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08-07-2025
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Penguin Solutions Reports Q3 Fiscal 2025 Financial Results
Company raises midpoint of full-year GAAP and Non-GAAP diluted EPS outlook MILPITAS, Calif., July 08, 2025--(BUSINESS WIRE)--Penguin Solutions, Inc. ("Penguin Solutions," "we," "us," or the "Company") (Nasdaq: PENG) today reported financial results for the third quarter of fiscal 2025. Third Quarter Fiscal 2025 Highlights Net sales of $324 million, up 7.9% versus the year-ago quarter GAAP gross margin of 29.3%, down 30 basis points versus the year-ago quarter Non-GAAP gross margin of 31.7%, down 60 basis points versus the year-ago quarter GAAP diluted EPS of $(0.01) versus $0.10 in the year-ago quarter Non-GAAP diluted EPS of $0.47 versus $0.37 in the year-ago quarter "We delivered solid third quarter results while executing against our strategic objectives," said Mark Adams, chief executive officer of Penguin Solutions. "We also strengthened our balance sheet through a refinancing after the close of Q3, and we remain focused on developing our AI software and services capabilities, expanding go-to-market resources, and driving long-term value for our stockholders." Quarterly Financial Results GAAP (1) Non-GAAP (2) (in thousands, except per share amounts) Q3-25 Q2-25 Q3-24 Q3-25 Q2-25 Q3-24 Net sales: Advanced Computing $ 132,498 $ 200,157 $ 144,968 $ 132,498 $ 200,157 $ 144,968 Integrated Memory 130,124 105,260 91,629 130,124 105,260 91,629 Optimized LED 61,629 60,102 63,983 61,629 60,102 63,983 Total net sales $ 324,251 $ 365,519 $ 300,580 $ 324,251 $ 365,519 $ 300,580 Gross profit $ 95,083 $ 104,648 $ 88,906 $ 102,753 $ 112,408 $ 96,962 Operating income (loss) 9,843 18,488 11,511 38,474 49,090 33,325 Net income (loss) attributable to Penguin Solutions 2,661 8,082 5,616 31,128 33,836 20,221 Diluted earnings (loss) per share $ (0.01 ) $ 0.09 $ 0.10 $ 0.47 $ 0.52 $ 0.37 (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 8, 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 +/-2% — 17% YoY Growth +/-2% Gross margin 29% +/- 0.5% 2% (A) 31% +/- 0.5% Operating expenses $340 million +/- $5 million ($80) million (B)(C)(E) $260 million +/- $5 million Diluted earnings per share $0.04 +/- $0.05 $1.76 (A)(B)(C)(D)(E)(F)(G) $1.80 +/- $0.05 Diluted shares 54 million — 54 million Non-GAAP adjustments (in millions) (A) Stock-based compensation and amortization of acquisition-related intangibles included in cost of sales $ 31 (B) Stock-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A 48 (C) Goodwill Impairment 16 (D) Loss on extinguishment of debt 3 (E) Other adjustments 16 (F) Estimated income tax effects (11 ) (G) Estimated effect of allocation of earnings to participating securities (8 ) $ 95 Prior 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) Stock-based compensation and amortization of acquisition-related intangibles included in cost of sales $ 31 (B) Stock-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 Third Quarter Fiscal 2025 Earnings Conference Call and Webcast Details Penguin Solutions will hold a conference call and webcast to discuss the third quarter of fiscal 2025 results and related matters today, July 8, 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 305335. The earnings presentation and a live webcast of the conference call can be accessed from the Company's investor relations website ( where they will remain available for approximately one year. 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 and expenses; statements regarding Penguin Solutions' strategic objectives and development of our services and capabilities; 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 our liquidity. 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 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 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; 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; 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 percent of our revenue; 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 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 30, 2024 filed prior to the U.S. Domestication by our predecessor Penguin Solutions Cayman (as defined below), as updated by the risk factors 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 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 the third quarter of fiscal 2025, for our non-GAAP reporting, we reduced our long-term projected non-GAAP effective tax rate from 28% to 25%, which includes the tax impact of pre-tax non-GAAP adjustments and reflects currently available information as well as other factors and assumptions. This reduction was due to changes in the geographic earnings mix. 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. Explanatory Note Subsequent to the end of the third quarter, on June 30, 2025, we completed the redomiciliation of the parent company of our corporate group, 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 April 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 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 Advanced Computing, Integrated Memory, and Optimized 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 Penguin Solutions, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 Net sales: Advanced Computing $ 132,498 $ 200,157 $ 144,968 $ 510,081 $ 405,197 Integrated Memory 130,124 105,260 91,629 332,090 260,594 Optimized LED 61,629 60,102 63,983 188,701 193,857 Total net sales 324,251 365,519 300,580 1,030,872 859,648 Cost of sales 229,168 260,871 211,674 733,329 605,958 Gross profit 95,083 104,648 88,906 297,543 253,690 Operating expenses: Research and development 20,222 19,907 19,681 59,940 61,596 Selling, general and administrative 59,724 59,315 57,249 179,575 175,851 Impairment of goodwill 5,294 6,079 — 11,373 — Other operating expense — 859 465 968 6,739 Total operating expenses 85,240 86,160 77,395 251,856 244,186 Operating income 9,843 18,488 11,511 45,687 9,504 Non-operating (income) expense: Interest expense, net 573 2,183 6,167 7,152 22,975 Other non-operating (income) expense (1,439 ) (209 ) 441 (1,012 ) 113 Total non-operating (income) expense (866 ) 1,974 6,608 6,140 23,088 Income (loss) before taxes 10,709 16,514 4,903 39,547 (13,584 ) Income tax provision 7,259 7,643 (1,323 ) 21,262 4,409 Net income (loss) from continuing operations 3,450 8,871 6,226 18,285 (17,993 ) Net loss from discontinued operations — — — — (8,148 ) Net income (loss) 3,450 8,871 6,226 18,285 (26,141 ) Net income attributable to noncontrolling interest 789 789 610 2,325 1,784 Net income (loss) attributable to Penguin Solutions 2,661 8,082 5,616 15,960 (27,925 ) Preferred share dividends 3,033 2,600 — 5,633 — Income available for distribution (372 ) 5,482 5,616 10,327 (27,925 ) Income allocated to participating securities — 482 — 678 — Net income (loss) available to ordinary shareholders $ (372 ) $ 5,000 $ 5,616 $ 9,649 $ (27,925 ) Basic earnings (loss) per share: Continuing operations $ (0.01 ) $ 0.09 $ 0.11 $ 0.18 $ (0.38 ) Discontinued operations — — — — (0.15 ) $ (0.01 ) $ 0.09 $ 0.11 $ 0.18 $ (0.53 ) Diluted earnings (loss) per share: Continuing operations $ (0.01 ) $ 0.09 $ 0.10 $ 0.18 $ (0.38 ) Discontinued operations — — — — (0.15 ) $ (0.01 ) $ 0.09 $ 0.10 $ 0.18 $ (0.53 ) Shares used in per share calculations: Basic 53,130 53,454 52,570 53,355 52,219 Diluted 53,738 54,384 54,283 54,336 52,219 Penguin Solutions, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands, except percentages) (Unaudited) Three Months Ended Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 GAAP gross profit $ 95,083 $ 104,648 $ 88,906 $ 297,543 $ 253,690 Share-based compensation expense 1,393 1,776 1,760 4,812 5,266 Amortization of acquisition-related intangibles 5,908 5,907 5,909 17,724 17,747 Cost of sales-related restructuring 369 77 387 404 1,271 Other — — — (200 ) — Non-GAAP gross profit $ 102,753 $ 112,408 $ 96,962 $ 320,283 $ 277,974 GAAP gross margin 29.3 % 28.6 % 29.6 % 28.9 % 29.5 % Effect of adjustments 2.4 % 2.2 % 2.7 % 2.2 % 2.8 % Non-GAAP gross margin 31.7 % 30.8 % 32.3 % 31.1 % 32.3 % GAAP operating expenses $ 85,240 $ 86,160 $ 77,395 $ 251,856 $ 244,186 Share-based compensation expense (8,858 ) (9,804 ) (9,432 ) (28,550 ) (27,535 ) Amortization of acquisition-related intangibles (2,531 ) (2,932 ) (3,857 ) (9,309 ) (11,778 ) Diligence, acquisition and integration expense (296 ) (567 ) (4 ) (1,696 ) (6,678 ) Redomiciliation costs (1) (3,702 ) (2,359 ) — (7,304 ) — Impairment of goodwill (5,294 ) (6,079 ) — (11,373 ) — Restructuring charges — (859 ) (465 ) (968 ) (6,739 ) Other (1) (280 ) (242 ) — (855 ) — Non-GAAP operating expenses $ 64,279 $ 63,318 $ 63,637 $ 191,801 $ 191,456 GAAP operating income $ 9,843 $ 18,488 $ 11,511 $ 45,687 $ 9,504 Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Amortization of acquisition-related intangibles 8,439 8,839 9,766 27,033 29,525 Cost of sales-related restructuring 369 77 387 404 1,271 Diligence, acquisition and integration expense 296 567 4 1,696 6,678 Redomiciliation costs (1) 3,702 2,359 — 7,304 — Impairment of goodwill 5,294 6,079 — 11,373 — Restructuring charges — 859 465 968 6,739 Other (1) 280 242 — 655 — Non-GAAP operating income $ 38,474 $ 49,090 $ 33,325 $ 128,482 $ 86,518 (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 Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 GAAP net income (loss) attributable to Penguin Solutions $ 2,661 $ 8,082 $ 5,616 $ 15,960 $ (19,777 ) Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Amortization of acquisition-related intangibles 8,439 8,839 9,766 27,033 29,525 Cost of sales-related restructuring 369 77 387 404 1,271 Diligence, acquisition and integration expense 296 567 4 1,696 6,678 Redomiciliation costs (1) 3,702 2,359 — 7,304 — Impairment of goodwill 5,294 6,079 — 11,373 — Restructuring charges — 859 465 968 6,739 Amortization of debt issuance costs 916 950 817 2,819 2,827 Loss (gain) on extinguishment or prepayment of debt — — 792 — 1,117 Foreign currency (gains) losses (1,134 ) 24 606 (82 ) 242 Other (1) 280 242 — 655 — Income tax effects 54 (5,822 ) (9,424 ) (10,010 ) (14,523 ) Non-GAAP net income attributable to Penguin Solutions 31,128 33,836 20,221 91,482 46,900 Preferred share dividends 3,033 2,600 — 5,633 — Non-GAAP income available for distribution 28,095 31,236 20,221 85,849 50,108 Income allocated to participating securities 2,863 2,706 — 5,545 — Non-GAAP net income available to ordinary shareholders $ 25,232 $ 28,530 $ 20,221 $ 80,304 $ 50,108 Weighted-average shares outstanding - Diluted: GAAP weighted-average shares outstanding 53,738 54,384 54,283 54,336 52,219 Adjustment for dilutive securities and capped calls — — (333 ) — 1,216 Non-GAAP weighted-average shares outstanding 53,738 54,384 53,950 54,336 53,435 Diluted earnings (loss) per share from continuing operations: GAAP diluted earnings (loss) per share $ (0.01 ) $ 0.09 $ 0.10 $ 0.18 $ (0.38 ) Effect of adjustments 0.48 0.43 0.27 1.30 1.26 Non-GAAP diluted earnings per share $ 0.47 $ 0.52 $ 0.37 $ 1.48 $ 0.88 Net income (loss) attributable to Penguin Solutions $ 2,661 $ 8,082 $ 5,616 $ 15,960 $ (19,777 ) Interest expense, net 573 2,183 6,167 7,152 22,975 Income tax provision (benefit) 7,259 7,643 (1,323 ) 21,262 4,409 Depreciation expense and amortization of intangible assets 14,012 14,037 15,525 43,010 50,335 Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Cost of sales-related restructuring 369 77 387 404 1,271 Diligence, acquisition and integration expense 296 567 4 1,696 6,678 Redomiciliation costs (1) 3,702 2,359 — 7,304 — Impairment of goodwill 5,294 6,079 — 11,373 — Restructuring charges — 859 465 968 6,739 Loss on extinguishment of debt — — 792 — 1,117 Other (1) 280 242 — 655 — Adjusted EBITDA $ 44,697 $ 53,708 $ 38,825 $ 143,146 $ 106,548 (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 May 30, 2025 August 30, 2024 Assets Cash and cash equivalents $ 709,871 $ 383,147 Short-term investments 25,676 6,337 Accounts receivable, net 292,504 251,743 Inventories 184,348 151,213 Other current assets 37,497 75,264 Total current assets 1,249,896 867,704 Property and equipment, net 93,882 106,548 Operating lease right-of-use assets 61,850 60,349 Intangible assets, net 95,130 121,454 Goodwill 150,585 161,958 Deferred tax assets 83,872 85,078 Other noncurrent assets 67,567 71,415 Total assets $ 1,802,782 $ 1,474,506 Liabilities and Equity Accounts payable and accrued expenses $ 310,572 $ 219,090 Current debt 19,916 — Deferred revenue 101,374 63,954 Other current liabilities 44,882 44,552 Total current liabilities 476,744 327,596 Long-term debt 639,562 657,347 Noncurrent operating lease liabilities 63,650 60,542 Other noncurrent liabilities 27,903 29,813 Total liabilities 1,207,859 1,075,298 Commitments and contingencies Penguin Solutions shareholders' equity: Ordinary shares 1,869 1,807 Preferred shares 6 — Additional paid-in capital 745,557 513,335 Retained earnings 40,312 29,985 Treasury shares (202,996 ) (153,756 ) Accumulated other comprehensive income 23 10 Total Penguin Solutions shareholders' equity 584,771 391,381 Noncontrolling interest in subsidiary 10,152 7,827 Total equity 594,923 399,208 Total liabilities and equity $ 1,802,782 $ 1,474,506 Penguin Solutions, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 Cash flows from operating activities Net income (loss) $ 3,450 $ 8,871 $ 6,226 $ 18,285 $ (26,141 ) Net loss from discontinued operations — — — — (8,148 ) Net income (loss) from continuing operations 3,450 8,871 6,226 18,285 (17,993 ) Adjustments to reconcile net income (loss) from continuing operations to cash provided by (used for) operating activities Depreciation expense and amortization of intangible assets 14,012 14,037 15,525 43,010 50,335 Amortization of debt issuance costs 917 950 817 2,820 2,827 Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Impairment of goodwill 5,294 6,079 — 11,373 — Loss on extinguishment or prepayment of debt — — 792 — 1,117 Deferred income taxes, net 959 (48 ) (3,840 ) 1,122 (3,646 ) Other (1,041 ) (716 ) (3,228 ) (2,469 ) (2,772 ) Changes in operating assets and liabilities: Accounts receivable 37,880 (54,755 ) (42,124 ) (40,760 ) 7,406 Inventories 15,389 47,215 (4,535 ) (30,776 ) (2,321 ) Other assets (1,979 ) 15,015 15,424 13,741 (5,703 ) Accounts payable and accrued expenses and other liabilities 11,788 24,649 83,632 133,908 84,626 Payment of acquisition-related contingent consideration — — — — (29,000 ) Net cash provided by operating activities from continuing operations 96,920 72,877 79,881 183,616 117,677 Net cash used for operating activities from discontinued operations (4,099 ) — (101 ) (4,099 ) (28,336 ) Net cash provided by operating activities 92,821 72,877 79,780 179,517 89,341 Cash flows from investing activities Capital expenditures and deposits on equipment (1,916 ) (2,335 ) (3,777 ) (6,087 ) (13,629 ) Proceeds from maturities of investment securities 12,650 11,055 9,915 27,485 31,870 Purchases of held-to-maturity investment securities (12,733 ) (12,671 ) — (46,127 ) (19,503 ) Purchases of non-marketable investments — — (1,000 ) — (1,000 ) Other (474 ) (398 ) (518 ) (1,015 ) (1,264 ) Net cash used for investing activities from continuing operations (2,473 ) (4,349 ) 4,620 (25,744 ) (3,526 ) Net cash provided by investing activities from discontinued operations 28,350 — 451 28,350 119,389 Net cash provided by (used for) investing activities $ 25,877 $ (4,349 ) $ 5,071 $ 2,606 $ 115,863 Penguin Solutions, Inc. Consolidated Statements of Cash Flows, Continued (In thousands) (Unaudited) Three Months Ended Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 Cash flows from financing activities Proceeds from issuance of convertible preferred shares, net of issuance costs $ — $ 191,182 $ — $ 191,182 $ — Repayments of debt — — (75,000 ) — (126,634 ) Payment of acquisition-related contingent consideration — — — — (21,000 ) Payments to acquire ordinary shares (31,645 ) (6,472 ) (2,129 ) (49,240 ) (17,991 ) Payment of preferred share cash dividends (2,867 ) (2,233 ) — (5,100 ) — Distribution to noncontrolling interest — — — — (1,470 ) Proceeds from issuance of ordinary shares 4,003 382 3,817 7,745 8,064 Other — — (1 ) — (584 ) Net cash used for financing activities from continuing operations (30,509 ) 182,859 (73,313 ) 144,587 (159,615 ) Net cash used for financing activities from discontinued operations — — — — (606 ) Net cash used for financing activities (30,509 ) 182,859 (73,313 ) 144,587 (160,221 ) Effect of changes in currency exchange rates — — (76 ) — (1,256 ) Net increase in cash, cash equivalents and restricted cash 88,189 251,387 11,462 326,710 43,727 Cash, cash equivalents and restricted cash at beginning of period 621,998 370,611 442,329 383,477 410,064 Cash, cash equivalents and restricted cash at end of period $ 710,187 $ 621,998 $ 453,791 $ 710,187 $ 453,791 View source version on Contacts Investor Contact: Suzanne SchmidtInvestor Relations+1-510-360-8596ir@ PR Contact: Maureen O'LearyCorporate Communications1-602-330-6846pr@
Business Wire
08-07-2025
- Business
- Business Wire
Penguin Solutions Reports Q3 Fiscal 2025 Financial Results
MILPITAS, Calif.--(BUSINESS WIRE)--Penguin Solutions, Inc. ('Penguin Solutions,' 'we,' 'us,' or the 'Company') (Nasdaq: PENG) today reported financial results for the third quarter of fiscal 2025. Third Quarter Fiscal 2025 Highlights Net sales of $324 million, up 7.9% versus the year-ago quarter GAAP gross margin of 29.3%, down 30 basis points versus the year-ago quarter Non-GAAP gross margin of 31.7%, down 60 basis points versus the year-ago quarter GAAP diluted EPS of $(0.01) versus $0.10 in the year-ago quarter Non-GAAP diluted EPS of $0.47 versus $0.37 in the year-ago quarter 'We delivered solid third quarter results while executing against our strategic objectives,' said Mark Adams, chief executive officer of Penguin Solutions. 'We also strengthened our balance sheet through a refinancing after the close of Q3, and we remain focused on developing our AI software and services capabilities, expanding go-to-market resources, and driving long-term value for our stockholders.' Quarterly Financial Results (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. Expand Business Outlook As of July 8, 2025, Penguin Solutions is providing the following financial outlook for fiscal year 2025: Non-GAAP adjustments (in millions) (A) Stock-based compensation and amortization of acquisition-related intangibles included in cost of sales $ 31 (B) Stock-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A 48 (C) Goodwill Impairment 16 (D) Loss on extinguishment of debt 3 (E) Other adjustments 16 (F) Estimated income tax effects (11 ) (G) Estimated effect of allocation of earnings to participating securities (8 ) $ 95 Expand Prior 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 Expand Non-GAAP adjustments (in millions) (A) Stock-based compensation and amortization of acquisition-related intangibles included in cost of sales $ 31 (B) Stock-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 Expand Third Quarter Fiscal 2025 Earnings Conference Call and Webcast Details Penguin Solutions will hold a conference call and webcast to discuss the third quarter of fiscal 2025 results and related matters today, July 8, 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 305335. The earnings presentation and a live webcast of the conference call can be accessed from the Company's investor relations website ( where they will remain available for approximately one year. 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 and expenses; statements regarding Penguin Solutions' strategic objectives and development of our services and capabilities; 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 our liquidity. 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 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 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; 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; 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 percent of our revenue; 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 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 30, 2024 filed prior to the U.S. Domestication by our predecessor Penguin Solutions Cayman (as defined below), as updated by the risk factors 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 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 the third quarter of fiscal 2025, for our non-GAAP reporting, we reduced our long-term projected non-GAAP effective tax rate from 28% to 25%, which includes the tax impact of pre-tax non-GAAP adjustments and reflects currently available information as well as other factors and assumptions. This reduction was due to changes in the geographic earnings mix. 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. Explanatory Note Subsequent to the end of the third quarter, on June 30, 2025, we completed the redomiciliation of the parent company of our corporate group, 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 April 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 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 Advanced Computing, Integrated Memory, and Optimized 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 Penguin Solutions, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands, except percentages) (Unaudited) Three Months Ended Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 GAAP gross profit $ 95,083 $ 104,648 $ 88,906 $ 297,543 $ 253,690 Share-based compensation expense 1,393 1,776 1,760 4,812 5,266 Amortization of acquisition-related intangibles 5,908 5,907 5,909 17,724 17,747 Cost of sales-related restructuring 369 77 387 404 1,271 Other — — — (200 ) — Non-GAAP gross profit $ 102,753 $ 112,408 $ 96,962 $ 320,283 $ 277,974 GAAP gross margin 29.3 % 28.6 % 29.6 % 28.9 % 29.5 % Effect of adjustments 2.4 % 2.2 % 2.7 % 2.2 % 2.8 % Non-GAAP gross margin 31.7 % 30.8 % 32.3 % 31.1 % 32.3 % GAAP operating expenses $ 85,240 $ 86,160 $ 77,395 $ 251,856 $ 244,186 Share-based compensation expense (8,858 ) (9,804 ) (9,432 ) (28,550 ) (27,535 ) Amortization of acquisition-related intangibles (2,531 ) (2,932 ) (3,857 ) (9,309 ) (11,778 ) Diligence, acquisition and integration expense (296 ) (567 ) (4 ) (1,696 ) (6,678 ) Redomiciliation costs (1) (3,702 ) (2,359 ) — (7,304 ) — Impairment of goodwill (5,294 ) (6,079 ) — (11,373 ) — Restructuring charges — (859 ) (465 ) (968 ) (6,739 ) Other (1) (280 ) (242 ) — (855 ) — Non-GAAP operating expenses $ 64,279 $ 63,318 $ 63,637 $ 191,801 $ 191,456 GAAP operating income $ 9,843 $ 18,488 $ 11,511 $ 45,687 $ 9,504 Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Amortization of acquisition-related intangibles 8,439 8,839 9,766 27,033 29,525 Cost of sales-related restructuring 369 77 387 404 1,271 Diligence, acquisition and integration expense 296 567 4 1,696 6,678 Redomiciliation costs (1) 3,702 2,359 — 7,304 — Impairment of goodwill 5,294 6,079 — 11,373 — Restructuring charges — 859 465 968 6,739 Other (1) 280 242 — 655 — Non-GAAP operating income $ 38,474 $ 49,090 $ 33,325 $ 128,482 $ 86,518 (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. Expand Penguin Solutions, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 GAAP net income (loss) attributable to Penguin Solutions $ 2,661 $ 8,082 $ 5,616 $ 15,960 $ (19,777 ) Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Amortization of acquisition-related intangibles 8,439 8,839 9,766 27,033 29,525 Cost of sales-related restructuring 369 77 387 404 1,271 Diligence, acquisition and integration expense 296 567 4 1,696 6,678 Redomiciliation costs (1) 3,702 2,359 — 7,304 — Impairment of goodwill 5,294 6,079 — 11,373 — Restructuring charges — 859 465 968 6,739 Amortization of debt issuance costs 916 950 817 2,819 2,827 Loss (gain) on extinguishment or prepayment of debt — — 792 — 1,117 Foreign currency (gains) losses (1,134 ) 24 606 (82 ) 242 Other (1) 280 242 — 655 — Income tax effects 54 (5,822 ) (9,424 ) (10,010 ) (14,523 ) Non-GAAP net income attributable to Penguin Solutions 31,128 33,836 20,221 91,482 46,900 Preferred share dividends 3,033 2,600 — 5,633 — Non-GAAP income available for distribution 28,095 31,236 20,221 85,849 50,108 Income allocated to participating securities 2,863 2,706 — 5,545 — $ 25,232 $ 28,530 $ 20,221 $ 80,304 $ 50,108 Weighted-average shares outstanding - Diluted: GAAP weighted-average shares outstanding 53,738 54,384 54,283 54,336 52,219 Adjustment for dilutive securities and capped calls — — (333 ) — 1,216 Non-GAAP weighted-average shares outstanding 53,738 54,384 53,950 54,336 53,435 Diluted earnings (loss) per share from continuing operations: GAAP diluted earnings (loss) per share $ (0.01 ) $ 0.09 $ 0.10 $ 0.18 $ (0.38 ) Effect of adjustments 0.48 0.43 0.27 1.30 1.26 Non-GAAP diluted earnings per share $ 0.47 $ 0.52 $ 0.37 $ 1.48 $ 0.88 Net income (loss) attributable to Penguin Solutions $ 2,661 $ 8,082 $ 5,616 $ 15,960 $ (19,777 ) Interest expense, net 573 2,183 6,167 7,152 22,975 Income tax provision (benefit) 7,259 7,643 (1,323 ) 21,262 4,409 Depreciation expense and amortization of intangible assets 14,012 14,037 15,525 43,010 50,335 Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Cost of sales-related restructuring 369 77 387 404 1,271 Diligence, acquisition and integration expense 296 567 4 1,696 6,678 Redomiciliation costs (1) 3,702 2,359 — 7,304 — Impairment of goodwill 5,294 6,079 — 11,373 — Restructuring charges — 859 465 968 6,739 Loss on extinguishment of debt — — 792 — 1,117 Other (1) 280 242 — 655 — Adjusted EBITDA $ 44,697 $ 53,708 $ 38,825 $ 143,146 $ 106,548 (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. Expand Penguin Solutions, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) As of May 30, 2025 August 30, 2024 Assets Cash and cash equivalents $ 709,871 $ 383,147 Short-term investments 25,676 6,337 Accounts receivable, net 292,504 251,743 Inventories 184,348 151,213 Other current assets 37,497 75,264 Total current assets 1,249,896 867,704 Property and equipment, net 93,882 106,548 Operating lease right-of-use assets 61,850 60,349 Intangible assets, net 95,130 121,454 Goodwill 150,585 161,958 Deferred tax assets 83,872 85,078 Other noncurrent assets 67,567 71,415 Total assets $ 1,802,782 $ 1,474,506 Liabilities and Equity Accounts payable and accrued expenses $ 310,572 $ 219,090 Current debt 19,916 — Deferred revenue 101,374 63,954 Other current liabilities 44,882 44,552 Total current liabilities 476,744 327,596 Long-term debt 639,562 657,347 Noncurrent operating lease liabilities 63,650 60,542 Other noncurrent liabilities 27,903 29,813 Total liabilities 1,207,859 1,075,298 Commitments and contingencies Penguin Solutions shareholders' equity: Ordinary shares 1,869 1,807 Preferred shares 6 — Additional paid-in capital 745,557 513,335 Retained earnings 40,312 29,985 Treasury shares (202,996 ) (153,756 ) Accumulated other comprehensive income 23 10 Total Penguin Solutions shareholders' equity 584,771 391,381 Noncontrolling interest in subsidiary 10,152 7,827 Total equity 594,923 399,208 Total liabilities and equity $ 1,802,782 $ 1,474,506 Expand Penguin Solutions, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended May 30, 2025 Feb. 28, 2025 May 31, 2024 May 30, 2025 May 31, 2024 Cash flows from operating activities Net income (loss) $ 3,450 $ 8,871 $ 6,226 $ 18,285 $ (26,141 ) Net loss from discontinued operations — — — — (8,148 ) Net income (loss) from continuing operations 3,450 8,871 6,226 18,285 (17,993 ) Adjustments to reconcile net income (loss) from continuing operations to cash provided by (used for) operating activities Depreciation expense and amortization of intangible assets 14,012 14,037 15,525 43,010 50,335 Amortization of debt issuance costs 917 950 817 2,820 2,827 Share-based compensation expense 10,251 11,580 11,192 33,362 32,801 Impairment of goodwill 5,294 6,079 — 11,373 — Loss on extinguishment or prepayment of debt — — 792 — 1,117 Deferred income taxes, net 959 (48 ) (3,840 ) 1,122 (3,646 ) Other (1,041 ) (716 ) (3,228 ) (2,469 ) (2,772 ) Changes in operating assets and liabilities: Accounts receivable 37,880 (54,755 ) (42,124 ) (40,760 ) 7,406 Inventories 15,389 47,215 (4,535 ) (30,776 ) (2,321 ) Other assets (1,979 ) 15,015 15,424 13,741 (5,703 ) Accounts payable and accrued expenses and other liabilities 11,788 24,649 83,632 133,908 84,626 Payment of acquisition-related contingent consideration — — — — (29,000 ) Net cash provided by operating activities from continuing operations 96,920 72,877 79,881 183,616 117,677 Net cash used for operating activities from discontinued operations (4,099 ) — (101 ) (4,099 ) (28,336 ) Net cash provided by operating activities 92,821 72,877 79,780 179,517 89,341 Cash flows from investing activities Capital expenditures and deposits on equipment (1,916 ) (2,335 ) (3,777 ) (6,087 ) (13,629 ) Proceeds from maturities of investment securities 12,650 11,055 9,915 27,485 31,870 Purchases of held-to-maturity investment securities (12,733 ) (12,671 ) — (46,127 ) (19,503 ) Purchases of non-marketable investments — — (1,000 ) — (1,000 ) Other (474 ) (398 ) (518 ) (1,015 ) (1,264 ) Net cash used for investing activities from continuing operations (2,473 ) (4,349 ) 4,620 (25,744 ) (3,526 ) Net cash provided by investing activities from discontinued operations 28,350 — 451 28,350 119,389 Net cash provided by (used for) investing activities $ 25,877 $ (4,349 ) $ 5,071 $ 2,606 $ 115,863 Expand
Yahoo
08-07-2025
- Business
- Yahoo
Q1 Processors and Graphics Chips Earnings: Penguin Solutions (NASDAQ:PENG) Earns Top Marks
Let's dig into the relative performance of Penguin Solutions (NASDAQ:PENG) and its peers as we unravel the now-completed Q1 processors and graphics chips earnings season. The biggest demand drivers for processors (CPUs) and graphics chips at the moment are secular trends related to 5G and Internet of Things, autonomous driving, and high performance computing in the data center space, specifically around AI and machine learning. Like all semiconductor companies, digital chip makers exhibit a degree of cyclicality, driven by supply and demand imbalances and exposure to PC and Smartphone product cycles. The 9 processors and graphics chips stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 2.6% while next quarter's revenue guidance was 0.5% below. Luckily, processors and graphics chips stocks have performed well with share prices up 22.3% on average since the latest earnings results. Based in the US, Penguin Solutions (NASDAQ:PENG) is a diversified semiconductor company offering memory, digital, and LED products. Penguin Solutions reported revenues of $365.5 million, up 28.3% year on year. This print exceeded analysts' expectations by 6.1%. Overall, it was a stunning quarter for the company with a significant improvement in its inventory levels and a solid beat of analysts' EPS estimates. 'We are pleased with the progress we are making in fiscal year 2025,' said Mark Adams, Chief Executive Officer ('CEO') of Penguin Solutions. Penguin Solutions pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 16.3% since reporting and currently trades at $21. Is now the time to buy Penguin Solutions? Access our full analysis of the earnings results here, it's free. The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers. Allegro MicroSystems reported revenues of $192.8 million, down 19.9% year on year, outperforming analysts' expectations by 4.3%. The business had a very strong quarter with a significant improvement in its inventory levels and an impressive beat of analysts' EPS estimates. The market seems happy with the results as the stock is up 81% since reporting. It currently trades at $33.83. Is now the time to buy Allegro MicroSystems? Access our full analysis of the earnings results here, it's free. A global leader in its category, Lattice Semiconductor (NASDAQ:LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning. Lattice Semiconductor reported revenues of $120.2 million, down 14.7% year on year, in line with analysts' expectations. It was a slower quarter as it posted an increase in its inventory levels and a slight miss of analysts' adjusted operating income estimates. As expected, the stock is down 8.3% since the results and currently trades at $48.66. Read our full analysis of Lattice Semiconductor's results here. Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers. AMD reported revenues of $7.44 billion, up 35.9% year on year. This print topped analysts' expectations by 4.4%. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts' adjusted operating income estimates but an increase in its inventory levels. The stock is up 43.5% since reporting and currently trades at $141.39. Read our full, actionable report on AMD here, it's free. Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets. Nvidia reported revenues of $44.06 billion, up 69.2% year on year. This result beat analysts' expectations by 1.8%. Overall, it was a strong quarter as it also put up a significant improvement in its inventory levels and an impressive beat of analysts' EPS estimates. Nvidia pulled off the fastest revenue growth among its peers. The stock is up 16.8% since reporting and currently trades at $157.53. Read our full, actionable report on Nvidia here, it's free. Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Gulf Today
02-06-2025
- Health
- Gulf Today
Dubai hospital performs 825 robotic surgeries
Clemenceau Medical Center Dubai (CMC Dubai), has performed over 825 robotic procedures in last four years using the state-of-the-art da Vinci surgical system. CMC Dubai celebrated the achievement recently at the hospital's Dubai campus, attended by hospital leadership, surgeons, and the da Vinci robotic surgical team. Mark Adams, CEO, Clemenceau Medical Center Dubai said, 'Dubai is the city of innovation with the vision of the future. Every day, there is innovation with new developments — and in CMC, we want to be in front of that. In 2021, we introduced robotic surgery, and in the last four years, we have performed 825 robotic surgeries, which makes CMC one of the most advanced hospitals.' The hospital continues to redefine surgical excellence through the advanced integration of robotic technology across multiple specialties. As a regional leader in medical innovation, CMC Dubai has successfully deployed robotic-assisted surgery in general surgery, gynecology, urology, bariatric surgery, and more recently, orthopedics—demonstrating a truly multidisciplinary approach to precision care. 'Robotic surgery offers unmatched precision and control, allowing us to minimize complications and ensure faster patient recovery,' said Dr Walid Faraj, Consultant General Surgeon at CMC Dubai. 'The robotic system doesn't replace the surgeon — it enhances our capabilities. With 360-degree articulation and exceptional accuracy, we're able to operate in areas that would be challenging or risky using traditional techniques.' 'Robotic surgery is no longer the future — it's the present, empowering surgeons to perform safer, faster, and more accurate procedures,' said Dr Abdul Kader Weiss, Specialist General & Laparoscopic Surgeon at CMC Dubai. 'What once required large incisions and long hospital stays can now be done through tiny ports, with the robot as an extension of the surgeon's hand. At CMC, we are proud to be at the forefront of this transformation, aligning with the UAE's ambition to lead in medical innovation.' The result is a transformative impact on both clinical outcomes and patient experience. Robotic-assisted procedures typically involve smaller incisions, reduced blood loss, less post-operative pain, and significantly shorter hospital stays. Many patients are discharged within 24 to 48 hours, returning to normal activities more quickly and with fewer complications. CMC Dubai was among the first hospitals in the UAE to adopt robotic surgery and continues to set benchmarks in this domain. The center's commitment to innovation is matched by its focus on patient safety, outcome-driven care, and ongoing investment in the latest surgical technologies. 'Our goal is to expand what is surgically possible,' added Dr. Faraj. 'With robotic systems, we are performing more complex surgeries with greater confidence and control, while continuously improving patient satisfaction and recovery time.'
Zawya
01-06-2025
- Health
- Zawya
Clemenceau Medical Center Dubai celebrates 825 robotic surgeries, leading innovation in surgical care
Dubai, UAE – Clemenceau Medical Center Dubai (CMC Dubai) continues to redefine surgical excellence through the advanced integration of robotic technology across multiple specialties. As a regional leader in medical innovation, CMC Dubai has successfully deployed robotic-assisted surgery in general surgery, gynecology, urology, bariatric surgery, and more recently, orthopedics—demonstrating a truly multidisciplinary approach to precision care. With over 825 robotic procedures performed using the state-of-the-art da Vinci Surgical System, CMC Dubai marks a major milestone in its journey toward transforming patient care. A celebration of this achievement will be held at 1:00 PM on Thursday, May 22, 2025, at the hospital's Dubai campus, attended by hospital leadership, surgeons, and the da Vinci robotic surgical team. 'Dubai is the city of innovation with the vision of the future. It helps the sociality. Every day, there is innovation with new developments—and in CMC, we want to be in front of that. In 2021, we introduced robotic surgery, and in the last four years, we have performed 825 robotic surgeries, which makes CMC one of the most advanced hospitals. I do not see the surgeon being replaced by the automatic system, but rather the system helps and guides the surgeon to perform with higher precision.' — Mr. Mark Adams, CEO, Clemenceau Medical Center Dubai "Robotic surgery offers unmatched precision and control, allowing us to minimize complications and ensure faster patient recovery," says Dr. Walid Faraj, Consultant General Surgeon at CMC Dubai. "The robotic system doesn't replace the surgeon—it enhances our capabilities. With 360-degree articulation and exceptional accuracy, we're able to operate in areas that would be challenging or risky using traditional techniques." "Robotic surgery is no longer the future—it's the present, empowering surgeons to perform safer, faster, and more accurate procedures," says Dr. Abdul Kader Weiss, Specialist General & Laparoscopic Surgeon at CMC Dubai. "What once required large incisions and long hospital stays can now be done through tiny ports, with the robot as an extension of the surgeon's hand. At CMC, we are proud to be at the forefront of this transformation, aligning with the UAE's ambition to lead in medical innovation." The result is a transformative impact on both clinical outcomes and patient experience. Robotic-assisted procedures typically involve smaller incisions, reduced blood loss, less post-operative pain, and significantly shorter hospital stays. Many patients are discharged within 24 to 48 hours, returning to normal activities more quickly and with fewer complications. Delivering Superior Outcomes Through Innovation CMC Dubai was among the first hospitals in the UAE to adopt robotic surgery and continues to set benchmarks in this domain. The center's commitment to innovation is matched by its focus on patient safety, outcome-driven care, and ongoing investment in the latest surgical technologies. "Our goal is to expand what is surgically possible," adds Dr. Faraj. "With robotic systems, we are performing more complex surgeries with greater confidence and control, while continuously improving patient satisfaction and recovery time." Backed by an international legacy of excellence and a strong vision for the future, Clemenceau Medical Center Dubai remains a leader in robotic surgery, not just within the UAE, but across the wider Middle East region. About Clemenceau Medical Center Dubai Clemenceau Medical Center Dubai is part of the Clemenceau Medicine International network, affiliated with Johns Hopkins Medicine International. With a mission to deliver world-class, patient-centered care using cutting-edge technology and internationally trained physicians, CMC Dubai is redefining healthcare standards in the region.
