sgh-20251128

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 28, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38102

PENGUIN SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)


Delaware			36-5142687
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)




45800 Northport Loop West
Fremont, CA			94538
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: (510) 623-1231

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.03 par value per share	PENG	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of January 2, 2026, the registrant had 52,560,157 shares of common stock outstanding.

Table of Contents


		Page

PART I. Financial Information
Item 1	Financial Statements	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4	Controls and Procedures	37

PART II. Other Information
Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3	Defaults Upon Senior Securities	38
Item 4	Mine Safety Disclosures	39
Item 5	Other Information	39
Item 6	Exhibits	39

Signatures		41


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Explanatory Note

On June 30, 2025, we completed the redomiciliation of the parent company of our corporate group, 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 Securities and Exchange Commission (the “SEC”) on April 2, 2025.

The common stock of Penguin Solutions Delaware began trading on The Nasdaq Global Select Market on July 1, 2025 (the first trading day following the U.S. Domestication) under the symbol “PENG”, which is the same symbol under which Penguin Solutions Cayman ordinary shares previously traded.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) 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 regarding future events or our future financial or operating performance, the extent and timing of, and expectations regarding, our future revenues and expenses and customer demand, statements regarding our objectives and development of our services and capabilities, statements regarding the deployment of our products and services, statements regarding our reliance on third parties, statements regarding our rebranding initiatives and strategy, and statements using words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “target,” “commit,” “potential,” “should” and similar words and the negatives thereof. These forward-looking statements are based on 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 (“AI”)), our customer markets and various geographic regions; uncertainties in the geopolitical environment; 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 our U.S. Domestication 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 Storm Private Holdings I Ltd. (together with its subsidiaries, “Stratus Technologies”); the failure to achieve the intended benefits of the sale of Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda. (“Zilia Technologies”) (formerly SMART Modular Technologies do Brasil - Indústria e Comércio de Componentes Ltda.) and its business, including the planned sale of our remaining 19% interest therein and the timing and closing of such sale; 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


3

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 CPS (as defined below) 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 our Annual Report on Form 10-K for the fiscal year ended August 29, 2025 (the “2025 Annual Report”), this Quarterly Report and the risks discussed in our other SEC filings. Such risks, uncertainties and factors as outlined above and in such filings could cause actual results of Penguin Solutions to be materially different from such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on any forward-looking statements.

The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report. We do not intend, and have no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Quarterly Report, except as required by law.

About This Quarterly Report

As used herein, unless stated otherwise or the context requires otherwise, the terms “Penguin Solutions,” “Company,” “Registrant,” “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 Quarterly Report, 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.

Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal years 2026 and 2025 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated.

Penguin Solutions, Penguin Computing, Penguin Edge, the Penguin Solutions logo, SMART Modular Technologies, SMART, Cree LED, Stratus, Stratus Technologies, and our other trademarks or service marks appearing in this Quarterly Report are our trademarks or registered trademarks. Trade names, trademarks and service marks of other companies appearing in this Quarterly Report are the property of their respective holders.

Certain information included herein or elsewhere, such as on our website or related materials, is disclosed in response to certain third-party frameworks or stakeholder expectations. However, such information, even if significant, is not necessarily material for purposes of our SEC filings, even if we use “material” or similar language. Particularly in the sustainability context, “materiality” is subject to multiple definitions that differ from — and are often more expansive than — the definition under U.S. federal securities laws.


4

PART I. Financial Information

Item 1. Financial Statements

INDEX TO FINANCIAL STATEMENTS


			Page

Consolidated Balance Sheets			6
Consolidated Statements of Operations			7
Consolidated Statements of Comprehensive Income (Loss)			8
Consolidated Statements of Shareholders’ Equity			9
Consolidated Statements of Cash Flows			10
Notes to Consolidated Financial Statements			11


5

Penguin Solutions, Inc.

Consolidated Balance Sheets

(In thousands, except par value amounts)

(Unaudited)


As of	November 28, 2025		August 29, 2025
Assets
Cash and cash equivalents	$	461,451	$	453,754

Accounts receivable, net	326,892		307,904
Accounts receivable, net - related party	15,076		—
Inventories	213,205		255,182
Other current assets	50,390		47,387

Total current assets	1,067,014		1,064,227
Property and equipment, net	90,383		92,603
Operating lease right-of-use assets	57,254		58,847
Intangible assets, net	80,568		87,754
Goodwill	145,895		145,895
Deferred tax assets	99,023		99,107
Other noncurrent assets	58,058		68,767
Total assets	$	1,598,195	$	1,617,200

Liabilities, Temporary Equity and Stockholders' Equity
Accounts payable and accrued expenses	$	347,526	$	318,761
Current debt	19,974		19,945
Deferred revenue	43,648		73,893

Other current liabilities	46,962		61,300

Total current liabilities	458,110		473,899
Long-term debt	442,333		441,893
Noncurrent operating lease liabilities	61,406		62,736
Other noncurrent liabilities	31,877		30,445
Total liabilities	993,726		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 November 28, 2025 and August 29, 2025. Redemption amount of 200,400 and 200,500 as of November 28, 2025 and August 29, 2025, respectively	202,710		202,710

Penguin Solutions stockholders’ equity:
Common stock, $0.03 par value; authorized 200,000 shares; 63,605 shares issued and 52,560 outstanding as of November 28, 2025; 62,756 shares issued and 52,738 outstanding as of August 29, 2025	1,908		1,883

Additional paid-in capital	565,105		551,712
Retained earnings	48,946		46,709
Treasury stock, 11,045 and 10,018 shares held as of November 28, 2025 and August 29, 2025, respectively	(226,269)		(206,076)
Accumulated other comprehensive income	13		18
Total Penguin Solutions stockholders’ equity	389,703		394,246
Noncontrolling interest in subsidiary	12,056		11,271
Total stockholders' equity	401,759		405,517
Total liabilities, temporary equity and stockholders' equity	$	1,598,195	$	1,617,200

The accompanying notes are an integral part of these consolidated financial statements.


6

Penguin Solutions, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	November 28, 2025		November 29, 2024
Net sales:
Products	$	246,392	$	270,260
Services	64,505		70,842
Related party	32,174		—

Total net sales	343,071		341,102
Cost of sales:
Products	220,055		215,149
Services	26,907		28,141


Total cost of sales	246,962		243,290
Gross profit	96,109		97,812

Operating expenses:
Research and development	18,693		19,811
Selling, general and administrative	53,092		60,536


Other operating expense	4,742		109
Total operating expenses	76,527		80,456
Operating income	19,582		17,356

Non-operating (income) expense:
Interest expense, net	47		4,396
Other non-operating expense	11,675		636
Total non-operating expense	11,722		5,032
Income (loss) before taxes	7,860		12,324

Income tax provision (benefit)	1,805		6,360


Net income (loss)	6,055		5,964
Net income (loss) attributable to noncontrolling interest	785		747
Net income (loss) attributable to Penguin Solutions	5,270		5,217

Preferred stock dividends	3,033		—
Income available for distribution	2,237		5,217
Income allocated to participating securities	231		—
Net income available to common stockholders	$	2,006	$	5,217

Earnings (loss) per share
Basic	$	0.04	$	0.10
Diluted	$	0.04	$	0.10

Common stock used in per share calculations:
Basic	52,900		53,482
Diluted	54,991		54,312

The accompanying notes are an integral part of these consolidated financial statements.


7

Penguin Solutions, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended
	November 28, 2025		November 29, 2024
Net income (loss)	$	6,055	$	5,964
Other comprehensive income (loss), net of tax:



Gain (loss) on investments	(5)		9
Comprehensive income (loss)	6,050		5,973
Comprehensive income attributable to noncontrolling interest	785		747
Comprehensive income (loss) attributable to Penguin Solutions	$	5,265	$	5,226

The accompanying notes are an integral part of these consolidated financial statements.


8

Penguin Solutions, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


	Common			Additional Paid-in-capital					Accumulated Other Comprehensive Income (Loss)			Total Penguin Solutions Stockholders’ Equity		Non- controlling Interest in Subsidiary
	Shares Issued	Amount					Retained Earnings				Treasury Shares							Total Equity
As of August 29, 2025	62,756	$	1,883		$	551,712	$	46,709	$	(206,076)		$	18	$	394,246	$	11,271	$	405,517
Net income							5,270							5,270		785		6,055
Other comprehensive income (loss)												(5)		(5)				(5)
Stock issued under equity plans	849	25			3,313									3,338				3,338
Repurchase of shares									(20,193)					(20,193)				(20,193)
Stock-based compensation expense					10,080									10,080				10,080

Preferred stock dividends							(3,033)							(3,033)				(3,033)

As of November 28, 2025	63,605	$	1,908		$	565,105	$	48,946	$	(226,269)		$	13	$	389,703	$	12,056	$	401,759


				Additional Paid-in-capital					Accumulated Other Comprehensive Income (Loss)			Total Penguin Solutions Stockholders’ Equity		Non- controlling Interest in Subsidiary
	Shares Issued	Amount					Retained Earnings				Treasury Shares							Total Equity
As of August 30, 2024	60,226	$	1,807		$	513,335	$	29,985	$	(153,756)		$	10	$	391,381	$	7,827	$	399,208
Net income	—	—			—		5,217		—			—		5,217		747		5,964
Other comprehensive income (loss)	—	—			—		—		—			9		9		—		9
Stock issued under equity plans	841	25			3,335		—		—			—		3,360		—		3,360
Repurchase of shares	—	—			—		—		(11,123)			—		(11,123)		—		(11,123)
Stock-based compensation expense	—	—			11,531		—		—			—		11,531		—		11,531

As of November 29, 2024	61,067	$	1,832		$	528,201	$	35,202	$	(164,879)		$	19	$	400,375	$	8,574	$	408,949

The accompanying notes are an integral part of these consolidated financial statements.


9

Penguin Solutions, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


Three Months Ended	November 28, 2025		November 29, 2024
Cash flows from operating activities
Net income (loss)	$	6,055	$	5,964


Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities:
Depreciation expense and amortization of intangible assets	12,819		14,961
Amortization of debt issuance costs	658		953
Stock-based compensation expense	10,080		11,531



Loss on impairment of non-marketable equity investment	10,000		—
Deferred income taxes, net	85		211
Other	2,129		(712)
Changes in operating assets and liabilities:
Accounts receivable	(34,064)		(23,885)
Inventories	41,977		(93,380)
Other assets	(876)		705
Accounts payable and accrued expenses and other liabilities	(17,805)		97,471



Net cash provided by operating activities	31,058		13,819

Cash flows from investing activities
Capital expenditures and deposits on equipment	(2,853)		(1,836)
Proceeds from sales and maturities of investment securities	—		3,780
Purchases of held-to-maturity investment securities

SEC Form 10-Q filed by Penguin Solutions Inc.