Penguin Solutions (PENG) Q4 2024 earnings summary

Executive summary

• Rebranded as Penguin Solutions, Inc. (Nasdaq: PENG), focusing on AI infrastructure, enterprise, and high-performance computing, with leadership strengthened by key hires.

• Completed divestiture of Brazil business and integrated Stratus Technologies.

• Announced a $200 million strategic partnership and investment from SK Telecom to drive global AI and edge computing growth.

• Achieved third consecutive quarter of sequential revenue growth in Q4 FY24, with Q4 revenue of $311 million.

• FY24 revenue totaled $1.17 billion, down from $1.44 billion in FY23, reflecting strategic shifts and divestitures.

Financial highlights

• FY24 total revenue was $1.17 billion; Q4 revenue was $311 million, up sequentially but down 1.7% year-over-year.

• FY24 non-GAAP gross margin was 31.9%; Q4 non-GAAP gross margin was 30.9%, down from 31.7% year-over-year.

• FY24 non-GAAP EPS was $1.25; Q4 non-GAAP EPS was $0.37, flat sequentially and up from $0.35 in the prior year quarter.

• Adjusted EBITDA for FY24 was $145.8 million; Q4 adjusted EBITDA was $39 million.

• Cash and equivalents plus short-term investments totaled $389 million at Q4 end.

Outlook and guidance

• FY25 revenue expected to grow 15% year-over-year (±5%), with non-GAAP gross margin at 32% (±1 percentage point).

• FY25 non-GAAP operating expenses projected at $275 million (±$15 million); non-GAAP diluted EPS expected at $1.70 (±$0.20).

• Segment guidance: IPS revenue to grow 10–25%, memory 10–20%, LED flat to up 10% year-over-year.

• Guidance does not include impact from the pending SK Telecom investment.

• FY25 GAAP diluted EPS projected at $0.30 (±$0.20); diluted share count projected at 56.3 million.