Penguin Solutions Reports Q2 Fiscal 2026 Financial Results

Penguin Solutions Reports Q2 Fiscal 2026 Financial Results April 1, 2026 Raises Full Year Net Sales and EPS Outlook Penguin Solutions, Inc. (“Penguin Solutions,” “we,” “us,” or the “Company”) (Nasdaq: PENG) today reported financial results for the second quarter of fiscal 2026. Second Quarter Fiscal 2026 Highlights Net sales of $343 million, down 6% versus the year-ago quarterGAAP gross margin of 27.3%, down 130 basis points versus the year-ago quarterNon-GAAP gross margin of 31.2%, up 40 basis points versus the year-ago quarterGAAP diluted EPS of $0.58 versus $0.09 in the year-ago quarterNon-GAAP diluted EPS of $0.52 for the current and year-ago quarters “Enterprises, governments, and neocloud providers are racing to build AI factories, as platforms scale to power the next generation of inference workloads,” said Kash Shaikh, CEO of Penguin Solutions. “Our AI/HPC pipeline continues to expand, and we added five AI/HPC customers this quarter, including a Tier One financial institution deploying our MemoryAI™ CXL-based KV cache server. Memory is a critical scaling factor for AI inference, and that aligns with one of our core strengths. Reflecting strong memory demand and disciplined execution, we are raising our full-year net sales and EPS outlook.” Quarterly Financial Results GAAP(1) Non-GAAP(2) (in thousands, except per share amounts) Q2-26 Q1-26 Q2-25 Q2-26 Q1-26 Q2-25 Net sales: Advanced Computing $ 115,715 $ 151,452 $ 200,157 $ 115,715 $ 151,452 $ 200,157 Integrated Memory 171,629 136,521 105,260 171,629 136,521 105,260 Optimized LED 55,655 55,098 60,102 55,655 55,098 60,102 Total net sales $ 342,999 $ 343,071 $ 365,519 $ 342,999 $ 343,071 $ 365,519 Gross profit $ 93,702 $ 96,109 $ 104,648 $ 106,916 $ 102,921 $ 112,408 Operating income (loss) 25,689 19,582 18,488 45,254 41,528 49,090 Net income (loss) attributable to Penguin Solutions 37,452 5,270 8,082 34,107 32,391 33,836 Diluted earnings (loss) per share $ 0.58 $ 0.04 $ 0.09 $ 0.52 $ 0.49 $ 0.52 (1) GAAP represents U.S. Generally Accepted Accounting Principles. (2) Non-GAAP represents GAAP excluding the impact of certain activities. Further information regarding the Company’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release. Business Outlook As of April 1, 2026, Penguin Solutions is providing the following financial outlook for fiscal year 2026: Updated Outlook GAAP Outlook Adjustments Non-GAAP Outlook Net sales 12% YoY Growth +/-5% — 12% YoY Growth +/-5% Gross margin 26% +/- 0.5% 2% (A) 28% +/- 0.5% Operating expenses $310 million +/- $5 million ($60) million (B)(C) $250 million +/- $5 million Diluted earnings per share $1.30 +/- $0.15 $0.85 (A)(B)(C)(D)(E)(F) $2.15 +/- $0.15 Diluted shares 53 million — 53 million Non-GAAP adjustments (in millions) (A) Stock-based compensation and amortization of acquisition-related intangibles included in cost of sales $ 30 (B) Stock-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A 50 (C) Other operating adjustments 10 (D) Other non-operating adjustments (1) (20 ) (E) Estimated income tax effects (18 ) (F) Estimated effect of allocation of earnings to participating securities (7 ) $ 45 (1) Primarily reflects net gains associated with non-marketable equity investments. Previous Outlook GAAP Outlook Adjustments Non-GAAP Outlook Net sales 6% YoY Growth +/-10% — 6% YoY Growth +/-10% Gross margin 27% +/- 1% 2% (A) 29% +/- 1% Operating expenses $307 million +/- $10 million ($57) million (B)(C) $250 million +/- $10 million Diluted earnings per share $0.85 +/- $0.25 $1.15 (A)(B)(C)(D)(E)(F) $2.00 +/- $0.25 Diluted shares 55 million — 55 million Non-GAAP adjustments (in millions) (A) Stock-based compensation and amortization of acquisition-related intangibles included in cost of sales $ 30 (B) Stock-based compensation and amortization of acquisition-related intangibles included in R&D and SG&A 49 (C) Other operating adjustments 8 (D) Other non-operating adjustments(1) 3 (E) Estimated income tax effects (20 ) (F) Estimated effect of allocation of earnings to participating securities (7 ) $ 63 (1) Primarily reflects net losses associated with non-marketable equity investments. Second Quarter Fiscal 2026 Earnings Conference Call and Webcast Details Penguin Solutions will hold a conference call and webcast to discuss the second quarter fiscal 2026 results and related matters today, April 1, 2026, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Interested parties may access the call by registering online at https://events.q4inc.com/analyst/550562118?pwd=0KlWip4M, at which time registrants will receive dial-in information as well as a conference ID. The live webcast will also be accessible from the Penguin Solutions investor relations website (https://ir.penguinsolutions.com/investors/default.aspx) on the Events page, along with the related earnings press release and slide presentation. The webcast replay will be made available on the Quarterly Results page after the call concludes. An archived version of the webcast will be available on the Penguin Solutions investor relations website for approximately one year after the webcast date. Use of Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that are not historical in nature, that are predictive or that depend upon or refer to future events or conditions. These statements may include, but are not limited to, statements concerning or regarding future events and the future financial and operating performance of Penguin Solutions; statements regarding the extent and timing of and expectations regarding Penguin Solutions’ future net sales, sales mix and expenses; statements regarding Penguin Solutions’ strategic transformation, divestiture of its remaining interest in Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda., a sociedade limitada governed by the laws of Brazil (“Zilia Technologies”), business momentum, and emerging leadership position; statements regarding AI-related demand, customer pipeline, market opportunities and product performance; statements regarding projected demand for the second half of fiscal year 2026; statements regarding long-term effective tax rates; and statements regarding the business and financial outlook for fiscal year 2026 described under “Business Outlook” above. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” “could,” and other words of similar meaning. Forward-looking statements provide our current expectations or forecasts of future events, circumstances, results or aspirations and are subject to a number of significant risks, uncertainties and other factors, many of which are outside of our control, including but not limited to: global business and economic conditions, including the impact on the financial condition of our customers, particularly in challenging macroeconomic environments, growth and demand trends in technology industries (including trends and markets related to artificial intelligence), our customer markets and various geographic regions; uncertainties in the geopolitical environment, including those related to global conflicts, such as those in the Middle East and Ukraine, and the global effects thereof on international relations, transport, and trade; our ability to manage our cost structure; disruptions in our operations or supply chain as a result of global pandemics, tariffs or other factors; changes in trade regulations and tariffs or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending, including changes in customer spending on our products and services; appropriations for government spending; the success of our strategic initiatives including the U.S. Domestication (as defined below) and our ability to realize the anticipated benefits thereof, our rebranding and related strategy, any existing or potential collaborations and additional investments in new products and additional capacity; acquisitions of companies or technologies and the failure to successfully integrate and operate them or customers’ negative reactions to them; issues, delays or complications in integrating the operations of Stratus Technologies; failure to achieve the intended benefits of the sale of Zilia Technologies and its business, including the sale of our remaining 19% interest therein; the impact of and expected timing of winding down the manufacturing and discontinuing the sale of products offered through our Penguin Edge business; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or volatile nature of pricing trends in memory or elsewhere; deterioration in customer relationships; our dependence on a select number of customers, and the timing and volume of customer orders and renewals; the impact of customer churn rates, including discounting and churn of significant customers from whom we derive a significant percentage of our revenue; changes in customer demand and sales mix; production or manufacturing difficulties; competitive factors; technological changes; difficulties with, or delays in, the introduction of new products; slowing or contraction of growth in the memory market, LED market or other markets in which we participate; changes to applicable tax regimes or rates; changes to the valuation allowance for our deferred tax assets, including any potential inability to realize these assets in the future; prices for the end products of our customers; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; the inability to maintain or expand government business; potential sales of our common stock by the holder of our issued convertible preferred stock or the anticipation of such sales; and the continuing availability of borrowings under revolving lines of credit or other debt arrangements and our ability to raise capital through debt or equity financings. These and other risks, uncertainties and factors are described in greater detail under the sections titled “Risk Factors,” “Critical Accounting Estimates,” “Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and “Liquidity and Capital Resources” contained in the Annual Report on Form 10-K for the fiscal year ended August 29, 2025, as updated by the risk factors, if any, contained in our Quarterly Reports on Form 10-Q and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”). Such risks, uncertainties and factors as outlined above and in such filings could cause our actual results to be materially different from such forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statements that we make in this press release speak only as of the date of this press release. Except as required by law, we do not undertake to update the forward-looking statements contained in this press release to reflect the impact of circumstances or events that may arise after the date that the forward-looking statements were made. Statement Regarding Use of Non-GAAP Financial Measures This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP net income, non-GAAP weighted-average shares outstanding, non-GAAP diluted earnings per share and adjusted EBITDA. Penguin Solutions’ management uses these non-GAAP measures to supplement Penguin Solutions’ financial results under GAAP. Management uses these measures to analyze its operations and make decisions as to future operational plans and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing the Company’s past and future operating performance. These non-GAAP measures exclude certain items, such as stock-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships and trademarks/trade names and backlog acquired in connection with business combinations); acquisition-related inventory adjustments; inventory write-off, stolen in-transit shipment; cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; restructuring charges; (gain) loss on disposition of equity investments; (gain) loss on non-marketable equity investments; impairment of goodwill; changes in the fair value of contingent consideration; (gains) losses from changes in foreign currency exchange rates; amortization of debt issuance costs; (gain) loss on extinguishment or prepayment of debt; gain on disposition of equity investment; other infrequent or unusual items and related tax effects and other tax adjustments. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies are reflected in the Company’s non-GAAP measures and these intangible assets contribute to revenue generation. Management believes the presentation of operating results that exclude certain items provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also uses adjusted EBITDA, which represents GAAP net income (loss), adjusted for net interest expense; income tax provision (benefit); depreciation expense and amortization of intangible assets; stock-based compensation expense; cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; (gain) loss on dispositions of equity investments; (gain) loss on non-marketable equity investments; impairment of goodwill; restructuring charges; loss on extinguishment of debt and other infrequent or unusual items. Our GAAP effective tax rate can vary significantly from quarter to quarter based on a variety of factors, including, but not limited to, discrete items which are recorded in the period they occur, the tax effects of certain items of income or expense, significant changes in our geographic earnings mix or changes to our strategy or business operations. We are unable to predict the timing and amounts of these items, which could significantly impact our GAAP effective tax rate, and therefore we are unable to reconcile our forward-looking non-GAAP effective tax rate measure to our GAAP effective tax rate. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as they exclude important information about Penguin Solutions’ financial results, as noted above. The presentation of these adjusted amounts varies from amounts presented in accordance with GAAP and therefore may not be comparable to amounts reported by other companies. In addition, adjusted EBITDA does not purport to represent cash flow provided by, or used for, operating activities in accordance with GAAP and should not be used as a measure of liquidity. Investors are encouraged to review the “Reconciliation of GAAP to Non-GAAP Measures” tables below. Explanatory Note On June 30, 2025, we completed the redomiciliation of the parent company of our corporate group, Penguin Solutions (Cayman), Inc. (formerly known as Penguin Solutions, Inc.), a Cayman Islands exempted company (“Penguin Solutions Cayman”), from the Cayman Islands to the State of Delaware in the United States, resulting in Penguin Solutions, Inc., a Delaware corporation (“Penguin Solutions Delaware”), becoming our publicly traded parent company (the “U.S. Domestication”). Penguin Solutions Delaware is the successor issuer to Penguin Solutions Cayman. The U.S. Domestication was approved by the shareholders of Penguin Solutions Cayman and effected via a court-sanctioned scheme of arrangement under Cayman Islands law, pursuant to which each ordinary share of Penguin Solutions Cayman was exchanged for one share of common stock of Penguin Solutions Delaware, and each convertible preferred share of Penguin Solutions Cayman was exchanged for one share of convertible preferred stock of Penguin Solutions Delaware. Additional information about the U.S. Domestication was included in Penguin Solutions Cayman’s definitive proxy statement on Schedule 14A, filed with the SEC on May 2, 2025. As used in this press release, unless stated otherwise or the context requires otherwise, the terms “Penguin Solutions,” “Company,” “we,” “our,” “us” or similar terms (i) for periods prior to the consummation of the U.S. Domestication, refer to Penguin Solutions Cayman and its consolidated subsidiaries and (ii) for periods at or after the consummation of the U.S. Domestication, refer to Penguin Solutions Delaware and its consolidated subsidiaries. Throughout this press release, we refer to our equity securities (i) for periods prior to the consummation of the U.S. Domestication, as ordinary shares and/or convertible preferred shares and (ii) for periods at or after the consummation of the U.S. Domestication, as shares of common stock and/or shares of convertible preferred stock. About Penguin Solutions The most transformative technological advancements are often the hardest to deploy and optimize. Penguin Solutions, the AI factory platform company, has the innovative technologies, skills, experience, and partnerships needed to turn your AI ambitions into reality. In addition to our AI capabilities, Penguin Solutions offers memory and LED solutions serving a wide range of high-performance and specialized applications. For more information, visit www.penguinsolutions.com. Penguin Solutions, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended February 27, 2026 November 28, 2025 February 28, 2025 February 27, 2026 February 28, 2025 Net sales: Advanced Computing $ 115,715 $ 151,452 $ 200,157 $ 267,167 $ 377,583 Integrated Memory 171,629 136,521 105,260 308,150 201,966 Optimized LED 55,655 55,098 60,102 110,753 127,072 Total net sales 342,999 343,071 365,519 686,070 706,621 Cost of sales 249,297 246,962 260,871 496,259 504,161 Gross profit 93,702 96,109 104,648 189,811 202,460 Operating expenses: Research and development 18,976 18,693 19,907 37,669 39,718 Selling, general and administrative 47,989 53,092 59,315 101,081 119,851 Impairment of goodwill — — 6,079 — 6,079 Other operating expense 1,048 4,742 859 5,790 968 Total operating expenses 68,013 76,527 86,160 144,540 166,616 Operating income 25,689 19,582 18,488 45,271 35,844 Non-operating (income) expense: Interest expense, net 721 47 2,183 768 6,579 Other non-operating (income) expense (27,983 ) 11,675 (209 ) (16,308 ) 427 Total non-operating (income) expense (27,262 ) 11,722 1,974 (15,540 ) 7,006 Income (loss) before taxes 52,951 7,860 16,514 60,811 28,838 Income tax provision (benefit) 14,410 1,805 7,643 16,215 14,003 Net income (loss) 38,541 6,055 8,871 44,596 14,835 Net income attributable to noncontrolling interest 1,089 785 789 1,874 1,536 Net income (loss) attributable to Penguin Solutions 37,452 5,270 8,082 42,722 13,299 Preferred stock dividends 3,033 3,033 2,600 6,066 2,600 Income available for distribution 34,419 2,237 5,482 36,656 10,699 Income allocated to participating securities 3,594 231 482 3,808 492 Net income available to common stockholders $ 30,825 $ 2,006 $ 5,000 $ 32,848 $ 10,207 Earnings (loss) per share: Basic $ 0.59 $ 0.04 $ 0.09 $ 0.62 $ 0.19 Diluted $ 0.58 $ 0.04 $ 0.09 $ 0.61 $ 0.19 Common stock used in per share calculations: Basic 52,283 52,900 53,454 52,592 53,468 Diluted 53,186 54,991 54,384 54,031 54,484 Penguin Solutions, Inc. Reconciliation of GAAP to Non-GAAP Measures (In thousands, except percentages) (Unaudited) Three Months Ended Six Months Ended February 27, 2026 November 28, 2025 February 28, 2025 February 27, 2026 February 28, 2025 GAAP gross profit $ 93,702 $ 96,109 $ 104,648 $ 189,811 $ 202,460 Stock-based compensation expense 1,522 1,386 1,776 2,908 3,419 Amortization of acquisition-related intangibles 5,909 5,909 5,907 11,818 11,816 Inventory write-off, stolen in-transit shipment 5,783 — — 5,783 — Cost of sales-related restructuring — (483 ) 77 (483 ) 35 Other — — — — (200 ) Non-GAAP gross profit $ 106,916 $ 102,921 $ 112,408 $ 209,837 $ 217,530 GAAP gross margin 27.3 % 28.0 % 28.6 % 27.7 % 28.7 % Effect of adjustments 3.9 % 2.0 % 2.2 % 2.9 % 2.1 % Non-GAAP gross margin 31.2 % 30.0 % 30.8 % 30.6 % 30.8 % GAAP operating expenses $ 68,013 $ 76,527 $ 86,160 $ 144,540 $ 166,616 Stock-based compensation expense (3,597 ) (8,694 ) (9,804 ) (12,291 ) (19,692 ) Amortization of acquisition-related intangibles (1,600 ) (1,599 ) (2,932 ) (3,199 ) (6,778 ) Diligence, acquisition and integration expense — — (567 ) — (1,400 ) Redomiciliation costs — — (2,359 ) — (3,602 ) Impairment of goodwill — — (6,079 ) — (6,079 ) Restructuring charges (1,048 ) (4,742 ) (859 ) (5,790 ) (968 ) Other (106 ) (99 ) (242 ) (205 ) (575 ) Non-GAAP operating expenses $ 61,662 $ 61,393 $ 63,318 $ 123,055 $ 127,522 GAAP operating income $ 25,689 $ 19,582 $ 18,488 $ 45,271 $ 35,844 Stock-based compensation expense 5,119 10,080 11,580 15,199 23,111 Amortization of acquisition-related intangibles 7,509 7,508 8,839 15,017 18,594 Inventory write-off, stolen in-transit shipment 5,783 — — 5,783 — Cost of sales-related restructuring — (483 ) 77 (483 ) 35 Diligence, acquisition and integration expense — — 567 — 1,400 Redomiciliation costs — — 2,359 — 3,602 Impairment of goodwill — — 6,079 — 6,079 Restructuring charges 1,048 4,742 859 5,790 968 Other 106 99 242 205 375 Non-GAAP operating income $ 45,254 $ 41,528 $ 49,090 $ 86,782 $ 90,008 GAAP operating margin 7.5 % 5.7 % 5.1 % 6.6 % 5.1 % Effect of adjustments 5.7 % 6.4 % 8.3 % 6.0 % 7.6 % Non-GAAP operating margin 13.2 % 12.1 % 13.4 % 12.6 % 12.7 % Penguin Solutions, Inc. Reconciliation of GAAP to Non-GAAP Measures, Continued (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended February 27, 2026 November 28, 2025 February 28, 2025 February 27, 2026 February 28, 2025 GAAP net income (loss) attributable to Penguin Solutions $ 37,452 $ 5,270 $ 8,082 $ 42,722 $ 13,299 Stock-based compensation expense 5,119 10,080 11,580 15,199 23,111 Amortization of acquisition-related intangibles 7,509 7,508 8,839 15,017 18,594 Inventory write-off, stolen in-transit shipment 5,783 — — 5,783 — Cost of sales-related restructuring — (483 ) 77 (483 ) 35 Diligence, acquisition and integration expense — — 567 — 1,400 Redomiciliation costs — — 2,359 — 3,602 Loss on non-marketable equity investment — 10,000 — 10,000 — Impairment of goodwill — — 6,079 — 6,079 Gain on disposition of equity investment (27,036 ) — — (27,036 ) — Restructuring charges 1,048 4,742 859 5,790 968 Amortization of debt issuance costs 658 658 950 1,316 1,903 Foreign currency (gains) losses (1,015 ) 1,212 24 197 1,052 Other 106 956 242 1,062 375 Income tax effects 4,483 (7,552 ) (5,822 ) (3,069 ) (10,064 ) Non-GAAP net income attributable to Penguin Solutions 34,107 32,391 33,836 66,498 60,354 Preferred stock dividends 3,033 3,033 2,600 6,066 2,600 Non-GAAP income available for distribution 31,074 29,358 31,236 60,432 57,754 Income allocated to participating securities 3,195 2,990 2,706 6,154 2,610 Non-GAAP net income available to common stockholders $ 27,879 $ 26,368 $ 28,530 $ 54,278 $ 55,144 Weighted-average shares outstanding - Diluted: GAAP weighted-average shares outstanding 53,186 54,991 54,384 54,031 54,484 Adjustment for dilutive securities and capped calls — (1,228 ) — (128 ) — Non-GAAP weighted-average shares outstanding 53,186 53,763 54,384 53,903 54,484 Penguin Solutions, Inc. Reconciliation of GAAP to Non-GAAP Measures, Continued (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended February 27, 2026 November 28, 2025 February 28, 2025 February 27, 2026 February 28, 2025 Diluted earnings (loss) per share: GAAP diluted earnings (loss) per share $ 0.58 $ 0.04 $ 0.09 $ 0.61 $ 0.19 Effect of adjustments (0.06 ) 0.45 0.43 0.40 0.82 Non-GAAP diluted earnings per share $ 0.52 $ 0.49 $ 0.52 $ 1.01 $ 1.01 Net income (loss) attributable to Penguin Solutions $ 37,452 $ 5,270 $ 8,082 $ 42,722 $ 13,299 Interest expense, net 721 47 2,183 768 6,579 Income tax provision (benefit) 14,410 1,805 7,643 16,215 14,003 Depreciation expense and amortization of intangible assets 12,751 12,819 14,037 25,570 28,998 Stock-based compensation expense 5,119 10,080 11,580 15,199 23,111 Inventory write-off, stolen in-transit shipment 5,783 — — 5,783 — Cost of sales-related restructuring — (483 ) 77 (483 ) 35 Diligence, acquisition and integration expense — — 567 — 1,400 Redomiciliation costs — — 2,359 — 3,602 Impairment of goodwill — — 6,079 — 6,079 Gain on disposition of equity investment (27,036 ) — — (27,036 ) — Restructuring charges 1,048 4,742 859 5,790 968 Loss on non-marketable equity investment — 10,000 — 10,000 — Other 106 956 242 1,062 375 Adjusted EBITDA $ 50,354 $ 45,236 $ 53,708 $ 95,590 $ 98,449 Penguin Solutions, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) As of February 27, 2026 August 29, 2025 Assets Cash and cash equivalents $ 489,172 $ 453,754 Accounts receivable, net 369,935 307,904 Accounts receivable, net - related party 674 — Inventories 322,360 255,182 Other current assets 56,301 47,387 Total current assets 1,238,442 1,064,227 Property and equipment, net 86,890 92,603 Operating lease right-of-use assets 56,630 58,847 Intangible assets, net 73,474 87,754 Goodwill 145,895 145,895 Deferred tax assets 99,078 99,107 Other noncurrent assets 49,348 68,767 Total assets $ 1,749,757 $ 1,617,200 Liabilities, Temporary Equity and Stockholders' Equity Accounts payable and accrued expenses $ 454,503 $ 318,761 Current debt — 19,945 Deferred revenue 81,623 73,893 Other current liabilities 54,568 61,300 Total current liabilities 590,694 473,899 Long-term debt 442,777 441,893 Noncurrent operating lease liabilities 60,751 62,736 Other noncurrent liabilities 44,866 30,445 Total liabilities 1,139,088 1,008,973 Commitments and contingencies Temporary equity Preferred stock, $0.03 par value; authorized 30,000 shares; 200 shares of convertible preferred stock issued and outstanding as of February 27, 2026 and August 29, 2025. Redemption amount of $200,366 and $200,500 as of February 27, 2026 and August 29, 2025, respectively. 202,710 202,710 Penguin Solutions stockholders’ equity: Common stock, $0.03 par value; authorized 200,000 shares; 64,199 shares issued and 51,213 outstanding as of February 27, 2026; 62,756 shares issued and 52,738 outstanding as of August 29, 2025. 1,926 1,883 Additional paid-in capital 572,719 551,712 Retained earnings 83,365 46,709 Treasury stock, 12,986 and 10,018 shares held as of February 27, 2026 and August 29, 2025, respectively (263,210 ) (206,076 ) Accumulated other comprehensive income 14 18 Total Penguin Solutions stockholders’ equity 394,814 394,246 Noncontrolling interest in subsidiary 13,145 11,271 Total stockholders' equity 407,959 405,517 Total liabilities, temporary equity and stockholders' equity $ 1,749,757 $ 1,617,200 Penguin Solutions, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended Six Months Ended February 27, 2026 November 28, 2025 February 28, 2025 February 27, 2026 February 28, 2025 Cash flows from operating activities Net income (loss) $ 38,541 $ 6,055 $ 8,871 $ 44,596 $ 14,835 Adjustments to reconcile net income (loss) from continuing operations to cash provided by (used for) operating activities Depreciation expense and amortization of intangible assets 12,751 12,819 14,037 25,570 28,998 Amortization of debt issuance costs 658 658 950 1,316 1,903 Stock-based compensation expense 5,119 10,080 11,580 15,199 23,111 Loss on impairment of non-marketable equity investment — 10,000 — 10,000 — Impairment of goodwill — — 6,079 — 6,079 Gain on disposition of equity investment (27,036 ) — — (27,036 ) — Deferred income taxes, net (55 ) 85 (48 ) 30 163 Other (1,226 ) 2,129 (716 ) 903 (1,428 ) Changes in operating assets and liabilities: Accounts receivable (28,641 ) (34,064 ) (54,755 ) (62,705 ) (78,640 ) Inventories (109,155 ) 41,977 47,215 (67,178 ) (46,165 ) Other assets (1,933 ) (876 ) 15,015 (2,809 ) 15,720 Accounts payable and accrued expenses and other liabilities 165,929 (17,805 ) 24,649 148,124 122,120 Net cash provided by (used for) operating activities 54,952 31,058 72,877 86,010 86,696 Cash flows from investing activities Capital expenditures and deposits on equipment (1,603 ) (2,853 ) (2,335 ) (4,456 ) (4,171 ) Proceeds from sales and maturities of investment securities — — 11,055 — 14,835 Proceeds from disposition of equity investments 32,186 — — 32,186 — Purchases of held-to-maturity investment securities — — (12,671 ) — (33,394 ) Other (319 ) (521 ) (398 ) (840 ) (541 ) Net cash provided by (used for) investing activities 30,264 (3,374 ) (4,349 ) 26,890 (23,271 ) Penguin Solutions, Inc. Consolidated Statements of Cash Flows, Continued (In thousands) (Unaudited) Three Months Ended Six Months Ended February 27, 2026 November 28, 2025 February 28, 2025 February 27, 2026 February 28, 2025 Cash flows from financing activities Proceeds from issuance of convertible preferred stock, net of issuance costs — — 191,182 — 191,182 Repayments of debt (20,000 ) — — (20,000 ) — Payments to acquire common stock (36,941 ) (20,193 ) (6,472 ) (57,134 ) (17,595 ) Payment of preferred stock cash dividends (3,067 ) (3,133 ) (2,233 ) (6,200 ) (2,233 ) Proceeds from issuance of common stock 2,513 3,339 382 5,852 3,742 Net cash used for financing activities (57,495 ) (19,987 ) 182,859 (77,482 ) 175,096 Net increase (decrease) in cash, cash equivalents and restricted cash 27,721 7,697 251,387 35,418 238,521 Cash, cash equivalents and restricted cash at beginning of period 461,767 454,070 370,611 454,070 383,477 Cash, cash equivalents and restricted cash at end of period $ 489,488 $ 461,767 $ 621,998 $ 489,488 $ 621,998 Source: Penguin Solutions, Inc.