Penguin Solutions (PENG) Q4 2024 earnings summary

Executive summary

• Rebranded as Penguin Solutions, focusing on AI infrastructure, enterprise solutions, and high-performance computing, with a name and ticker change effective October 15, 2024.

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

• Completed divestiture of Brazil business and strengthened leadership with key hires, including a new CFO and President of Intelligent Platform Solutions.

• Announced a $200M strategic partnership and investment from SK Telecom to drive global growth in AI and edge computing, expected to close by end of 2024 or early 2025.

• FY24 revenue totaled $1.17B, down from $1.44B in FY23, reflecting a strategic shift and divestitures.

Financial highlights

• FY24 revenue was $1.17B; Q4 revenue reached $311M, up 4% sequentially, but down 1.7% year-over-year.

• Q4 non-GAAP gross margin was 30.9%, down from 32.3% in Q3 and 31.7% year-over-year; FY24 non-GAAP gross margin was 31.9%.

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

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

• Cash and equivalents at quarter-end were $389M; FY24 year-end cash was $383.1M, after significant debt prepayment and note repurchase.

Outlook and guidance

• FY25 revenue expected to grow 15% year-over-year (±5%), with non-GAAP gross margin at 32% (±1 ppt) and non-GAAP operating expenses at $275M (±$15M).

• Non-GAAP full-year diluted EPS expected at $1.70 (±$0.20); GAAP diluted EPS projected at $0.30 (±$0.20).

• IPS revenue projected to grow 10–25%, memory 10–20%, LED flat to up 10%.

• Guidance reflects macro headwinds, supply chain constraints, and focus on AI, HPC, and global expansion.