Penguin Solutions, Inc.(PENG) - 2025 Q2 - Quarterly Results

Financial Performance - Total net sales for Q2 fiscal 2025 reached $365.5 million, representing a 28.3% increase compared to the same quarter last year[5] - GAAP gross margin was 28.6%, a decrease of 20 basis points from the year-ago quarter, while non-GAAP gross margin was 30.8%, down 70 basis points[5] - GAAP diluted earnings per share (EPS) improved to$ 0.09 from a loss of $(0.26) in the year-ago quarter, while non-GAAP diluted EPS increased to$ 0.52 from $0.27[5] - Total net sales for the three months ended February 28, 2025, reached$ 365,519 thousand, a 7.5% increase from $341,102 thousand in the previous quarter[21] - Advanced Computing segment sales increased to$ 200,157 thousand, up 12.8% from $177,426 thousand in the prior quarter[21] - Gross profit for the three months ended February 28, 2025, was$ 104,648 thousand, representing a gross margin of 28.6%[22] - Operating income for the three months ended February 28, 2025, was $18,488 thousand, compared to$ 17,356 thousand in the previous quarter[21] - Net income attributable to Penguin Solutions for the three months ended February 28, 2025, was $8,082 thousand, an increase from$ 5,217 thousand in the prior quarter[21] - Non-GAAP gross profit for the three months ended February 28, 2025, was $112,408 thousand, with a non-GAAP gross margin of 30.8%[22] - GAAP net income for the three months ended February 28, 2025, was$ 8,082,000, compared to $5,217,000 for the same period in 2024, representing a 55.5% increase[23] - Non-GAAP net income attributable to Penguin Solutions for the six months ended February 28, 2025, was$ 60,354,000, up from $26,679,000 in the prior year, reflecting a 126.3% increase[23] Financial Outlook - The company raised its revenue outlook for fiscal year 2025 to a growth of 17% year-over-year, with a margin of +/- 3%[6] - Projected gross margin for fiscal year 2025 is set at 29% +/- 1% for GAAP and 31% +/- 1% for non-GAAP[6] - Operating expenses are expected to be approximately$ 336 million +/- $5 million for GAAP and$ 265 million +/- $5 million for non-GAAP[6] - The company anticipates a diluted EPS of$ -0.02 +/- $0.10 for GAAP and$ 1.60 +/- $0.10 for non-GAAP in fiscal year 2025[6] Cash and Assets - Total current assets increased to$ 1,244,765,000 as of February 28, 2025, from $867,704,000 as of August 30, 2024, marking a 43.4% growth[24] - Cash and cash equivalents rose to$ 621,682,000 as of February 28, 2025, compared to $383,147,000 a year earlier, indicating a 62.2% increase[24] - Total assets reached$ 1,811,344,000 as of February 28, 2025, up from $1,474,506,000 as of August 30, 2024, representing a 22.8% increase[24] - Cash, cash equivalents, and restricted cash at the end of the period on February 28, 2025, totaled$ 621,998,000, up from $370,611,000 at the end of the previous period[26] Expenses and Liabilities - Research and development expenses for the three months ended February 28, 2025, totaled$ 19,907 thousand, slightly up from $19,811 thousand in the previous quarter[21] - Total operating expenses for the three months ended February 28, 2025, were$ 86,160 thousand, compared to $80,456 thousand in the prior quarter[21] - Interest expense for the three months ended February 28, 2025, was$ 2,183 thousand, down from $4,396 thousand in the previous quarter[21] - Long-term debt decreased to$ 638,900,000 as of February 28, 2025, from $657,347,000 as of August 30, 2024, a reduction of 2.1%[24] - Total liabilities increased to$ 1,199,453,000 as of February 28, 2025, from $1,075,298,000 as of August 30, 2024, indicating an 11.5% rise[24] Cash Flow - The company reported a net cash provided by operating activities from continuing operations of$ 72,877,000 for the three months ended February 28, 2025, significantly up from $13,819,000 in the prior year[25] - The net cash used for investing activities from continuing operations was$ (4,349,000) for the three months ended February 28, 2025, compared to $(18,922,000) in the same period of 2024[26] - The company experienced a net cash used for financing activities from continuing operations of$ 182,859,000 for the three months ended February 28, 2025, compared to $(7,763,000) in the prior year[26] Special Events and Changes - The company plans to transition Jack Pacheco to a special advisor role following his retirement on December 31, 2025[10] - Non-GAAP adjustments for fiscal year 2025 include$ 31 million for share-based compensation and $48 million for amortization of acquisition-related intangibles[7] - The company incurred an impairment of goodwill amounting to$ 6,079,000 during the three months ended February 28, 2025[25] - The company raised $191,182,000 from the issuance of convertible preferred shares during the three months ended February 28, 2025[26] - Preferred shares increased to 6 as of February 28, 2025, from none as of August 30, 2024, reflecting a new issuance[24] Strategic Importance of Non-GAAP Measures - Penguin Solutions emphasizes the importance of non-GAAP measures for assessing operational performance and making strategic decisions[17]