Penguin Solutions — Fiscal 2026 Earnings Summary

Financial Performance

• Q4 FY26 net sales reached $567 million, a 68% year-over-year increase; full-year FY26 net sales were $1.73 billion, up 26% year-over-year.
• Q4 FY26 operating income was $69 million (up 458% YoY); full-year FY26 operating income was $166 million (up 185% YoY).
• Q4 FY26 non-GAAP operating income was $90 million (up 129% YoY); full-year FY26 non-GAAP operating income was $241 million (up 44% YoY).
• Q4 FY26 net income was $93 million (up 888% YoY); full-year FY26 net income was $181 million (up 611% YoY).
• Q4 FY26 adjusted EBITDA was $93 million (up 115% YoY); full-year FY26 adjusted EBITDA was $256 million (up 37% YoY).
• Q4 FY26 diluted EPS was $1.29 (up 1,073% YoY); full-year FY26 diluted EPS was $2.60 (up 829% YoY).
• Q4 FY26 non-GAAP diluted EPS was $1.00 (up 133% YoY); full-year FY26 non-GAAP diluted EPS was $2.87 (up 51% YoY).
• Full-year FY26 gross profit was $479 million; non-GAAP gross profit was $508 million.
• Full-year FY26 operating expenses were $313 million (GAAP) and $267 million (Non-GAAP).
• Balance sheet as of August 28, 2026, showed cash and cash equivalents of $647.2 million, total assets of $2.78 billion, and total liabilities of $2.04 billion.
• Long-term debt increased to $735.5 million as of August 28, 2026, from $441.9 million in the prior year.
• Deferred revenue was $123.3 million as of August 28, 2026, compared to $73.9 million in the prior year.

Guidance and Future Outlook

• Raised FY27 net sales guidance to approximately $2.43 billion at the midpoint, representing ~40% year-over-year growth (plus or minus 10 percentage points).
• Raised FY27 diluted EPS guidance to $3.50 (plus or minus $0.70), representing ~35% year-over-year growth.
• Raised FY27 non-GAAP diluted EPS guidance to $4.45 (plus or minus $0.70), representing ~55% year-over-year growth.
• FY27 non-GAAP gross margin guidance is 28% plus or minus 2%.
• FY27 non-GAAP operating expenses guidance is $275 million plus or minus $10 million.
• Guidance exceeds the preliminary view shared during the Q3 FY26 earnings call.

Business Segments and Product Lines

• Q4 FY26 Advanced Computing net sales were $154 million; Integrated Memory net sales were $341 million; Optimized LED net sales were $72 million.
• Full-year FY26 Advanced Computing net sales were $559 million; Integrated Memory net sales were $924 million; Optimized LED net sales were $249 million.
• Won six new AI Infrastructure data center customers in Q4, including four neocloud providers.
• Added 17 new AI Infrastructure customers and 12 existing customers expanded business in FY26.
• Secured a multi-year contract with a neocloud customer backed by a leading South Korean technology company for an NVIDIA GB300 NVL72-based platform.
• Secured a publicly traded neocloud customer with over $3 billion in signed, multi-year contracts for AI infrastructure deployment and operations.
• Secured a neocloud customer with $10 billion in contracted compute for a 36,000-GPU AI factory in Norway.
• Won Lektra, a neocloud customer, to deploy distributed AI micro data centers powered by carbon-free energy.
• Advanced ClusterWareAI with self-managing agentic AI capabilities to detect and remediate GPU performance issues.
• Closed an oversubscribed $750 million convertible senior notes offering due 2031 with a 0% coupon.
• Established new supply arrangements with an AI Infrastructure supplier and a leading memory supplier to improve component availability.

Market and Competitive Landscape

• Performance accelerated in the second half of FY26 following the launch of the AI Factory Platform.
• Growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%.
• Strong demand from neocloud customers for the full-stack AI Factory Platform.
• Continued focus on neocloud and enterprise customers.

Risks and Challenges

• Forward-looking statements are subject to risks including global business and economic conditions, geopolitical conflicts, supply chain disruptions, and changes in trade regulations.
• Risks include dependence on a select number of customers, customer churn, and fluctuations in material costs.
• Potential risks related to the success of strategic initiatives, including U.S. Domestication, and the integration of acquisitions.
• Risks include limitations on supply availability, production difficulties, and changes in customer demand and sales mix.
• Risks include changes in tax regimes, valuation allowances for deferred tax assets, and labor disputes.

Management Commentary and Tone

• CEO Kash Shaikh stated company performance accelerated significantly in the second half of FY26, prioritizing alignment of AI Infrastructure and Memory businesses with strong AI-driven data center demand.
• Management highlighted increased investment in product innovation and sharpened go-to-market execution to make neocloud and enterprise customers successful.
• Management expressed confidence in the continued momentum of the memory business and the further acceleration of the AI Infrastructure business.
• Management noted the ability to drive strong operating leverage across the business.

Other Key Points

• Completed U.S. Domestication on June 30, 2025, redomiciling the parent company from the Cayman Islands to Delaware.
• The company raised $750 million via a 0% coupon convertible senior notes offering due 2031.
• Q4 FY26 net cash used for operating activities was $163.1 million; full-year FY26 net cash used for operating activities was $151.9 million.
• Q4 FY26 net cash provided by financing activities was $337.1 million, driven by proceeds from debt issuance.
• Full-year FY26 net cash provided by financing activities was $287.3 million.
• The company announced a conference call and webcast for October 6, 2026, at 1:30 p.m. Pacific Time.