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]
Penguin Solutions, Inc.(PENG) - 2025 Q3 - Quarterly Report