Penguin Solutions Reports Q2 Fiscal 2025 Financial Results
Revenue up 28% compared with year-ago quarter
Company raises midpoint of annual revenue outlook
MILPITAS, Calif.--(BUSINESS WIRE)--April 02, 2025--
Penguin Solutions, Inc. ("Penguin Solutions," "we," "us," or the "Company") (NASDAQ: PENG) today reported financial results for the second quarter of fiscal 2025 and announced the planned retirement of Chief Operating Officer ("COO") and President of Integrated Memory Jack Pacheco.
Second Quarter Fiscal 2025 Highlights
-- Net sales of $366 million, up 28.3% versus the year-ago quarter
-- GAAP gross margin of 28.6%, down 20 basis points versus the year-ago
quarter
-- Non-GAAP gross margin of 30.8%, down 70 basis points versus the year-ago
quarter
-- GAAP diluted EPS of $0.09 versus $(0.26) in the year-ago quarter
-- Non-GAAP diluted EPS of $0.52 versus $0.27 in the year-ago quarter
"We are pleased with the progress we are making in fiscal year 2025," said Mark Adams, Chief Executive Officer ("CEO") of Penguin Solutions. "Our results reinforce our capabilities in managing the complexity of AI for our valued customers. Given our strong start to the fiscal year, we are raising the midpoint of our revenue outlook for the full year."
Quarterly Financial Results
GAAP (1) Non-GAAP (2)
----------------------------- ----------------------------
(in thousands,
except per
share amounts) Q2-25 Q1-25 Q2-24 Q2-25 Q1-25 Q2-24
--------------- -------- -------- --------- -------- -------- --------
Net sales:
Advanced
Computing $200,157 $177,426 $141,405 $200,157 $177,426 $141,405
Integrated
Memory 105,260 96,706 83,297 105,260 96,706 83,297
Optimized
LED 60,102 66,970 60,119 60,102 66,970 60,119
------- ------- ------- ------- ------- -------
Total net sales $365,519 $341,102 $284,821 $365,519 $341,102 $284,821
======= ======= ======= ======= ======= =======
Gross profit $104,648 $ 97,812 $ 81,934 $112,408 $105,122 $ 89,735
Operating
income (loss) 18,488 17,356 (3,312) 49,090 40,918 26,514
Net income
(loss)
attributable
to Penguin
Solutions 8,082 5,217 (13,620) 33,836 26,518 14,141
Diluted
earnings
(loss) per
share $ 0.09 $ 0.10 $ (0.26) $ 0.52 $ 0.49 $ 0.27
(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 2, 2025, Penguin Solutions is providing the following financial outlook for fiscal year 2025:
GAAP Non-GAAP
New Outlook Outlook Adjustments Outlook
-------------- -------------- ------------------------------ --------------
17% YoY Growth 17% YoY Growth
Net sales +/- 3% -- +/- 3%
Gross margin 29% +/- 1% 2% $(A)$ 31% +/- 1%
$336 million $265 million
Operating +/- $5 +/- $5
expenses million (71) million (B)(D)$ million
Diluted
earnings per $-0.02 +/- $1.60 +/-
share $0.10 1.62 (A)(B)(C)(E)$ $0.10
Diluted shares 54 million 1 million 55 million
Non-GAAP adjustments (in millions)
------------------------------------------------------------------- -------
(A) Share-based compensation and amortization of
acquisition-related intangibles included in cost of sales $ 31
(B) Share-based compensation and amortization of
acquisition-related intangibles included in R&D and SG&A 48
(C) Goodwill impairment 16
(D) Other adjustments 7
(E) Estimated income tax effects (13)
---
$ 89
===
GAAP Non-GAAP
Prior Outlook Outlook Adjustments Outlook
--------------- --------------- --------------------------- ---------------
15% YoY Growth 15% YoY Growth
Net sales +/- 5% -- +/- 5%
Gross margin 30% +/- 1% 2% (A) 32% +/- 1%
$335 million $275 million
Operating +/- $15 +/- $15
expenses million ($60) million (B)(C) million
Diluted
earnings per
share $0.10 +/- $0.20 $1.40 (A)(B)(C)(D) $1.50 +/- $0.20
Diluted shares 56.3 million -- 56.3 million
Non-GAAP adjustments (in millions)
------------------------------------------------------------------- -------
(A) Share-based compensation and amortization of
acquisition-related intangibles included in cost of sales $ 31
(B) Share-based compensation and amortization of
acquisition-related intangibles included in R&D and SG&A 48
(C) Other adjustments 12
(D) Estimated income tax effects (12)
---
$ 79
===
Second Quarter Fiscal 2025 Earnings Conference Call and Webcast Details
Penguin Solutions will hold a conference call and webcast to discuss the second quarter of fiscal 2025 results and related matters today, April 2, 2025, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Interested parties may access the call by dialing +1-833-470-1428 in the United States or +1-404-975-4839 from international locations, using the access code 858614. The earnings presentation and a live webcast of the conference call can be accessed from the Company's investor relations website where they will remain available for approximately one year.
Jack Pacheco to Retire as Chief Operating Officer and President of Integrated Memory
Jack Pacheco, Executive Vice President ("EVP"), COO and President of Integrated Memory, is expected to retire from the Company on December 31, 2025. The Company has initiated a succession planning process. Mr. Pacheco is expected to transition into a special advisor role if his successor is appointed before his retirement, and to provide consulting services following his retirement to ensure continuity and a smooth transition of his responsibilities.
Mr. Pacheco first joined the Company in 1994 and has served in various leadership roles during his tenure. He remained with the Company from 1994 until 2001, and then returned in 2004 as Chief Financial Officer ("CFO"), a position he held until 2008. In 2011, Mr. Pacheco returned to the Company and served as Senior Vice President, COO and CFO until becoming EVP, COO and President of Integrated Memory in September 2020.
"On behalf of the entire company, I want to thank Jack for his nearly 25 years of leadership and dedication," said Mark Adams, CEO of Penguin Solutions. "Jack played a key role in scaling our memory business and strengthening our global operations. We're grateful for his many contributions and his support through this transition."
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. These statements 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 revenues and expenses; statements regarding Penguin Solutions' strategic transformation and priorities; statements regarding long-term effective tax rates; statements regarding the business and financial outlook for fiscal year 2025 described under "Business Outlook" above; and statements regarding the expected retirement of Mr. Pacheco and related succession planning activities.
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 and growth trends in technology industries (including trends and markets related to artificial intelligence), our customer markets and various geographic regions; uncertainties in the geopolitical environment; the ability to manage our cost structure; disruptions in our operations or supply chain as a result of global pandemics or otherwise; changes in trade regulations or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending; appropriations for government spending; the success of our strategic initiatives including our proposed redomiciliation to the United States (which remains subject to shareholder and court approval), 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 SMART Brazil and its 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; 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; and the continuing availability of borrowings under term loans and revolving lines of credit 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 and Quarterly Reports on Form 10-Q and our other filings with the U.S. Securities and Exchange Commission. In addition, such risks, uncertainties and factors as outlined above and in such filings do not constitute all risks, uncertainties and factors that 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 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 share-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships and trademarks/trade names acquired in connection with business combinations); cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; restructuring charges; 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; 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; share-based compensation expense; cost of sales-related restructuring; diligence, acquisition and integration expense; redomiciliation costs; impairment of goodwill; restructuring charges; loss on extinguishment of debt and other infrequent or unusual items.
In fiscal 2024, for our non-GAAP reporting, we began to utilize a long-term projected non-GAAP effective tax rate of 28%, which includes the tax impact of pre-tax non-GAAP adjustments and reflects currently available information as well as other factors and assumptions. While we expect to use this normalized non-GAAP effective tax rate through fiscal 2025, this long-term non-GAAP effective tax rate may be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. 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.
About Penguin Solutions
The most exciting technological advancements are also the most challenging for companies to adopt. At Penguin Solutions, we support our customers in achieving their ambitions across our computing, memory, and LED lines of business. With our expert skills, experience, and partnerships, we turn our customers' most complex challenges into compelling opportunities.
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 November March 1, February March 1,
28, 2025 29, 2024 2024 28, 2025 2024
-------------------- --------- --------- --------- --------- -----------
Net sales:
Advanced
Computing $200,157 $ 177,426 $141,405 $ 377,583 $260,229
Integrated Memory 105,260 96,706 83,297 201,966 168,965
Optimized LED 60,102 66,970 60,119 127,072 129,874
------- -------- ------- -------- -------
Total net
sales 365,519 341,102 284,821 706,621 559,068
Cost of sales 260,871 243,290 202,887 504,161 394,284
------- -------- ------- -------- -------
Gross
profit 104,648 97,812 81,934 202,460 164,784
------- -------- ------- -------- -------
Operating expenses:
Research and
development 19,907 19,811 20,526 39,718 41,915
Selling, general
and
administrative 59,315 60,536 61,385 119,851 118,602
Impairment of
goodwill 6,079 -- -- 6,079 --
Other operating
expense 859 109 3,335 968 6,274
------- -------- ------- -------- -------
Total
operating
expenses 86,160 80,456 85,246 166,616 166,791
------- -------- ------- -------- -------
Operating income
(loss) 18,488 17,356 (3,312) 35,844 (2,007)
------- -------- ------- -------- -------
Non-operating
(income) expense:
Interest expense,
net 2,183 4,396 7,249 6,579 16,808
Other
non-operating
(income)
expense (209) 636 248 427 (328)
------- -------- ------- -------- -------
Total
non-operating
(income)
expense 1,974 5,032 7,497 7,006 16,480
------- -------- ------- -------- -------
Income (loss) before
taxes 16,514 12,324 (10,809) 28,838 (18,487)
Income tax provision 7,643 6,360 2,198 14,003 5,732
------- -------- ------- -------- -------
Net income (loss)
from continuing
operations 8,871 5,964 (13,007) 14,835 (24,219)
Net loss from
discontinued
operations -- -- -- -- (8,148)
------- -------- ------- -------- -------
Net income (loss) 8,871 5,964 (13,007) 14,835 (32,367)
Net income
attributable to
noncontrolling
interest 789 747 613 1,536 1,174
------- -------- ------- -------- -------
Net income (loss)
attributable to
Penguin Solutions 8,082 5,217 (13,620) 13,299 (33,541)
------- -------- ------- -------- -------
Preferred share
dividends 2,600 -- -- 2,600 --
------- -------- ------- -------- -------
Income available for
distribution 5,482 5,217 (13,620) 10,699 (33,541)
Income allocated to
participating
securities 482 -- -- 492 --
------- -------- ------- -------- -------
Net income available
to ordinary
shareholders $ 5,000 $ 5,217 $(13,620) $ 10,207 $(33,541)
======= ======== ======= ======== =======
Basic earnings
(loss) per share:
Continuing
operations $ 0.09 $ 0.10 $ (0.26) $ 0.19 $ (0.49)
Discontinued
operations -- -- -- -- (0.15)
------- -------- ------- -------- -------
$ 0.09 $ 0.10 $ (0.26) $ 0.19 $ (0.64)
======= ======== ======= ======== =======
Diluted earnings
(loss) per share:
Continuing
operations $ 0.09 $ 0.10 $ (0.26) $ 0.19 $ (0.49)
Discontinued
operations -- -- -- -- (0.15)
------- -------- ------- -------- -------
$ 0.09 $ 0.10 $ (0.26) $ 0.19 $ (0.64)
======= ======== ======= ======== =======
Shares used in per
share calculations:
Basic 53,454 53,482 52,031 53,468 52,050
Diluted 54,384 54,312 52,031 54,484 52,050
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands, except percentages)
(Unaudited)
Three Months Ended Six Months Ended
--------------------------------------- --------------------------
February 28, November 29, March 1, February 28, March 1,
2025 2024 2024 2025 2024
----------------------- ------------ ------------ ----------- ------------ ------------
GAAP gross profit $104,648 $ 97,812 $81,934 $202,460 $164,784
Share-based
compensation
expense 1,776 1,643 1,691 3,419 3,506
Amortization of
acquisition-related
intangibles 5,907 5,909 5,894 11,816 11,838
Cost of
sales-related
restructuring 77 (42) 216 35 884
Other -- (200) -- (200) --
------- ------- ------ ------- -------
Non-GAAP gross profit $112,408 $105,122 $89,735 $217,530 $181,012
======= ======= ====== ======= =======
GAAP gross margin 28.6% 28.7% 28.8% 28.7% 29.5%
Effect of
adjustments 2.2% 2.1% 2.7% 2.1% 2.9%
------- ------- ------ ------- -------
Non-GAAP gross margin 30.8% 30.8% 31.5% 30.8% 32.4%
======= ======= ====== ======= =======
GAAP operating expenses $ 86,160 $ 80,456 $85,246 $166,616 $166,791
Share-based
compensation
expense (9,804) (9,888) (8,948) (19,692) (18,103)
Amortization of
acquisition-related
intangibles (2,932) (3,846) (3,857) (6,778) (7,921)
Diligence,
acquisition and
integration
expense (567) (833) (5,885) (1,400) (6,674)
Redomiciliation
costs (1) (2,359) (1,243) -- (3,602) --
Impairment of
goodwill (6,079) -- -- (6,079) --
Restructuring
charges (859) (109) (3,335) (968) (6,274)
Other (1) (242) (333) -- $(575.SI)$ --
------- ------- ------ ------- -------
Non-GAAP operating
expenses $ 63,318 $ 64,204 $63,221 $127,522 $127,819
======= ======= ====== ======= =======
GAAP operating income
(loss) $ 18,488 $ 17,356 $(3,312) $ 35,844 $ (2,007)
Share-based
compensation
expense 11,580 11,531 10,639 23,111 21,609
Amortization of
acquisition-related
intangibles 8,839 9,755 9,751 18,594 19,759
Cost of
sales-related
restructuring 77 (42) 216 35 884
Diligence,
acquisition and
integration
expense 567 833 5,885 1,400 6,674
Redomiciliation
costs (1) 2,359 1,243 -- 3,602 --
Impairment of
goodwill 6,079 -- -- 6,079 --
Restructuring
charges 859 109 3,335 968 6,274
Other (1) 242 133 -- 375 --
------- ------- ------ ------- -------
Non-GAAP operating
income $ 49,090 $ 40,918 $26,514 $ 90,008 $ 53,193
======= ======= ====== ======= =======
(1) In the second quarter of fiscal 2025 we began breaking out redomiciliation costs from
"Other." All periods presented have been adjusted to reflect this change.
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
----------------------------- ----------------------
February November
28, 29, March 1, February March 1,
2025 2024 2024 28, 2025 2024
----------------------- -------- -------- --------- --------- -----------
GAAP net income (loss)
attributable to
Penguin Solutions $ 8,082 $ 5,217 $(13,620) $ 13,299 $(25,393)
Share-based
compensation
expense 11,580 11,531 10,639 23,111 21,609
Amortization of
acquisition-related
intangibles 8,839 9,755 9,751 18,594 19,759
Cost of
sales-related
restructuring 77 (42) 216 35 884
Diligence,
acquisition and
integration
expense 567 833 5,885 1,400 6,674
Redomiciliation
costs (1) 2,359 1,243 -- 3,602 --
Impairment of
goodwill 6,079 -- -- 6,079 --
Restructuring
charges 859 109 3,335 968 6,274
Amortization of debt
issuance costs 950 953 968 1,903 2,010
Loss (gain) on
extinguishment or
prepayment of debt -- -- 325 -- 325
Foreign currency
(gains) losses 24 1,028 182 1,052 (364)
Other (1) 242 133 -- 375 --
Income tax effects (5,822) (4,242) (3,540) (10,064) (5,099)
------ ------ ------- ------- -------
Non-GAAP net income
attributable to
Penguin Solutions 33,836 26,518 14,141 60,354 26,679
------ ------ ------- ------- -------
Preferred share
dividends 2,600 -- -- 2,600 --
------ ------ ------- ------- -------
Non-GAAP income
available for
distribution 31,236 26,518 14,141 57,754 29,887
Income allocated to
participating
securities 2,706 -- -- 2,610 --
------ ------ ------- ------- -------
Non-GAAP net income
available to ordinary
shareholders $28,530 $26,518 $ 14,141 $ 55,144 $ 29,887
====== ====== ======= ======= =======
Weighted-average shares
outstanding - Diluted:
GAAP
weighted-average
shares outstanding 54,384 54,312 52,031 54,484 52,050
Adjustment for
dilutive securities
and capped calls -- -- 1,043 -- 1,128
------ ------ ------- ------- -------
Non-GAAP
weighted-average
shares outstanding 54,384 54,312 53,074 54,484 53,178
====== ====== ======= ======= =======
Diluted earnings (loss)
per share from
continuing operations:
GAAP diluted
earnings (loss) per
share $ 0.09 $ 0.10 $ (0.26) $ 0.19 $ (0.49)
Effect of
adjustments 0.43 0.39 0.53 0.82 0.99
------ ------ ------- ------- -------
Non-GAAP diluted
earnings per share $ 0.52 $ 0.49 $ 0.27 $ 1.01 $ 0.50
====== ====== ======= ======= =======
Net income (loss)
attributable to
Penguin Solutions $ 8,082 $ 5,217 $(13,620) $ 13,299 $(25,393)
Interest expense,
net 2,183 4,396 7,249 6,579 16,808
Income tax provision
(benefit) 7,643 6,360 2,198 14,003 5,732
Depreciation expense
and amortization of
intangible assets 14,037 14,961 17,156 28,998 34,810
Share-based
compensation
expense 11,580 11,531 10,639 23,111 21,609
Cost of
sales-related
restructuring 77 (42) 216 35 884
Diligence,
acquisition and
integration
expense 567 833 5,885 1,400 6,674
Redomiciliation
costs (1) 2,359 1,243 -- 3,602 --
Impairment of
goodwill 6,079 -- -- 6,079 --
Restructuring
charges 859 109 3,335 968 6,274
Loss on
extinguishment of
debt -- -- 325 -- 325
Other (1) 242 133 -- 375 --
------ ------ ------- ------- -------
Adjusted EBITDA $53,708 $44,741 $ 33,383 $ 98,449 $ 67,723
(1) In the second quarter of fiscal 2025 we began breaking out redomiciliation
costs from "Other." All periods presented have been adjusted to reflect this
change.
Penguin Solutions, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
February 28, August 30,
As of 2025 2024
---------------------------------------- --------------- -------------
Assets
Cash and cash equivalents $ 621,682 $ 383,147
Short-term investments 25,323 6,337
Accounts receivable, net 330,384 251,743
Inventories 199,737 151,213
Other current assets 67,639 75,264
---------- ---------
Total current assets 1,244,765 867,704
Property and equipment, net 97,116 106,548
Operating lease right-of-use assets 56,363 60,349
Intangible assets, net 103,280 121,454
Goodwill 155,879 161,958
Deferred tax assets 84,944 85,078
Other noncurrent assets 68,997 71,415
---------- ---------
Total assets $ 1,811,344 $1,474,506
========== =========
Liabilities and Equity
Accounts payable and accrued expenses $ 278,093 $ 219,090
Current debt 19,891 --
Deferred revenue 121,646 63,954
Other current liabilities 54,075 44,552
---------- ---------
Total current liabilities 473,705 327,596
Long-term debt 638,900 657,347
Noncurrent operating lease liabilities 56,816 60,542
Other noncurrent liabilities 30,032 29,813
---------- ---------
Total liabilities 1,199,453 1,075,298
---------- ---------
Commitments and contingencies
Penguin Solutions shareholders' equity:
Preferred shares 6 --
Ordinary shares 1,849 1,807
Additional paid-in capital 731,323 513,335
Retained earnings 40,684 29,985
Treasury shares (171,351) (153,756)
Accumulated other comprehensive
income (loss) 17 10
---------- ---------
Total Penguin Solutions
shareholders' equity 602,528 391,381
Noncontrolling interest in subsidiary 9,363 7,827
---------- ---------
Total equity 611,891 399,208
---------- ---------
Total liabilities and equity $ 1,811,344 $1,474,506
========== =========
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
------------------------------- ----------------------
February November March 1, February March 1,
28, 2025 29, 2024 2024 28, 2025 2024
-------------------------- --------- --------- --------- --------- -----------
Cash flows from operating
activities
Net income (loss) $ 8,871 $ 5,964 $(13,007) $ 14,835 $(32,367)
Net loss from discontinued
operations -- -- -- -- (8,148)
------- ------- ------- ------- -------
Net income (loss) from
continuing operations 8,871 5,964 (13,007) 14,835 (24,219)
Adjustments to reconcile
net income (loss) from
continuing operations to
cash provided by (used
for) operating activities
Depreciation expense
and amortization of
intangible assets 14,037 14,961 17,156 28,998 34,810
Amortization of debt
issuance costs 950 953 968 1,903 2,010
Share-based
compensation expense 11,580 11,531 10,639 23,111 21,609
Impairment of goodwill 6,079 -- -- 6,079 --
Loss on extinguishment
or prepayment of debt -- -- 325 -- 325
Deferred income taxes,
net (48) 211 476 163 194
Other (716) (712) (208) (1,428) 456
Changes in operating
assets and
liabilities:
Accounts receivable (54,755) (23,885) 872 (78,640) 49,530
Inventories 47,215 (93,380) 35,678 (46,165) 2,214
Other assets 15,015 705 (23,229) 15,720 (21,127)
Accounts payable and
accrued expenses
and other
liabilities 24,649 97,471 (22,587) 122,120 994
Payment of
acquisition-related
contingent
consideration -- -- (29,000) -- (29,000)
------- ------- ------- ------- -------
Net cash provided by (used
for) operating activities
from continuing
operations 72,877 13,819 (21,917) 86,696 37,796
Net cash used for
operating activities from
discontinued operations -- -- -- -- (28,235)
------- ------- ------- ------- -------
Net cash provided by (used
for) operating
activities 72,877 13,819 (21,917) 86,696 9,561
------- ------- ------- ------- -------
Cash flows from investing
activities
Capital expenditures and
deposits on equipment (2,335) (1,836) (5,204) (4,171) (9,852)
Proceeds from maturities
of investment securities 11,055 3,780 12,290 14,835 21,955
Purchases of
held-to-maturity
investment securities (12,671) (20,723) (11,034) (33,394) (19,503)
Purchases of
non-marketable
investments -- -- -- -- --
Other (398) (143) $(558.SI)$ $(541.SI)$ (746)
------- ------- ------- ------- -------
Net cash used for
investing activities from
continuing operations (4,349) (18,922) (4,506) (23,271) (8,146)
Net cash provided by
investing activities from
discontinued operations -- -- -- -- 118,938
------- ------- ------- ------- -------
Net cash provided by (used
for) investing
activities $ (4,349) $(18,922) $ (4,506) $(23,271) $110,792
------- ------- ------- ------- -------
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows, Continued
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
------------------------------- ----------------------
February November March 1, February March 1,
28, 2025 29, 2024 2024 28, 2025 2024
-------------------- --------- --------- --------- --------- -----------
Cash flows from
financing
activities
Proceeds from
issuance of
convertible
preferred shares,
net of issuance
costs $191,182 $ -- $ -- $191,182 $ --
Repayments of debt -- -- (37,211) -- (51,634)
Payment of
acquisition-related
contingent
consideration -- -- (21,000) -- (21,000)
Payments to acquire
ordinary shares (6,472) (11,123) (2,732) (17,595) (15,862)
Payment of preferred
share cash
dividends (2,233) -- -- (2,233) --
Distribution to
noncontrolling
interest -- -- -- -- (1,470)
Proceeds from
issuance of
ordinary shares 382 3,360 792 3,742 4,247
Other -- -- (1) -- $(583.SI)$
------- ------- ------- ------- -------
Net cash used for
financing
activities from
continuing
operations 182,859 (7,763) (60,152) 175,096 (86,302)
Net cash used for
financing
activities from
discontinued
operations -- -- -- -- (606)
------- ------- ------- ------- -------
Net cash used for
financing
activities 182,859 (7,763) (60,152) 175,096 (86,908)
------- ------- ------- ------- -------
Effect of changes in
currency exchange
rates -- -- (155) -- (1,180)
------- ------- ------- ------- -------
Net increase
(decrease) in cash,
cash equivalents
and restricted
cash 251,387 (12,866) (86,730) 238,521 32,265
Cash, cash
equivalents and
restricted cash at
beginning of
period 370,611 383,477 529,059 383,477 410,064
------- ------- ------- ------- -------
Cash, cash
equivalents and
restricted cash at
end of period $621,998 $370,611 $442,329 $621,998 $442,329
======= ======= ======= ======= =======
View source version on businesswire.com: https://www.businesswire.com/news/home/20250402373835/en/
CONTACT: Investor Contact:
Suzanne Schmidt
Investor Relations
+1-510-360-8596
ir@penguinsolutions.com
PR Contact:
Maureen O'Leary
Director Communications
1-602-330-6846
pr@penguinsolutions.com
(END) Dow Jones Newswires
April 02, 2025 16:05 ET (20:05 GMT)
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