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SMART Global Holdings (NASDAQ:SGH) reported Q1 FY2024 results in line with expectations, with revenue down 41.1% year on year to $274.2 million. Next quarter’s revenue is expected to be around $285 million, 2.9% above estimates. Non-GAAP profit was $0.24 per share. CEO Mark Adams is pleased with progress and transformation after the divestiture of their Brazil business, marking another quarter of record non-GAAP gross margins. SMART is a US-based semiconductor company offering memory, digital, and LED products.

SMART’s revenue growth has been unremarkable, with a 41.1% YoY decline in Q1 FY2024. Digital chip makers show cyclicality, driven by supply and demand imbalances and exposure to product cycles.

Days Inventory Outstanding (DIO) is an important metric for chipmakers, reflecting the cyclical nature of semiconductor supply and demand. This quarter, SMART’s DIO came in at 99, 23 days above its five-year average, suggesting higher inventory levels.

SMART’s Q1 results showed strong gross margin improvement and exceeded EPS estimates. The stock is up 8.2% after reporting, currently trading at $20 per share. Valuation, business qualities, and latest quarter performance should be considered when deciding to invest in SMART.

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Read more: SMART (NASDAQ:SGH) Reports Q1 In Line With Expectations, Stock Soars