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]
Penguin Solutions, Inc.(PENG) - 2025 Q3 - Earnings Call Transcript