Financial Position - As of November 28, 2025, total assets of Penguin Solutions amounted to $1,598,195,000, a decrease from $1,617,200,000 as of August 29, 2025[17] - Total current liabilities decreased to $458,110,000 from $473,899,000, a reduction of approximately 3.5%[17] - Long-term debt remained relatively stable at $442,333,000 compared to $441,893,000, showing minimal change[17] - Total stockholders' equity decreased to $401,759,000 from $405,517,000, a decline of about 0.2%[17] - Total liabilities decreased to $993,726,000 from $1,008,973,000, a reduction of 1.5%[17] Revenue and Sales Performance - Total net sales for the three months ended November 28, 2025, were $343,071,000, a slight increase from $341,102,000 for the same period in 2024, representing a growth of 0.6%[18] - Advanced Computing segment sales decreased to $151.5 million from $177.4 million, a decline of 14.6% year-over-year[109] - Integrated Memory segment sales increased significantly to $136.5 million from $96.7 million, marking a growth of 41.2%[109] Profitability Metrics - Gross profit for the three months ended November 28, 2025, was $96,109,000, compared to $97,812,000 in the prior year, indicating a decrease of 1.7%[18] - Operating income increased to $19,582,000 for the three months ended November 28, 2025, up from $17,356,000 in the same period of 2024, reflecting a growth of 12.8%[18] - Net income attributable to Penguin Solutions for the three months ended November 28, 2025, was $5,270,000, slightly higher than $5,217,000 for the same period in 2024, showing an increase of 1.0%[18] - Earnings per share (basic and diluted) for the three months ended November 28, 2025, were both $0.04, down from $0.10 in the prior year, a decrease of 60%[18] Cash Flow and Liquidity - Cash flows from operating activities for the three months ended November 28, 2025, were $31,058,000, significantly higher than $13,819,000 for the same period in 2024, representing an increase of 125.5%[23] - Cash, cash equivalents, and restricted cash at the end of the period on November 28, 2025, totaled $461,767,000, compared to $370,611,000 at the end of the same period in 2024, an increase of 24.6%[23] - Cash and cash equivalents increased to $461,451,000 from $453,754,000, indicating a growth of approximately 0.15%[17] Expenses and Cost Management - Research and development expenses for the three months ended November 28, 2025, were $18,693,000, down from $19,811,000 in the prior year, a decrease of 5.6%[18] - Total operating expenses decreased to $61.4 million from $64.2 million, a reduction of 4.4%[109] - Stock-based compensation expense for continuing operations decreased from $11.5 million in Q1 2025 to $10.1 million in Q1 2026, with significant reductions in cost of sales and R&D expenses[86] Shareholder Activities - The company repurchased shares amounting to $20,193,000 during the three months ended November 28, 2025, compared to $11,123,000 in the same period of 2024, an increase of 81.5%[23] - The company declared and paid preferred cash dividends of $3.1 million in Q1 2026, with accrued preferred dividends of $0.4 million as of November 28, 2025[72] - The company approved a total of $225.0 million in stock repurchase authorizations, with $96.5 million remaining available as of November 28, 2025[77] Impairments and Restructuring - The company reported a loss on impairment of non-marketable equity investment of $10,000,000 for the three months ended November 28, 2025[23] - Restructuring charges amounted to $4.7 million in Q1 2026, up from $0.1 million in Q1 2025, indicating ongoing workforce adjustments[94] - The company recognized a full impairment charge of $10.0 million for a non-marketable equity investment during the quarter ended November 28, 2025, reducing its carrying amount to zero[38] Inventory and Accounts Management - Total inventories decreased from $255.2 million as of August 29, 2025, to $213.2 million as of November 28, 2025, with raw materials increasing to $108.3 million[41] - Accounts receivable, net rose to $326,892,000, up from $307,904,000, reflecting an increase of about 6.4%[17] - Accounts payable increased to $304.9 million as of November 28, 2025, from $267.5 million as of August 29, 2025[45] Debt and Financing - The company has a revolving credit facility of $400.0 million under the 2025 Credit Agreement, maturing on June 24, 2030[49] - The effective interest rates for the Convertible Senior Notes are 2.83% for the 2026 Notes, 2.40% for the 2029 Notes, and 2.65% for the 2030 Notes as of November 28, 2025[52] - As of November 28, 2025, the total debt maturities include $20.0 million due in 2026, $150.0 million in 2029, and $300.0 million in 2030, totaling $462.3 million after accounting for unamortized costs[53] Future Outlook and Strategic Initiatives - The company is in the process of selling its equity interest in Zilia Technologies for a gross cash purchase price of $46.1 million, expected to close by April 28, 2026[114] - The company is evaluating the impact of several recently issued accounting standards, including ASU 2025-06 and ASU 2025-05, on its consolidated financial statements[29][30]
Penguin Solutions, Inc.(PENG) - 2026 Q1 - Quarterly Report