SGI Proprietary

SGI Q3FY08 Results

May 6, 2008

EXHIBIT 99.2

2

Topics

•

Introductory

Comments

–

Bo

Ewald,

CEO

•

Q3

Results

–

Kathy

Lanterman,

CFO

•

Company

Directions

–

Bo

Ewald

–

Business

–

Market

–

Technology

•

Sales

Update

–

Doug

Britt,

SVP

Sales

•

Outlook -

Kathy Lanterman

3

Legal Disclaimers

This presentation contains forward-looking statements that are subject to risks and uncertainties that could

cause actual results to differ materially from those set forth herein, including increased demands on our

working capital due to growth in backlog, in particular for large sales transactions; our ability to raise additional

capital in the future on commercially attractive terms or at all, which would restrict our growth and impair our

ability to operate; our historical losses and possible failure to attain profitability on a quarterly, annual or

sustained basis and risks related to the impact on our business of cost reduction initiatives to be effected in

the coming quarters to bring costs more in-line with current revenues; our operating results continuing to

fluctuate significantly and continuing to be difficult to predict; our stock continuing to have extremely low

trading

volume

and

price

volatility;

our

failure

to

continue

growth

in

bookings,

delays

in

the

conversion

of

backl

og

to

revenue

due

to

application

of SOP 97-2, shipment delays and the other risks and uncertainties discussed

under

the

caption

“Risk

Factors”

and

elsewhere

in

SGI’s

Form

10-K

or

Form

10-Q

most

recently

filed

with

the

Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof.

SGI disclaims any intent or obligation to update these forward-looking statements.

In this presentation, SGI uses certain pro forma financial measures that are not calculated in accordance with

GAAP,

or

non-GAAP

financial

measures.

These

measures

are

referred

to

as

“pro

forma”

in

this

presentation.

In addition, the company uses bookings and backlog to measure performance. Management believes that

these

non

GAAP

financial

measures,

bookings

and

backlog

are

useful

to

investors

because

they

facilitate

peri

od

to

period

comparisons

of

SGI

performance

and because they help investors view the company’s results of

operations through the eyes of management and the company’s lenders. SGI’s credit line covenants,

management reporting and incentive plans are measured against certain of these non-GAAP financial

measures.

A Reconciliation of the non-GAAP financial measures set forth above and used in this presentation is posted

on

our

website

at

www.sgi.com/investors

and

is

included

in

our

May

6,

2008

press

release

announcing

our

financial results for the quarter and nine months ended March 28, 2008.

4

Q3 Highlights—Bookings

•

Q3 Bookings

–

$83M compared to $55M in Q3FY07

–

~50% growth

•

Key Customer Wins

–

NBA: Digital Media Management System

–

Pittsburgh

Supercomputing

Center:

two

Altix

®

4700

systems

totaling

912

processors

–

Sikorsky:

Visual Flight

Simulator

•

Backlog

–

$134M (>80% increase from start of the year)

•

Q4 Bookings Momentum Continues

–

NASA/AMES –

20,000 core, 20 TB ICE system

–

Major European research center ~ $25M+

–

European data warehouse solution –

5 Altix systems running Oracle ~ $3M

5

Q3 Highlights—Operations

•

Products

–

Visualization –

Virtu VN200

–

Server –

ICE enhancements

–

Storage –

InfiniteStorage 4600 and Virtualized Storage Migration Solution

–

Climate Savers Initiative

•

Software

–

Irene Qualters joins to lead Software

–

Linux Networx Software, etc.

–

Progress toward release of our Industrial Strength Linux Environment (ISLE)

•

Service

–

Support

Solutions

Plus

launched

for

other

companies’

products

6

Topics

•

Introductory

Comments

–

Bo

Ewald,

CEO

•

Q3

Results

–

Kathy

Lanterman,

CFO

•

Company

Directions

-

Bo

Ewald

–

Business

–

Market

–

Technology

•

Sales

Update

–

Doug

Britt,

SVP

Sales

•

Outlook -

Kathy Lanterman

7

Financial Results

Q307

Q407

Q108

Q208

Q308

Q307

Q407

Q108

Q208

Q308

Backlog

4

$118M

$89M

$113M

$163M

$202M

$109M

$66M

$65M

$96M

$134M

Bookings

3

$55M

$54M

$77M

$100M

$83M

$55M

$54M

$77M

$100M

$83M

Revenue

$111M

$122M

$91M

$90M

$79M

$130M

$141M

$121M

$109M

$81M

Products standard profit margin

44.3%

34.5%

37.7%

42.2%

41.1%

53.8%

40.7%

36.1%

45.4%

42.2%

Products gross profit margin

29.4%

17.7%

17.3%

19.5%

10.8%

43.4%

28.1%

24.6%

31.0%

15.1%

Services gross profit margin

37.1%

39.6%

43.1%

41.5%

34.1%

43.9%

46.4%

47.9%

41.3%

36.1%

Gross Margin

33.00%

26.30%

30.20%

30.90%

23.50%

43.60%

35.20%

34.30%

35.70%

26.90%

Operating Expenses

$57M

$57M

$55M

$59M

$59M

$53M

$53M

$51M

$55M

$53M

Operating Profit (Loss)

($20M)

($25M)

($27M)

($31M)

($41M)

$4M

($3M)

($10M)

($16M)

($31M)

EBITDA

2

$10M

$3M

($4M)

($11M)

($26M)

Unrestricted Cash

$70M

$70M

$55M

$33M

$43M

$70M

$70M

$55M

$33M

$43M

Non-GAAP1

GAAP

1) Non-GAAP results exclude restructuring, fresh start account, non-cash impact of LXNI asset acquisition, and impact of implementing

Software Revenue Recognition (SOP97-2).

2) EBITDA as calculated under the terms of the loan agreement

3) Bookings are new orders for products and professional services taken in the quarter that are expected to ship in the next 12 months, and

exclude

the

value

of

our

Customer

Support

(CS)

contracts.

4) Backlog is defined as bookings for products and professional services for which we have not yet recognized revenue, also excluding CS

5) A reconciliation

of

the

non-GAAP

financial

measures

set

forth

above

and

used

in

this

presentation

is

posted

on

our

website

at

www.sgi.com/investors

and

is

included

in

our

May

6,

2008

press

release

announcing

our

financial

results

for

the

quarter

and

the

nine

months ended March 28, 2008.

8

Bookings Results by Product Line ($M)

Revenue Results by Product  (Non-GAAP $M)

* A reconciliation

of

the

non-GAAP

financial

measures

set

forth

above

and

used

in

this

presentation

is

posted

on

our

website

at

www.sgi.com/investors

and

is

included

in

our

May

6,

2006

press

release

announcing

our

financial

results

for

the

quarter

and

nine

months

ended

March

28,

2008

9

10

Topics

•

Introductory

Comments

–

Bo

Ewald,

CEO

•

Q3

Results

–

Kathy

Lanterman,

CFO

•

Company

Directions

–

Bo

Ewald

–

Business

–

Market

–

Technology

•

Sales Update –

Doug Britt, SVP Sales

•

Outlook –

Kathy

Lanterman

11

Company Overview

•

Founded:

1982

•

Headquarters:

Sunnyvale, CA

•

Customers:

Over 4000, with

products and services in more than

50 countries

•

Employees:

~1650

–

800+ customer facing employees

–

340+ U.S. Government

clearances

–

300+ engineers continue to

innovate

For over 25 years, SGI has provided high performance computing (HPC), storage and

visualization solutions to help solve the world’s most challenging computing problems

12

Customers—Strong Base in Government and Research

Classified

National Centers

Defense

Strategic Systems

Weather

Government Customer Base

Research Customers

Universities

13

Customers—Growing in Industry and Business

Energy

Manufacturing

Automotive

Aerospace

Biosciences

Enterprises

Industry

Business

14

Strong Foundation

•

4000 Customers

•

Silicon

Graphics

Brand

•

Engineering

–

System Architecture

–

Packaging

•

Software

–

High productivity Linux environment for our customers

•

Systems

that

work

“out

of

the

box”

-

manufacturing,

installation,

production

•

People

who

know

the

space

-

compute,

data-intensive,

and

visualization

15

3 Year Business Roadmap

+

+

+

+

+

+

+

+

+

16

SGI—Performance Meets Next Wave

HPC

Foundation

Fast Analysis

Data Intensive

Growing Storage Req.

New Media

3D, HD and Web 3.0

Huge Models

Performance Database

Active Digital Content

Massive Unstructured Data

New

Visualization

New

Data Management

17

SGI and NBA—Monetizing Digital Content

Opportunity:

•

Massive volume of video content—every NBA game for 40 years

•

Opportunity

to

sell

“clips”

to

consumers

et

al

Challenges:

•

Inability to store and manage large volume of unstructured data

•

Inability

to

dynamically

select

and

deliver

“chunks”

of

video

from

large

streams

•

Complexity of encoding/transcoding delivery for diverse OS/user environments

SGI Solution:

•

Scalable and flexible storage designed for large unstructured data sets

–

Initial project: 8TB, Today: 210TB –

7PB library = 250,000 hours+ of content and

growing

•

DMF

offers

ability

to

select

any

portion

of

a

streaming

file,

in

real-time

•

Hollywood HPC expertise powers transparent and immediate transcoding to

match any flavor OS –

in real-time

18

SGI

Visualization

•

Market-leading, patented technology

–

Viz Anywhere (WAVE)

–

Virtual worlds/reality

–

3D visualization

•

Massive uptake across HPC and Commercial

–

Visual collaboration, design, decision-making

–

Virtual training across medical, defense, law enforcement, sports and more

•

Eventual consumer opportunity

–

3D Web

–

Mobile gaming

–

Virtual worlds

•

Virtual worlds are powering range of applications

–

Second Life: training, shopping, real estate, travel. +10% new users/month

–

Entertainment and gaming on the brink of virtual evolution

–

The Nintendo

®

Wii™

is the first entry of Virtual Worlds into the home.

19

SGI Technology Strategy—Unified High Performance

Solutions

Compute

Visualization

Storage

Storage

Hybrid

Systems

•

Focus on core platforms for

compute, visualization &

storage

•

Best of Breed Products in

each

•

Industrial Strength Linux

Environment (ISLE) to

integrate

•

Hybrid Computing

•

Leverage R&D investments

20

ISLE & Hybrid Computing

LINUX OPERATING

BIOS

End user environment

Improving & Expanding Our Software Content

Compute

Compute

Visualization

Visualization

Storage

Storage

Hybrid

Systems

Strategy Supports Present and Future Markets

HPC

HPC

3D, HD Viz

3D, HD Viz

Complex Data

Complex Data

Management

Management

Compute

Compute

Visualization

Visualization

Storage

Storage

Hybrid

Systems

23

FY08 Major Objectives

•

Bookings–Double-digit growth

•

Strategy–Rollout Hybrid Computing, ISLE, launch Visualization

•

Products–Introduce and refresh:

•

Compute–ICE and Altix

•

Storage–SGI

®

InfiniteStorage NEXIS NAS

•

Visualization

Virtu

•

Services–Slow decline of CS, start to grow PS

•

Organization–Vertical Sales & Marketing; Software

•

Leadership–Supplement the team

•

IP–Develop

strategy to monetize

24

FY08 Highlights

•

July

Strategy finalized

•

August

1   ICE systems shipped

Shahin Khan joins to lead IP program

•

September

NEXIS NAS storage family launched

Bookings grow 43% over prev. quarter

Significant Orders:  NASA/Ames, Honda, Malaysian Research, Idaho Natl. Lab

•

October

Sales Conference builds momentum

•

November

Supercomputing ’07 –

“SGI is back”

ICE is #3 on Top500 list

Record performance on Oracle OASB

Doug Britt joins to lead sales

•

December

Nancy Hanna joins to lead HR

Bookings grow 30% over Q1 to $100M

Significant Orders:  BAW, TOTAL, NMCAC, HLRN, Sikorsky, Merck KgAA

st

25

FY08 Highlights (cont.)

•

January

Irene Qualters joins to lead Software

•

February

Linux Networx

Software, etc.

Support Solutions Plus launched

•

March

ICE upgrades

Bookings grow 50% over Q3 FY07

Significant Orders:  GFDL, McLaren, Pittsburgh Supercomputing, NBA, Japanese automaker, Internet

commerce site

•

April

1   Visualization Product

Virtu

VN200 Announced

NBA project has 250,000 hours digitized (N7PB)

Significant Orders:

European weather service, National European supercomputing

center,  NASA/AMES…

st

26

Topics

•

Introductory Comments –

Bo Ewald, CEO

•

Q3 Results –

Kathy Lanterman, CFO

•

Company Directions –

Bo Ewald

–

Business

–

Market

–

Technology

•

Sales Update –

Doug Britt, SVP Sales

•

Outlook –

Kathy Lanterman

Bookings Through FY07

27

Bookings Inflection Point

Q4 Guidance

FY08 YTD

28

Good Progress on Bookings & Backlog

29

SGI Revenue Distribution Percentage

by Market Segment

31

Critical Success Factors for Our Sales Team

to Sustain Consistent Growth

Protect and grow the base business

Focus on hunting new business

Add strategic selling resources

A proactive and aggressive selling culture

Industry marketing —

the “Virtual Team”

A well-executed targeted customer coverage model

Differentiated value proposition

Talents, rewards, execution, and accountability

32

Proactive Solution Selling Culture

Address customer pain points

SGI Value Proposition

Target Accounts/Industry

Partners: ISVs, SIs, VARs

Products/Solutions: aligned to customer challenge

Selling resources proactively solving customer problems

Sales Support Collateral:

Customer Presentations —

Executive/Technical

White Papers

Competitive Data

Quick Sales Guide

33

Actions Currently Underway to

Sustain Sales Growth

Increase and realign sales and management resources that are

100% focused on hunting new business

Investing in telesales for demand generation

Revamping the Channel sales strategy

Created a dedicated Storage/Data Management Sales Team

Improve sales training and collateral

Align industry marketing to support and drive market segment

penetration strategies —

the “Virtual Team”

Hired New Sales Leader for EMEA

34

Topics

•

Introductory Comments –

Bo Ewald, CEO

•

Q3 Results –

Kathy Lanterman, CFO

•

Company Directions –

Bo Ewald

–

Business

–

Market

–

Technology

•

Sales Update –

Doug Britt, SVP Sales

•

Outlook –

Kathy

Lanterman

35