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Penguin Solutions Reports Q2 Fiscal 2025 Financial Results

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Penguin Solutions (NASDAQ: PENG) reported strong Q2 fiscal 2025 results with net sales of $366 million, up 28.3% year-over-year. The company's GAAP diluted EPS improved to $0.09 from $(0.26) in the year-ago quarter, while non-GAAP diluted EPS reached $0.52 versus $0.27.

The company's performance was driven by its Advanced Computing segment, which generated $200.2 million in revenue. The Integrated Memory and Optimized LED segments contributed $105.3 million and $60.1 million respectively.

Based on strong performance, Penguin Solutions raised its fiscal year 2025 revenue outlook to 17% YoY growth (±3%) from the previous 15% (±5%). The company also announced the planned retirement of COO and President of Integrated Memory Jack Pacheco, effective December 31, 2025.

Penguin Solutions (NASDAQ: PENG) ha riportato risultati solidi per il secondo trimestre dell'anno fiscale 2025, con vendite nette di 366 milioni di dollari, in aumento del 28,3% rispetto all'anno precedente. L'utile per azione diluito GAAP della società è migliorato a 0,09 dollari rispetto a (0,26) dollari del trimestre dell'anno scorso, mentre l'utile per azione diluito non GAAP ha raggiunto 0,52 dollari rispetto a 0,27 dollari.

Le prestazioni della società sono state trainate dal segmento di Advanced Computing, che ha generato 200,2 milioni di dollari di fatturato. I segmenti di Integrated Memory e Optimized LED hanno contribuito rispettivamente con 105,3 milioni di dollari e 60,1 milioni di dollari.

In base alle forti prestazioni, Penguin Solutions ha rivisto al rialzo le previsioni di fatturato per l'anno fiscale 2025, prevedendo una crescita del 17% anno su anno (±3%) rispetto al precedente 15% (±5%). La società ha anche annunciato il pensionamento programmato del COO e Presidente di Integrated Memory, Jack Pacheco, a partire dal 31 dicembre 2025.

Penguin Solutions (NASDAQ: PENG) reportó resultados sólidos para el segundo trimestre del año fiscal 2025, con ventas netas de 366 millones de dólares, un aumento del 28,3% en comparación con el año anterior. Las ganancias por acción diluidas GAAP de la compañía mejoraron a 0,09 dólares desde (0,26) dólares en el trimestre del año pasado, mientras que las ganancias por acción diluidas no GAAP alcanzaron 0,52 dólares frente a 0,27 dólares.

El rendimiento de la compañía fue impulsado por su segmento de Computación Avanzada, que generó 200,2 millones de dólares en ingresos. Los segmentos de Memoria Integrada y LED Optimizado contribuyeron con 105,3 millones de dólares y 60,1 millones de dólares, respectivamente.

Basado en un rendimiento sólido, Penguin Solutions elevó su pronóstico de ingresos para el año fiscal 2025 a un crecimiento del 17% interanual (±3%) desde el anterior 15% (±5%). La compañía también anunció la jubilación programada del COO y Presidente de Memoria Integrada, Jack Pacheco, a partir del 31 de diciembre de 2025.

펭귄 솔루션즈 (NASDAQ: PENG)는 2025 회계연도 2분기 실적을 발표하며 순매출 3억 6,600만 달러를 기록하여 전년 대비 28.3% 증가했다고 보고했습니다. 회사의 GAAP 희석 주당순이익은 작년 동기 -0.26달러에서 0.09달러로 개선되었으며, 비GAAP 희석 주당순이익은 0.27달러에서 0.52달러로 증가했습니다.

회사의 실적은 2억 2백만 달러의 수익을 올린 고급 컴퓨팅 부문에 의해 주도되었습니다. 통합 메모리 및 최적화된 LED 부문은 각각 1억 5백만 달러와 6천만 달러를 기여했습니다.

강력한 성과를 바탕으로 펭귄 솔루션즈는 2025 회계연도 매출 전망을 이전 15% (±5%)에서 17% (±3%) 성장으로 상향 조정했습니다. 회사는 또한 통합 메모리 COO이자 사장인 잭 파체코의 은퇴 계획을 2025년 12월 31일자로 발표했습니다.

Penguin Solutions (NASDAQ: PENG) a annoncé de solides résultats pour le deuxième trimestre de l'exercice 2025, avec des ventes nettes de 366 millions de dollars, en hausse de 28,3 % par rapport à l'année précédente. Le bénéfice par action dilué selon les normes GAAP de l'entreprise a augmenté à 0,09 dollar contre (0,26) dollar au trimestre de l'année dernière, tandis que le bénéfice par action dilué non GAAP a atteint 0,52 dollar contre 0,27 dollar.

La performance de l'entreprise a été tirée par son segment d'Informatique Avancée, qui a généré 200,2 millions de dollars de revenus. Les segments de Mémoire Intégrée et de LED Optimisé ont contribué respectivement 105,3 millions de dollars et 60,1 millions de dollars.

Sur la base de cette performance solide, Penguin Solutions a relevé ses prévisions de chiffre d'affaires pour l'exercice 2025 à une croissance de 17 % par rapport à l'année précédente (±3 %) contre 15 % (±5 %) auparavant. L'entreprise a également annoncé la retraite prévue de son COO et Président de la Mémoire Intégrée, Jack Pacheco, à compter du 31 décembre 2025.

Penguin Solutions (NASDAQ: PENG) berichtete über starke Ergebnisse im zweiten Quartal des Geschäftsjahres 2025 mit Nettoumsätzen von 366 Millionen Dollar, was einem Anstieg von 28,3 % im Vergleich zum Vorjahr entspricht. Der verwässerte Gewinn je Aktie nach GAAP verbesserte sich auf 0,09 Dollar von (0,26) Dollar im Vorjahresquartal, während der nicht-GAAP verwässerte Gewinn je Aktie 0,52 Dollar gegenüber 0,27 Dollar erreichte.

Die Leistung des Unternehmens wurde durch den Bereich Advanced Computing angetrieben, der 200,2 Millionen Dollar Umsatz generierte. Die Segmente Integrated Memory und Optimized LED trugen jeweils mit 105,3 Millionen Dollar und 60,1 Millionen Dollar bei.

Aufgrund der starken Leistung hob Penguin Solutions seine Umsatzprognose für das Geschäftsjahr 2025 auf ein Wachstum von 17 % im Vergleich zum Vorjahr (±3 %) an, gegenüber zuvor 15 % (±5 %). Das Unternehmen gab auch die geplante Pensionierung von COO und Präsident von Integrated Memory, Jack Pacheco, bekannt, die am 31. Dezember 2025 wirksam wird.

Positive
  • Revenue increased 28.3% year-over-year to $366 million
  • Non-GAAP diluted EPS nearly doubled to $0.52 from $0.27
  • Advanced Computing segment showed strong growth to $200.2 million
  • Raised full-year revenue growth guidance to 17% ±3%
Negative
  • GAAP gross margin declined 20 basis points year-over-year to 28.6%
  • Non-GAAP gross margin decreased 70 basis points to 30.8%
  • Optimized LED segment revenue remained flat at $60.1 million
  • Expects negative GAAP EPS of -$0.02 ±$0.10 for FY2025

Insights

Penguin Solutions delivered exceptional Q2 results with $365.5 million in revenue, representing 28.3% year-over-year growth. This substantial revenue acceleration significantly outpaces their previous full-year guidance of 15% growth. The company's performance was primarily driven by their Advanced Computing segment, which grew 41.5% year-over-year to $200.2 million, reflecting strong momentum in AI infrastructure solutions.

On the profitability front, non-GAAP EPS nearly doubled to $0.52 from $0.27 in the year-ago quarter, while GAAP EPS swung positive to $0.09 from ($0.26). This dramatic improvement in bottom-line performance occurred despite a slight margin compression, with non-GAAP gross margin declining 70 basis points to 30.8%.

Management's decision to raise the midpoint of annual revenue growth guidance from 15% to 17% signals confidence in their business momentum. However, the revised EPS guidance presents a mixed picture - while the non-GAAP EPS midpoint increased to $1.60 from $1.50, the GAAP EPS outlook deteriorated to ($0.02) from $0.10, partly due to a $16 million goodwill impairment charge.

The announced retirement of COO Jack Pacheco by year-end creates some uncertainty, but the extended timeline allows for a structured succession planning process and knowledge transfer, minimizing operational disruption.

Revenue up 28% compared with year-ago quarter

Company raises midpoint of annual revenue outlook

MILPITAS, Calif.--(BUSINESS WIRE)-- Penguin Solutions, Inc. (“Penguin Solutions,” “we,” “us,” or the “Company”) (NASDAQ: PENG) today reported financial results for the second quarter of fiscal 2025 and announced the planned retirement of Chief Operating Officer (“COO”) and President of Integrated Memory Jack Pacheco.

Second Quarter Fiscal 2025 Highlights

  • Net sales of $366 million, up 28.3% versus the year-ago quarter
  • GAAP gross margin of 28.6%, down 20 basis points versus the year-ago quarter
  • Non-GAAP gross margin of 30.8%, down 70 basis points versus the year-ago quarter
  • GAAP diluted EPS of $0.09 versus $(0.26) in the year-ago quarter
  • Non-GAAP diluted EPS of $0.52 versus $0.27 in the year-ago quarter

“We are pleased with the progress we are making in fiscal year 2025,” said Mark Adams, Chief Executive Officer (“CEO”) of Penguin Solutions. “Our results reinforce our capabilities in managing the complexity of AI for our valued customers. Given our strong start to the fiscal year, we are raising the midpoint of our revenue outlook for the full year.”

Quarterly Financial Results

 

GAAP (1)

 

Non-GAAP (2)

(in thousands, except per share amounts)

Q2-25

 

Q1-25

 

Q2-24

 

Q2-25

 

Q1-25

 

Q2-24

Net sales:

 

 

 

 

 

 

 

 

 

 

 

Advanced Computing

$

200,157

 

$

177,426

 

$

141,405

 

 

$

200,157

 

$

177,426

 

$

141,405

Integrated Memory

 

105,260

 

 

96,706

 

 

83,297

 

 

 

105,260

 

 

96,706

 

 

83,297

Optimized LED

 

60,102

 

 

66,970

 

 

60,119

 

 

 

60,102

 

 

66,970

 

 

60,119

Total net sales

$

365,519

 

$

341,102

 

$

284,821

 

 

$

365,519

 

$

341,102

 

$

284,821

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

$

104,648

 

$

97,812

 

$

81,934

 

 

$

112,408

 

$

105,122

 

$

89,735

Operating income (loss)

 

18,488

 

 

17,356

 

 

(3,312

)

 

 

49,090

 

 

40,918

 

 

26,514

Net income (loss) attributable to Penguin Solutions

 

8,082

 

 

5,217

 

 

(13,620

)

 

 

33,836

 

 

26,518

 

 

14,141

Diluted earnings (loss) per share

$

0.09

 

$

0.10

 

$

(0.26

)

 

$

0.52

 

$

0.49

 

$

0.27

(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 April 2, 2025, Penguin Solutions is providing the following financial outlook for fiscal year 2025:

New Outlook

GAAP
Outlook

Adjustments

Non-GAAP
Outlook

Net sales

17% YoY Growth +/- 3%

17% YoY Growth +/- 3%

Gross margin

29% +/- 1%

2%

(A)

31% +/- 1%

Operating expenses

$336 million +/- $5 million

($71) million

(B)(C)(D)

$265 million +/- $5 million

Diluted earnings per share

$-0.02 +/- $0.10

$1.62

(A)(B)(C)(D)(E)

$1.60 +/- $0.10

Diluted shares

54 million

1 million

55 million

Non-GAAP adjustments (in millions)

 

(A) Share-based compensation and amortization of acquisition-related intangibles included in cost of sales

$

31

 

(B) Share-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A

 

48

 

(C) Goodwill impairment

 

16

 

(D) Other adjustments

 

7

 

(E) Estimated income tax effects

 

(13

)

 

$

89

 

Prior Outlook

GAAP
Outlook

Adjustments

Non-GAAP
Outlook

Net sales

15% YoY Growth +/- 5%

15% YoY Growth +/- 5%

Gross margin

30% +/- 1%

2%

(A)

32% +/- 1%

Operating expenses

$335 million +/- $15 million

($60) million

(B)(C)

$275 million +/- $15 million

Diluted earnings per share

$0.10 +/- $0.20

$1.40

(A)(B)(C)(D)

$1.50 +/- $0.20

Diluted shares

56.3 million

56.3 million

Non-GAAP adjustments (in millions)

 

(A) Share-based compensation and amortization of acquisition-related intangibles included in cost of sales

$

31

 

(B) Share-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A

 

48

 

(C) Other adjustments

 

12

 

(D) Estimated income tax effects

 

(12

)

 

$

79

 

Second Quarter Fiscal 2025 Earnings Conference Call and Webcast Details

Penguin Solutions will hold a conference call and webcast to discuss the second quarter of fiscal 2025 results and related matters today, April 2, 2025, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Interested parties may access the call by dialing +1-833-470-1428 in the United States or +1-404-975-4839 from international locations, using the access code 858614. The earnings presentation and a live webcast of the conference call can be accessed from the Company’s investor relations website (https://ir.penguinsolutions.com/investors/default.aspx) where they will remain available for approximately one year.

Jack Pacheco to Retire as Chief Operating Officer and President of Integrated Memory

Jack Pacheco, Executive Vice President (“EVP”), COO and President of Integrated Memory, is expected to retire from the Company on December 31, 2025. The Company has initiated a succession planning process. Mr. Pacheco is expected to transition into a special advisor role if his successor is appointed before his retirement, and to provide consulting services following his retirement to ensure continuity and a smooth transition of his responsibilities.

Mr. Pacheco first joined the Company in 1994 and has served in various leadership roles during his tenure. He remained with the Company from 1994 until 2001, and then returned in 2004 as Chief Financial Officer (“CFO”), a position he held until 2008. In 2011, Mr. Pacheco returned to the Company and served as Senior Vice President, COO and CFO until becoming EVP, COO and President of Integrated Memory in September 2020.

“On behalf of the entire company, I want to thank Jack for his nearly 25 years of leadership and dedication,” said Mark Adams, CEO of Penguin Solutions. “Jack played a key role in scaling our memory business and strengthening our global operations. We’re grateful for his many contributions and his support through this transition.”

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. These statements 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 revenues and expenses; statements regarding Penguin Solutions’ strategic transformation and priorities; statements regarding long-term effective tax rates; statements regarding the business and financial outlook for fiscal year 2025 described under “Business Outlook” above; and statements regarding the expected retirement of Mr. Pacheco and related succession planning activities.

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 and growth trends in technology industries (including trends and markets related to artificial intelligence), 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 as a result of global pandemics or otherwise; 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 our proposed redomiciliation to the United States (which remains subject to shareholder and court approval), 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; issues, delays or complications in integrating the operations of Stratus Technologies; failure to achieve the intended benefits of the sale of SMART Brazil and its 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; 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; 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 and Quarterly Reports on Form 10-Q and our other filings with the U.S. Securities and Exchange Commission. In addition, such risks, uncertainties and factors as outlined above and in such filings do not constitute all risks, uncertainties and factors that 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 effective tax rate, non-GAAP net income, 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 share-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships and trademarks/trade names acquired in connection with business combinations); cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; restructuring charges; 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; share-based compensation expense; cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; impairment of goodwill; restructuring charges; loss on extinguishment of debt and other infrequent or unusual items.

In fiscal 2024, for our non-GAAP reporting, we began to utilize a long-term projected non-GAAP effective tax rate of 28%, which includes the tax impact of pre-tax non-GAAP adjustments and reflects currently available information as well as other factors and assumptions. While we expect to use this normalized non-GAAP effective tax rate through fiscal 2025, this long-term non-GAAP effective tax rate may be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. 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.

About Penguin Solutions

The most exciting technological advancements are also the most challenging for companies to adopt. At Penguin Solutions, we support our customers in achieving their ambitions across our computing, memory, and LED lines of business. With our expert skills, experience, and partnerships, we turn our customers’ most complex challenges into compelling opportunities.

For more information, visit www.penguinsolutions.com.

Penguin Solutions, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited) 

 

Three Months Ended

 

Six Months Ended

 

February 28,
2025

 

November 29,
2024

 

March 1,
2024

 

February 28,
2025

 

March 1,
2024

Net sales:

 

 

 

 

 

 

 

 

 

Advanced Computing

$

200,157

 

 

$

177,426

 

$

141,405

 

 

$

377,583

 

$

260,229

 

Integrated Memory

 

105,260

 

 

 

96,706

 

 

83,297

 

 

 

201,966

 

 

168,965

 

Optimized LED

 

60,102

 

 

 

66,970

 

 

60,119

 

 

 

127,072

 

 

129,874

 

Total net sales

 

365,519

 

 

 

341,102

 

 

284,821

 

 

 

706,621

 

 

559,068

 

Cost of sales

 

260,871

 

 

 

243,290

 

 

202,887

 

 

 

504,161

 

 

394,284

 

Gross profit

 

104,648

 

 

 

97,812

 

 

81,934

 

 

 

202,460

 

 

164,784

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

19,907

 

 

 

19,811

 

 

20,526

 

 

 

39,718

 

 

41,915

 

Selling, general and administrative

 

59,315

 

 

 

60,536

 

 

61,385

 

 

 

119,851

 

 

118,602

 

Impairment of goodwill

 

6,079

 

 

 

 

 

 

 

 

6,079

 

 

 

Other operating expense

 

859

 

 

 

109

 

 

3,335

 

 

 

968

 

 

6,274

 

Total operating expenses

 

86,160

 

 

 

80,456

 

 

85,246

 

 

 

166,616

 

 

166,791

 

Operating income (loss)

 

18,488

 

 

 

17,356

 

 

(3,312

)

 

 

35,844

 

 

(2,007

)

 

 

 

 

 

 

 

 

 

 

Non-operating (income) expense:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

2,183

 

 

 

4,396

 

 

7,249

 

 

 

6,579

 

 

16,808

 

Other non-operating (income) expense

 

(209

)

 

 

636

 

 

248

 

 

 

427

 

 

(328

)

Total non-operating (income) expense

 

1,974

 

 

 

5,032

 

 

7,497

 

 

 

7,006

 

 

16,480

 

Income (loss) before taxes

 

16,514

 

 

 

12,324

 

 

(10,809

)

 

 

28,838

 

 

(18,487

)

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

7,643

 

 

 

6,360

 

 

2,198

 

 

 

14,003

 

 

5,732

 

Net income (loss) from continuing operations

 

8,871

 

 

 

5,964

 

 

(13,007

)

 

 

14,835

 

 

(24,219

)

Net loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(8,148

)

Net income (loss)

 

8,871

 

 

 

5,964

 

 

(13,007

)

 

 

14,835

 

 

(32,367

)

Net income attributable to noncontrolling interest

 

789

 

 

 

747

 

 

613

 

 

 

1,536

 

 

1,174

 

Net income (loss) attributable to Penguin Solutions

 

8,082

 

 

 

5,217

 

 

(13,620

)

 

 

13,299

 

 

(33,541

)

 

 

 

 

 

 

 

 

 

 

Preferred share dividends

 

2,600

 

 

 

 

 

 

 

 

2,600

 

 

 

Income available for distribution

 

5,482

 

 

 

5,217

 

 

(13,620

)

 

 

10,699

 

 

(33,541

)

Income allocated to participating securities

 

482

 

 

 

 

 

 

 

 

492

 

 

 

Net income available to ordinary shareholders

$

5,000

 

 

$

5,217

 

$

(13,620

)

 

$

10,207

 

$

(33,541

)

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Continuing operations

$

0.09

 

 

$

0.10

 

$

(0.26

)

 

$

0.19

 

$

(0.49

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.15

)

 

$

0.09

 

 

$

0.10

 

$

(0.26

)

 

$

0.19

 

$

(0.64

)

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Continuing operations

$

0.09

 

 

$

0.10

 

$

(0.26

)

 

$

0.19

 

$

(0.49

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.15

)

 

$

0.09

 

 

$

0.10

 

$

(0.26

)

 

$

0.19

 

$

(0.64

)

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

Basic

 

53,454

 

 

 

53,482

 

 

52,031

 

 

 

53,468

 

 

52,050

 

Diluted

 

54,384

 

 

 

54,312

 

 

52,031

 

 

 

54,484

 

 

52,050

 

Penguin Solutions, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands, except percentages)

(Unaudited) 

 

Three Months Ended

 

Six Months Ended

 

February 28,
2025

 

November 29,
2024

 

March 1,
2024

 

February 28,
2025

 

March 1,
2024

GAAP gross profit

$

104,648

 

 

$

97,812

 

 

$

81,934

 

 

$

202,460

 

 

$

164,784

 

Share-based compensation expense

 

1,776

 

 

 

1,643

 

 

 

1,691

 

 

 

3,419

 

 

 

3,506

 

Amortization of acquisition-related intangibles

 

5,907

 

 

 

5,909

 

 

 

5,894

 

 

 

11,816

 

 

 

11,838

 

Cost of sales-related restructuring

 

77

 

 

 

(42

)

 

 

216

 

 

 

35

 

 

 

884

 

Other

 

 

 

 

(200

)

 

 

 

 

 

(200

)

 

 

 

Non-GAAP gross profit

$

112,408

 

 

$

105,122

 

 

$

89,735

 

 

$

217,530

 

 

$

181,012

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

28.6

%

 

 

28.7

%

 

 

28.8

%

 

 

28.7

%

 

 

29.5

%

Effect of adjustments

 

2.2

%

 

 

2.1

%

 

 

2.7

%

 

 

2.1

%

 

 

2.9

%

Non-GAAP gross margin

 

30.8

%

 

 

30.8

%

 

 

31.5

%

 

 

30.8

%

 

 

32.4

%

 

 

 

 

 

 

 

 

 

 

GAAP operating expenses

$

86,160

 

 

$

80,456

 

 

$

85,246

 

 

$

166,616

 

 

$

166,791

 

Share-based compensation expense

 

(9,804

)

 

 

(9,888

)

 

 

(8,948

)

 

 

(19,692

)

 

 

(18,103

)

Amortization of acquisition-related intangibles

 

(2,932

)

 

 

(3,846

)

 

 

(3,857

)

 

 

(6,778

)

 

 

(7,921

)

Diligence, acquisition and integration expense

 

(567

)

 

 

(833

)

 

 

(5,885

)

 

 

(1,400

)

 

 

(6,674

)

Redomiciliation costs (1)

 

(2,359

)

 

 

(1,243

)

 

 

 

 

 

(3,602

)

 

 

 

Impairment of goodwill

 

(6,079

)

 

 

 

 

 

 

 

 

(6,079

)

 

 

 

Restructuring charges

 

(859

)

 

 

(109

)

 

 

(3,335

)

 

 

(968

)

 

 

(6,274

)

Other (1)

 

(242

)

 

 

(333

)

 

 

 

 

 

(575

)

 

 

 

Non-GAAP operating expenses

$

63,318

 

 

$

64,204

 

 

$

63,221

 

 

$

127,522

 

 

$

127,819

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income (loss)

$

18,488

 

 

$

17,356

 

 

$

(3,312

)

 

$

35,844

 

 

$

(2,007

)

Share-based compensation expense

 

11,580

 

 

 

11,531

 

 

 

10,639

 

 

 

23,111

 

 

 

21,609

 

Amortization of acquisition-related intangibles

 

8,839

 

 

 

9,755

 

 

 

9,751

 

 

 

18,594

 

 

 

19,759

 

Cost of sales-related restructuring

 

77

 

 

 

(42

)

 

 

216

 

 

 

35

 

 

 

884

 

Diligence, acquisition and integration expense

 

567

 

 

 

833

 

 

 

5,885

 

 

 

1,400

 

 

 

6,674

 

Redomiciliation costs (1)

 

2,359

 

 

 

1,243

 

 

 

 

 

 

3,602

 

 

 

 

Impairment of goodwill

 

6,079

 

 

 

 

 

 

 

 

 

6,079

 

 

 

 

Restructuring charges

 

859

 

 

 

109

 

 

 

3,335

 

 

 

968

 

 

 

6,274

 

Other (1)

 

242

 

 

 

133

 

 

 

 

 

 

375

 

 

 

 

Non-GAAP operating income

$

49,090

 

 

$

40,918

 

 

$

26,514

 

 

$

90,008

 

 

$

53,193

 

(1) In the second quarter of fiscal 2025 we began breaking out redomiciliation costs from “Other.” All periods presented have been adjusted to reflect this change.

Penguin Solutions, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands, except per share amounts)

(Unaudited) 

 

Three Months Ended

 

Six Months Ended

 

February 28,
2025

 

November 29,
2024

 

March 1,
2024

 

February 28,
2025

 

March 1,
2024

GAAP net income (loss) attributable to Penguin Solutions

$

8,082

 

 

$

5,217

 

 

$

(13,620

)

 

$

13,299

 

 

$

(25,393

)

Share-based compensation expense

 

11,580

 

 

 

11,531

 

 

 

10,639

 

 

 

23,111

 

 

 

21,609

 

Amortization of acquisition-related intangibles

 

8,839

 

 

 

9,755

 

 

 

9,751

 

 

 

18,594

 

 

 

19,759

 

Cost of sales-related restructuring

 

77

 

 

 

(42

)

 

 

216

 

 

 

35

 

 

 

884

 

Diligence, acquisition and integration expense

 

567

 

 

 

833

 

 

 

5,885

 

 

 

1,400

 

 

 

6,674

 

Redomiciliation costs (1)

 

2,359

 

 

 

1,243

 

 

 

 

 

 

3,602

 

 

 

 

Impairment of goodwill

 

6,079

 

 

 

 

 

 

 

 

 

6,079

 

 

 

 

Restructuring charges

 

859

 

 

 

109

 

 

 

3,335

 

 

 

968

 

 

 

6,274

 

Amortization of debt issuance costs

 

950

 

 

 

953

 

 

 

968

 

 

 

1,903

 

 

 

2,010

 

Loss (gain) on extinguishment or prepayment of debt

 

 

 

 

 

 

 

325

 

 

 

 

 

 

325

 

Foreign currency (gains) losses

 

24

 

 

 

1,028

 

 

 

182

 

 

 

1,052

 

 

 

(364

)

Other (1)

 

242

 

 

 

133

 

 

 

 

 

 

375

 

 

 

 

Income tax effects

 

(5,822

)

 

 

(4,242

)

 

 

(3,540

)

 

 

(10,064

)

 

 

(5,099

)

Non-GAAP net income attributable to Penguin Solutions

 

33,836

 

 

 

26,518

 

 

 

14,141

 

 

 

60,354

 

 

 

26,679

 

 

 

 

 

 

 

 

 

 

 

Preferred share dividends

 

2,600

 

 

 

 

 

 

 

 

 

2,600

 

 

 

 

Non-GAAP income available for distribution

 

31,236

 

 

 

26,518

 

 

 

14,141

 

 

 

57,754

 

 

 

29,887

 

Income allocated to participating securities

 

2,706

 

 

 

 

 

 

 

 

 

2,610

 

 

 

 

Non-GAAP net income available to ordinary shareholders

$

28,530

 

 

$

26,518

 

 

$

14,141

 

 

$

55,144

 

 

$

29,887

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding - Diluted:

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding

 

54,384

 

 

 

54,312

 

 

 

52,031

 

 

 

54,484

 

 

 

52,050

 

Adjustment for dilutive securities and capped calls

 

 

 

 

 

 

 

1,043

 

 

 

 

 

 

1,128

 

Non-GAAP weighted-average shares outstanding

 

54,384

 

 

 

54,312

 

 

 

53,074

 

 

 

54,484

 

 

 

53,178

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share from continuing operations:

 

 

 

 

 

 

 

 

 

GAAP diluted earnings (loss) per share

$

0.09

 

 

$

0.10

 

 

$

(0.26

)

 

$

0.19

 

 

$

(0.49

)

Effect of adjustments

 

0.43

 

 

 

0.39

 

 

 

0.53

 

 

 

0.82

 

 

 

0.99

 

Non-GAAP diluted earnings per share

$

0.52

 

 

$

0.49

 

 

$

0.27

 

 

$

1.01

 

 

$

0.50

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Penguin Solutions

$

8,082

 

 

$

5,217

 

 

$

(13,620

)

 

$

13,299

 

 

$

(25,393

)

Interest expense, net

 

2,183

 

 

 

4,396

 

 

 

7,249

 

 

 

6,579

 

 

 

16,808

 

Income tax provision (benefit)

 

7,643

 

 

 

6,360

 

 

 

2,198

 

 

 

14,003

 

 

 

5,732

 

Depreciation expense and amortization of intangible assets

 

14,037

 

 

 

14,961

 

 

 

17,156

 

 

 

28,998

 

 

 

34,810

 

Share-based compensation expense

 

11,580

 

 

 

11,531

 

 

 

10,639

 

 

 

23,111

 

 

 

21,609

 

Cost of sales-related restructuring

 

77

 

 

 

(42

)

 

 

216

 

 

 

35

 

 

 

884

 

Diligence, acquisition and integration expense

 

567

 

 

 

833

 

 

 

5,885

 

 

 

1,400

 

 

 

6,674

 

Redomiciliation costs (1)

 

2,359

 

 

 

1,243

 

 

 

 

 

 

3,602

 

 

 

 

Impairment of goodwill

 

6,079

 

 

 

 

 

 

 

 

 

6,079

 

 

 

 

Restructuring charges

 

859

 

 

 

109

 

 

 

3,335

 

 

 

968

 

 

 

6,274

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

325

 

 

 

 

 

 

325

 

Other (1)

 

242

 

 

 

133

 

 

 

 

 

 

375

 

 

 

 

Adjusted EBITDA

$

53,708

 

 

$

44,741

 

 

$

33,383

 

 

$

98,449

 

 

$

67,723

 

(1) In the second quarter of fiscal 2025 we began breaking out redomiciliation costs from “Other.” All periods presented have been adjusted to reflect this change.

Penguin Solutions, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited) 

As of

February 28,
2025

 

August 30,
2024

Assets

 

 

 

Cash and cash equivalents

$

621,682

 

 

$

383,147

 

Short-term investments

 

25,323

 

 

 

6,337

 

Accounts receivable, net

 

330,384

 

 

 

251,743

 

Inventories

 

199,737

 

 

 

151,213

 

Other current assets

 

67,639

 

 

 

75,264

 

Total current assets

 

1,244,765

 

 

 

867,704

 

Property and equipment, net

 

97,116

 

 

 

106,548

 

Operating lease right-of-use assets

 

56,363

 

 

 

60,349

 

Intangible assets, net

 

103,280

 

 

 

121,454

 

Goodwill

 

155,879

 

 

 

161,958

 

Deferred tax assets

 

84,944

 

 

 

85,078

 

Other noncurrent assets

 

68,997

 

 

 

71,415

 

Total assets

$

1,811,344

 

 

$

1,474,506

 

 

 

 

 

Liabilities and Equity

 

 

 

Accounts payable and accrued expenses

$

278,093

 

 

$

219,090

 

Current debt

 

19,891

 

 

 

 

Deferred revenue

 

121,646

 

 

 

63,954

 

Other current liabilities

 

54,075

 

 

 

44,552

 

Total current liabilities

 

473,705

 

 

 

327,596

 

Long-term debt

 

638,900

 

 

 

657,347

 

Noncurrent operating lease liabilities

 

56,816

 

 

 

60,542

 

Other noncurrent liabilities

 

30,032

 

 

 

29,813

 

Total liabilities

 

1,199,453

 

 

 

1,075,298

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Penguin Solutions shareholders’ equity:

 

 

 

Preferred shares

 

6

 

 

 

 

Ordinary shares

 

1,849

 

 

 

1,807

 

Additional paid-in capital

 

731,323

 

 

 

513,335

 

Retained earnings

 

40,684

 

 

 

29,985

 

Treasury shares

 

(171,351

)

 

 

(153,756

)

Accumulated other comprehensive income (loss)

 

17

 

 

 

10

 

Total Penguin Solutions shareholders’ equity

 

602,528

 

 

 

391,381

 

Noncontrolling interest in subsidiary

 

9,363

 

 

 

7,827

 

Total equity

 

611,891

 

 

 

399,208

 

Total liabilities and equity

$

1,811,344

 

 

$

1,474,506

 

Penguin Solutions, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited) 

 

Three Months Ended

 

Six Months Ended

 

February 28,
2025

 

November 29,
2024

 

March 1,
2024

 

February 28,
2025

 

March 1,
2024

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net income (loss)

$

8,871

 

 

$

5,964

 

 

$

(13,007

)

 

$

14,835

 

 

$

(32,367

)

Net loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,148

)

Net income (loss) from continuing operations

 

8,871

 

 

 

5,964

 

 

 

(13,007

)

 

 

14,835

 

 

 

(24,219

)

Adjustments to reconcile net income (loss) from continuing operations to cash provided by (used for) operating activities

 

 

 

 

 

 

 

 

 

Depreciation expense and amortization of intangible assets

 

14,037

 

 

 

14,961

 

 

 

17,156

 

 

 

28,998

 

 

 

34,810

 

Amortization of debt issuance costs

 

950

 

 

 

953

 

 

 

968

 

 

 

1,903

 

 

 

2,010

 

Share-based compensation expense

 

11,580

 

 

 

11,531

 

 

 

10,639

 

 

 

23,111

 

 

 

21,609

 

Impairment of goodwill

 

6,079

 

 

 

 

 

 

 

 

 

6,079

 

 

 

 

Loss on extinguishment or prepayment of debt

 

 

 

 

 

 

 

325

 

 

 

 

 

 

325

 

Deferred income taxes, net

 

(48

)

 

 

211

 

 

 

476

 

 

 

163

 

 

 

194

 

Other

 

(716

)

 

 

(712

)

 

 

(208

)

 

 

(1,428

)

 

 

456

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(54,755

)

 

 

(23,885

)

 

 

872

 

 

 

(78,640

)

 

 

49,530

 

Inventories

 

47,215

 

 

 

(93,380

)

 

 

35,678

 

 

 

(46,165

)

 

 

2,214

 

Other assets

 

15,015

 

 

 

705

 

 

 

(23,229

)

 

 

15,720

 

 

 

(21,127

)

Accounts payable and accrued expenses and other liabilities

 

24,649

 

 

 

97,471

 

 

 

(22,587

)

 

 

122,120

 

 

 

994

 

Payment of acquisition-related contingent consideration

 

 

 

 

 

 

 

(29,000

)

 

 

 

 

 

(29,000

)

Net cash provided by (used for) operating activities from continuing operations

 

72,877

 

 

 

13,819

 

 

 

(21,917

)

 

 

86,696

 

 

 

37,796

 

Net cash used for operating activities from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,235

)

Net cash provided by (used for) operating activities

 

72,877

 

 

 

13,819

 

 

 

(21,917

)

 

 

86,696

 

 

 

9,561

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Capital expenditures and deposits on equipment

 

(2,335

)

 

 

(1,836

)

 

 

(5,204

)

 

 

(4,171

)

 

 

(9,852

)

Proceeds from maturities of investment securities

 

11,055

 

 

 

3,780

 

 

 

12,290

 

 

 

14,835

 

 

 

21,955

 

Purchases of held-to-maturity investment securities

 

(12,671

)

 

 

(20,723

)

 

 

(11,034

)

 

 

(33,394

)

 

 

(19,503

)

Purchases of non-marketable investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

(398

)

 

 

(143

)

 

 

(558

)

 

 

(541

)

 

 

(746

)

Net cash used for investing activities from continuing operations

 

(4,349

)

 

 

(18,922

)

 

 

(4,506

)

 

 

(23,271

)

 

 

(8,146

)

Net cash provided by investing activities from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

118,938

 

Net cash provided by (used for) investing activities

$

(4,349

)

 

$

(18,922

)

 

$

(4,506

)

 

$

(23,271

)

 

$

110,792

 

Penguin Solutions, Inc.

Consolidated Statements of Cash Flows, Continued

(In thousands)

(Unaudited)

 

Three Months Ended

 

Six Months Ended

 

February 28,
2025

 

November 29,
2024

 

March 1,
2024

 

February 28,
2025

 

March 1,
2024

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible preferred shares, net of issuance costs

$

191,182

 

 

$

 

 

$

 

 

$

191,182

 

 

$

 

Repayments of debt

 

 

 

 

 

 

 

(37,211

)

 

 

 

 

 

(51,634

)

Payment of acquisition-related contingent consideration

 

 

 

 

 

 

 

(21,000

)

 

 

 

 

 

(21,000

)

Payments to acquire ordinary shares

 

(6,472

)

 

 

(11,123

)

 

 

(2,732

)

 

 

(17,595

)

 

 

(15,862

)

Payment of preferred share cash dividends

 

(2,233

)

 

 

 

 

 

 

 

 

(2,233

)

 

 

 

Distribution to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,470

)

Proceeds from issuance of ordinary shares

 

382

 

 

 

3,360

 

 

 

792

 

 

 

3,742

 

 

 

4,247

 

Other

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(583

)

Net cash used for financing activities from continuing operations

 

182,859

 

 

 

(7,763

)

 

 

(60,152

)

 

 

175,096

 

 

 

(86,302

)

Net cash used for financing activities from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

(606

)

Net cash used for financing activities

 

182,859

 

 

 

(7,763

)

 

 

(60,152

)

 

 

175,096

 

 

 

(86,908

)

 

 

 

 

 

 

 

 

 

 

Effect of changes in currency exchange rates

 

 

 

 

 

 

 

(155

)

 

 

 

 

 

(1,180

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

251,387

 

 

 

(12,866

)

 

 

(86,730

)

 

 

238,521

 

 

 

32,265

 

Cash, cash equivalents and restricted cash at beginning of period

 

370,611

 

 

 

383,477

 

 

 

529,059

 

 

 

383,477

 

 

 

410,064

 

Cash, cash equivalents and restricted cash at end of period

$

621,998

 

 

$

370,611

 

 

$

442,329

 

 

$

621,998

 

 

$

442,329

 

 

Investor Contact:

Suzanne Schmidt

Investor Relations

+1-510-360-8596

ir@penguinsolutions.com

PR Contact:

Maureen O’Leary

Director Communications

1-602-330-6846

pr@penguinsolutions.com

Source: Penguin Solutions, Inc.

FAQ

What was Penguin Solutions (PENG) revenue growth in Q2 2025?

PENG reported Q2 2025 revenue growth of 28.3% year-over-year, reaching $366 million.

How much did PENG's Advanced Computing segment generate in Q2 2025?

The Advanced Computing segment generated $200.2 million in revenue for Q2 2025.

What is PENG's updated revenue guidance for fiscal year 2025?

PENG raised its FY2025 revenue guidance to 17% year-over-year growth (±3%), up from previous guidance of 15% (±5%).

What was PENG's Q2 2025 earnings per share?

PENG reported GAAP EPS of $0.09 and non-GAAP EPS of $0.52 for Q2 2025.

When is PENG's COO Jack Pacheco retiring?

Jack Pacheco will retire as COO and President of Integrated Memory on December 31, 2025.
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