Penguin Solutions (PENG) investor relations material

Executive summary

• Achieved record Q3 net sales of $479 million, up 48% year-over-year, driven by strong AI-related demand and disciplined execution.

• AI-driven businesses represented 74% of total net sales, growing 104% year-over-year, with significant traction in Integrated Memory and non-hyperscale AI infrastructure.

• Raised full-year fiscal 2026 outlook for both net sales and EPS, reflecting robust demand and strong backlog entering Q4.

• Leadership transition announced: CFO Nate Olmstead to depart, with Aaron Johnson named interim CFO.

• Completed U.S. Domestication in June 2025, moving parent entity from the Cayman Islands to Delaware.

Financial highlights

• Q3 non-GAAP operating income reached $64 million, up 67% year-over-year; GAAP operating income was $51 million, up 417% year-over-year.

• Non-GAAP gross margin was 28.1%, down from 29.3% a year ago, primarily due to business mix shifts.

• Non-GAAP diluted EPS was $0.84, up 79% year-over-year; GAAP diluted EPS was $0.68.

• Adjusted EBITDA for Q3 was $68 million, up 51% year-over-year.

• Cash, cash equivalents, and short-term investments totaled $440 million at quarter end.

Outlook and guidance

• Fiscal 2026 net sales growth outlook raised to 22% ±2%, with non-GAAP diluted EPS now expected at $2.60 ±$0.05.

• Non-GAAP gross margin outlook for FY 2026 is 28.5% ±0.5 percentage points.

• Memory segment net sales expected to grow 90%-95% year-over-year; Advanced Computing to decline 15%-20%; Optimized LED to decline ~5%.

• Preliminary fiscal 2027 view: ~30% growth in both net sales and non-GAAP EPS from FY 2026 midpoint.

• Operating expenses (GAAP): $303 million ±$5 million; non-GAAP: $260 million ±$5 million.