Record Results Across Key Financial Metrics Reflecting AI-Driven Data Center Demand; Raising Fiscal 2027 Outlook Supported by Accelerating AI Infrastructure Business
Fremont, Calif. – October 6, 2026 – Penguin Solutions, Inc. (“Penguin Solutions,” “Penguin,” “we,” “us,” “our,” or the “Company”) (Nasdaq: PENG), the AI Factory Platform Company, today announced financial results for its fiscal fourth quarter and full year 2026 ended August 28, 2026. The Company also raised its outlook for its fiscal 2027 full year as compared to the preliminary view provided last quarter.
Fourth Quarter Financial Highlights
•Record net sales of $567 million, up 68% year over year
•Record operating income of $69 million, up 458% year over year
•Record Non-GAAP operating income of $90 million, up 129% year over year
•Record net income of $93 million, up 888% year over year
•Record adjusted EBITDA of $93 million, up 115% year over year
•Diluted EPS of $1.29 versus $0.11 in the year-ago quarter, up 1,073% year over year
•Non-GAAP diluted EPS of $1.00 versus $0.43 in the year-ago quarter, up 133% year over year
“Our company performance accelerated significantly in the second half of fiscal 2026 following the launch of our AI Factory Platform and increased focus on the data center market. We prioritized and aligned our AI Infrastructure and Memory businesses with strong AI-driven data center demand, increased investment in product innovation, and sharpened go-to-market execution with a focus on making neocloud and enterprise customers successful,” said Kash Shaikh, president and CEO of Penguin Solutions.
“The proof is in the results. After relatively flat year-over-year net sales in the first half, growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%. As we enter fiscal 2027, our memory business remains strong, and our AI Infrastructure business is accelerating further. Based on this continued momentum, particularly the strength in AI Infrastructure, we are increasing our fiscal 2027 expectations for both net sales and non-GAAP diluted EPS beyond the preliminary growth view shared during the third-quarter earnings call, as we continue to drive strong operating leverage across the business.”
Recent Business Highlights
Neocloud Momentum and Customer Expansion Across AI Infrastructure
•Won six new AI Infrastructure data center customers in the fourth quarter, including four neocloud providers, reflecting a surge in demand from neocloud customers for our full-stack AI Factory Platform.
•Continued to execute our land-and-expand strategy. Across fiscal 2026, we added seventeen new AI Infrastructure customers, and twelve customers expanded their business with Penguin in the same period.
•Won a neocloud customer backed by a leading South Korean technology company that selected Penguin to design, build, deploy, and manage an NVIDIA GB300 NVL72-based platform.
•Won a publicly traded neocloud customer with more than $3 billion in signed, multi-year contracts to provide AI infrastructure deployment and 24x7 operations services, supported by ClusterWareAI™, our AI factory operating system software.
•Won a neocloud customer with $10 billion in contracted compute from a leading AI lab. The customer selected Penguin to deploy and operate a 36,000-GPU AI factory in Norway. This multi-year engagement demonstrates the scale and capabilities of our AI Factory Platform.
•Won another neocloud customer, Lektra, which selected our AI Factory Platform to deploy and optimize distributed AI micro data centers powered by existing carbon-free energy. We provide validated reference designs, NVIDIA-based AI compute, and expert services with ClusterWareAI and support.
Key Product Innovation and Company Milestones
•Advanced ClusterWareAI with new self-managing agentic AI capabilities, building on the AI Factory Operations Agent introduced last quarter. ClusterWareAI now automatically detects and remediates GPU performance issues across inference environments, helping customers maintain higher uptime and reduce operational overhead as they scale AI workloads.
•Continued investment in new CXL memory expansion products to support strengthening bookings.
•Closed an oversubscribed $750 million convertible senior notes offering due 2031, with favorable economic terms including a 0% coupon.
•Established a new relationship with an additional AI Infrastructure supplier to improve component availability and support growing demand.
•Established a new supply arrangement with a leading memory supplier to improve supply availability and support growing AI-driven memory demand in the data center.
Fiscal 2026 Highlights
•Net sales of $1.73 billion, up 26% year over year
•Operating income of $166 million, up 185% year over year
•Record Non-GAAP operating income of $241 million, up 44% year over year
•Record net income of $181 million, up 611% year over year
•Record adjusted EBITDA of $256 million, up 37% year over year
•Diluted EPS of $2.60 versus $0.28 in the prior year, up 829% year over year
•Non-GAAP diluted EPS of $2.87 versus $1.90 in the prior year, up 51% year over year
Raising Fiscal 2027 Outlook
Penguin Solutions is providing an updated financial outlook for full-year fiscal 2027 that exceeds the preliminary view provided during its third-quarter fiscal 2026 earnings call, which called for net sales and non-GAAP diluted EPS growth of approximately 30% year over year from the midpoint of the then-current fiscal 2026 outlook, representing fiscal 2027 net sales of $2.17 billion at the midpoint.
Penguin Solutions now expects fiscal 2027 net sales of approximately $2.43 billion at the midpoint, representing growth of approximately 40%, plus or minus 10 percentage points. The Company also expects diluted EPS of $3.50 and non-GAAP diluted EPS of $4.45, representing year-over-year growth of approximately 35% and 55%, respectively.
Annual Financial Results
GAAP (1)
Non-GAAP (2)
(in thousands, except per share amounts)
FY26
FY25
FY26
FY25
Net sales:
Advanced Computing
$
558,789
$
648,417
$
558,789
$
648,417
Integrated Memory
924,001
464,249
924,001
464,249
Optimized LED
248,678
256,128
248,678
256,128
Total net sales
$
1,731,468
$
1,368,794
$
1,731,468
$
1,368,794
Gross profit
$
478,925
$
394,274
$
507,862
$
424,600
Operating income
165,596
58,135
240,962
167,652
Net income attributable to Penguin Solutions
180,615
25,391
190,182
120,325
Diluted earnings per share
$
2.60
$
0.28
$
2.87
$
1.90
Quarterly Financial Results
GAAP (1)
Non-GAAP (2)
(in thousands, except per share amounts)
Q4-26
Q3-26
Q4-25
Q4-26
Q3-26
Q4-25
Net sales:
Advanced Computing
$
154,039
$
137,583
$
138,336
$
154,039
$
137,583
$
138,336
Integrated Memory
340,784
275,067
132,159
340,784
275,067
132,159
Optimized LED
71,862
66,063
67,427
71,862
66,063
67,427
Total net sales
$
566,685
$
478,713
$
337,922
$
566,685
$
478,713
$
337,922
Gross profit
$
155,900
$
133,214
$
96,731
$
163,275
$
134,750
$
104,317
Operating income
69,462
50,863
12,448
89,796
64,384
39,170
Net income attributable to Penguin Solutions
93,204
44,689
9,431
71,438
52,246
28,843
Diluted earnings per share
$
1.29
$
0.68
$
0.11
$
1.00
$
0.84
$
0.43
(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 October 6, 2026, Penguin Solutions is providing the following financial outlook for fiscal year 2027:
Outlook
GAAP
Outlook
Adjustments
Non-GAAP
Outlook
Net sales
40% YoY Growth +/-10%
—
40% YoY Growth +/-10%
Gross margin
27% +/- 2%
1%
(A)
28% +/- 2%
Operating expenses
$329 million +/- $10 million
($54) million
(B)(C)
$275 million +/- $10 million
Diluted earnings per share
$3.50 +/- $0.70
$0.95
(A)(B)(C)(D)(E)
$4.45 +/- $0.70
Diluted shares
63 million
—
63 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
46
(C) Other operating adjustments
8
(D) Estimated income tax effects
(17)
(E) Estimated effect of allocation of earnings to participating securities
(7)
$
60
Fourth Quarter and Full-Year Fiscal 2026 Earnings Conference Call and Webcast Details
Penguin Solutions will hold a conference call and webcast to discuss the fourth quarter and full-year fiscal 2026 results and related matters today, October 6, 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/198397741, 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, operating leverage, and expenses; statements regarding Penguin Solutions’ business momentum and emerging leadership position; statements regarding AI-related demand, customer pipeline, bookings, backlog and the conversion of backlog to net sales, the expected scope, timing, and benefits of customer engagements and deployments, market opportunities, industry trends and product development, roadmap, capabilities and performance; statements regarding supply arrangements and component availability; statements regarding working capital, liquidity, capital expenditures and capital structure; statements regarding projected demand for fiscal year 2027 and beyond; statements regarding long-term effective tax rates; and statements regarding the business and financial outlook for fiscal year 2027, including the information 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; (gains) losses from changes in foreign currency exchange rates; amortization of debt issuance costs; (gain) loss on extinguishment or prepayment of debt; inducement expense associated with conversions of the 2029 and 2030 Notes; 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 or prepayment of debt; inducement expense associated with conversions of the 2029 and 2030 Notes 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 the AI Factory Platform Company. We design, build, and manage next-generation data centers for enterprises, sovereign AI initiatives, and neocloud providers.
With deep design expertise at the intersection of data center AI infrastructure and memory solutions, our Full-Stack AI Factory Platform combines differentiated infrastructure software, advanced memory, compute systems, end-to-end services, and industry-leading partner technologies to help customers accelerate deployment, optimize token economics, and maximize the return on their AI investments.
Learn more at PenguinSolutions.com.
Penguin Solutions, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
August 28, 2026
May 29, 2026
August 29, 2025
August 28, 2026
August 29, 2025
Net sales:
Advanced Computing
$
154,039
$
137,583
$
138,336
$
558,789
$
648,417
Integrated Memory
340,784
275,067
132,159
924,001
464,249
Optimized LED
71,862
66,063
67,427
248,678
256,128
Total net sales
566,685
478,713
337,922
1,731,468
1,368,794
Cost of sales
410,785
345,499
241,191
1,252,543
974,520
Gross profit
155,900
133,214
96,731
478,925
394,274
Operating expenses:
Research and development
22,024
21,984
19,861
81,677
79,801
Selling, general and administrative
59,927
59,404
58,602
220,412
238,177
Impairment of goodwill
—
—
4,690
—
16,063
Other operating expense
4,487
963
1,130
11,240
2,098
Total operating expenses
86,438
82,351
84,283
313,329
336,139
Operating income
69,462
50,863
12,448
165,596
58,135
Non-operating (income) expense:
Interest (income) expense, net
(980)
650
153
438
7,305
Other non-operating (income) expense
33,028
(3,485)
2,941
13,235
1,929
Total non-operating (income) expense
32,048
(2,835)
3,094
13,673
9,234
Income before taxes
37,414
53,698
9,354
151,923
48,901
Income tax (benefit) provision
(57,595)
7,515
(1,196)
(33,865)
20,066
Net income
95,009
46,183
10,550
185,788
28,835
Net income attributable to noncontrolling interest
1,805
1,494
1,119
5,173
3,444
Net income attributable to Penguin Solutions
93,204
44,689
9,431
180,615
25,391
Preferred stock dividends
3,034
3,033
3,034
12,133
8,667
Income available for distribution
90,170
41,656
6,397
168,482
16,724
Income allocated to participating securities
8,903
4,448
666
17,394
1,263
Net income available to common stockholders
$
81,267
$
37,208
$
5,731
$
151,088
$
15,461
Earnings per share:
Basic
$
1.46
$
0.73
$
0.11
$
2.85
$
0.29
Diluted
$
1.29
$
0.68
$
0.11
$
2.60
$
0.28
Common stock used in per share calculations:
Basic
55,645
50,998
52,553
52,952
53,154
Diluted
64,040
55,063
54,371
58,825
54,368
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands, except percentages)
(Unaudited)
Three Months Ended
Year Ended
August 28, 2026
May 29, 2026
August 29, 2025
August 28, 2026
August 29, 2025
GAAP gross profit
$
155,900
$
133,214
$
96,731
$
478,925
$
394,274
Stock-based compensation expense
1,463
1,411
1,324
5,782
6,136
Amortization of acquisition-related intangibles
5,912
5,908
5,920
23,638
23,644
Inventory write-off, stolen in-transit shipment, net of insurance recovery
—
(5,783)
—
—
—
Cost of sales-related restructuring
—
—
342
(483)
746
Other
—
—
—
—
(200)
Non-GAAP gross profit
$
163,275
$
134,750
$
104,317
$
507,862
$
424,600
GAAP gross margin
27.5
%
27.8
%
28.6
%
27.7
%
28.8
%
Effect of adjustments
1.3
%
0.3
%
2.3
%
1.6
%
2.2
%
Non-GAAP gross margin
28.8
%
28.1
%
30.9
%
29.3
%
31.0
%
GAAP operating expenses
$
86,438
$
82,351
$
84,283
$
313,329
$
336,139
Stock-based compensation expense
(5,157)
(8,585)
(6,490)
(26,033)
(35,040)
Amortization of acquisition-related intangibles
(1,316)
(1,316)
(1,885)
(5,831)
(11,194)
Diligence, acquisition and integration expense
(858)
(1,058)
(133)
(1,916)
(1,829)
Redomiciliation costs
—
—
(2,734)
—
(10,038)
Impairment of goodwill
—
—
(4,690)
—
(16,063)
Restructuring charges
(4,487)
(963)
(1,130)
(11,240)
(2,098)
Other
(1,141)
(63)
(2,074)
(1,409)
(2,929)
Non-GAAP operating expenses
$
73,479
$
70,366
$
65,147
$
266,900
$
256,948
GAAP operating income
$
69,462
$
50,863
$
12,448
$
165,596
$
58,135
Stock-based compensation expense
6,620
9,996
7,814
31,815
41,176
Amortization of acquisition-related intangibles
7,228
7,224
7,805
29,469
34,838
Inventory write-off, stolen in-transit shipment, net of insurance recovery
—
(5,783)
—
—
—
Cost of sales-related restructuring
—
—
342
(483)
746
Diligence, acquisition and integration expense
858
1,058
133
1,916
1,829
Redomiciliation costs
—
—
2,734
—
10,038
Impairment of goodwill
—
—
4,690
—
16,063
Restructuring charges
4,487
963
1,130
11,240
2,098
Other
1,141
63
2,074
1,409
2,729
Non-GAAP operating income
$
89,796
$
64,384
$
39,170
$
240,962
$
167,652
GAAP operating margin
12.3
%
10.6
%
3.7
%
9.6
%
4.2
%
Effect of adjustments
3.5
%
2.8
%
7.9
%
4.3
%
8.0
%
Non-GAAP operating margin
15.8
%
13.4
%
11.6
%
13.9
%
12.2
%
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures, Continued
(In thousands, except percentages) (Unaudited)
Three Months Ended
Year Ended
August 28, 2026
May 29, 2026
August 29, 2025
August 28, 2026
August 29, 2025
GAAP effective tax rate
(153.9)
%
14.0
%
(12.8)
%
(22.3)
%
41.0
%
Effect of adjustments
173.9
%
3.3
%
37.8
%
42.3
%
(16.0)
%
Non-GAAP effective tax rate
20.0
%
17.3
%
25.0
%
20.0
%
25.0
%
GAAP net income attributable to Penguin Solutions
$
93,204
$
44,689
$
9,431
$
180,615
$
25,391
Stock-based compensation expense
6,620
9,996
7,814
31,815
41,176
Amortization of acquisition-related intangibles
7,228
7,224
7,805
29,469
34,838
Inventory write-off, stolen in-transit shipment, net of insurance recovery
—
(5,783)
—
—
—
Cost of sales-related restructuring
—
—
342
(483)
746
Diligence, acquisition and integration expense
858
1,058
133
1,916
1,829
Redomiciliation costs
—
—
2,734
—
10,038
Loss on non-marketable equity investment
—
—
—
10,000
—
Impairment of goodwill
—
—
4,690
—
16,063
Gain on disposition of equity investment
(14)
(3,892)
—
(30,942)
—
Restructuring charges
4,487
963
1,130
11,240
2,098
Amortization of debt issuance costs
836
576
674
2,728
3,493
Loss on extinguishment or prepayment of debt
—
—
2,908
—
2,908
Inducement expense associated with conversions of 2029 and 2030 Notes
33,248
—
—
33,248
—
Foreign currency (gains) losses
(263)
1,080
287
1,014
205
Other
1,141
63
2,074
2,266
2,729
Income tax effects (1)
(75,907)
(3,728)
(11,179)
(82,704)
(21,189)
Non-GAAP net income attributable to Penguin Solutions
71,438
52,246
28,843
190,182
120,325
Preferred stock dividends
3,034
3,033
3,034
12,133
8,667
Non-GAAP income available for distribution
68,404
49,213
25,809
178,049
111,658
Income allocated to participating securities
6,124
5,091
2,639
17,486
8,250
Non-GAAP net income available to common stockholders
$
62,280
$
44,122
$
23,170
$
160,563
$
103,408
Weighted-average shares outstanding - Diluted:
GAAP weighted-average shares outstanding
64,040
55,063
54,371
58,825
54,368
Adjustment for dilutive securities and capped calls
(2,040)
(2,226)
(838)
(2,848)
—
Non-GAAP weighted-average shares outstanding
62,000
52,837
53,533
55,977
54,368
(1) The three months and year ended August 29, 2025 include ($8,249) as a one-time tax effect of the U.S. Domestication completed in the fourth quarter of fiscal 2025.
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures, Continued
(In thousands, except per share amounts) (Unaudited)
Three Months Ended
Year Ended
August 28, 2026
May 29, 2026
August 29, 2025
August 28, 2026
August 29, 2025
Diluted earnings per share:
GAAP diluted earnings per share
$
1.29
$
0.68
$
0.11
$
2.60
$
0.28
Effect of adjustments
(0.29)
0.16
0.32
0.27
1.62
Non-GAAP diluted earnings per share
$
1.00
$
0.84
$
0.43
$
2.87
$
1.90
Net income attributable to Penguin Solutions
$
93,204
$
44,689
$
9,431
$
180,615
$
25,391
Interest (income) expense, net
(980)
650
153
438
7,305
Income tax (benefit) provision
(57,595)
7,515
(1,196)
(33,865)
20,066
Depreciation expense and amortization of intangible assets
12,299
12,307
13,206
50,176
56,216
Stock-based compensation expense
6,620
9,996
7,814
31,815
41,176
Inventory write-off, stolen in-transit shipment, net of insurance recovery
—
(5,783)
—
—
—
Cost of sales-related restructuring
—
—
342
(483)
746
Diligence, acquisition and integration expense
858
1,058
133
1,916
1,829
Redomiciliation costs
—
—
2,734
—
10,038
Impairment of goodwill
—
—
4,690
—
16,063
Gain on disposition of equity investment
(14)
(3,892)
—
(30,942)
—
Restructuring charges
4,487
963
1,130
11,240
2,098
Loss on extinguishment or prepayment of debt
—
—
2,908
—
2,908
Inducement expense associated with conversions of 2029 and 2030 Notes
33,248
—
—
33,248
—
Loss on non-marketable equity investment
—
—
—
10,000
—
Other
1,141
63
2,074
2,266
2,729
Adjusted EBITDA
$
93,268
$
67,566
$
43,419
$
256,424
$
186,565
Penguin Solutions, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of
August 28, 2026
August 29, 2025
Assets
Cash and cash equivalents
$
647,208
$
453,754
Accounts receivable, net (including $683 and $— due from related party as of August 28, 2026 and August 29, 2025, respectively)
796,264
307,904
Inventories
748,785
255,182
Other current assets
56,249
47,387
Total current assets
2,248,506
1,064,227
Property and equipment, net
84,244
92,603
Operating lease right-of-use assets
54,237
58,847
Intangible assets, net
59,856
87,754
Goodwill
145,895
145,895
Deferred tax assets
173,389
99,107
Other noncurrent assets
12,007
68,767
Total assets
$
2,778,134
$
1,617,200
Liabilities, Temporary Equity and Stockholders' Equity
Accounts payable and accrued expenses
$
890,476
$
318,761
Current debt
53,418
19,945
Deferred revenue
123,283
73,893
Other current liabilities
128,770
61,300
Total current liabilities
1,195,947
473,899
Long-term debt
735,532
441,893
Noncurrent operating lease liabilities
57,896
62,736
Other noncurrent liabilities
48,863
30,445
Total liabilities
2,038,238
1,008,973
Temporary equity
202,710
202,710
Penguin Solutions stockholders’ equity:
Common stock
2,215
1,883
Additional paid-in capital
583,628
551,712
Retained earnings
215,191
46,709
Treasury stock
(280,503)
(206,076)
Accumulated other comprehensive income
211
18
Total Penguin Solutions stockholders’ equity
520,742
394,246
Noncontrolling interest in subsidiary
16,444
11,271
Total stockholders' equity
537,186
405,517
Total liabilities, temporary equity and stockholders' equity
$
2,778,134
$
1,617,200
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
Year Ended
August 28, 2026
May 29, 2026
August 29, 2025
August 28, 2026
August 29, 2025
Cash flows from operating activities
Net income
$
95,009
$
46,183
$
10,550
$
185,788
$
28,835
Adjustments to reconcile net income from continuing operations to cash provided by (used for) operating activities
Depreciation expense and amortization of intangible assets
12,299
12,307
13,206
50,176
56,216
Amortization of debt issuance costs
836
576
674
2,728
3,493
Stock-based compensation expense
6,620
9,996
7,814
31,815
41,176
Loss on impairment of non-marketable equity investment
—
—
—
10,000
—
Impairment of goodwill
—
—
4,690
—
16,063
Gain on disposition of equity investment
(14)
(3,892)
—
(30,942)
—
Loss on extinguishment of debt
—
—
2,908
—
2,908
Inducement expense related to the conversion of the 2029 and 2030 Notes
33,248
—
—
33,248
—
Deferred income taxes, net
(62,981)
291
(15,234)
(62,660)
(14,112)
Other
1,443
(377)
176
1,969
(2,293)
Changes in operating assets and liabilities:
Accounts receivable
(91,995)
(333,660)
(15,400)
(488,360)
(56,160)
Inventories
(250,467)
(175,958)
(70,834)
(493,603)
(101,610)
Other assets
(8,935)
12,708
(6,088)
964
7,653
Accounts payable and accrued expenses and other liabilities
101,801
357,038
(2,894)
606,963
131,014
Net cash provided by (used for) operating activities from continuing operations
(163,136)
(74,788)
(70,432)
(151,914)
113,183
Net cash used for operating activities from discontinued operations
—
—
—
—
(4,099)
Net cash provided by (used for) operating activities
(163,136)
(74,788)
(70,432)
(151,914)
109,084
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows, Continued
(In thousands)
(Unaudited)
Three Months Ended
Year Ended
August 28, 2026
May 29, 2026
August 29, 2025
August 28, 2026
August 29, 2025
Cash flows from investing activities
Capital expenditures and deposits on equipment
(4,272)
(2,841)
(2,925)
(11,569)
(9,012)
Proceeds from disposition of equity investments
14
39,552
—
71,752
—
Purchases of held-to-maturity investment securities
—
—
(12,939)
—
(59,066)
Proceeds from sales and maturities of investment securities
—
—
38,876
—
66,361
Other
(761)
(492)
(645)
(2,093)
(1,660)
Net cash provided by (used for) investing activities from continuing operations
(5,019)
36,219
22,367
58,090
(3,377)
Net cash provided by investing activities from discontinued operations
—
—
—
—
28,350
Net cash provided by (used for) investing activities
(5,019)
36,219
22,367
58,090
24,973
Cash flows from financing activities
Proceeds from issuance of convertible preferred stock, net of issuance costs
—
—
—
—
191,182
Repayments of debt
(295,454)
—
(300,015)
(315,454)
(300,015)
Payments to acquire common stock
(5,541)
(11,752)
(3,080)
(74,427)
(52,320)
Proceeds from restricted cash advances
55,000
38,000
—
93,000
—
Payment of preferred stock cash dividends
(3,133)
(2,900)
(2,760)
(12,233)
(7,860)
Net cash paid for purchase of capped calls
(49,125)
—
—
(49,125)
—
Repayments of borrowings under line of credit
(100,000)
—
—
(100,000)
—
Proceeds from debt
750,000
—
—
750,000
—
Payment of debt issuance costs
(14,841)
—
—
(14,841)
—
Proceeds from issuance of common stock
156
4,350
1,058
10,358
8,804
Proceeds from borrowing under line of credit
—
—
100,000
—
100,000
Other
—
—
(3,255)
—
(3,255)
Net cash provided by (used for) financing activities
337,062
27,698
(208,052)
287,278
(63,464)
Net increase (decrease) in cash, cash equivalents and restricted cash
168,907
(10,871)
(256,117)
193,454
70,593
Cash, cash equivalents and restricted cash at beginning of period
478,617
489,488
710,187
454,070
383,477
Cash, cash equivalents and restricted cash at end of period
