Core Viewpoint - Penguin Solutions Inc. reported strong earnings for Q3, exceeding earnings estimates but falling short on sales expectations [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q3 were 47 cents, surpassing market estimates of 33 cents [1]. - Quarterly sales totaled $324.25 million, compared to expectations of $328.81 million [1]. Guidance Update - The company raised its FY2025 adjusted EPS guidance from a range of $1.50-$1.70 to $1.75-$1.85 [1]. - Sales forecast was narrowed from $1.33 billion-$1.41 billion to $1.35 billion-$1.39 billion [1]. Strategic Focus - The CEO emphasized the company's commitment to strategic objectives, including strengthening the balance sheet and developing AI software and services [2]. - The company is focused on expanding go-to-market resources and driving long-term value for shareholders [2]. Stock Performance - Following the earnings announcement, Penguin Solutions shares increased by 6%, trading at $22.45 [2]. Analyst Ratings and Price Targets - Goldman Sachs maintained a Buy rating and raised the price target from $22.5 to $25 [5]. - JP Morgan maintained a Neutral rating and increased the price target from $18 to $21 [5]. - JMP Securities reiterated a Market Outperform rating with a $26 price target [5]. - Needham maintained a Buy rating with a price target of $27 [5].

分组1 - Penguin Solutions, Inc. reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, and showing an increase from $0.37 per share a year ago, resulting in an earnings surprise of +56.67% [1] - The company posted revenues of $324.25 million for the quarter ended May 2025, slightly missing the Zacks Consensus Estimate by 0.05%, but up from $300.58 million year-over-year [2] - Over the last four quarters, Penguin Solutions has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] 分组2 - The stock has gained approximately 9.1% since the beginning of the year, outperforming the S&P 500's gain of 5.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $342.59 million, and for the current fiscal year, it is $1.62 on revenues of $1.37 billion [7] - The Internet - Software industry, to which Penguin Solutions belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Data and Key Metrics Changes - Revenue for Q3 fiscal year 2025 was $324 million, an increase of 7.9% compared to Q3 fiscal year 2024 [4][20] - Non-GAAP diluted earnings per share was $0.47, a 25% increase year over year [5][21] - Non-GAAP operating income was $38 million, up 15% from the prior year [5][21] - Non-GAAP gross margin was 31.7%, down 0.6 percentage points year over year [21][22] Business Segment Data and Key Metrics Changes - Advanced Computing revenue was $132 million, down 9% year over year [21][10] - Integrated Memory revenue was $130 million, up 42% year over year [21][12] - Optimized LED revenue was $62 million, down 4% year over year [21][15] Market Data and Key Metrics Changes - Strong demand for Integrated Memory from computing, networking, and telecommunications customers [12] - Pricing in both DRAM and NAND appears stable, with balanced inventory levels at major customers [13] Company Strategy and Development Direction - The company is focusing on AI infrastructure solutions and has seen early-stage enterprise AI adoption across various sectors [5][6] - Investments in channel partnerships are being made to provide new growth opportunities [8] - The company has transitioned to providing a full-year financial outlook to better reflect the timing of AI infrastructure deployments [9] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed the full-year revenue growth outlook at 17% and raised the non-GAAP diluted earnings per share outlook to $1.8 [9][29] - The company is navigating macroeconomic uncertainties while investing in long-term growth [32] Other Important Information - The company completed a refinancing that reduced gross leverage and extended debt maturity [17][28] - The re-domiciliation from the Cayman Islands to the United States as a Delaware Corporation was completed [17][18] Q&A Session Summary Question: Details on new customer bookings - The sales cycle for new customers typically ranges from 12 to 18 months, with hardware recognized upfront and software/services recognized over time [35][36] Question: Collaboration with SK Telecom - The relationship with SK Telecom is expected to generate new business opportunities globally, particularly in AI data center infrastructure [39][40] Question: Memory segment growth dynamics - No significant pull forwards were observed in memory demand, and the pipeline remains healthy [45][46] Question: Advanced computing segment outlook - The growth in advanced computing is expected to be more diversified across multiple customers rather than driven by one major deployment [50][51] Question: Incremental deployments in advanced computing - Strength is seen in federal, energy, and biotech sectors, with increased interest in the financial sector [53] Question: CDW agreement details - The company is investing in partnerships to scale customer engagement and expand internationally [59][60] Question: Software and services revenue growth - Services revenue growth was driven by a mix of ratified services and lower hardware revenue recognition in Q3 [61] Question: Strength in memory products - DRAM pricing stability has been observed, and the attach rate of memory products to advanced computing products is being developed [70]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $324 million, an increase of 7.9% compared to Q3 2024 [4][19] - Non-GAAP gross margin was 31.7%, down 0.6 percentage points year over year [21] - Non-GAAP diluted earnings per share was $0.47, a 25% increase year over year [5][20] - Non-GAAP operating income was $38 million, up 15% from the prior year [5][21] Business Segment Data and Key Metrics Changes - Advanced Computing revenue was $132 million, down 9% year over year [20] - Integrated Memory revenue was $130 million, up 42% year over year [20] - Optimized LED revenue was $62 million, down 4% year over year [20] Market Data and Key Metrics Changes - Strong demand observed in sectors such as financial services, energy, defense, education, and neo cloud segments [5][6] - Integrated Memory segment saw a 24% increase in revenue compared to the prior quarter [11] Company Strategy and Development Direction - Company is focusing on transforming into a leader in high-performance enterprise infrastructure solutions [5] - Investment in channel partnerships to create new growth opportunities [7] - Transitioned to providing a full-year financial outlook to better reflect business dynamics [8] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year revenue growth outlook at 17% [8] - Anticipation of growth in AI infrastructure deployments in 2025 and 2026 [5][6] - Management expressed confidence in navigating macroeconomic uncertainties while investing for long-term growth [30] Other Important Information - Completed a refinancing to strengthen the balance sheet and reduce gross leverage [16] - Re-domiciled from the Cayman Islands to the United States as a Delaware Corporation [16] Q&A Session Summary Question: Details on new customer bookings - New customer bookings typically take 12 to 18 months to finalize, with hardware recognized upfront and software/services recognized over time [32][34] Question: Collaboration with SK Telecom - Positive progress with SK Telecom and SK Hynix, focusing on AI data center infrastructure solutions globally [36][38] Question: Memory segment growth dynamics - No significant pull forwards observed; healthy pipeline for Q4 [42][44] Question: Advanced computing segment strength - Growth in Q4 expected from a diversified customer base rather than a single large deployment [46][48] Question: Incremental deployments in advanced computing - Strength seen in federal, energy, and biotech sectors, with increased interest from the financial sector [51] Question: CDW agreement details - Early success in partnerships with CDW and Dell, focusing on scaling customer reach [57][58] Question: Services revenue growth - Services revenue growth driven by a mix of ratified services and lower hardware deals in Q3 [60] Question: Memory product strength - DRAM pricing stable; memory gross margins slightly impacted by higher DRAM percentage [68]

Financial Performance - Total net sales for the three months ended May 30, 2025, increased to $324,251,000, up 7.6% from $300,580,000 for the same period in 2024[17] - Gross profit for the nine months ended May 30, 2025, was $297,543,000, representing a 17.3% increase compared to $253,690,000 for the same period in 2024[17] - Operating income for the three months ended May 30, 2025, was $9,843,000, a decrease of 14.5% from $11,511,000 in the prior year[17] - Net income attributable to Penguin Solutions for the three months ended May 30, 2025, was $2,661,000, down from $5,616,000 in the same period of 2024[17] - Basic earnings per ordinary share for continuing operations was $(0.01) for the three months ended May 30, 2025, compared to $0.11 for the same period in 2024[17] - Comprehensive income attributable to Penguin Solutions for the three months ended May 30, 2025, was $2,667,000, compared to $5,527,000 in the same period of 2024[18] - The company reported a net loss from discontinued operations of $0 for the three months ended May 30, 2025, compared to a loss of $8,148,000 in the previous year[17] Assets and Liabilities - As of May 30, 2025, total assets increased to $1,802.8 million from $1,474.5 million as of August 30, 2024, representing a growth of approximately 22.1%[16] - Total current liabilities increased to $476.7 million from $327.6 million, marking a rise of 45.4%[16] - Total shareholders' equity grew to $594.9 million from $399.2 million, an increase of 49.0%[16] - As of May 30, 2025, total debt was $659.5 million, with long-term debt at $639.6 million, a slight decrease from $657.3 million as of August 30, 2024[58] - Accounts payable increased to $272.1 million as of May 30, 2025, up from $182.0 million as of August 30, 2024[57] Cash Flow - The company generated $183,616 in net cash provided by operating activities from continuing operations for the nine months ended May 30, 2025, an increase from $117,677 in the prior year[22] - Total cash, cash equivalents, and restricted cash at the end of the period was $710,187, up from $453,791 a year earlier[22] - The net cash used for investing activities from continuing operations was $25,744 thousand for the nine months ended May 30, 2025, compared to a net cash used of $3,526 thousand in the prior year[22] Strategic Initiatives - The company is focused on strategic initiatives including rebranding and potential acquisitions to enhance its market position[7] - The company anticipates continued growth in technology industries, particularly in artificial intelligence markets, despite potential macroeconomic challenges[7] Shareholder Actions - The company completed the redomiciliation from the Cayman Islands to Delaware on June 30, 2025, which was approved by shareholders[6] - The common stock began trading on The Nasdaq Global Select Market under the symbol "PENG" on July 1, 2025[11] - The company repurchased 2,456 thousand ordinary shares for $40.9 million in the first nine months of 2025, compared to 931 thousand shares for $13.9 million in the same period of 2024[79] - An additional $75.0 million share repurchase authorization was approved on January 9, 2024, with $36.8 million remaining available as of May 30, 2025[79] Research and Development - Research and development expenses for the nine months ended May 30, 2025, totaled $59,940,000, slightly down from $61,596,000 in the previous year[17] Divestitures and Impairments - Penguin Solutions completed the divestiture of an 81% interest in SMART Brazil on November 29, 2023, which has been classified as discontinued operations[26] - The divestiture resulted in a pre-tax loss of $163.9 million, leading to a total loss on divestiture of $190.5 million after accounting for income tax provisions[40] - The company recognized an impairment charge of $153.0 million related to SMART Brazil's assets in Q4 2023[38] Debt and Financing - The 2025 Credit Agreement provides a revolving credit facility of $400.0 million, maturing on June 24, 2030, with $100.0 million borrowed on the closing date[112] - The company repaid all borrowings under the 2022 Amended Credit Agreement, which had $300.0 million principal outstanding and an effective interest rate of 7.17%[113] - The effective interest rate for the 2026 Convertible Senior Notes was 2.83% as of May 30, 2025, with total interest expense for these notes amounting to $2.3 million in the third quarter of 2025[61] Inventory and Assets Management - As of May 30, 2025, total inventories amounted to $184.3 million, an increase from $151.2 million as of August 30, 2024[49] - The company has $53.0 million in non-marketable equity investments, which are accounted for at cost less impairment[47] Legal and Compliance - The company has not recorded any liability for indemnities related to product defects or third-party infringements to date[68] - The company regularly reviews legal contingencies to assess potential losses, although the outcomes of such proceedings are difficult to predict[69]

Financial Performance - Penguin Solutions' Q3 FY25 revenue reached $324 million, a 7.9% increase compared to the year-ago quarter[12] - The non-GAAP gross margin was 31.7%[12] - Non-GAAP diluted EPS was $0.47, a 25% increase year-over-year[12] - Non-GAAP operating income was $38 million, a 15% increase compared to the previous year, with a non-GAAP operating margin of 11.9%[12] Segment Performance - Advanced Computing generated $132 million in revenue, a sequential decrease due to the timing of a large hyperscaler deployment in Q2[24] - Integrated Memory revenue was $130 million, a 24% sequential increase driven by strong demand across computing, networking, and telecom customers[26] - Optimized LED revenue was $62 million, a slight increase compared to the prior quarter, impacted by tariff-related costs and uncertainty related to products from Huizhou, China[29] Strategic Initiatives - Penguin Solutions completed redomiciliation to the United States (Delaware) on June 30, supporting ongoing transformation and aligning with strategic long-term goals[40] - A refinancing was announced on June 26, strengthening the balance sheet by reducing gross leverage, extending debt maturity, and establishing a new $400 million revolving credit facility[40] FY25 Outlook (Non-GAAP) - Net Sales: 17% YoY Growth +/- 2%[50] - Gross margin: 31% +/- 0.5%[50] - Operating expenses: $260 million +/- $5 million[50] - Diluted earnings per share: $1.80 +/- $0.05[50]

Exhibit 99.1 Press Release FOR IMMEDIATE RELEASE PENGUIN SOLUTIONS REPORTS Q3 FISCAL 2025 FINANCIAL RESULTS Company raises midpoint of full-year GAAP and Non-GAAP diluted EPS outlook Milpitas, Calif. – July 8, 2025 – 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 "We delivered solid third quarter results while executing against our strategic objectives," sai ...

Group 1 - Penguin Solutions, Inc. is set to release its third-quarter earnings results on July 8, with expected earnings of 33 cents per share, a decrease from 37 cents per share in the same period last year [1] - The company projects quarterly revenue of $330.82 million, an increase from $300.58 million a year earlier [1] - In the second quarter, Penguin Solutions reported better-than-expected financial results, leading to a 1.8% increase in share price, closing at $20.17 [2] Group 2 - Goldman Sachs analyst Michael Ng maintained a Buy rating but reduced the price target from $26 to $22.5 [4] - JP Morgan analyst Samik Chatterjee initiated coverage with a Neutral rating and a price target of $20 [4] - Barclays analyst Tom O'Malley maintained an Overweight rating and raised the price target from $22 to $23 [4] - Loop Capital analyst Ananda Baruah initiated coverage with a Buy rating and a price target of $30 [4] - Stifel analyst Brian Chin maintained a Buy rating but lowered the price target from $32 to $27 [4]

Penguin Solutions is one of those lesser-covered semiconductor names that doesn’t come up often in AI investing circles, but I think it’ll become more well-known over the next few years. And that’s because even though the marketI am a financial analyst and writer with a strong foundation in financial modeling, valuation, and data analysis. I hold FMVA (Financial Modeling & Valuation Analyst) and BIDA (Business Intelligence & Data Analyst) certifications from the Corporate Finance Institute (CFI) in Canada.T ...

Summary of Penguin Solutions Conference Call Company Overview - The conference featured Penguin Solutions, with CEO Mark Adams and CFO Nate Onstead discussing the company's outlook and industry dynamics [2][4]. Industry Insights - Concerns about a potential economic slowdown in the latter half of the year were highlighted, particularly regarding supply chain impacts and customer demand [3][4]. - The company noted that while supply chain impacts are quantifiable, customer demand impacts are harder to assess, especially in light of recent economic discussions [5][11]. - The LED segment, which constitutes 15-20% of revenue but only 5% of operating profit, is significantly affected by supply chain issues [6][9]. Supply Chain and Tariff Impacts - The company is exploring alternatives to mitigate supply chain risks, including relocating some manufacturing to Malaysia [9][10]. - Tariff impacts have led to price increases, which were not well received by customers, resulting in shorter ordering windows and more conservative inventory management [13][14]. AI and Advanced Computing Opportunities - The company sees AI as a resilient sector, with enterprises still in the early stages of AI adoption compared to hyperscalers [15][16]. - Enterprises are moving from proof of concept to actual deployment, with significant opportunities in sectors like finance, energy, education, and federal defense [22][23]. - The emergence of "Neo Clouds" presents new opportunities, as these companies lack the capabilities to establish AI infrastructure independently [27][28]. Customer Engagement and Services - Penguin Solutions focuses on long-term customer relationships, emphasizing value-added services rather than one-off transactions [29][30]. - The company reported $230 million in high-margin services, indicating a strong service-oriented business model [32]. Competitive Landscape - The company differentiates itself from traditional competitors like Dell and HP by focusing on AI infrastructure management rather than just hardware sales [36][37]. - Partnerships with companies like SK are seen as strategic for expanding AI infrastructure capabilities and accessing new customer segments [53][54]. Financial Performance and Strategy - The company aims for a 15-17% growth target for the fiscal year, with a focus on managing debt levels and opportunistically buying back shares [61][63]. - Recent margin improvements in the memory segment were noted, with operating margins exceeding 10% [58][59]. Conclusion - Overall, Penguin Solutions is positioned to capitalize on AI and advanced computing trends while navigating supply chain challenges and economic uncertainties. The focus on customer relationships and service differentiation is expected to drive long-term growth and profitability [24][31].