Delivers Record Quarterly Results and Raises Full-Year Outlook for Both Net Sales and EPS, Reflecting AI-Driven Demand
FREMONT, Calif.--(BUSINESS WIRE)--July 07, 2026--
Penguin Solutions, Inc. ("Penguin Solutions," "we," "us," or the "Company") (Nasdaq: PENG) today reported financial results for the third quarter of fiscal 2026.
Third Quarter Financial Highlights
-- Record net sales of $479 million, up 48% versus the year-ago quarter
-- Record Q3 GAAP operating income of $51 million, up 417% versus the
year-ago quarter
-- Record Q3 Non-GAAP operating income of $64 million, up 67% versus the
year-ago quarter
-- Q3 GAAP diluted EPS of $0.68 versus $(0.01) in the year-ago quarter
-- Q3 Non-GAAP diluted EPS of $0.84 versus $0.47 in the year-ago quarter,
an increase of 79%
"Penguin Solutions delivered a record quarter, exceeding expectations for both net sales and EPS. This profitable growth acceleration reinforces our confidence that our AI Factory Platform strategy is working. Integrated Memory net sales more than doubled year over year, and our AI Infrastructure business continued to build momentum, reflecting strong demand and execution across our memory and AI Infrastructure portfolio," said Kash Shaikh, CEO of Penguin Solutions.
"We are seeing very strong AI-driven customer demand for memory and AI infrastructure solutions. As inference and agentic AI workloads become more persistent and context-rich, memory is increasingly becoming one of the primary performance and scalability bottlenecks. Penguin is well positioned at the intersection of memory and AI infrastructure to help customers address these evolving requirements. Given robust demand and disciplined execution, we are raising our full-year outlook for both net sales and EPS."
Third Quarter Business Highlights
Customer Wins Across Integrated Memory and AI Infrastructure:
-- Continued to execute our land-and-expand strategy, converting new
customer wins into expanded commercial relationships across both
Integrated Memory and AI Infrastructure.
-- Integrated Memory: Across the trailing four quarters from Q3-25 to
Q2-26, we added 16 new logos, and five of those customers subsequently
increased their business with us.
-- AI Infrastructure: Added four new AI Infrastructure customer logos in
Q3. Across the trailing four quarters from Q3-25 to Q2-26, we added 13
new logos, and seven of those customers subsequently increased their
business with us.
Key Technology and Market Leadership Milestones for Penguin's AI Factory Platform:
-- Recognized as Dell Technologies Global Alliances Americas AI Partner of the Year, highlighting Penguin's role in delivering full-stack AI Factory Platforms that combine infrastructure software, advanced memory technologies, compute systems, and services. -- Became an NVIDIA AI Factory Specialized Partner, recognizing Penguin's expertise in designing, building, deploying, and managing full-stack AI factory infrastructure for enterprise, sovereign AI, and neocloud environments. -- Expanded ClusterWareAI operating system software for AI factories with AI-powered operations. The new AI Factory Operations Agent provides administrators with a conversational interface using natural language queries. This agent is the first in a planned family of agentic AI-powered agents designed to automate AI cluster operations with a human-in-the-loop approach.
Raised Fiscal 2026 Outlook
Penguin Solutions is further raising its previously-issued improved financial outlook for full-year fiscal 2026, and as of July 7, 2026, expects both net sales and diluted EPS for full-year fiscal 2026 to be above the high end of its previously-issued outlook ranges. Supported by very strong agentic AI-driven customer demand across its Integrated Memory and AI Infrastructure businesses, Penguin Solutions now expects full-year fiscal 2026 net sales growth of 22% plus or minus 2%, full-year GAAP EPS of $1.97 plus or minus 5 cents, and full-year non-GAAP EPS of $2.60 plus or minus 5 cents.
Quarterly Financial Results
GAAP (1) Non-GAAP (2)
----------------------------- ----------------------------
(in thousands,
except per
share amounts) Q3-26 Q2-26 Q3-25 Q3-26 Q2-26 Q3-25
--------------- -------- -------- --------- -------- -------- --------
Net sales:
Advanced
Computing $137,583 $115,715 $132,498 $137,583 $115,715 $132,498
Integrated
Memory 275,067 171,629 130,124 275,067 171,629 130,124
Optimized LED 66,063 55,655 61,629 66,063 55,655 61,629
------- ------- ------- ------- ------- -------
Total net sales $478,713 $342,999 $324,251 $478,713 $342,999 $324,251
======= ======= ======= ======= ======= =======
Gross profit $133,214 $ 93,702 $ 95,083 $134,750 $106,916 $102,753
Operating
income 50,863 25,689 9,843 64,384 45,254 38,474
Net income
attributable
to Penguin
Solutions 44,689 37,452 2,661 52,246 34,107 31,128
Diluted
earnings
(loss) per
share $ 0.68 $ 0.58 $ (0.01) $ 0.84 $ 0.52 $ 0.47
(1) GAAP represents U.S. Generally Accepted Accounting Principles.
(2) Non-GAAP represents GAAP excluding the impact of certain activities.
Further information regarding the Company's use of non-GAAP measures and
reconciliations between GAAP and non-GAAP measures are included within
this press release.
Business Outlook
As of July 7, 2026, Penguin Solutions is providing the following financial outlook for fiscal year 2026:
Updated GAAP Non-GAAP
Outlook Outlook Adjustments Outlook
------------ -------------- -------------------------------- --------------
22% YoY Growth 22% YoY Growth
Net sales +/-2% -- +/-2%
Gross margin 26.5% +/- 0.5% 2% $(A)$ 28.5% +/- 0.5%
$303 million $260 million
Operating +/- $5 ($43) +/- $5
expenses million million (B)$(CUL3)$ million
Diluted
earnings per $1.97 +/- $2.60 +/-
share $0.05 0.63 (B)$(C)$(D)$(E)$(F)$ $0.05
Diluted
shares 59 million (3) million 56 million
Non-GAAP adjustments (in millions)
------------------------------------------------------------------------ ----
(A) Stock-based compensation and amortization of acquisition-related
intangibles included in cost of sales $ 30
(B) Stock-based compensation and amortization of acquisition-related
intangibles included in R&D and SG&A 33
(C) Other operating adjustments 10
(D) Other non-operating adjustments (1) (20)
$(E)$ Estimated income tax effects (13)
(F) Estimated effect of allocation of earnings to participating
securities (5)
----
$ 35
====
(1) Primarily reflects net gains associated with non-marketable equity
investments.
Previous GAAP Non-GAAP
Outlook Outlook Adjustments Outlook
------------ -------------- -------------------------------- --------------
12% YoY Growth 12% YoY Growth
Net sales +/-5% -- +/-5%
Gross margin 26% +/- 0.5% 2% (A) 28% +/- 0.5%
$310 million $250 million
Operating +/- $5 ($60) +/- $5
expenses million million (B)(C) million
Diluted
earnings per $1.30 +/- $2.15 +/-
share $0.15 $0.85 (A)(B)(C)(D)(E)(F) $0.15
Diluted
shares 53 million -- 53 million
Non-GAAP adjustments (in millions)
------------------------------------------------------------------------ ----
(A) Stock-based compensation and amortization of acquisition-related
intangibles included in cost of sales $ 30
(B) Stock-based compensation and amortization of acquisition-related
intangibles included in R&D and SG&A 50
(C) Other operating adjustments 10
(D) Other non-operating adjustments (1) (20)
(E) Estimated income tax effects (18)
(F) Estimated effect of allocation of earnings to participating
securities (7)
----
$ 45
====
(1) Primarily reflects net gains associated with non-marketable equity
investments.
Third Quarter Fiscal 2026 Earnings Conference Call and Webcast Details
Penguin Solutions will hold a conference call and webcast to discuss the third quarter fiscal 2026 results and related matters today, July 7, 2026, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Interested parties may access the call by registering online at https://events.q4inc.com/attendee/735199556, at which time registrants will receive dial-in information as well as a conference ID. The live webcast will also be accessible from the Penguin Solutions investor relations website https://ir.penguinsolutions.com/investors/default.aspx on the Events page, along with the related earnings press release and slide presentation. The webcast replay will be made available on the Quarterly Results page after the call concludes. An archived version of the webcast will be available on the Penguin Solutions investor relations website for approximately one year after the webcast date.
Use of Forward-Looking Statements
This press release 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 may include, but are not limited to, statements concerning or regarding future events and the future financial and operating performance of Penguin Solutions; statements regarding the extent and timing of and expectations regarding Penguin Solutions' future net sales, sales mix, profitability and expenses; statements regarding Penguin Solutions' strategic transformation, business momentum, and emerging leadership position; statements regarding AI-related demand, customer pipeline, market opportunities, industry trends and product performance; statements regarding projected demand for the fourth quarter of fiscal year 2026 and beyond; statements regarding long-term effective tax rates; and statements regarding the business and financial outlook for fiscal year 2026 described under "Business Outlook" above.
These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipate," "target," "expect," "estimate," "intend," "plan," "goal," "believe," "could," and other words of similar meaning. Forward-looking statements provide 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, including the impact on the financial condition of our customers, particularly in challenging macroeconomic environments; growth and demand trends in technology industries (including trends and markets related to artificial intelligence), our customer markets and various geographic regions; uncertainties in the geopolitical environment, including those related to global conflicts, such as those in the Middle East and Ukraine, and the global effects thereof on international relations, transport, and trade; our ability to manage our cost structure; disruptions in our operations or supply chain as a result of global pandemics, tariffs, disruptions at our suppliers, or other factors; changes in trade regulations and tariffs or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending, including changes in customer spending on our products and services; appropriations for government spending; the success of our strategic initiatives including the U.S. Domestication (as defined below) and our ability to realize the anticipated benefits thereof, our rebranding and related strategy, any existing or potential collaborations and 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; failure to achieve the intended benefits of the sale of Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda. (formerly SMART Modular Technologies do Brasil - Indústria e Comércio de Componentes Ltda.) and its business; the impact of and expected timing of winding down the manufacturing and discontinuing the sale of products offered through our Penguin Edge business; 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 and renewals; the impact of customer churn rates, including discounting and churn of significant customers from whom we derive a significant percentage of our revenue; changes in customer demand and sales mix; 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 memory market, LED market or other markets in which we participate; changes to applicable tax regimes or rates; changes to the valuation allowance for our deferred tax assets, including any potential inability to realize these assets in the future; 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; potential sales of our common stock by the holder of our issued convertible preferred stock or the anticipation of such sales; and the continuing availability of borrowings under revolving lines of credit or other debt arrangements 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 the Annual Report on Form 10-K for the fiscal year ended August 29, 2025, as updated by the risk factors, if any, contained in our Quarterly Reports on Form 10-Q and in our other filings with the U.S. Securities and Exchange Commission (the "SEC"). Such risks, uncertainties and factors as outlined above and in such filings could cause our actual results to be materially different from such forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statements that we make in this press release speak only as of the date of this press release. Except as required by law, we do not undertake to update the forward-looking statements contained in this press release to reflect the impact of circumstances or events that may arise after the date that the forward-looking statements were made.
Statement Regarding Use of Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP net income attributable to Penguin Solutions, non-GAAP income available for distribution, non-GAAP net income available to common stockholders, non-GAAP weighted-average shares outstanding, non-GAAP diluted earnings per share and adjusted EBITDA. Penguin Solutions' management uses these non-GAAP measures to supplement Penguin Solutions' financial results under GAAP. Management uses these measures 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 stock-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships and trademarks/trade names and backlog acquired in connection with business combinations); inventory write-off, stolen in-transit shipment, net of insurance recovery; cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; restructuring charges; (gain) loss on disposition of equity investments; (gain) loss on non-marketable equity investments; impairment of goodwill; changes in the fair value of contingent consideration; (gains) losses from changes in foreign currency exchange rates; amortization of debt issuance costs; (gain) loss on extinguishment or prepayment of debt; other infrequent or unusual items and related tax effects and other tax adjustments. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies are reflected in the Company's non-GAAP measures and these intangible assets contribute to revenue generation. Management believes the presentation of operating results that exclude certain items provides useful supplemental information to investors and facilitates the analysis of the Company's core operating results and comparison of operating results across reporting periods. Management also uses adjusted EBITDA, which represents GAAP net income (loss), adjusted for net interest expense; income tax provision (benefit); depreciation expense and amortization of intangible assets; stock-based compensation expense; inventory write-off, stolen in-transit shipment, net of insurance recovery; cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation
costs; (gain) loss on dispositions of equity investments; (gain) loss on non-marketable equity investments; impairment of goodwill; restructuring charges; loss on extinguishment of debt and other infrequent or unusual items.
Our GAAP effective tax rate can vary significantly from quarter to quarter based on a variety of factors, including, but not limited to, discrete items which are recorded in the period they occur, the tax effects of certain items of income or expense, significant changes in our geographic earnings mix or changes to our strategy or business operations. We are unable to predict the timing and amounts of these items, which could significantly impact our GAAP effective tax rate, and therefore we are unable to reconcile our forward-looking non-GAAP effective tax rate measure to our GAAP effective tax rate.
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 Penguin Solutions' 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. In addition, adjusted EBITDA does not purport to represent cash flow provided by, or used for, operating activities in accordance with GAAP and should not be used as a measure of liquidity. Investors are encouraged to review the "Reconciliation of GAAP to Non-GAAP Measures" tables below.
Explanatory Note
On June 30, 2025, we completed the redomiciliation of the parent company of our corporate group, Penguin Solutions (Cayman), Inc. (formerly known as Penguin Solutions, Inc.), a Cayman Islands exempted company ("Penguin Solutions Cayman"), from the Cayman Islands to the State of Delaware in the United States, resulting in Penguin Solutions, Inc., a Delaware corporation ("Penguin Solutions Delaware"), becoming our publicly traded parent company (the "U.S. Domestication"). Penguin Solutions Delaware is the successor issuer to Penguin Solutions Cayman. The U.S. Domestication was approved by the shareholders of Penguin Solutions Cayman and effected via a court-sanctioned scheme of arrangement under Cayman Islands law, pursuant to which each ordinary share of Penguin Solutions Cayman was exchanged for one share of common stock of Penguin Solutions Delaware, and each convertible preferred share of Penguin Solutions Cayman was exchanged for one share of convertible preferred stock of Penguin Solutions Delaware. Additional information about the U.S. Domestication was included in Penguin Solutions Cayman's definitive proxy statement on Schedule 14A, filed with the SEC on May 2, 2025.
As used in this press release, unless stated otherwise or the context requires otherwise, the terms "Penguin Solutions," "Company," "we," "our, " "us" or similar terms (i) for periods prior to the consummation of the U.S. Domestication, refer to Penguin Solutions Cayman and its consolidated subsidiaries and (ii) for periods at or after the consummation of the U.S. Domestication, refer to Penguin Solutions Delaware and its consolidated subsidiaries. Throughout this press release, we refer to our equity securities (i) for periods prior to the consummation of the U.S. Domestication, as ordinary shares and/or convertible preferred shares and (ii) for periods at or after the consummation of the U.S. Domestication, as shares of common stock and/or shares of convertible preferred stock.
About Penguin Solutions
Penguin Solutions is a leading provider of memory and AI infrastructure, powering the AI factories of the future for enterprises, sovereign AI initiatives, and neocloud providers.
Built on decades of engineering expertise at the intersection of memory and AI/HPC infrastructure, we bring together differentiated infrastructure software, advanced memory, compute systems, end-to-end services, and industry-leading partner solutions in a full-stack AI factory platform designed to help customers deploy and scale AI workloads with speed and precision.
Headquartered in Silicon Valley, California, we operate globally through our network of R&D, manufacturing, and sales locations. Learn more at PenguinSolutions.com.
Penguin Solutions, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------------- --------------------------
May 29, February May 30, May 29, May 30,
2026 27, 2026 2025 2026 2025
------------------ --------- --------- --------- ----------- -------------
Net sales:
Advanced
Computing $137,583 $115,715 $132,498 $ 404,750 $ 510,081
Integrated
Memory 275,067 171,629 130,124 583,217 332,090
Optimized LED 66,063 55,655 61,629 176,816 188,701
------- ------- ------- --------- ---------
Total net
sales 478,713 342,999 324,251 1,164,783 1,030,872
Cost of sales 345,499 249,297 229,168 841,758 733,329
------- ------- ------- --------- ---------
Gross profit 133,214 93,702 95,083 323,025 297,543
------- ------- ------- --------- ---------
Operating
expenses:
Research and
development 21,984 18,976 20,222 59,653 59,940
Selling, general
and
administrative 59,404 47,989 59,724 160,485 179,575
Impairment of
goodwill -- -- 5,294 -- 11,373
Other operating
expense 963 1,048 -- 6,753 968
------- ------- ------- --------- ---------
Total
operating
expenses 82,351 68,013 85,240 226,891 251,856
------- ------- ------- --------- ---------
Operating income 50,863 25,689 9,843 96,134 45,687
------- ------- ------- --------- ---------
Non-operating
(income) expense:
Interest
expense, net 650 721 573 1,418 7,152
Other
non-operating
(income) expense (3,485) (27,983) (1,439) (19,793) (1,012)
------- ------- ------- --------- ---------
Total
non-operating
(income)
expense (2,835) (27,262) (866) (18,375) 6,140
------- ------- ------- --------- ---------
Income before
taxes 53,698 52,951 10,709 114,509 39,547
Income tax
provision 7,515 14,410 7,259 23,730 21,262
------- ------- ------- --------- ---------
Net income 46,183 38,541 3,450 90,779 18,285
Net income
attributable to
noncontrolling
interest 1,494 1,089 789 3,368 2,325
------- ------- ------- --------- ---------
Net income
attributable to
Penguin
Solutions 44,689 37,452 2,661 87,411 15,960
------- ------- ------- --------- ---------
Preferred stock
dividends 3,033 3,033 3,033 9,099 5,633
------- ------- ------- --------- ---------
Income available
for distribution 41,656 34,419 (372) 78,312 10,327
Income allocated
to participating
securities 4,448 3,594 -- 8,210 678
------- ------- ------- --------- ---------
Net income (loss)
available to
common
stockholders $ 37,208 $ 30,825 $ (372) $ 70,102 $ 9,649
======= ======= ======= ========= =========
Earnings (loss)
per share:
Basic $ 0.73 $ 0.59 $ (0.01) $ 1.35 $ 0.18
Diluted $ 0.68 $ 0.58 $ (0.01) $ 1.29 $ 0.18
Common stock used
in per share
calculations:
Basic 50,998 52,283 53,130 52,051 53,355
Diluted 55,063 53,186 53,738 54,565 54,336
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands, except percentages)
(Unaudited)
Three Months Ended Nine Months Ended
---------------------------------------- --------------------------
May 29, February 27, May 30, May 29, May 30,
2026 2026 2025 2026 2025
---------------------- ------------ ------------ ------------ ------------ ------------
GAAP gross profit $133,214 $ 93,702 $ 95,083 $323,025 $297,543
Stock-based
compensation
expense 1,411 1,522 1,393 4,319 4,812
Amortization of
acquisition-related
intangibles 5,908 5,909 5,908 17,726 17,724
Inventory write-off,
stolen in-transit
shipment, net of
insurance recovery (5,783) 5,783 -- -- --
Cost of
sales-related
restructuring -- -- 369 (483) 404
Other -- -- -- -- (200)
------- ------- ------- ------- -------
Non-GAAP gross profit $134,750 $106,916 $102,753 $344,587 $320,283
======= ======= ======= ======= =======
GAAP gross margin 27.8% 27.3% 29.3% 27.7% 28.9%
Effect of
adjustments 0.3% 3.9% 2.4% 1.9% 2.2%
------- ------- ------- ------- -------
Non-GAAP gross margin 28.1% 31.2% 31.7% 29.6% 31.1%
======= ======= ======= ======= =======
GAAP operating
expenses $ 82,351 $ 68,013 $ 85,240 $226,891 $251,856
Stock-based
compensation
expense (8,585) (3,597) (8,858) (20,876) (28,550)
Amortization of
acquisition-related
intangibles (1,316) (1,600) (2,531) (4,515) (9,309)
Diligence,
acquisition and
integration
expense (1,058) -- (296) (1,058) (1,696)
Redomiciliation
costs -- -- (3,702) -- (7,304)
Impairment of
goodwill -- -- (5,294) -- (11,373)
Restructuring
charges (963) (1,048) -- (6,753) (968)
Other (63) (106) (280) (268) (855)
------- ------- ------- ------- -------
Non-GAAP operating
expenses $ 70,366 $ 61,662 $ 64,279 $193,421 $191,801
======= ======= ======= ======= =======
GAAP operating income $ 50,863 $ 25,689 $ 9,843 $ 96,134 $ 45,687
Stock-based
compensation
expense 9,996 5,119 10,251 25,195 33,362
Amortization of
acquisition-related
intangibles 7,224 7,509 8,439 22,241 27,033
Inventory write-off,
stolen in-transit
shipment, net of
insurance recovery (5,783) 5,783 -- -- --
Cost of
sales-related
restructuring -- -- 369 (483) 404
Diligence,
acquisition and
integration
expense 1,058 -- 296 1,058 1,696
Redomiciliation
costs -- -- 3,702 -- 7,304
Impairment of
goodwill -- -- 5,294 -- 11,373
Restructuring
charges 963 1,048 -- 6,753 968
Other 63 106 280 268 655
------- ------- ------- ------- -------
Non-GAAP operating
income $ 64,384 $ 45,254 $ 38,474 $151,166 $128,482
======= ======= ======= ======= =======
GAAP operating margin 10.6% 7.5% 3.0% 8.3% 4.4%
Effect of
adjustments 2.8% 5.7% 8.9% 4.7% 8.1%
------- ------- ------- ------- -------
Non-GAAP operating
margin 13.4% 13.2% 11.9% 13.0% 12.5%
======= ======= ======= ======= =======
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures, Continued
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
-------------------------------------- --------------------------
May 29, February 27, May 30, May 29, May 30,
2026 2026 2025 2026 2025
---------------------- ----------- ------------ ----------- ------------ ------------
GAAP effective tax
rate 14.0% 27.2% 67.8% 20.7% 53.8%
Effect of
adjustments 3.3% (5.2)% (49.4)% (0.7)% (28.8)%
------ ------- ------ ------- -------
Non-GAAP effective tax
rate 17.3% 22.0% 18.4% 20.0% 25.0%
====== ======= ====== ======= =======
GAAP net income
attributable to
Penguin Solutions $44,689 $ 37,452 $ 2,661 $ 87,411 $ 15,960
Stock-based
compensation
expense 9,996 5,119 10,251 25,195 33,362
Amortization of
acquisition-related
intangibles 7,224 7,509 8,439 22,241 27,033
Inventory write-off,
stolen in-transit
shipment, net of
insurance recovery (5,783) 5,783 -- -- --
Cost of
sales-related
restructuring -- -- 369 (483) 404
Diligence,
acquisition and
integration
expense 1,058 -- 296 1,058 1,696
Redomiciliation
costs -- -- 3,702 -- 7,304
Loss on
non-marketable
equity investment -- -- -- 10,000 --
Impairment of
goodwill -- -- 5,294 -- 11,373
Gain on disposition
of equity
investment (3,892) (27,036) -- (30,928) --
Restructuring
charges 963 1,048 -- 6,753 968
Amortization of debt
issuance costs 576 658 916 1,892 2,819
Foreign currency
(gains) losses 1,080 (1,015) (1,134) 1,277 (82)
Other 63 106 280 1,125 655
Income tax effects (3,728) 4,483 54 (6,797) (10,010)
------ ------- ------ ------- -------
Non-GAAP net income
attributable to
Penguin Solutions 52,246 34,107 31,128 118,744 91,482
------ ------- ------ ------- -------
Preferred stock
dividends 3,033 3,033 3,033 9,099 5,633
------ ------- ------ ------- -------
Non-GAAP income
available for
distribution 49,213 31,074 28,095 109,645 85,849
Income allocated to
participating
securities 5,091 3,195 2,863 11,180 5,545
------ ------- ------ ------- -------
Non-GAAP net income
available to common
stockholders $44,122 $ 27,879 $25,232 $ 98,465 $ 80,304
====== ======= ====== ======= =======
Weighted-average
shares outstanding -
Diluted:
GAAP
weighted-average
shares outstanding 55,063 53,186 53,738 54,565 54,336
Adjustment for
dilutive securities
and capped calls (2,226) -- -- (872) --
------ ------- ------ ------- -------
Non-GAAP
weighted-average
shares outstanding 52,837 53,186 53,738 53,693 54,336
====== ======= ====== ======= =======
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures, Continued
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
----------------------------- -------------------
May 29, February May 30, May 29, May 30,
2026 27, 2026 2025 2026 2025
-------- --------- -------- --------- --------
Diluted earnings
(loss) per share:
GAAP diluted
earnings (loss)
per share $ 0.68 $ 0.58 $ (0.01) $ 1.29 $ 0.18
Effect of
adjustments 0.16 (0.06) 0.48 0.54 1.30
------ ------- ------ ------- -------
Non-GAAP diluted
earnings per
share $ 0.84 $ 0.52 $ 0.47 $ 1.83 $ 1.48
====== ======= ====== ======= =======
Net income
attributable to
Penguin
Solutions $44,689 $ 37,452 $ 2,661 $ 87,411 $ 15,960
Interest
expense, net 650 721 573 1,418 7,152
Income tax
provision 7,515 14,410 7,259 23,730 21,262
Depreciation
expense and
amortization of
intangible
assets 12,307 12,751 14,012 37,877 43,010
Stock-based
compensation
expense 9,996 5,119 10,251 25,195 33,362
Inventory
write-off,
stolen
in-transit
shipment, net
of insurance
recovery (5,783) 5,783 -- -- --
Cost of
sales-related
restructuring -- -- 369 (483) 404
Diligence,
acquisition and
integration
expense 1,058 -- 296 1,058 1,696
Redomiciliation
costs -- -- 3,702 -- 7,304
Impairment of
goodwill -- -- 5,294 -- 11,373
Gain on
disposition of
equity
investment (3,892) (27,036) -- (30,928) --
Restructuring
charges 963 1,048 -- 6,753 968
Loss on
non-marketable
equity
investment -- -- -- 10,000 --
Other 63 106 280 1,125 655
------ ------- ------ ------- -------
Adjusted EBITDA $67,566 $ 50,354 $44,697 $163,156 $143,146
====== ======= ====== ======= =======
Penguin Solutions, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
May 29, August 29,
As of 2026 2025
------------------------------------------ ----------- -------------
Assets
Cash and cash equivalents $ 440,301 $ 453,754
Accounts receivable, net 702,981 307,904
Accounts receivable, net - related party 1,288 --
Inventories 498,318 255,182
Other current assets 85,866 47,387
--------- ---------
Total current assets 1,728,754 1,064,227
Property and equipment, net 85,209 92,603
Operating lease right-of-use assets 55,515 58,847
Intangible assets, net 66,536 87,754
Goodwill 145,895 145,895
Deferred tax assets 98,789 99,107
Other noncurrent assets 10,336 68,767
--------- ---------
Total assets $2,191,034 $1,617,200
========= =========
Liabilities, Temporary Equity and
Stockholders' Equity
Accounts payable and accrued expenses $ 802,639 $ 318,761
Current debt 148,401 19,945
Deferred revenue 90,406 73,893
Other current liabilities 78,291 61,300
--------- ---------
Total current liabilities 1,119,737 473,899
Long-term debt 294,763 441,893
Noncurrent operating lease liabilities 59,345 62,736
Other noncurrent liabilities 60,779 30,445
--------- ---------
Total liabilities 1,534,624 1,008,973
--------- ---------
Commitments and contingencies
Temporary equity
Preferred stock, $0.03 par value;
authorized 30,000 shares; 200 shares of
convertible preferred stock issued and
outstanding as of May 29, 2026 and
August 29, 2025. Redemption amount of
$200,500 as of May 29, 2026 and August
29, 2025. 202,710 202,710
Penguin Solutions stockholders' equity:
Common stock, $0.03 par value;
authorized 200,000 shares; 64,804
shares issued and 51,240 outstanding as
of May 29, 2026; 62,756 shares issued
and 52,738 outstanding as of August 29,
2025. 1,944 1,883
Additional paid-in capital 587,047 551,712
Retained earnings 125,021 46,709
Treasury stock, 13,564 and 10,018 shares
held as of May 29, 2026 and August 29,
2025, respectively (274,962) (206,076)
Accumulated other comprehensive income 11 18
--------- ---------
Total Penguin Solutions stockholders'
equity 439,061 394,246
Noncontrolling interest in subsidiary 14,639 11,271
--------- ---------
Total stockholders' equity 453,700 405,517
--------- ---------
Total liabilities, temporary equity
and stockholders' equity $2,191,034 $1,617,200
========= =========
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------------------- -----------------------
May 29, February May 30, May 29, May 30,
2026 27, 2026 2025 2026 2025
----------------- ---------- ---------- --------- ---------- -----------
Cash flows from
operating
activities
Net income $ 46,183 $ 38,541 $ 3,450 $ 90,779 $ 18,285
Adjustments to
reconcile net
income (loss)
from continuing
operations to
cash provided by
(used for)
operating
activities
Depreciation
expense and
amortization
of intangible
assets 12,307 12,751 14,012 37,877 43,010
Amortization of
debt issuance
costs 576 658 916 1,892 2,819
Stock-based
compensation
expense 9,996 5,119 10,251 25,195 33,362
Loss on
impairment of
non-marketable
equity
investment -- -- -- 10,000 --
Impairment of
goodwill -- -- 5,294 -- 11,373
Gain on
disposition of
equity
investment (3,892) (27,036) -- (30,928) --
Deferred income
taxes, net 291 (55) 959 321 1,122
Other (377) (1,226) (1,040) 526 (2,468)
Changes in
operating
assets and
liabilities:
Accounts
receivable (333,660) (28,641) 37,880 (396,365) (40,760)
Inventories (175,958) (109,155) 15,389 (243,136) (30,776)
Other assets 12,708 (1,933) (1,979) 9,899 13,741
Accounts
payable and
accrued
expenses and
other
liabilities 357,038 165,929 11,788 505,162 133,908
-------- -------- ------- -------- -------
Net cash provided
by (used for)
operating
activities from
continuing
operations (74,788) 54,952 96,920 11,222 183,616
Net cash used for
operating
activities from
discontinued
operations -- -- (4,099) -- (4,099)
-------- -------- ------- -------- -------
Net cash provided
by (used for)
operating
activities (74,788) 54,952 92,821 11,222 179,517
-------- -------- ------- -------- -------
Cash flows from
investing
activities
Capital
expenditures and
deposits on
equipment (2,841) (1,603) (1,916) (7,297) (6,087)
Proceeds from
sales and
maturities of
investment
securities -- -- 12,650 -- 27,485
Proceeds from
disposition of
equity
investments 39,552 32,186 -- 71,738 --
Purchases of
held-to-maturity
investment
securities -- -- (12,733) -- (46,127)
Other (492) (319) (474) (1,332) (1,015)
-------- -------- ------- -------- -------
Net cash provided
by (used for)
investing
activities from
continuing
operations 36,219 30,264 (2,473) 63,109 (25,744)
Net cash provided
by investing
activities from
discontinued
operations -- -- 28,350 -- 28,350
-------- -------- ------- -------- -------
Net cash provided
by investing
activities 36,219 30,264 25,877 63,109 2,606
-------- -------- ------- -------- -------
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows, Continued
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------------- ----------------------
May 29, February May 30, May 29, May 30,
2026 27, 2026 2025 2026 2025
--------- --------- --------- --------- -----------
Cash flows
from
financing
activities
Proceeds
from
issuance of
convertible
preferred
stock, net
of issuance
costs -- -- -- -- 191,182
Repayments
of debt -- (20,000) -- (20,000) --
Payments to
acquire
common
stock (11,752) (36,941) (31,645) (68,886) (49,240)
Proceeds
from
restricted
cash
advances 38,000 -- -- 38,000 --
Payment of
preferred
stock cash
dividends (2,900) (3,067) (2,867) (9,100) (5,100)
Proceeds
from
issuance of
common
stock 4,350 2,513 4,004 10,202 7,745
------- ------- ------- ------- -------
Net cash
provided by
(used for)
financing
activities 27,698 (57,495) (30,508) (49,784) 144,587
------- ------- ------- ------- -------
Net increase
(decrease)
in cash,
cash
equivalents
and
restricted
cash (10,871) 27,721 88,189 24,547 326,710
Cash, cash
equivalents
and
restricted
cash at
beginning
of period 489,488 461,767 621,998 454,070 383,477
------- ------- ------- ------- -------
Cash, cash
equivalents
and
restricted
cash at end
of period $478,617 $489,488 $710,187 $478,617 $710,187
======= ======= ======= ======= =======
View source version on businesswire.com: https://www.businesswire.com/news/home/20260707722795/en/
CONTACT: Investor Contact:
Suzanne Schmidt
Investor Relations
+1-510-360-8596
ir@penguinsolutions.com
PR Contact:
Maureen O'Leary
Corporate Communications
+1-602-330-6846
pr@penguinsolutions.com
(END) Dow Jones Newswires
July 07, 2026 16:05 ET
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