equivalents and investments of $553.4 million as of December 1, 2023. We maintain our cash and cash equivalents in deposit accounts, money market funds with various financial institutions and in short-duration fixed income securities. Due to the short-term nature of these instruments, we believe that we do not have any material exposure to changes in the fair value of these investments as a result of changes in interest rates. Increases or declines in interest rates would be expected to augment or reduce future interest income by an insignificant amount.

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 principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of December 1, 2023 to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

During the first quarter of fiscal 2024, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

35

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 “Item 1A. Risk Factors.”

Item 1A. Risk Factors

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 fiscal year ended August 25, 2023. You should carefully consider the risks and uncertainties and the other information in our Annual Report on Form 10-K and 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.

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 our Annual Report on Form 10-K for the fiscal year ended August 25, 2023.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities

On April 5, 2022, we announced that our Board of Directors approved a $75 million share repurchase authorization, under which we may repurchase our 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 our Board of Directors at any time. As of December 1, 2023, the remaining dollar value of shares that may be repurchased under this authorization was $4.5 million.

The following table sets forth information relating to repurchases of our equity securities during the three months ended December 1, 2023:

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
August 26, 2023 – September 29, 2023	—	$	—	—
September 30, 2023 - October 27, 2023	217,357	$	13.66	217,357
October 28, 2023 – December 1, 2023	608,376	$	14.96	608,376
	825,733	$	14.62	825,733	$	4,549,000

On January 8, 2024, the Audit Committee of the Board of Directors approved an additional $75.0 million share repurchase authorization, under which we may repurchase our 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 Audit Committee at any time and does not obligate the Company to acquire any amount of ordinary shares.

Item 3. Defaults Upon Senior Securities

None.

36

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the fiscal quarter ended December 1, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

Item 6. Exhibits

INDEX TO EXHIBITS

			Incorporated by Reference
Exhibit No.	Description	Filed Herewith	Form	File No.	Exhibit	Filing Date
2.1*	Letter Agreement, dated as of October 24, 2023, to that certain Stock Purchase Agreement, dated as of June 13, 2023, by and among SMART Modular Technologies (LX) S.à.r.l., a société à responsabilité limitée governed by the laws of Grand Duchy of Luxembourg, Lexar Europe B.V., a company organized under the laws of The Netherlands, Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People’s Republic of China, solely with respect to certain provisions therein, Shanghai Intelligent Memory Semiconductor Co., Ltd., a limited liability company governed by the laws of the People’s Republic of China, and, solely with respect to certain provisions therein, SMART Global Holdings, Inc., a Cayman Islands exempted company	X
3.1	Second Amended and Restated Memorandum and Articles of Association of SMART Global Holdings, Inc.		10-Q	001-38102	3.1	04/07/2020
4.1	Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Exchange Act of 1934		10-K	001-38102	4.1	10/25/2021
10.1**	Independent Director Compensation Policy		10-K	001-38102	10.13	10/20/2023
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 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 of the Sarbanes-Oxley Act of 2002	X
32.1***	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2***	Certification of Chief Financial Officer Pursuant to 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

37

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)	X

*	The schedules and exhibits to the Letter Agreement to the Stock Purchase Agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Registrant will furnish copies of such exhibits and schedules to the Securities and Exchange Commission upon request.
**	Constitutes a management contract or compensatory plan or arrangement.
***	The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

38

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: January 9, 2024	By:	/s/ Mark Adams
		Mark Adams
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: January 9, 2024	By:	/s/ Ken Rizvi
		Ken Rizvi
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

39

EX-2.1

EXHIBIT 2.1

STRICTLY CONFIDENTIAL

October 24, 2023

By email

To:

Lexar Europe B.V.

Shenzhen Longsys Electronics Co., Ltd.

c/o Shenzhen Longsys Electronics Co., Ltd.

Attention: Senior Vice President

Email: [***]

Copy:

[***]

[***]

[***]

Re: Project Bolt

Dear Sirs/Madams,

We refer to that certain Stock Purchase Agreement, dated as of June 13, 2023 (the “SPA”), by and among SMART Modular Technologies (LX) S.à. r.l., a société à responsabilité limitée governed by the laws of Grand Duchy of Luxembourg (“Seller”), Lexar Europe B.V., a company organized under the laws of The Netherlands (“Purchaser”), Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People’s Republic of China (“Parent”), solely for Article IV, Section 5.06 and Section 5.22 of the SPA, Shanghai Intelligent Memory Semiconductor Co., Ltd. (上海慧忆半导体有限公司), a limited liability company governed by the laws of the People’s Republic of China, and, solely for purposes of Section 3.01, Section 3.02, Section 3.03(b), Section 5.04, Section 5.06, Section 5.16, Section 5.17, Section 5.19, Section 5.20 and Section 11.17 of the SPA, SMART Global Holdings, Inc., a Cayman Islands exempted company limited by shares. Unless otherwise defined herein, capitalized terms used in this letter agreement shall have the meaning given to them in the SPA.

The undersigned parties hereby acknowledge and agree that:

1.The reference to “December 10, 2023” in Section 8.01(b) of the SPA is hereby replaced with “January 31, 2024.”

2.The first sentence of Section 5.18 of the SPA is hereby replaced in its entirety with the following sentence: “As promptly as reasonably practicable following Parent’s receipt of the Target Financial Statements (and in any event within sixty (60) days thereafter), Parent shall prepare and submit for approval to the Shenzhen Stock Exchange the Circular and notice of the Parent Shareholder Meeting.”

3.Section 5.23 of the SPA is hereby replaced in its entirety with the following: “The Transferred Subsidiaries will (a) retain any copies of the software code that is referred to as “WipTrack” and “Stage Coach,” a related database referred to as “Stable” and all included data, and any associated printed and electronic materials and associated documentation, as each item exists and is used by the Transferred Subsidiaries as of the Closing Date and is located on the Transferred Subsidiaries’ premises or on IT Systems located in Brazil as of the Closing Date, and (b) receive a license under the applicable Seller affiliates’ Intellectual Property Rights in the foregoing as set forth in Section 2.2(a) of the Intellectual Property License Agreement. For clarity, all Intellectual Property Rights in this software and documentation will remain with the applicable Seller affiliates

(excluding, for clarity, the Transferred Subsidiaries), and no such rights will be assigned or transferred to the Transferred Subsidiaries or to Purchaser or its Affiliates. The parties will revise the Intellectual Property License Agreement and the schedules to the Transition Services Agreement prior to Closing to reflect the foregoing.”

4.Exhibit C of the SPA is hereby replaced in its entirety with Exhibit A hereto.

5.For the avoidance of doubt, Parent shall not be responsible for any fees payable in connection with the audit of the Target Financial Statements that are attributable to the US GAAP and SOX audits of the Brazil financial statements, which fees, for the avoidance of doubt, shall be the sole responsibility of Seller and Seller Guarantor. Exhibit B hereto sets out a detailed break-down of such fees.

The provisions of the SPA shall, save for the provisions expressly set out in this letter agreement, continue in full force and effect, and shall be read and construed as one document with this letter agreement. Section 5.04 (Confidentiality) and Article XI (Miscellaneous) of the SPA shall apply mutatis mutandis to this letter agreement.

[Signature Pages Follow]

By signing this letter agreement in the space below, each party hereto hereby indicates its consent to the foregoing agreements and understandings set forth herein as of the date first written above.

SMART Modular Technologies (LX) S.à r.l.

By: /s/ Anne Kuykendall

Name: Anne Kuykendall

Title: Class A Manager

By: /s/ Thomas Probst

Name: Thomas Probst

Title: Class B Manager

SMART Global Holdings, Inc.

By: /s/ Anne Kuykendall

Name: Anne Kuykendall

Title: Senior Vice President, Secretary and Chief Legal Officer

[Signature Page to Side Letter to SPA]

ACKNOWLEDGED AND AGREED:

Lexar Europe B.V.

By: /s/ Christopher H. Chang

Name: Christopher H. Chang

Title: Authorized Person

Shenzhen Longsys Electronics Co., Ltd.

By: /s/ Christopher H. Chang

Name: Christopher H. Chang

Title: Authorized Person

Shanghai Intelligent Memory Semiconductor Co., Ltd.

By: /s/ Christopher H. Chang

Name: Christopher H. Chang

Title: Authorized Person

[Signature Page to Side Letter to SPA]

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: January 9, 2024	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: January 9, 2024	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 ended December 1, 2023 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 results of operations of the Company.

Date: January 9, 2024	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 ended December 1, 2023 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 results of operations of the Company.

Date: January 9, 2024	By:	/s/ Ken Rizvi
		Ken Rizvi
		Senior Vice President and Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Dec. 01, 2023	Jan. 02, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 01, 2023
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		51,830,117
Entity Central Index Key	0001616533
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
Current Fiscal Year End Date	--08-30

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Assets
Cash and cash equivalents	$ 529,059	$ 365,563
Short-term investments	24,385	25,251
Accounts receivable, net	170,590	219,247
Inventories	208,441	174,977
Other current assets	54,373	51,790
Current assets of discontinued operations	0	70,574
Total current assets	986,848	907,402
Property and equipment, net	112,328	118,734
Operating lease right-of-use assets	64,637	68,444
Intangible assets, net	150,283	160,185
Goodwill	161,958	161,958
Deferred tax assets	74,365	74,085
Other noncurrent assets	80,446	15,150
Total assets	1,630,865	1,505,958
Liabilities and Equity
Accounts payable and accrued expenses	219,082	182,035
Current debt	28,511	35,618
Deferred revenue	39,096	48,096
Acquisition-related contingent consideration	50,000	50,000
Other current liabilities	32,115	32,731
Current liabilities of discontinued operations	0	77,770
Total current liabilities	368,804	426,250
Long-term debt	748,299	754,820
Noncurrent operating lease liabilities	64,407	66,407
Other noncurrent liabilities	33,346	29,248
Total liabilities	1,214,856	1,276,725
Commitments and contingencies
SMART Global Holdings shareholders’ equity:
Ordinary shares, $0.03 par value; authorized 200,000 shares; 58,447 shares issued and 51,906 outstanding as of December 1, 2023; 57,542 shares issued and 51,901 outstanding as of August 25, 2023	1,753	1,726
Additional paid-in capital	491,145	476,703
Retained earnings	62,536	82,457
Treasury shares, 6,541 and 5,641 shares held as of December 1, 2023 and August 25, 2023, respectively	(145,577)	(132,447)
Accumulated other comprehensive income (loss)	303	(205,964)
Total SGH shareholders’ equity	410,160	222,475
Noncontrolling interest in subsidiary	5,849	6,758
Total equity	416,009	229,233
Total liabilities and equity	$ 1,630,865	$ 1,505,958

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 01, 2023	Aug. 25, 2023
Statement of Financial Position [Abstract]
Ordinary shares, par value (in usd per share)	$ 0.03	$ 0.03
Ordinary shares, authorized (in shares)	200,000	200,000
Ordinary shares, issued (in shares)	58,447	57,542
Ordinary shares, outstanding (in shares)	51,906	51,901
Treasury shares (in shares)	6,541	5,641

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Total net sales	$ 274,247	$ 391,797
Total cost of sales	191,397	279,699
Gross profit	82,850	112,098
Operating expenses:
Research and development	21,389	24,072
Selling, general and administrative	57,217	67,708
Change in fair value of contingent consideration	0	3,700
Other operating (income) expense	2,939	1,771
Total operating expenses	81,545	97,251
Operating income (loss)	1,305	14,847
Non-operating (income) expense:
Interest expense, net	9,559	8,494
Other non-operating (income) expense	(576)	(1,362)
Total non-operating (income) expense	8,983	7,132
Income (loss) before taxes	(7,678)	7,715
Income tax provision (benefit)	3,534	11,322
Net income (loss) from continuing operations	(11,212)	(3,607)
Net income (loss) from discontinued operations	(8,148)	8,931
Net income (loss)	(19,360)	5,324
Net income attributable to noncontrolling interest	561	332
Net income (loss) attributable to SGH	$ (19,921)	$ 4,992
Basic earnings (loss) per share:
Continuing Operations (in usd per share)	$ (0.23)	$ (0.08)
Discontinued Operations (in usd per share)	(0.15)	0.18
Basic (in usd per share)	(0.38)	0.10
Diluted earnings (loss) per share:
Continuing Operations (in usd per share)	(0.23)	(0.08)
Discontinued Operations (in usd per share)	(0.15)	0.18
Diluted (in usd per share)	$ (0.38)	$ 0.10
Shares used in per share calculations:
Basic (in shares)	52,068	48,962
Diluted (in shares)	52,068	48,962
Products
Total net sales	$ 206,430	$ 316,508
Total cost of sales	163,413	251,291
Services
Total net sales	67,817	75,289
Total cost of sales	$ 27,984	$ 28,408

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (19,360)	$ 5,324
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment	(6,142)	(2,008)
Cumulative translation adjustment reclassified to net income	212,397	0
Gains (losses) on derivative instruments	0	20
Gains (losses) on investments	12	(7)
Comprehensive income (loss)	186,907	3,329
Comprehensive income attributable to noncontrolling interest	561	332
Comprehensive income (loss) attributable to SGH	$ 186,346	$ 2,997

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Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Revision of Prior Period, Accounting Standards Update, Adjustment	Ordinary shares	Additional Paid-in Capital	Additional Paid-in Capital Revision of Prior Period, Accounting Standards Update, Adjustment	Retained Earnings	Retained Earnings Revision of Prior Period, Accounting Standards Update, Adjustment	Treasury Shares	Accumulated Other Comprehensive Income (Loss)	Total SGH Shareholders’ Equity	Total SGH Shareholders’ Equity Revision of Prior Period, Accounting Standards Update, Adjustment	Non- controlling Interest in Subsidiary
Common stock, beginning balance (in shares) at Aug. 26, 2022			52,880
Beginning balance at Aug. 26, 2022	$ 378,546		$ 1,586	$ 448,112		$ 251,344		$ (107,776)	$ (221,655)	$ 371,611		$ 6,935
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	5,324					4,992				4,992		332
Other comprehensive income (loss)	(1,995)								(1,995)	(1,995)
Shares issued under equity plans (in shares)			1,060
Shares issued under equity plans	3,942		$ 32	3,910						3,942
Repurchase of ordinary shares	(4,659)							(4,659)		(4,659)
Share-based compensation expense	10,412			10,412						10,412
Common stock, ending balance (in shares) at Nov. 25, 2022			53,940
Ending balance at Nov. 25, 2022	$ 359,387	$ (32,183)	$ 1,618	411,612	$ (50,822)	274,975	$ 18,639	(112,435)	(223,650)	352,120	$ (32,183)	7,267
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2020-06
Common stock, beginning balance (in shares) at Aug. 25, 2023	51,901		57,542
Beginning balance at Aug. 25, 2023	$ 229,233		$ 1,726	476,703		82,457		(132,447)	(205,964)	222,475		6,758
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(19,360)					(19,921)				(19,921)		561
Other comprehensive income (loss)	206,267								206,267	206,267
Shares issued under equity plans (in shares)			905
Shares issued under equity plans	3,455		$ 27	3,428						3,455
Repurchase of ordinary shares	(13,130)							(13,130)		(13,130)
Share-based compensation expense	11,014			11,014						11,014
Distribution to noncontrolling interest	$ (1,470)											(1,470)
Common stock, ending balance (in shares) at Dec. 01, 2023	51,906		58,447
Ending balance at Dec. 01, 2023	$ 416,009		$ 1,753	$ 491,145		$ 62,536		$ (145,577)	$ 303	$ 410,160		$ 5,849

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Feb. 24, 2023	Nov. 25, 2022
Cash flows from operating activities
Net income (loss)	$ (19,360)		$ 5,324
Net income (loss) from discontinued operations	(8,148)		8,931
Net income (loss) from continuing operations	(11,212)		(3,607)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used for) operating activities:
Depreciation expense and amortization of intangible assets	17,654		17,049
Amortization of debt discount and issuance costs	1,042		1,069
Share-based compensation expense	10,970		9,981
Change in fair value of contingent consideration	0		3,700
Loss (gain) on extinguishment of debt	0	$ 16,700	(767)
Deferred income taxes, net	(282)		1,718
Other	664		357
Changes in operating assets and liabilities:
Accounts receivable	48,658		123,097
Inventories	(33,464)		(102,047)
Other assets	2,102		(6,828)
Accounts payable and accrued expenses and other liabilities	23,581		(54,749)
Payment of acquisition-related contingent consideration	0		(73,724)
Net cash provided by (used for) operating activities from continuing operations	59,713		(84,751)
Net cash provided by (used for) operating activities from discontinued operations	(28,235)		10,766
Net cash provided by (used for) operating activities	31,478		(73,985)
Cash flows from investing activities
Capital expenditures and deposits on equipment	(4,648)		(7,991)
Proceeds from maturities of investment securities	9,665		0
Purchases of held-to-maturity investment securities	(8,469)		0
Acquisition of business, net of cash acquired	0		(210,273)
Other	(188)		(1,759)
Net cash used for investing activities from continuing operations	(3,640)		(220,023)
Net cash provided by (used for) investing activities from discontinued operations	118,938		(3,620)
Net cash provided by (used for) investing activities	115,298		(223,643)
Cash flows from financing activities
Proceeds from debt	0		295,287
Proceeds from issuance of ordinary shares	3,455		3,942
Payment of acquisition-related contingent consideration	0		(28,100)
Payments to acquire ordinary shares	(13,130)		(4,659)
Repayments of debt	(14,423)		(3,606)
Distribution to noncontrolling interest	(1,470)		0
Other	(582)		(788)
Net cash provided by (used for) financing activities from continuing operations	(26,150)		262,076
Net cash used for financing activities from discontinued operations	(606)		(97)
Net cash provided by (used for) financing activities	(26,756)		261,979
Effect of changes in currency exchange rates	(1,025)		205
Net increase (decrease) in cash and cash equivalents	118,995		(35,444)
Cash and cash equivalents at beginning of period	410,064	327,621	363,065
Cash and cash equivalents at end of period	529,059		327,621
Continuing operations
Cash flows from financing activities
Cash and cash equivalents at beginning of period		284,398
Cash and cash equivalents at end of period	529,059		284,398
Discontinued operations
Cash flows from financing activities
Cash and cash equivalents at beginning of period		$ 43,223
Cash and cash equivalents at end of period	$ 0		$ 43,223

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Significant Accounting Policies

3 Months Ended

Dec. 01, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of SMART Global Holdings, Inc. and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023 and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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 fiscal year ended August 25, 2023.

Presentation of SMART Brazil as Discontinued Operations: On June 13, 2023, we entered into an agreement to divest of an 81% interest in SMART Modular Technologies do Brasil – Indústria e Comercio de Componentes Ltda. (“SMART Brazil”). We concluded that, as of August 25, 2023, (i) the net assets of SMART Brazil met the criteria for classification as held for sale and (ii) the proposed sale represented a strategic shift that was expected to have a major effect on our operations and financial results. On November 29, 2023, we completed the divestiture. The balance sheets, results of operations and cash flows of SMART Brazil have been presented as discontinued operations for all periods presented. SMART Brazil was previously included within our Memory Solutions segment. See “Divestiture of SMART Brazil.”

Unless otherwise noted, amounts and discussion within these notes to the consolidated financial statements relate to our continuing operations. Prior period comparative information has been conformed to current period presentation for continuing operations.

Reclassifications: 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 year 2024 and 2023 contain 53 weeks and 52 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated.

Financial information for our subsidiaries in Brazil was included in our consolidated financial statements on a one-month lag because their fiscal years ended on July 31 of each year. In connection with the completion of the divestiture of an 81% interest in SMART Brazil, we ceased consolidating the operations of SMART Brazil in our financial statements as of the November 29, 2023 disposal date. As a result, financial information for SMART Brazil in the first quarter of 2024 includes the four-month period from August 1, 2023 to November 29, 2023.

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Divestiture of SMART Brazil

3 Months Ended

Dec. 01, 2023

Discontinued Operations and Disposal Groups [Abstract]

Divestiture of SMART Brazil

Divestiture of SMART Brazil

Overview of Transaction

On November 29, 2023, we completed the previously announced divestiture of SMART Brazil pursuant to the terms of that certain Stock Purchase Agreement (the “Brazil Purchase Agreement”), by and among SMART Modular Technologies (LX) S.à r.l., a société à responsabilité limitée governed by the laws of Grand Duchy of Luxembourg and a wholly owned subsidiary of SGH (the “Brazil Seller”), Lexar Europe B.V., a company organized under the laws of The Netherlands (the “Brazil Purchaser”), Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People’s Republic of China (“Longsys”), solely with respect to certain provisions therein, Shanghai Intelligent Memory Semiconductor Co., Ltd., a limited liability company governed by the laws of the People’s Republic of China and, solely with respect to certain provisions therein, SGH.

Pursuant to the Brazil Purchase Agreement, Brazil Seller sold to Brazil Purchaser, and Brazil Purchaser purchased from Brazil Seller, 81% of Brazil Seller’s right, title and interest in and to the outstanding quotas of SMART Brazil, with Brazil Seller retaining a 19% interest in SMART Brazil (the “Retained Interest”) (the “Brazil Divestiture”).

At the closing of the Brazil Divestiture, Brazil Purchaser paid to Brazil Seller (based on a total enterprise value of $205 million for SMART Brazil) an upfront cash purchase price, subject to certain customary adjustments as set forth in the Brazil Purchase Agreement. In addition, pursuant to the Brazil Purchase Agreement, we have a right to receive, and Brazil Purchaser is obligated to pay, (i) a deferred payment due eighteen months following the closing and (ii) subject to and at the time of exercise of the Put/Call Option (as defined below), an additional deferred cash adjustment equal to 19% of the amount of SMART Brazil’s net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement).

Put/Call Option: Pursuant to the Brazil Purchase Agreement, at the closing, SMART Brazil, Brazil Seller, Brazil Purchaser and Longsys entered into a Quotaholders Agreement, which provides Brazil Seller with a put option to sell the Retained Interest in SMART Brazil to Brazil Purchaser (the “Put Option”) during three exercise windows following its fiscal years ending December 31, 2026, December 31, 2027 or December 31, 2028 (the “Exercise Windows”), with such Exercise Windows beginning on June 15, 2027 and ending on July 15, 2027, beginning on June 15, 2028 and ending on July 15, 2028 and beginning on June 15, 2029 and ending on July 15, 2029, respectively. A call option has also been granted to Brazil Purchaser to require Brazil Seller to sell the Retained Interest to Brazil Purchaser during the Exercise Windows (together with the Put Option, the “Put/Call Option”). The price for the Put/Call Option is based on a 100% enterprise value of 7.5x net income for SMART Brazil for the preceding fiscal year at the time of exercise.

Consideration: The following is a summary of total consideration in exchange for the sale of an 81% interest in SMART Brazil:

Cash received at closing (1)	$	164,487
Post-closing adjustment for net cash and net working capital (2)	451
Deferred payment (3)	25,433
Deferred cash adjustment (4)	3,721
Total consideration	$	194,092

(1)Includes $26.8 million of cash received at closing for an estimated amount of net cash and an estimated net working capital amount (in excess of a minimum target amount) as of the closing.

(2)Represents the post-closing adjustment for net cash and net working capital, which is expected to be received in the second or third quarter of 2024 upon completion of the review of the final net cash and final working capital amounts. The post closing adjustment is included in other current assets in the accompanying consolidated balance sheet.

(3)Represents the fair value of the deferred payment, comprised of a notional amount of $28.4 million, discounted at 7.5% and due May 2025. The deferred payment is included in other noncurrent assets in the accompanying consolidated balance sheet.

(4)Represents the fair value of the deferred cash adjustment, comprised of a notional amount of $4.8 million, discounted at 7.5%, equal to 19% of the amount of SMART Brazil’s net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement). The deferred cash adjustment is accounted for as a derivative financial instrument, is due at the time of exercise of the Put/Call Option and is included in other noncurrent assets in the accompanying consolidated balance sheet.

Presentation of SMART Brazil Operations

As of August 25, 2023, we concluded that the net assets of SMART Brazil met the criteria for classification as held for sale. In addition, the divestiture of SMART Brazil is expected to have a major effect on our operations and financial results. As a result, we have presented the results of operations, cash flows and financial position of SMART Brazil as discontinued operations in the accompanying consolidated financial statements and notes for all periods presented.

A disposal group classified as held for sale is measured at the lower of its carrying amount or fair value less costs to sell. Accordingly, we evaluated the carrying value of the net assets of SMART Brazil (including $206.3 million recognized within shareholders’ equity related to the cumulative translation adjustment from SMART Brazil), estimated costs to sell and expected proceeds and concluded the net assets were impaired as of August 25, 2023. As a result, we recognized an impairment charge of $153.0 million in the fourth quarter of 2023 to write down the carrying value of the net assets of SMART Brazil. In addition, we concluded that the outside basis of SMART Brazil inclusive of any withholding taxes should be recognized upon the classification as held for sale as of August 25, 2023. Accordingly, we recognized withholding taxes on the expected capital gain and deferred tax liabilities of $28.6 million in 2023.

Assets and liabilities of SMART Brazil as of the November 29, 2023 disposal date and as of August 25, 2023 were as follows:

As of	November 29, 2023		August 25, 2023
Cash and cash equivalents	$	40,927	$	44,501
Accounts receivable, net	16,482		17,055
Inventories	26,103		25,877
Other current assets	17,800		17,732
Total current assets	101,312		105,165
Property and equipment, net	66,870		58,321
Operating lease right-of-use assets	6,912		5,213
Goodwill	19,856		20,668
Other noncurrent assets	27,490		34,243
Total assets	222,440		223,610
Impairment of SMART Brazil assets	(153,036)		(153,036)
Total assets, net of impairment	$	69,404	$	70,574
Accounts payable and accrued expenses	$	20,576	$	25,867
Current debt	3,872		4,006
Other current liabilities	1,023		1,030
Total current liabilities	25,471		30,903
Long-term debt	11,938		13,689
Noncurrent operating lease liabilities	5,686		4,614
Noncurrent deferred tax liabilities	28,564		28,564
Other noncurrent liabilities	93		$	—
Total liabilities	$	71,752	$	77,770
Net assets of discontinued operations	$	(2,348)	$	(7,196)
Reported as:
Current assets of discontinued operations			$	70,574
Current liabilities of discontinued operations			77,770
Net assets of discontinued operations			$	(7,196)

The following table presents the results of operations for SMART Brazil:

	Three Months Ended
	December 1, 2023		November 25, 2022
Net sales	$	55,159	$	73,681
Cost of sales	50,560		67,369
Gross profit	4,599		6,312
Operating expenses:
Research and development	157		(16)
Selling, general and administrative	5,421		3,314
Other operating (income) expense	64		270
Total operating expenses	5,642		3,568
Operating income (loss)	(1,043)		2,744
Non-operating (income) expense:
Loss from divestiture of 81% interest in SMART Brazil	10,888		—
Interest (income) expense, net	(1,262)		(457)
Other non-operating (income) expense	138		702
Total non-operating (income) expense	9,764		245
Income (loss) before taxes	(10,807)		2,499
Income tax provision (benefit)	(2,659)		(6,432)
Net income (loss) from discontinued operations	$	(8,148)	$	8,931

Loss from Divestiture of SMART Brazil

The following table presents the calculation of the loss from the divestiture of an 81% interest in SMART Brazil:

Proceeds, less costs to sell and other expenses:
Consideration	$	194,092
Costs to sell and other expenses	(4,150)
	189,942
Basis in 81% interest in SMART Brazil:
Net assets of SMART Brazil	145,194
Cumulative translation adjustment (1)	212,397
	357,591
Gain on revalue of 19% Retained Interest in SMART Brazil (2)	3,725
Pre-tax loss on divestiture of 81% interest in SMART Brazil	163,924
Income tax provision	26,580
Loss on divestiture of 81% interest in SMART Brazil	$	190,504

(1)The sale of an 81% interest in SMART Brazil resulted in the de-consolidation of SMART Brazil and, accordingly, the release of the related cumulative translation adjustment. Included in the basis calculation above is the balance of cumulative translation adjustment for SMART Brazil as of the closing. The release of the cumulative translation adjustment is included in net income (loss) from discontinued operations in the accompanying consolidated statement of operations.

(2)In connection with the transaction, we revalued our 19% Retained Interest in SMART Brazil based on the implied value for 100% of SMART Brazil, adjusted for lack of control premium. As of the end of the first quarter of 2024, the carrying value of our remaining 19% interest in SMART Brazil was $37.8 million.

Recognition Periods: The loss from the divestiture of an 81% interest in SMART Brazil was recognized as follows:

	Three Months Ended
	December 1, 2023		August 25, 2023		Total
Pre-tax loss on divestiture of 81% interest in SMART Brazil	$	10,888	$	153,036	$	163,924
Income tax provision (benefit)	(1,984)		28,564		26,580
Loss on divestiture of 81% interest in SMART Brazil	$	8,904	$	181,600	$	190,504

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Recently Adopted Accounting Standards

3 Months Ended

Dec. 01, 2023

Accounting Changes and Error Corrections [Abstract]

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, and requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU was effective for us in the first quarter of 2023 and permitted the use of either the modified retrospective or fully retrospective method of transition.

We adopted ASU 2020-06 in the first quarter of 2023 under the modified retrospective method. Upon adoption, the previously separated equity component and associated issuance costs for our 2.25% convertible senior notes due 2026 were reclassified from additional paid-in capital to long-term debt, thereby eliminating future amortization of the debt discount as interest expense. The following table summarizes the effects of adopting ASU 2020-06:

	Ending Balance as of August 26, 2022		Adoption of ASU 2020-06		Beginning Balance as of August 27, 2022
Long-term debt	$	575,682	$	32,183	$	607,865
Additional paid-in capital	448,112		(50,822)		397,290
Retained earnings	251,344		18,639		269,983

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Segment Reporting Disclosures, which will require an entity to provide more detailed information about its reportable segment expenses that are included within management’s measurement of profit and loss and will require certain annual disclosures to be provided on an interim basis. The amendments in this ASU are effective for us in 2025 for annual reporting and in 2026 for interim reporting, with early adoption permitted beginning in 2024, and is required to be applied using the full retrospective method of transition. We are evaluating the timing and effects of adoption of this ASU on the Company’s segment disclosures.

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Business Acquisition

3 Months Ended

Dec. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Business Acquisition

Business Acquisition

Stratus Technologies

On August 29, 2022 (the “Stratus Acquisition Date”), we completed the acquisition of Storm Private Holdings I Ltd., a Cayman Islands exempted company (“Stratus Holding Company” and together with its subsidiaries, “Stratus Technologies”), pursuant to the terms of that certain Share Purchase Agreement (the “Stratus Purchase Agreement”), dated as of June 28, 2022, by and among SGH, Stratus Holding Company and Storm Private Investments LP, a Cayman Islands exempted limited partnership (the “Stratus Seller”). Pursuant to the Stratus Purchase Agreement, among other matters, the Stratus Seller sold to SGH, and SGH purchased from the Stratus Seller, all of the Stratus Seller’s right, title and interest in and to the outstanding equity securities of Stratus Holding Company.

Stratus Technologies is a global leader in simplified, protected and autonomous computing platforms and services in the data center and at the Edge. For more than 40 years, Stratus Technologies has provided high-availability fault-tolerant computing, allowing Fortune 500 companies and small-to-medium sized businesses to securely and remotely turn data into actionable intelligence at the Edge, data center and cloud - driving uptime and efficiency. Stratus Technologies operates as part of SGH’s Intelligent Platform Solutions (“IPS”) segment and further enhances SGH’s growth and diversification strategy and complements and expands SGH’s IPS business in data center and edge environments.

Purchase Price: At the closing of the transaction, we paid the Stratus Seller a cash purchase price of $225 million, subject to certain adjustments. In addition, the Stratus Seller has the right to receive, and we are obligated to pay, contingent consideration of up to $50 million (the “Stratus Earnout”) based on the gross profit performance of Stratus Technologies during the first full 12 fiscal months following the closing of the acquisition. Pursuant to the terms of the Stratus Purchase Agreement, we had the option to settle the Stratus Earnout amount owed to the Stratus Seller in cash, ordinary shares of SGH, or a mix of cash and ordinary shares of SGH. On June 28, 2023, we provided notice to the Stratus Seller of our election to settle the Stratus Earnout in cash.

Based on the gross profit achieved by Stratus Technologies during the 12 fiscal months following the closing of the acquisition, as of December 1, 2023, current liabilities included $50.0 million for the amount payable in connection with the Stratus Earnout. In December 2023, subsequent to the end of our first quarter of 2024, we paid in full the $50.0 million related to the Stratus Earnout.

Cash paid at closing was utilized, in part, to settle the outstanding debt of Stratus Technologies as of the closing of the transaction and was recognized as a component of consideration transferred. As a result, the assets acquired and liabilities assumed do not include an assumed liability for the outstanding debt of Stratus Technologies. The purchase price for Stratus Technologies was as follows:

Cash	$	225,000
Additional payment for net working capital adjustment (1)	17,246
Fair value of Stratus Earnout	20,800
	$	263,046

(1)Includes $14.4 million paid at closing and $2.8 million paid in the second quarter of 2023 upon completion of the review of the working capital assets acquired and liabilities assumed.

Contingent Consideration: The Stratus Earnout was accounted for as contingent consideration. As of the Stratus Acquisition Date, the fair value of the Stratus Earnout was estimated to be $20.8 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, including forecasted gross profit, comparable company volatility, discount rate and cost of debt. The fair value of the Stratus Earnout was estimated based on the Company’s evaluation of the probability and amount of the Stratus Earnout to be achieved based on the expected gross profit of Stratus Technologies, using an estimated gross profit volatility of 33.4% and a discount rate of 7.3% as of the Stratus Acquisition Date.

Valuation: The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed as follows:

Cash and cash equivalents	$	29,174
Accounts receivable	26,685
Inventories	10,890
Other current assets	6,536
Property and equipment	7,292
Operating lease right-of-use assets	9,216
Intangible assets	123,700
Goodwill	125,929
Other noncurrent assets	11,661
Accounts payable and accrued expenses	(32,656)
Other current liabilities	(36,723)
Noncurrent operating lease liabilities	(7,067)
Other noncurrent liabilities	(11,591)
Total net assets acquired	$	263,046

The goodwill arising from the acquisition of Stratus Technologies was assigned to our IPS segment. None of the goodwill recognized is deductible for income tax purposes.

The fair values and useful lives of identifiable intangible assets were as follows:

	Amount		Estimated useful life (in years)
Technology	$	82,000	5
Customer relationships	27,800		8
Trademarks/trade names	10,000		9
In-process research and development	3,900		N/A
	$	123,700

•Technology intangible assets were valued using the multi-period excess earnings method based on the discounted cash flow and technology obsolescence rate. Discounted cash flow requires the use of significant unobservable inputs, including projected revenue, expenses, capital expenditures and other costs and discount rates calculated based on the cost of equity adjusted for various risks, including the size of the acquiree, industry risk and other risk factors.

•Customer relationship intangible assets were valued using the multi-period excess earnings method, which is the present value of the projected cash flows that are expected to be generated by the existing intangible assets after reduction by an estimated fair rate of return on contributory assets required to generate the customer relationship revenues. Key assumptions included discounted cash flow, estimated life cycle and customer attrition rates.

•Trademark/trade name intangible assets were valued using the relief from royalty method, which is the discounted cash flow savings accruing to the owner by virtue of the fact that the owner is not required to license the trademarks/trade names from a third party. Key assumptions included attributable revenue expected from the trademarks/trade names, royalty rates and assumed asset life.

•In-process research and development (“IPR&D”) relates to next generation fault tolerant architecture. IPR&D is indefinite-lived and will be reviewed for impairment at least annually. Amortization will commence upon completion of research and development efforts. IPR&D was valued based on discounted cash flow, which requires the use of significant unobservable inputs, including projected revenue, expenses, capital expenditures and other costs.

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Cash and Investments

3 Months Ended

Dec. 01, 2023

Investments, Debt and Equity Securities [Abstract]

Cash and Investments

Cash and Investments

As of December 1, 2023 and August 25, 2023, all of our debt securities, the fair values of which approximated their carrying values, were classified as held to maturity. Cash, cash equivalents and investments were as follows:

	As of December 1, 2023				As of August 25, 2023
	Cash and Cash Equivalents		Short-term Investments		Cash and Cash Equivalents		Short-term Investments
Cash and cash equivalents	$	443,245	$	—	$	321,937	$	—
Level 1:
Money market funds	70,814		—		43,626		—
U.S. Treasury securities	—		24,385		—		25,251
Level 2:
Time deposits	15,000		—		—		—
	$	529,059	$	24,385	$	365,563	$	25,251

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Accounts Receivable

3 Months Ended

Dec. 01, 2023

Receivables [Abstract]

Accounts Receivable

Accounts Receivable

In the third quarter of 2023, we entered into a trade accounts receivable sale program with a third-party financial institution to sell certain of our trade accounts receivable on a non-recourse basis pursuant to a factoring arrangement. This program allows us to sell certain of our trade accounts receivables up to $60 million. There were no trade accounts receivable sold during the first quarter of 2024.

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Inventories

3 Months Ended

Dec. 01, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

As of	December 1, 2023		August 25, 2023
Raw materials	$	97,853	$	90,085
Work in process	57,192		24,485
Finished goods	53,396		60,407
	$	208,441	$	174,977

As of December 1, 2023 and August 25, 2023, 8% of total inventories were owned and held under our logistics services.

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Property and Equipment

3 Months Ended

Dec. 01, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

As of	December 1, 2023		August 25, 2023
Equipment	$	87,528	$	86,429
Buildings and building improvements	67,683		69,325
Furniture, fixtures and software	43,082		44,121
Land	16,126		16,126
	214,419		216,001
Accumulated depreciation	(102,091)		(97,267)
	$	112,328	$	118,734

Depreciation expense for property and equipment was $7.5 million and $6.1 million in the first quarter of 2024 and 2023, respectively.

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Intangible Assets and Goodwill

3 Months Ended

Dec. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

	As of December 1, 2023				As of August 25, 2023
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Technology	$	141,491	$	(40,698)	$	141,201	$	(34,569)
Customer relationships	72,500		(36,996)		72,500		(33,990)
Trademarks/trade names	28,300		(14,314)		28,300		(13,257)
	$	242,291	$	(92,008)	$	242,001	$	(81,816)
Goodwill by segment:
Intelligent Platform Solutions	$	147,238			$	147,238
Memory Solutions	14,720				14,720
	$	161,958			$	161,958

In the first quarter of 2024 and 2023, we capitalized $0.3 million and $126.4 million, respectively, for intangible assets with weighted-average useful lives of 19.0 years and 6.0 years, respectively. Amortization expense for intangible assets was $10.2 million and $10.9 million in the first quarter of 2024 and 2023, respectively. Amortization expense is expected to be $29.8 million for the remainder of 2024, $35.6 million for 2025, $30.2 million for 2026, $29.5 million for 2027, $13.9 million for 2028 and $11.2 million for 2029 and thereafter.

Impairment of Penguin Edge Goodwill

During the second quarter of 2023, we initiated a plan within our IPS segment pursuant to which we intend to wind down manufacturing and discontinue the sale of legacy products offered through our Penguin Edge business by approximately the end of calendar 2024. In connection therewith, we performed a quantitative assessment of the fair value of goodwill using an income approach with assumptions that are considered Level 3 measurements and concluded that the carrying value of the Penguin Edge reporting unit goodwill exceeded its fair value. The fair value of the Penguin Edge reporting unit was determined primarily by discounting estimated future cash flows, which were determined based on revenue and expense assumptions over the next two years, at a weighted-average cost of capital of 14.5%. As a result, we recorded aggregate charges of $19.1 million in 2023 to impair the carrying value of Penguin Edge goodwill.

We concluded that long-lived assets other than goodwill, primarily consisting of customer relationship intangible assets, had fair values in excess of their carrying amounts and, accordingly, recorded no impairments of such assets. These assets will continue to be amortized over their remaining useful lives through the date of our anticipated completion of wind-down activities.

At each reporting date through the end of the wind-down period, we will reassess the estimated remaining cash flows of the Penguin Edge business. We currently anticipate that the remaining goodwill of the Penguin Edge reporting unit of $16.1 million as of the end of the first quarter of 2024 may become further impaired in future periods.

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Accounts Payable and Accrued Expenses

3 Months Ended

Dec. 01, 2023

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

As of	December 1, 2023		August 25, 2023
Accounts payable (1)	$	181,791	$	134,980
Salaries, wages and benefits	19,666		27,665
Income and other taxes	13,317		13,370
Other	4,308		6,020
	$	219,082	$	182,035

(1)Includes accounts payable for property and equipment of $1.7 million and $5.2 million as of December 1, 2023 and August 25, 2023, respectively.

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Debt

3 Months Ended

Dec. 01, 2023

Debt Disclosure [Abstract]

Debt

Debt

As of	December 1, 2023		August 25, 2023
Amended 2027 TLA	$	531,019	$	544,943
2029 Notes	147,034		146,886
2026 Notes	98,757		98,609
	776,810		790,438
Less current debt	(28,511)		(35,618)
Long-term debt	$	748,299	$	754,820

Credit Facility

As of December 1, 2023, there was $537.2 million of principal amount outstanding under the Amended 2027 TLA, unamortized issuance costs were $6.2 million and the effective interest rate was 8.51%. As of December 1, 2023, there were no amounts outstanding under the 2027 Revolver and unamortized issuance costs were $2.9 million.

Convertible Senior Notes

Convertible Senior Notes Exchange

On January 18, 2023, SGH entered into separate, privately negotiated exchange agreements with a limited number of holders of its 2.25% Convertible Senior Notes due 2026 (the “2026 Notes”) to exchange $150.0 million principal amount of the 2026 Notes for (i) $150.0 million in aggregate principal amount of new 2.00% Convertible Senior Notes due 2029 (the “2029 Notes”) and (ii) an aggregate of $15.6 million in cash, with such cash payment representing $14.1 million of premium paid for the 2026 Notes in excess of par value and $1.5 million of accrued and unpaid interest on the 2026 Notes (collectively, the “Exchange Transactions”). The 2029 Notes were issued pursuant to, and are governed by, an indenture (the “2029 Indenture”), dated as of January 23, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee.

Transactions involving contemporaneous exchanges between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation are accounted for as debt extinguishments if the debt instruments have substantially different terms. An exchange is deemed to have substantially different terms if:

•The present value of the remaining cash flows of the old instrument differs by more than 10% of the present value of the cash flows of the new instrument, or

•The change in the fair value of the conversion option immediately before and after the exchange is greater than 10% of the carrying value of the debt instrument immediately prior to the exchange.

We concluded that the exchanged 2026 Notes and the 2029 Notes had substantially different terms and, accordingly, accounted for the Exchange Transactions as the extinguishment of the 2026 Notes and the issuance of the 2029 Notes. As a result, we recognized an extinguishment loss in the second quarter of 2023, included in other non-operating expense, of $16.7 million consisting of $14.1 million of premium paid to extinguish the 2026 Notes and $2.5 million for the write-off of unamortized issuance costs.

Convertible Senior Notes Interest

Unamortized debt discount and issuance costs are amortized over the terms of our 2026 Notes and 2029 Notes using the effective interest method. As of December 1, 2023 and August 25, 2023, the effective interest rate for our 2026 Notes was 2.83%. As of December 1, 2023 and August 25, 2023, the effective interest rate for our 2029 Notes was 2.40%. Aggregate

interest expense for our convertible notes consisted of contractual stated interest and amortization of discount and issuance costs and included the following:

	Three Months Ended
	December 1, 2023		November 25, 2022
Contractual stated interest	$	1,400	$	1,391
Amortization of discount and issuance costs	297		337
	$	1,697	$	1,728

As of August 26, 2022, the carrying amount of the equity components of the 2026 Notes, which was included in additional paid-in capital, was $50.8 million. As of the beginning of 2023, we adopted ASU 2020-06. In connection therewith, we reclassified $32.2 million from additional paid-in-capital to long-term debt and $18.6 million from additional paid-in-capital to retained earnings. See “Recently Adopted Accounting Standards.”

Maturities of Debt

As of December 1, 2023, maturities of debt were as follows:

Remainder of 2024	$	21,633
2025	28,844
2026	128,844
2027	457,904
2028	—
2029 and thereafter	150,000
Less unamortized discount and issuance costs	(10,415)
	$	776,810

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Leases

3 Months Ended

Dec. 01, 2023

Leases [Abstract]

Leases

Leases

We have 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 any period presented. The components of operating lease expense were as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Fixed lease cost	$	3,505	$	4,611
Variable lease cost	449		384
Short-term lease cost	639		499
	$	4,593	$	5,494

Cash flows used for operating activities in the first quarter of 2024 and 2023 included payments for operating leases of $2.5 million and $2.5 million, respectively. Acquisitions of right-of-use assets were $9.4 million in the first quarter of 2023.

As of December 1, 2023 and August 25, 2023, the weighted-average remaining lease term for our operating leases was 10.5 years and the weighted-average discount rate was 6.0%. 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 December 1, 2023, minimum payments of lease liabilities were as follows:

Remainder of 2024	$	9,994
2025	11,252
2026	9,921
2027	7,678
2028	7,901
2029 and thereafter	54,395
	101,141
Less imputed interest	(27,586)
Present value of total lease liabilities	$	73,555

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Commitments and Contingencies

3 Months Ended

Dec. 01, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Product Warranty and Indemnities

We generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective items or return of amounts paid for such items. Our warranty obligations are not material.

We are party to a number of agreements in which we have agreed to defend, indemnify and hold harmless our customers and suppliers from damages and costs, which may arise from product defects as well as from any alleged infringement by our products of third-party patents, trademarks or other proprietary rights. We believe our internal development processes and other policies and practices limit our exposure related to such indemnities. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. However, to date, we have not had to reimburse any of our customers or suppliers for any losses related to these indemnities. We have not recorded any liability for such indemnities.

Contingencies

From time to time, we may be 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. 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

3 Months Ended

Dec. 01, 2023

Equity [Abstract]

Equity

Equity

SGH Shareholders’ Equity

Share Repurchase Authorization

On April 4, 2022, our Board of Directors approved a $75.0 million share repurchase authorization, under which we may repurchase our 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 first quarter of 2024 and 2023, we repurchased 825 thousand and 182 thousand shares for $12.1 million and $2.8 million, respectively, under the repurchase authorization. As of December 1, 2023, $4.5 million of this authorization remained available for the repurchase of our ordinary shares.

On January 8, 2024, the Audit Committee of the Board of Directors approved an additional $75.0 million share repurchase authorization, under which we may repurchase our 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 Audit Committee at any time and does not obligate the Company to acquire any amount of ordinary shares.

Other Share Repurchases

Ordinary shares withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are treated as ordinary share repurchases. In the first quarter of 2024 and 2023, we repurchased 75 thousand and 143 thousand ordinary shares as payment of withholding taxes for $1.1 million and $1.9 million, respectively.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component in the first quarter of 2024 were as follows:

	Cumulative Translation Adjustment		Gains (Losses) on Investments		Total
As of August 25, 2023	$	(205,969)	$	5	$	(205,964)
Other comprehensive income (loss) before reclassifications	(6,142)		12		(6,130)
Reclassifications out of accumulated other comprehensive income	212,397		—		212,397
Other comprehensive income (loss)	206,255		12		206,267
As of December 1, 2023	$	286	$	17	$	303

In connection with our divestiture of an 81% interest in SMART Brazil, we reclassified $212.4 million of cumulative translation adjustment related to SMART Brazil from other accumulated comprehensive income to results of operations in the first quarter of 2024. See “Divestiture of SMART Brazil.”

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Fair Value Measurements

3 Months Ended

Dec. 01, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

	As of December 1, 2023				As of August 25, 2023
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Derivative financial instruments	$	3,721	$	3,721	$	—	$	—
Liabilities:
Amended 2027 TLA	$	537,226	$	531,019	$	551,648	$	544,943
2029 Notes	148,649		147,034		195,426		146,886
2026 Notes	105,714		98,757		131,864		98,609

The deferred cash adjustment resulting from the divestiture of an 81% interest in SMART Brazil is accounted for as a derivative financial instrument and is revalued at the end of each reporting period. The fair value as of December 1, 2023, as measured on a recurring basis, was based on Level 2 measurements, including market-based observable inputs of interest rates and credit-risk spreads.

The fair value of the Amended 2027 TLA, 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. The fair values of the 2029 Notes and the 2026 Notes, as measured on a non-recurring basis, was determined based on Level 2 measurements, including the trading prices of the 2029 Notes and the 2026 Notes

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Equity Plans

3 Months Ended

Dec. 01, 2023

Share-Based Payment Arrangement [Abstract]

Equity Plans

Equity Plans

As of December 1, 2023, 7.3 million of our ordinary shares were available for future awards under our equity plans.

The disclosures related to our restricted awards, share options and employee share purchase plan include both our continuing and discontinued operations.

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

Aggregate Restricted Award activity was as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Awards granted	419		1,010
Weighted-average grant date fair value per share	$	30.49	$	19.51
Aggregate vesting date fair value of shares vested	$	8,733	$	8,949

As of December 1, 2023, total unrecognized compensation costs for unvested Restricted Awards was $79.0 million, which was expected to be recognized over a weighted-average period of 2.3 years.

Share Options

As of December 1, 2023, total aggregate unrecognized compensation costs for unvested options was $0.8 million, which was expected to be recognized over a weighted-average period of 0.7 years.

Employee Share Purchase Plan (“ESPP”)

Under our ESPP, employees purchased 298 thousand ordinary shares for $3.3 million in the first quarter of 2024 and 265 thousand shares for $2.9 million in the first quarter of 2023.

Share-Based Compensation Expense

Share-based compensation expense for our continuing operations was as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Share-based compensation expense by caption:
Cost of sales	$	1,815	$	1,642
Research and development	1,597		1,556
Selling, general and administrative	7,558		6,783
	$	10,970	$	9,981

Income tax benefits for share-based awards were $1.8 million in the first quarter of 2024 and 2023.

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Revenue and Customer Contract Balances

3 Months Ended

Dec. 01, 2023

Revenue from Contract with Customer [Abstract]

Revenue and Customer Contract Balances

Revenue and Customer Contract Balances

Net Sales and Gross Billings

We provide certain logistics services on an agent basis, whereby we procure materials and services on behalf of our customers and then resell such materials and services to our customers. Our materials logistics business 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.

Gross amounts invoiced to customers in connection with these agent services include amounts related to the services performed by us in addition to the cost of the materials and services procured. However, only the amount related to the agent component is recognized as revenue in our results of operations. We generally recognize revenue for these procurement, logistics and inventory management services upon the completion of such services, which typically occurs at

the time of shipment of product to the customer. The cost of materials and services invoiced to our customers under these arrangements, but not recognized as revenue or cost of sales in our results of operations, were as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Cost of materials and services invoiced in connection with logistics services	$	108,969	$	377,751

Customer Contract Balances

As of	December 1, 2023		August 25, 2023
Contract assets (1)	$	2,391	$	—
Contract liabilities: (2)
Deferred revenue	$	59,082	$	69,326
Customer advances	4,124		5,565
	$	63,206	$	74,891

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

(2)Contract liabilities are included in other current 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.

Contract assets represent amounts recognized as revenue for which we do not have the unconditional right to consideration.

Deferred revenue represents amounts received from customers in advance of satisfying performance obligations. As of December 1, 2023, we expect to recognize revenue of $39.1 million of the $59.1 million balance in the next 12 months and the remaining amount thereafter. In the first quarter of 2024, we recognized revenue of $23.9 million from satisfying performance obligations related to amounts included in deferred revenue as of August 25, 2023. Deferred revenue includes $7.3 million and $10.9 million as of December 1, 2023 and August 25, 2023, respectively, related to contracts that contain termination rights.

Customer advances represent amounts received from customers for advance payments to secure product. In the first quarter of 2024, we recognized revenue of $1.0 million from satisfying performance obligations related to amounts included in customer advances as of August 25, 2023.

As of December 1, 2023 and August 25, 2023, other current liabilities included $14.2 million and $12.5 million, respectively, for estimates of consideration payable to customers, including estimates for pricing adjustments and returns.

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Other Operating (Income) Expense

3 Months Ended

Dec. 01, 2023

Other Income and Expenses [Abstract]

Other Operating (Income) Expense

Other Operating (Income) Expense

In 2024 and 2023, we initiated plans that included workforce reductions and the elimination of certain projects across our businesses. In connection therewith, we recorded restructure charges of $2.9 million and $1.8 million in the first quarter of 2024 and 2023, respectively, primarily for employee severance costs and other benefits. We anticipate that these activities will continue into future quarters and anticipate recording additional restructure charges. As of December 1, 2023, $2.3 million remained unpaid, which is expected to be paid in 2024.

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Other Non-operating (Income) Expense

3 Months Ended

Dec. 01, 2023

Nonoperating Income (Expense) [Abstract]

Other Non-operating (Income) Expense

Other Non-operating (Income) Expense

	Three Months Ended
	December 1, 2023		November 25, 2022
Loss (gain) on extinguishment of debt	$	—	$	(767)
Loss (gain) from changes in foreign currency exchange rates	(546)		(520)
Loss (gain) on disposition of assets	45		(41)
Other	(75)		(34)
	$	(576)	$	(1,362)

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Income Taxes

3 Months Ended

Dec. 01, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Three Months Ended
	December 1, 2023		November 25, 2022
Income (loss) before taxes	$	(7,678)	$	7,715
Income tax provision (benefit)	3,534		11,322

Income taxes include 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. We have historically determined our interim income tax provision (benefit) by applying the annual estimated effective income tax rate expected to be applicable for the full fiscal year to the income (loss) before taxes for jurisdictions which are subject to income tax. In determining the full year estimate, we do not include the impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax provision (benefit) and income (loss) before taxes. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate. Additionally, our income tax provision (benefit) is subject to volatility and could be impacted by changes in our geographic earnings, non-deductible share-based compensation and certain tax credits.

Determining the consolidated income tax provision (benefit), income tax liabilities and deferred tax assets and liabilities involves judgment. We calculate and provide for income taxes in each of the tax jurisdictions in which we operate, 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

3 Months Ended

Dec. 01, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

	Three Months Ended
	December 1, 2023		November 25, 2022
Net income (loss) from continuing operations	$	(11,773)	$	(3,939)
Net income (loss) from discontinued operations	(8,148)		8,931
Net income (loss) attributable to SGH – Basic and Diluted	$	(19,921)	$	4,992
Weighted-average shares outstanding – Basic	52,068		48,962
Dilutive effect of equity plans and convertible notes	—		—
Weighted-average shares outstanding – Diluted	52,068		48,962
Basic earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10
Diluted earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10

Below are unweighted 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
	December 1, 2023	November 25, 2022
Equity plans	6,060	8,432
Stratus Technologies contingently issuable shares	—	1,715
	6,060	10,147

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Segment and Other Information

3 Months Ended

Dec. 01, 2023

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. We have the following three business units, which are our 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 and computing, including server applications and other vertical markets. These products are marketed to original equipment manufacturers 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: Our IPS group, under our Penguin Solutions and Stratus Technologies brands, offers specialized platform solutions and services for high-performance computing, artificial intelligence, machine learning, advanced modeling and the internet of things that span the continuum of edge, core and cloud. Our solutions are designed specifically for customers across multiple markets, including government, hyperscale, energy, financial services, health care, education and others.

•LED Solutions: Our LED Solutions group, under our CreeLED brand, offers a broad portfolio of application-optimized LEDs focused on improving lumen density, intensity, efficacy, optical control and/or 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.

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 identify (other than goodwill) or report internally our assets nor allocate certain expenses and amortization, interest, other non-operating (income) expense or taxes to segments.

	Three Months Ended
	December 1, 2023		November 25, 2022
Net sales:
Memory Solutions	$	85,668	$	118,286
Intelligent Platform Solutions	118,824		210,971
LED Solutions	69,755		62,540
Total net sales	$	274,247	$	391,797
Segment operating income:
Memory Solutions	$	7,195	$	19,039
Intelligent Platform Solutions	17,901		32,985
LED Solutions	1,583		(636)
Total segment operating income	26,679		51,388
Unallocated:
Share-based compensation expense	(10,970)		(9,981)
Amortization of acquisition-related intangibles	(10,008)		(10,858)
Flow through of inventory step up	—		(2,599)
Cost of sales-related restructure	(668)		—
Acquisition and integration expenses	(789)		(6,732)
Change in fair value of contingent consideration	—		(3,700)
Restructure charge	(2,939)		(1,771)
Other	—		(900)
Total unallocated	(25,374)		(36,541)
Consolidated operating income (loss)	$	1,305	$	14,847

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (19,921)	$ 4,992

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Insider Trading Arrangements	3 Months Ended
	Dec. 01, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Significant Accounting Policies (Policies)

3 Months Ended

Dec. 01, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements include the accounts of SMART Global Holdings, Inc. and its consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended August 25, 2023 and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. 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 fiscal year ended August 25, 2023.

Presentation of SMART Brazil as Discontinued Operations: On June 13, 2023, we entered into an agreement to divest of an 81% interest in SMART Modular Technologies do Brasil – Indústria e Comercio de Componentes Ltda. (“SMART Brazil”). We concluded that, as of August 25, 2023, (i) the net assets of SMART Brazil met the criteria for classification as held for sale and (ii) the proposed sale represented a strategic shift that was expected to have a major effect on our operations and financial results. On November 29, 2023, we completed the divestiture. The balance sheets, results of operations and cash flows of SMART Brazil have been presented as discontinued operations for all periods presented. SMART Brazil was previously included within our Memory Solutions segment. See “Divestiture of SMART Brazil.”

Unless otherwise noted, amounts and discussion within these notes to the consolidated financial statements relate to our continuing operations. Prior period comparative information has been conformed to current period presentation for continuing operations.

Reclassifications: 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 year 2024 and 2023 contain 53 weeks and 52 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated.

Financial information for our subsidiaries in Brazil was included in our consolidated financial statements on a one-month lag because their fiscal years ended on July 31 of each year. In connection with the completion of the divestiture of an 81% interest in SMART Brazil, we ceased consolidating the operations of SMART Brazil in our financial statements as of the November 29, 2023 disposal date. As a result, financial information for SMART Brazil in the first quarter of 2024 includes the four-month period from August 1, 2023 to November 29, 2023.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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, and requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU was effective for us in the first quarter of 2023 and permitted the use of either the modified retrospective or fully retrospective method of transition.

We adopted ASU 2020-06 in the first quarter of 2023 under the modified retrospective method. Upon adoption, the previously separated equity component and associated issuance costs for our 2.25% convertible senior notes due 2026 were reclassified from additional paid-in capital to long-term debt, thereby eliminating future amortization of the debt discount as interest expense. The following table summarizes the effects of adopting ASU 2020-06:

	Ending Balance as of August 26, 2022		Adoption of ASU 2020-06		Beginning Balance as of August 27, 2022
Long-term debt	$	575,682	$	32,183	$	607,865
Additional paid-in capital	448,112		(50,822)		397,290
Retained earnings	251,344		18,639		269,983

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Segment Reporting Disclosures, which will require an entity to provide more detailed information about its reportable segment expenses that are included within management’s measurement of profit and loss and will require certain annual disclosures to be provided on an interim basis. The amendments in this ASU are effective for us in 2025 for annual reporting and in 2026 for interim reporting, with early adoption permitted beginning in 2024, and is required to be applied using the full retrospective method of transition. We are evaluating the timing and effects of adoption of this ASU on the Company’s segment disclosures.

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Divestiture of SMART Brazil (Tables)

3 Months Ended

Dec. 01, 2023

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Noncash or Part Noncash Divestitures

Consideration: The following is a summary of total consideration in exchange for the sale of an 81% interest in SMART Brazil:

Cash received at closing (1)	$	164,487
Post-closing adjustment for net cash and net working capital (2)	451
Deferred payment (3)	25,433
Deferred cash adjustment (4)	3,721
Total consideration	$	194,092

(1)Includes $26.8 million of cash received at closing for an estimated amount of net cash and an estimated net working capital amount (in excess of a minimum target amount) as of the closing.

(2)Represents the post-closing adjustment for net cash and net working capital, which is expected to be received in the second or third quarter of 2024 upon completion of the review of the final net cash and final working capital amounts. The post closing adjustment is included in other current assets in the accompanying consolidated balance sheet.

(3)Represents the fair value of the deferred payment, comprised of a notional amount of $28.4 million, discounted at 7.5% and due May 2025. The deferred payment is included in other noncurrent assets in the accompanying consolidated balance sheet.

(4)Represents the fair value of the deferred cash adjustment, comprised of a notional amount of $4.8 million, discounted at 7.5%, equal to 19% of the amount of SMART Brazil’s net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement). The deferred cash adjustment is accounted for as a derivative financial instrument, is due at the time of exercise of the Put/Call Option and is included in other noncurrent assets in the accompanying consolidated balance sheet.

Disposal Groups, Including Discontinued Operations

Assets and liabilities of SMART Brazil as of the November 29, 2023 disposal date and as of August 25, 2023 were as follows:

As of	November 29, 2023		August 25, 2023
Cash and cash equivalents	$	40,927	$	44,501
Accounts receivable, net	16,482		17,055
Inventories	26,103		25,877
Other current assets	17,800		17,732
Total current assets	101,312		105,165
Property and equipment, net	66,870		58,321
Operating lease right-of-use assets	6,912		5,213
Goodwill	19,856		20,668
Other noncurrent assets	27,490		34,243
Total assets	222,440		223,610
Impairment of SMART Brazil assets	(153,036)		(153,036)
Total assets, net of impairment	$	69,404	$	70,574
Accounts payable and accrued expenses	$	20,576	$	25,867
Current debt	3,872		4,006
Other current liabilities	1,023		1,030
Total current liabilities	25,471		30,903
Long-term debt	11,938		13,689
Noncurrent operating lease liabilities	5,686		4,614
Noncurrent deferred tax liabilities	28,564		28,564
Other noncurrent liabilities	93		$	—
Total liabilities	$	71,752	$	77,770
Net assets of discontinued operations	$	(2,348)	$	(7,196)
Reported as:
Current assets of discontinued operations			$	70,574
Current liabilities of discontinued operations			77,770
Net assets of discontinued operations			$	(7,196)

The following table presents the results of operations for SMART Brazil:

	Three Months Ended
	December 1, 2023		November 25, 2022
Net sales	$	55,159	$	73,681
Cost of sales	50,560		67,369
Gross profit	4,599		6,312
Operating expenses:
Research and development	157		(16)
Selling, general and administrative	5,421		3,314
Other operating (income) expense	64		270
Total operating expenses	5,642		3,568
Operating income (loss)	(1,043)		2,744
Non-operating (income) expense:
Loss from divestiture of 81% interest in SMART Brazil	10,888		—
Interest (income) expense, net	(1,262)		(457)
Other non-operating (income) expense	138		702
Total non-operating (income) expense	9,764		245
Income (loss) before taxes	(10,807)		2,499
Income tax provision (benefit)	(2,659)		(6,432)
Net income (loss) from discontinued operations	$	(8,148)	$	8,931

The following table presents the calculation of the loss from the divestiture of an 81% interest in SMART Brazil:

Proceeds, less costs to sell and other expenses:
Consideration	$	194,092
Costs to sell and other expenses	(4,150)
	189,942
Basis in 81% interest in SMART Brazil:
Net assets of SMART Brazil	145,194
Cumulative translation adjustment (1)	212,397
	357,591
Gain on revalue of 19% Retained Interest in SMART Brazil (2)	3,725
Pre-tax loss on divestiture of 81% interest in SMART Brazil	163,924
Income tax provision	26,580
Loss on divestiture of 81% interest in SMART Brazil	$	190,504

(1)The sale of an 81% interest in SMART Brazil resulted in the de-consolidation of SMART Brazil and, accordingly, the release of the related cumulative translation adjustment. Included in the basis calculation above is the balance of cumulative translation adjustment for SMART Brazil as of the closing. The release of the cumulative translation adjustment is included in net income (loss) from discontinued operations in the accompanying consolidated statement of operations.

(2)In connection with the transaction, we revalued our 19% Retained Interest in SMART Brazil based on the implied value for 100% of SMART Brazil, adjusted for lack of control premium. As of the end of the first quarter of 2024, the carrying value of our remaining 19% interest in SMART Brazil was $37.8 million.

Recognition Periods: The loss from the divestiture of an 81% interest in SMART Brazil was recognized as follows:

	Three Months Ended
	December 1, 2023		August 25, 2023		Total
Pre-tax loss on divestiture of 81% interest in SMART Brazil	$	10,888	$	153,036	$	163,924
Income tax provision (benefit)	(1,984)		28,564		26,580
Loss on divestiture of 81% interest in SMART Brazil	$	8,904	$	181,600	$	190,504

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Recently Adopted Accounting Standards (Tables)

3 Months Ended

Dec. 01, 2023

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Update and Change in Accounting Principle

The following table summarizes the effects of adopting ASU 2020-06:

	Ending Balance as of August 26, 2022		Adoption of ASU 2020-06		Beginning Balance as of August 27, 2022
Long-term debt	$	575,682	$	32,183	$	607,865
Additional paid-in capital	448,112		(50,822)		397,290
Retained earnings	251,344		18,639		269,983

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Business Acquisition (Tables)

3 Months Ended

Dec. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Purchase Price

The purchase price for Stratus Technologies was as follows:

Cash	$	225,000
Additional payment for net working capital adjustment (1)	17,246
Fair value of Stratus Earnout	20,800
	$	263,046

(1)Includes $14.4 million paid at closing and $2.8 million paid in the second quarter of 2023 upon completion of the review of the working capital assets acquired and liabilities assumed.

Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date

The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed as follows:

Cash and cash equivalents	$	29,174
Accounts receivable	26,685
Inventories	10,890
Other current assets	6,536
Property and equipment	7,292
Operating lease right-of-use assets	9,216
Intangible assets	123,700
Goodwill	125,929
Other noncurrent assets	11,661
Accounts payable and accrued expenses	(32,656)
Other current liabilities	(36,723)
Noncurrent operating lease liabilities	(7,067)
Other noncurrent liabilities	(11,591)
Total net assets acquired	$	263,046

Summary of Intangible Assets

The fair values and useful lives of identifiable intangible assets were as follows:

	Amount		Estimated useful life (in years)
Technology	$	82,000	5
Customer relationships	27,800		8
Trademarks/trade names	10,000		9
In-process research and development	3,900		N/A
	$	123,700

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Cash and Investments (Tables)

3 Months Ended

Dec. 01, 2023

Investments, Debt and Equity Securities [Abstract]

Fair Value, Assets Measured on Recurring and Nonrecurring Basis

Cash, cash equivalents and investments were as follows:

	As of December 1, 2023				As of August 25, 2023
	Cash and Cash Equivalents		Short-term Investments		Cash and Cash Equivalents		Short-term Investments
Cash and cash equivalents	$	443,245	$	—	$	321,937	$	—
Level 1:
Money market funds	70,814		—		43,626		—
U.S. Treasury securities	—		24,385		—		25,251
Level 2:
Time deposits	15,000		—		—		—
	$	529,059	$	24,385	$	365,563	$	25,251

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Inventories (Tables)

3 Months Ended

Dec. 01, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

As of	December 1, 2023		August 25, 2023
Raw materials	$	97,853	$	90,085
Work in process	57,192		24,485
Finished goods	53,396		60,407
	$	208,441	$	174,977

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Property and Equipment (Tables)

3 Months Ended

Dec. 01, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

As of	December 1, 2023		August 25, 2023
Equipment	$	87,528	$	86,429
Buildings and building improvements	67,683		69,325
Furniture, fixtures and software	43,082		44,121
Land	16,126		16,126
	214,419		216,001
Accumulated depreciation	(102,091)		(97,267)
	$	112,328	$	118,734

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Intangible Assets and Goodwill (Tables)

3 Months Ended

Dec. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill by Segment

	As of December 1, 2023				As of August 25, 2023
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Intangible assets:
Technology	$	141,491	$	(40,698)	$	141,201	$	(34,569)
Customer relationships	72,500		(36,996)		72,500		(33,990)
Trademarks/trade names	28,300		(14,314)		28,300		(13,257)
	$	242,291	$	(92,008)	$	242,001	$	(81,816)
Goodwill by segment:
Intelligent Platform Solutions	$	147,238			$	147,238
Memory Solutions	14,720				14,720
	$	161,958			$	161,958

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Accounts Payable and Accrued Expenses (Tables)

3 Months Ended

Dec. 01, 2023

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Expenses

As of	December 1, 2023		August 25, 2023
Accounts payable (1)	$	181,791	$	134,980
Salaries, wages and benefits	19,666		27,665
Income and other taxes	13,317		13,370
Other	4,308		6,020
	$	219,082	$	182,035

(1)Includes accounts payable for property and equipment of $1.7 million and $5.2 million as of December 1, 2023 and August 25, 2023, respectively.

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Debt (Tables)

3 Months Ended

Dec. 01, 2023

Debt Disclosure [Abstract]

Summary of Long-Term Debt

As of	December 1, 2023		August 25, 2023
Amended 2027 TLA	$	531,019	$	544,943
2029 Notes	147,034		146,886
2026 Notes	98,757		98,609
	776,810		790,438
Less current debt	(28,511)		(35,618)
Long-term debt	$	748,299	$	754,820

Interest Income and Interest Expense Disclosure

Aggregate

interest expense for our convertible notes consisted of contractual stated interest and amortization of discount and issuance costs and included the following:

	Three Months Ended
	December 1, 2023		November 25, 2022
Contractual stated interest	$	1,400	$	1,391
Amortization of discount and issuance costs	297		337
	$	1,697	$	1,728

Summary of Maturities of Debt

As of December 1, 2023, maturities of debt were as follows:

Remainder of 2024	$	21,633
2025	28,844
2026	128,844
2027	457,904
2028	—
2029 and thereafter	150,000
Less unamortized discount and issuance costs	(10,415)
	$	776,810

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Leases (Tables)

3 Months Ended

Dec. 01, 2023

Leases [Abstract]

Summary of Components of Operating Lease Expense

The components of operating lease expense were as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Fixed lease cost	$	3,505	$	4,611
Variable lease cost	449		384
Short-term lease cost	639		499
	$	4,593	$	5,494

Schedule of Minimum Payments of Lease Liabilities

of December 1, 2023, minimum payments of lease liabilities were as follows:

Remainder of 2024	$	9,994
2025	11,252
2026	9,921
2027	7,678
2028	7,901
2029 and thereafter	54,395
	101,141
Less imputed interest	(27,586)
Present value of total lease liabilities	$	73,555

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Equity (Tables)

3 Months Ended

Dec. 01, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component in the first quarter of 2024 were as follows:

	Cumulative Translation Adjustment		Gains (Losses) on Investments		Total
As of August 25, 2023	$	(205,969)	$	5	$	(205,964)
Other comprehensive income (loss) before reclassifications	(6,142)		12		(6,130)
Reclassifications out of accumulated other comprehensive income	212,397		—		212,397
Other comprehensive income (loss)	206,255		12		206,267
As of December 1, 2023	$	286	$	17	$	303

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Fair Value Measurements (Tables)

3 Months Ended

Dec. 01, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements of Other Assets and Liabilities

	As of December 1, 2023				As of August 25, 2023
	Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Derivative financial instruments	$	3,721	$	3,721	$	—	$	—
Liabilities:
Amended 2027 TLA	$	537,226	$	531,019	$	551,648	$	544,943
2029 Notes	148,649		147,034		195,426		146,886
2026 Notes	105,714		98,757		131,864		98,609

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Equity Plans (Tables)

3 Months Ended

Dec. 01, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Aggregate Restricted Award Activity and Assumptions

Aggregate Restricted Award activity was as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Awards granted	419		1,010
Weighted-average grant date fair value per share	$	30.49	$	19.51
Aggregate vesting date fair value of shares vested	$	8,733	$	8,949

Schedule of Share Based Compensation Expense Allocation

	Three Months Ended
	December 1, 2023		November 25, 2022
Share-based compensation expense by caption:
Cost of sales	$	1,815	$	1,642
Research and development	1,597		1,556
Selling, general and administrative	7,558		6,783
	$	10,970	$	9,981

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Revenue and Customer Contract Balances (Tables)

3 Months Ended

Dec. 01, 2023

Revenue from Contract with Customer [Abstract]

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

The cost of materials and services invoiced to our customers under these arrangements, but not recognized as revenue or cost of sales in our results of operations, were as follows:

	Three Months Ended
	December 1, 2023		November 25, 2022
Cost of materials and services invoiced in connection with logistics services	$	108,969	$	377,751

Summary of Customer Contract Balances

As of	December 1, 2023		August 25, 2023
Contract assets (1)	$	2,391	$	—
Contract liabilities: (2)
Deferred revenue	$	59,082	$	69,326
Customer advances	4,124		5,565
	$	63,206	$	74,891

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

(2)Contract liabilities are included in other current 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)

3 Months Ended

Dec. 01, 2023

Nonoperating Income (Expense) [Abstract]

Schedule of Other Non-operating (Income) Expense

	Three Months Ended
	December 1, 2023		November 25, 2022
Loss (gain) on extinguishment of debt	$	—	$	(767)
Loss (gain) from changes in foreign currency exchange rates	(546)		(520)
Loss (gain) on disposition of assets	45		(41)
Other	(75)		(34)
	$	(576)	$	(1,362)

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Income Taxes (Tables)

3 Months Ended

Dec. 01, 2023

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) before Income Taxes and Components of Income Tax Provision (Benefit)

	Three Months Ended
	December 1, 2023		November 25, 2022
Income (loss) before taxes	$	(7,678)	$	7,715
Income tax provision (benefit)	3,534		11,322

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Earnings Per Share (Tables)

3 Months Ended

Dec. 01, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

	Three Months Ended
	December 1, 2023		November 25, 2022
Net income (loss) from continuing operations	$	(11,773)	$	(3,939)
Net income (loss) from discontinued operations	(8,148)		8,931
Net income (loss) attributable to SGH – Basic and Diluted	$	(19,921)	$	4,992
Weighted-average shares outstanding – Basic	52,068		48,962
Dilutive effect of equity plans and convertible notes	—		—
Weighted-average shares outstanding – Diluted	52,068		48,962
Basic earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10
Diluted earnings (loss) per share:
Continuing operations	$	(0.23)	$	(0.08)
Discontinued operations	(0.15)		0.18
	$	(0.38)	$	0.10

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Below are unweighted 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
	December 1, 2023	November 25, 2022
Equity plans	6,060	8,432
Stratus Technologies contingently issuable shares	—	1,715
	6,060	10,147

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Segment and Other Information (Tables)

3 Months Ended

Dec. 01, 2023

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 identify (other than goodwill) or report internally our assets nor allocate certain expenses and amortization, interest, other non-operating (income) expense or taxes to segments.

	Three Months Ended
	December 1, 2023		November 25, 2022
Net sales:
Memory Solutions	$	85,668	$	118,286
Intelligent Platform Solutions	118,824		210,971
LED Solutions	69,755		62,540
Total net sales	$	274,247	$	391,797
Segment operating income:
Memory Solutions	$	7,195	$	19,039
Intelligent Platform Solutions	17,901		32,985
LED Solutions	1,583		(636)
Total segment operating income	26,679		51,388
Unallocated:
Share-based compensation expense	(10,970)		(9,981)
Amortization of acquisition-related intangibles	(10,008)		(10,858)
Flow through of inventory step up	—		(2,599)
Cost of sales-related restructure	(668)		—
Acquisition and integration expenses	(789)		(6,732)
Change in fair value of contingent consideration	—		(3,700)
Restructure charge	(2,939)		(1,771)
Other	—		(900)
Total unallocated	(25,374)		(36,541)
Consolidated operating income (loss)	$	1,305	$	14,847

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Significant Accounting Policies - Additional Information (Details)	Nov. 29, 2023	Jun. 13, 2023
Significant Accounting Policies [Line Items]
Stock repurchase agreement, ownership rights, percentage	1
SMART Modular Technologies
Significant Accounting Policies [Line Items]
Stock repurchase agreement, ownership rights, percentage	0.19
SMART Modular Technologies | Lexar Europe B.V.
Significant Accounting Policies [Line Items]
Stock repurchase agreement, ownership rights, percentage	0.81	0.81

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Divestiture of SMART Brazil - Narrative (Details) $ in Thousands	12 Months Ended
	Aug. 25, 2023 USD ($)	Nov. 29, 2023 USD ($)	Jun. 13, 2023
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage		1
Discontinued Operations, Disposed of by Sale
Disposal Groups, Including Discontinued Operations [Line Items]
Impairment charge related to proposed divestiture of SMART Brazil	$ 153,000
Noncurrent deferred tax liabilities	28,564	$ 28,564
SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage		0.19
SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Total enterprise value		$ 205,000
Net income ratio		7.5
Foreign currency translation gains (losses)	(206,300)
SMART Modular Technologies | Discontinued Operations, Disposed of by Sale
Disposal Groups, Including Discontinued Operations [Line Items]
Noncurrent deferred tax liabilities	$ 28,600
Lexar Europe B.V. | SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage		0.81	0.81
Lexar Europe B.V. | SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Total enterprise value, percentage		1

XML

Divestiture of SMART Brazil - Total Consideration (Details) $ in Thousands	Nov. 29, 2023 USD ($)	Jun. 13, 2023
Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of interest in consolidated subsidiaries, net cash and working capital	$ 26,800
Deferred payment	$ 28,400
Deferred payment, discount rate	7.50%
Deferred net cash adjustment, nominal amount	$ 4,800
Stock repurchase agreement, ownership rights, percentage	1
SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage	0.19
SMART Modular Technologies | Lexar Europe B.V.
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage	0.81	0.81
SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Noncash or part noncash divestiture, amount of consideration received, deferred net cash adjustment, discount rate	7.50%
SMART Modular Technologies | Discontinued Operations, Disposed of by Sale
Disposal Groups, Including Discontinued Operations [Line Items]
Cash received at closing	$ 164,487
Post-closing adjustment for net cash and net working capital	451
Deferred payment	25,433
Deferred cash adjustment	$ 3,721

XML

Divestiture of SMART Brazil - Assets and Liabilities of Brazil Operations (Details) - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands	Nov. 29, 2023	Aug. 25, 2023
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract]
Cash and cash equivalents	$ 40,927	$ 44,501
Accounts receivable, net	16,482	17,055
Inventories	26,103	25,877
Other current assets	17,800	17,732
Total current assets	101,312	105,165
Property and equipment, net	66,870	58,321
Operating lease right-of-use assets	6,912	5,213
Goodwill	19,856	20,668
Other noncurrent assets	27,490	34,243
Total assets	222,440	223,610
Impairment of SMART Brazil assets	(153,036)	(153,036)
Total assets, net of impairment	69,404	70,574
Accounts payable and accrued expenses	20,576	25,867
Current debt	3,872	4,006
Other current liabilities	1,023	1,030
Total current liabilities	25,471	30,903
Long-term debt	11,938	13,689
Noncurrent operating lease liabilities	5,686	4,614
Noncurrent deferred tax liabilities	28,564	28,564
Other noncurrent liabilities	93	0
Total liabilities	71,752	77,770
Net assets of discontinued operations	$ (2,348)	$ (7,196)

XML

Divestiture of SMART Brazil - Results of out SMART Brazil operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Disposal Groups, Including Discontinued Operations [Line Items]
Net income (loss) from discontinued operations	$ (8,148)	$ 8,931
Discontinued Operations, Disposed of by Sale
Disposal Groups, Including Discontinued Operations [Line Items]
Net sales	55,159	73,681
Cost of sales	50,560	67,369
Gross profit	4,599	6,312
Research and development	157	(16)
Selling, general and administrative	5,421	3,314
Other operating (income) expense	64	270
Total operating expenses	5,642	3,568
Operating income (loss)	(1,043)	2,744
Loss from divestiture of 81% interest in SMART Brazil	10,888	0
Interest (income) expense, net	(1,262)	(457)
Other non-operating (income) expense	138	702
Total non-operating (income) expense	9,764	245
Income (loss) before taxes	(10,807)	2,499
Income tax provision (benefit)	(2,659)	(6,432)
Net income (loss) from discontinued operations	$ (8,148)	$ 8,931

XML

Divestiture of SMART Brazil - Loss From Divestiture (Details) $ in Thousands		3 Months Ended
	Nov. 29, 2023 USD ($)	Dec. 01, 2023 USD ($)	Aug. 25, 2023 USD ($)	Jun. 13, 2023
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage	1
Discontinued Operations, Disposed of by Sale
Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration	$ 194,092
Costs to sell and other expenses	(4,150)
Proceeds, less costs to sell and other expenses:	189,942
Net assets of SMART Brazil	145,194
Cumulative translation adjustment	212,397
Assets net of cumulative translation adjustment	357,591
Revaluation of 19% retained interest in SMART Brazil	3,725
Pre-tax loss on divestiture of 81% interest in SMART Brazil	163,924
Income tax provision (benefit)	(26,580)
Loss from divestiture of 81% interest in SMART Brazil	190,504
SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Equity securities, FV-NI	37,800
SMART Modular Technologies | Discontinued Operations, Disposed of by Sale
Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration	194,092
Pre-tax loss on divestiture of 81% interest in SMART Brazil	(163,924)	$ (10,888)	$ (153,036)
Income tax provision (benefit)	26,580	(1,984)	28,564
Loss from divestiture of 81% interest in SMART Brazil	$ (190,504)	$ (8,904)	$ (181,600)
SMART Modular Technologies
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage	0.19
SMART Modular Technologies | Lexar Europe B.V.
Disposal Groups, Including Discontinued Operations [Line Items]
Stock repurchase agreement, ownership rights, percentage	0.81			0.81

XML

Recently Adopted Accounting Standards - Accounting Standards Update and Change in Accounting Principle (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023	Jan. 18, 2023	Aug. 27, 2022	Aug. 26, 2022
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Long-term debt	$ 748,299	$ 754,820
Additional paid-in capital				$ 397,290	$ 448,112
Retained earnings	$ 62,536	$ 82,457		269,983	251,344
Cumulative Translation Adjustment
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Additional paid-in capital				(50,822)
Retained earnings				18,639
2.25% Convertible Senior Notes Due 2026
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Note interest rate			2.25%
Long-term debt				607,865	$ 575,682
2.25% Convertible Senior Notes Due 2026 | Cumulative Translation Adjustment
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Long-term debt				$ 32,183

XML

Business Acquisition - Additional Information (Details) $ in Thousands	Aug. 29, 2022 USD ($)	Dec. 01, 2023 USD ($)	Aug. 25, 2023 USD ($)
Business Acquisition [Line Items]
Acquisition-related contingent consideration		$ 50,000	$ 50,000
Measurement Input, Price Volatility | Valuation Technique, Monte Carlo Simulation
Business Acquisition [Line Items]
Measurement input	0.334
Measurement Input, Discount Rate | Valuation Technique, Monte Carlo Simulation
Business Acquisition [Line Items]
Measurement input	0.073
Stratus Technologies
Business Acquisition [Line Items]
Payments to acquire businesses, gross	$ 225,000
Contingent consideration (up to)	50,000
Acquisition-related contingent consideration		$ 50,000
Acquisition-related contingent consideration	$ 20,800

XML

Business Acquisition - Schedule of Purchase Price (Details) - Stratus Technologies - USD ($) $ in Thousands	Aug. 29, 2022	Aug. 25, 2023
Business Acquisition [Line Items]
Cash	$ 225,000
Additional payment for net working capital adjustment	17,246
Change in fair value of contingent consideration	20,800
Total consideration	$ 263,046
Assets acquired		$ 14,400
Liabilities assumed		$ 2,800

XML

Business Acquisition - Summary of Assets Acquired and Liabilities Assumed at the Acquisition Date (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023	Nov. 25, 2022	Aug. 29, 2022
Business Acquisition [Line Items]
Intangible assets	$ 300		$ 126,400
Goodwill	$ 161,958	$ 161,958
Stratus Technologies
Business Acquisition [Line Items]
Cash and cash equivalents				$ 29,174
Accounts receivable				26,685
Inventories				10,890
Other current assets				6,536
Property and equipment				7,292
Operating lease right-of-use assets				9,216
Intangible assets				123,700
Goodwill				125,929
Other noncurrent assets				11,661
Accounts payable and accrued expenses				(32,656)
Other current liabilities				(36,723)
Noncurrent operating lease liabilities				(7,067)
Other noncurrent liabilities				(11,591)
Total net assets acquired				$ 263,046

XML

Business Acquisition - Summary of Intangible Assets (Details) - USD ($) $ in Thousands		3 Months Ended
	Aug. 29, 2022	Dec. 01, 2023	Nov. 25, 2022
Business Acquisition [Line Items]
Amount		$ 300	$ 126,400
Estimated useful life (in years)		19 years	6 years
Stratus Technologies
Business Acquisition [Line Items]
Amount	$ 123,700
Stratus Technologies | Technology
Business Acquisition [Line Items]
Amount	$ 82,000
Estimated useful life (in years)	5 years
Stratus Technologies | Customer relationships
Business Acquisition [Line Items]
Amount	$ 27,800
Estimated useful life (in years)	8 years
Stratus Technologies | Trademarks/trade names
Business Acquisition [Line Items]
Amount	$ 10,000
Estimated useful life (in years)	9 years
Stratus Technologies | In-process research and development
Business Acquisition [Line Items]
Amount	$ 3,900

XML

Cash and Investments (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 529,059	$ 365,563
Short-term investments	24,385	25,251
Level 2:
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	15,000	0
Short-term investments	0	0
Money market funds | Level 1:
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	70,814	43,626
Short-term investments	0	0
U.S. Treasury securities | Level 1:
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	0	0
Short-term investments	24,385	25,251
Cash and cash equivalents
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	443,245	321,937
Short-term investments	$ 0	$ 0

XML

Accounts Receivable (Details)	3 Months Ended
	Dec. 01, 2023 USD ($)
Receivables [Abstract]
Trade accounts receivable, available-for-sale (up to)	$ 60,000,000
Trade accounts receivable, sale	$ 0

XML

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 97,853	$ 90,085
Work in process	57,192	24,485
Finished goods	53,396	60,407
Total inventories	$ 208,441	$ 174,977

XML

Inventories - Additional Information (Details)	Dec. 01, 2023	Aug. 25, 2023
Inventory Disclosure [Abstract]
Percentage of inventories	8.00%	8.00%

XML

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022	Aug. 25, 2023
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 214,419		$ 216,001
Accumulated depreciation	(102,091)		(97,267)
Net property and equipment	112,328		118,734
Depreciation expense	7,500	$ 6,100
Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	87,528		86,429
Buildings and building improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	67,683		69,325
Furniture, fixtures and software
Property Plant And Equipment [Line Items]
Property and equipment, gross	43,082		44,121
Land
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 16,126		$ 16,126

XML

Intangible Assets and Goodwill - Schedule of Intangible Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Finite Lived Intangible Assets [Line Items]
Intangible assets, Gross Amount	$ 242,291	$ 242,001
Intangible assets, Accumulated Amortization	(92,008)	(81,816)
Goodwill	161,958	161,958
Intelligent Platform Solutions
Finite Lived Intangible Assets [Line Items]
Goodwill	147,238	147,238
Memory Solutions
Finite Lived Intangible Assets [Line Items]
Goodwill	14,720	14,720
Technology
Finite Lived Intangible Assets [Line Items]
Intangible assets, Gross Amount	141,491	141,201
Intangible assets, Accumulated Amortization	(40,698)	(34,569)
Customer relationships
Finite Lived Intangible Assets [Line Items]
Intangible assets, Gross Amount	72,500	72,500
Intangible assets, Accumulated Amortization	(36,996)	(33,990)
Trademarks/trade names
Finite Lived Intangible Assets [Line Items]
Intangible assets, Gross Amount	28,300	28,300
Intangible assets, Accumulated Amortization	$ (14,314)	$ (13,257)

XML

Intangible Assets and Goodwill - Additional Information (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 01, 2023 USD ($)	Nov. 25, 2022 USD ($)	Aug. 25, 2023 USD ($)
Finite Lived Intangible Assets [Line Items]
Amount	$ 300	$ 126,400
Estimated useful life (in years)	19 years	6 years
Amortization of intangible assets	$ 10,200	$ 10,900
Finite-lived intangible assets, expected amortization remainder of fiscal year	29,800
Finite-lived intangible assets, expected amortization for 2025	35,600
Finite-lived intangible assets, expected amortization for 2026	30,200
Finite-lived intangible assets, expected amortization for 2027	29,500
Finite-lived intangible assets, expected amortization for 2028	13,900
Finite-lived intangible asset, expected amortization, 2029 and after	$ 11,200
Penguin Edge
Finite Lived Intangible Assets [Line Items]
Weighted-average cost of capital	0.145
Goodwill, impairment loss	$ 16,100		$ 19,100

XML

Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Payables and Accruals [Abstract]
Accounts payable	$ 181,791	$ 134,980
Salaries, wages and benefits	19,666	27,665
Income and other taxes	13,317	13,370
Other	4,308	6,020
Total	219,082	182,035
Accounts payable for property and equipment	$ 1,700	$ 5,200

XML

Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023	Aug. 27, 2022	Aug. 26, 2022
Debt Instrument [Line Items]
Debt	$ 776,810	$ 790,438
Less current debt	(28,511)	(35,618)
Long-term debt	748,299	754,820
Amended 2027 TLA
Debt Instrument [Line Items]
Debt	531,019	544,943
2029 Notes
Debt Instrument [Line Items]
Debt	147,034	146,886
2026 Notes
Debt Instrument [Line Items]
Debt	$ 98,757	$ 98,609
Long-term debt			$ 607,865	$ 575,682

XML

Debt - Credit Facility (Details)	Dec. 01, 2023 USD ($)
Debt Instrument [Line Items]
Unamortized debt discounts and issuance costs	$ (10,415,000)
Amended 2027 TLA | The Credit Facility Agreement
Debt Instrument [Line Items]
Debt instrument outstanding amount	537,200,000
Unamortized debt discounts and issuance costs	$ (6,200,000)
Debt instrument, effective interest rate	8.51%
Revolving Credit Facility | The Credit Facility Agreement
Debt Instrument [Line Items]
Debt instrument outstanding amount	$ 0
Unamortized debt issuance expense	$ 2,900,000

XML

Debt - Convertible Senior Notes (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 18, 2023	Dec. 01, 2023	Feb. 24, 2023	Nov. 25, 2022	Aug. 25, 2023	Aug. 27, 2022	Aug. 26, 2022
Debt Instrument [Line Items]
Convertible notes, cash payment	$ 15,600
Payment of premium for convertible notes in excess of par value	14,100
Convertible notes, payment for accrued and unpaid interest	$ 1,500
Gain (loss) on extinguishment of debt		$ 0	$ (16,700)	$ 767
Long-term debt		776,810			$ 790,438
Retained earnings		$ 62,536			82,457	$ 269,983	$ 251,344
Cumulative Translation Adjustment
Debt Instrument [Line Items]
Retained earnings						$ 18,639
Cumulative Translation Adjustment | Accounting Standards Update 2020-06
Debt Instrument [Line Items]
Long-term debt					32,200
Retained earnings					$ 18,600
2.25% Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Note interest rate	2.25%
Debt instrument, face amount	$ 150,000
Payment of premium for convertible notes in excess of par value	14,100
Write off of unamortized debt issuance cost	$ 2,500
Debt instrument, effective interest rate		2.83%			2.83%
Long-term debt		$ 98,757			$ 98,609
2.25% Convertible Senior Notes Due 2026 | Additional Paid-in Capital
Debt Instrument [Line Items]
Debt instrument, carrying amount of equity component					$ 50,800
2.00% Convertible Senior Notes Due 2029
Debt Instrument [Line Items]
Note interest rate	2.00%
Debt instrument, face amount	$ 150,000
Debt instrument, effective interest rate		2.40%			2.40%
Long-term debt		$ 147,034			$ 146,886

XML

Debt - Interest Expense Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Debt Instrument [Line Items]
Amortization of debt discount and issuance costs	$ 1,042	$ 1,069
Convertible Notes
Debt Instrument [Line Items]
Contractual stated interest	1,400	1,391
Amortization of debt discount and issuance costs	297	337
Total interest cost recognized	$ 1,697	$ 1,728

XML

Debt - Summary of Maturities of Debt (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Debt Disclosure [Abstract]
Remainder of 2024	$ 21,633
2025	28,844
2026	128,844
2027	457,904
2028	0
2029 and thereafter	150,000
Less unamortized discount and issuance costs	(10,415)
Debt	$ 776,810	$ 790,438

XML

Leases - Summary of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Leases [Abstract]
Fixed lease cost	$ 3,505	$ 4,611
Variable lease cost	449	384
Short-term lease cost	639	499
Total lease cost	$ 4,593	$ 5,494

XML

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022	Aug. 25, 2023
Lessee Lease Description [Line Items]
Operating lease payments	$ 2.5	$ 2.5
Right-of-use assets obtained in exchange for operating lease liabilities		$ 9.4
Weighted-average remaining lease term for operating leases	10 years 6 months		10 years 6 months
Weighted-average discount rate for operating leases	6.00%
Minimum
Lessee Lease Description [Line Items]
Operating lease term	2 years
Maximum
Lessee Lease Description [Line Items]
Operating lease term	5 years

XML

Leases - Schedule of Minimum Payments of Lease Liabilities (Details) $ in Thousands	Dec. 01, 2023 USD ($)
Leases [Abstract]
Remainder of 2024	$ 9,994
2025	11,252
2026	9,921
2027	7,678
2028	7,901
2029 and thereafter	54,395
Total	101,141
Less imputed interest	(27,586)
Present value of total lease liabilities	$ 73,555

XML

Equity - Additional Information (Details) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 01, 2023 USD ($) shares	Nov. 25, 2022 USD ($) shares	Jan. 08, 2024 USD ($)	Nov. 29, 2023	Jun. 13, 2023	Apr. 04, 2022 USD ($)
Class Of Stock [Line Items]
Shares acquired, value	$ 13,130	$ 4,659
Stock repurchase agreement, ownership rights, percentage				1
Reclassifications out of accumulated other comprehensive income	212,397
Cumulative Translation Adjustment
Class Of Stock [Line Items]
Reclassifications out of accumulated other comprehensive income	212,397
SMART Modular Technologies
Class Of Stock [Line Items]
Stock repurchase agreement, ownership rights, percentage				0.19
SMART Modular Technologies | Lexar Europe B.V.
Class Of Stock [Line Items]
Stock repurchase agreement, ownership rights, percentage				0.81	0.81
Share Repurchase Authorization
Class Of Stock [Line Items]
Stock repurchase program, authorized amount	$ 4,500					$ 75,000
Repurchase of ordinary shares (in shares) | shares	825	182
Shares acquired, value	$ 12,100	$ 2,800
Share Repurchase Authorization | Subsequent Event
Class Of Stock [Line Items]
Stock repurchase program, authorized amount			$ 75,000
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. | Exchange Transaction
Class Of Stock [Line Items]
Repurchase of ordinary shares (in shares) | shares	75
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
Class Of Stock [Line Items]
Repurchase of ordinary shares (in shares) | shares	75	143
Shares acquired, value	$ 1,100	$ 1,900

XML

Equity - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands	3 Months Ended
	Dec. 01, 2023 USD ($)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 229,233
Components of Other Comprehensive Income (Loss):
Other comprehensive income (loss) before reclassifications	(6,130)
Reclassifications out of accumulated other comprehensive income	212,397
Other comprehensive income (loss)	206,267
Ending balance	416,009
AOCI Including Portion Attributable to Noncontrolling Interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(205,964)
Components of Other Comprehensive Income (Loss):
Ending balance	303
Cumulative Translation Adjustment
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(205,969)
Components of Other Comprehensive Income (Loss):
Other comprehensive income (loss) before reclassifications	(6,142)
Reclassifications out of accumulated other comprehensive income	212,397
Other comprehensive income (loss)	206,255
Ending balance	286
Gains (Losses) on Investments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	5
Components of Other Comprehensive Income (Loss):
Other comprehensive income (loss) before reclassifications	12
Reclassifications out of accumulated other comprehensive income	0
Other comprehensive income (loss)	12
Ending balance	$ 17

XML

Fair Value Measurements - Schedule of Fair Value Measurements of Other Assets and Liabilities (Details) - Level 2: - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Fair Value | Derivative financial instruments
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Derivative financial instrument asset	$ 3,721	$ 0
Fair Value | Amended 2027 TLA
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instruments fair value	537,226	551,648
Fair Value | 2029 Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instruments fair value	148,649	195,426
Fair Value | 2026 Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instruments fair value	105,714	131,864
Carrying Value | Derivative financial instruments
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Derivative financial instrument asset	3,721	0
Carrying Value | Amended 2027 TLA
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instruments fair value	531,019	544,943
Carrying Value | 2029 Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instruments fair value	147,034	146,886
Carrying Value | 2026 Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt instruments fair value	$ 98,757	$ 98,609

XML

Equity Plans - Additional Information (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Ordinary shares, available for issuance (in shares)	7,300
Unrecognized compensation costs related to awards	$ 0.8
Unrecognized compensation costs recognition period	8 months 12 days
Income tax benefits for share-based awards	$ 1.8	$ 1.8
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share issued under purchase plan (in shares)	298	265
Share issued under purchase plan	$ 3.3	$ 2.9
Restricted Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation costs related to awards	$ 79.0
Unrecognized compensation costs recognition period	2 years 3 months 18 days

XML

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
	Dec. 01, 2023	Nov. 25, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards granted (in shares)	419	1,010
Weighted average grant-date fair value per share (in usd per share)	$ 30.49	$ 19.51
Aggregate vesting date fair value of shares vested	$ 8,733	$ 8,949

XML

Equity Plans - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 10,970	$ 9,981
Cost of sales
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	1,815	1,642
Research and development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	1,597	1,556
Selling, general and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 7,558	$ 6,783

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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
	Dec. 01, 2023	Nov. 25, 2022
Revenue from Contract with Customer [Abstract]
Cost of materials and services invoiced in connection with logistics services	$ 108,969	$ 377,751

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Revenue and Customer Contract Balances - Summary of Customer Contract Balances (Details) - USD ($) $ in Thousands	Dec. 01, 2023	Aug. 25, 2023
Revenue from Contract with Customer [Abstract]
Contract assets	$ 2,391	$ 0
Contract liabilities:
Deferred revenue	59,082	69,326
Customer advances	4,124	5,565
Contract liabilities	$ 63,206	$ 74,891

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Revenue and Customer Contract Balances - Additional information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 01, 2023	Aug. 25, 2023
Disaggregation Of Revenue [Line Items]
Expected revenue recognized on remaining performance obligations	$ 59.1
Termination fees	7.3	$ 10.9
Revenue recognized	23.9
Estimates of consideration payable to customers, including estimates for pricing adjustments and returns	14.2	$ 12.5
Customer Advances
Disaggregation Of Revenue [Line Items]
Revenue recognized	1.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-12-02
Disaggregation Of Revenue [Line Items]
Expected revenue recognized on remaining performance obligations	$ 39.1
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months

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Other Operating (Income) Expense - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Other Income and Expenses [Abstract]
Restructure charge	$ 2.9	$ 1.8
Restructuring costs payable	$ 2.3

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Other Non-operating (Income) Expense - Schedule of Other Non-operating (Income) Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Feb. 24, 2023	Nov. 25, 2022
Nonoperating Income (Expense) [Abstract]
Loss (gain) on extinguishment of debt	$ 0	$ 16,700	$ (767)
Loss (gain) from changes in foreign currency exchange rates	(546)		(520)
Loss (gain) on disposition of assets	45		(41)
Other	(75)		(34)
Other non-operating (income) expense	$ (576)		$ (1,362)

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Income Taxes - Schedule of Income (Loss) before Income Taxes and Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Income Tax Disclosure [Abstract]
Income (loss) before taxes	$ (7,678)	$ 7,715
Income tax provision (benefit)	$ 3,534	$ 11,322

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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
	Dec. 01, 2023	Nov. 25, 2022
Earnings Per Share [Abstract]
Net income (loss) from continuing operations	$ (11,773)	$ (3,939)
Net income (loss) from discontinued operations	(8,148)	8,931
Net income (loss) attributable to SGH – diluted	(19,921)	4,992
Net income (loss) attributable to SGH – basic	$ (19,921)	$ 4,992
Weighted-average shares outstanding – Basic (in shares)	52,068	48,962
Dilutive effect of equity plans and convertible notes (in shares)	0	0
Weighted-average shares outstanding – Diluted (in shares)	52,068	48,962
Basic earnings (loss) per share:
Continuing Operations (in usd per share)	$ (0.23)	$ (0.08)
Discontinued Operations (in usd per share)	(0.15)	0.18
Basic (in usd per share)	(0.38)	0.10
Diluted earnings (loss) per share:
Continuing Operations (in usd per share)	(0.23)	(0.08)
Discontinued Operations (in usd per share)	(0.15)	0.18
Diluted (in usd per share)	$ (0.38)	$ 0.10

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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
	Dec. 01, 2023	Nov. 25, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	6,060	10,147
Equity plans
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	6,060	8,432
Stratus Technologies contingently issuable shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	1,715

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Segment and Other Information - Additional Information (Details)	3 Months Ended
	Dec. 01, 2023 businessUnit
Segment Reporting [Abstract]
Number of business units	3

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Segment and Other Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 01, 2023	Nov. 25, 2022
Segment Reporting Information [Line Items]
Total net sales	$ 274,247	$ 391,797
Total segment operating income	1,305	14,847
Share-based compensation expense	(10,970)	(9,981)
Amortization of acquisition-related intangibles	(10,200)	(10,900)
Change in fair value of contingent consideration	0	(3,700)
Restructure charge	(2,900)	(1,800)
Total unallocated	(81,545)	(97,251)
Unallocated:
Segment Reporting Information [Line Items]
Share-based compensation expense	(10,970)	(9,981)
Amortization of acquisition-related intangibles	(10,008)	(10,858)
Flow through of inventory step up	0	(2,599)
Cost of sales-related restructure	(668)	0
Acquisition and integration expenses	(789)	(6,732)
Change in fair value of contingent consideration	0	(3,700)
Restructure charge	(2,939)	(1,771)
Other	0	(900)
Total unallocated	(25,374)	(36,541)
Operating Segments
Segment Reporting Information [Line Items]
Total net sales	274,247	391,797
Total segment operating income	26,679	51,388
Operating Segments | Memory Solutions
Segment Reporting Information [Line Items]
Total net sales	85,668	118,286
Total segment operating income	7,195	19,039
Operating Segments | Intelligent Platform Solutions
Segment Reporting Information [Line Items]
Total net sales	118,824	210,971
Total segment operating income	17,901	32,985
Operating Segments | LED Solutions
Segment Reporting Information [Line Items]
Total net sales	69,755	62,540
Total segment operating income	$ 1,583	$ (636)