Penguin Solutions, Inc.: Q4 FY2026 earnings call

What management said about Q4 FY2026, from the documents filed with the SEC on 6 October 2026: press release. Guidance figures: 2 raised, 5 new. The quarter’s numbers.

Key takeaways

Fourth-quarter sales rose 68%: Net sales were $566.7 million, up from $478.7 million in the third quarter and $337.9 million a year earlier. GAAP operating income was $69.5 million, against $12.4 million a year earlier.
Growth accelerated in second half: Management said first-half net sales were relatively flat year over year, then grew 48% in the third quarter, 68% in the fourth, and 58% across the second half.
Per-share earnings rose sharply: GAAP diluted EPS was $1.29 in the fourth quarter against $0.11 a year earlier, and non-GAAP diluted EPS was $1.00 against $0.43. Fiscal 2026 GAAP diluted EPS was $2.60.
Integrated Memory led the growth: Integrated Memory net sales were $340.8 million in the fourth quarter, up from $275.1 million in the third quarter and $132.2 million a year earlier. Fiscal 2026 sales were $924.0 million, against $464.2 million.
Six new AI infrastructure customers in Q4: The company won six new AI Infrastructure data center customers in the fourth quarter, four of them neocloud providers. Seventeen new AI Infrastructure customers were added across fiscal 2026.
Non-GAAP operating margin rose: Non-GAAP operating margin was 15.8% in the fourth quarter, up from 13.4% in the third quarter and 11.6% a year earlier. GAAP operating margin was 12.3%.
Operating cash flow negative in Q4: Operating cash flow was negative $163.1 million in the fourth quarter and negative $151.9 million for fiscal 2026, against $109.1 million provided in fiscal 2025. Receivable and inventory increases were the largest changes.
Businesses aligned to data center demand: Management said it prioritized and aligned its AI Infrastructure and Memory businesses with data center demand, and increased investment in product innovation and go-to-market execution.

“The proof is in the results. After relatively flat year-over-year net sales in the first half, growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%.”
Kash Shaikh, president and CEO of Penguin Solutions

Guidance

Area	Period	Figure	Against last quarter
Net sales	Fiscal 2027	approximately $2.43 billion at the midpoint, growth of approximately 40%, plus or minus 10 percentage points	Raised from approximately $2.17 billion at the midpoint (about 30% growth, preliminary)
Diluted EPS (GAAP)	Fiscal 2027	$3.50 +/- $0.70	New
Non-GAAP diluted EPS	Fiscal 2027	$4.45 +/- $0.70	Raised from growth of approximately 30% year over year (preliminary)
Non-GAAP adjustments to diluted EPS	Fiscal 2027	$0.95	New
Gross margin	Fiscal 2027	GAAP 27% +/- 2%; non-GAAP 28% +/- 2%	New
Operating expenses	Fiscal 2027	GAAP $329 million +/- $10 million; non-GAAP $275 million +/- $10 million	New
Diluted shares	Fiscal 2027	63 million	New

What changed from last quarter

Guidance raised: Fiscal 2027 net sales midpoint raised from about $2.17 billion to about $2.43 billion.
Guidance raised: Non-GAAP diluted EPS and net sales expectations raised above the preliminary growth view given on the third-quarter call.
New guidance: Gross margin, operating expense and diluted share figures appear in the fiscal 2027 guidance table; the preliminary view as described covered net sales and non-GAAP diluted EPS only.
New: Stephen Cumming appointed Senior Vice President and Chief Financial Officer, effective immediately. Source
Ended: Aaron Johnson, Interim CFO since July 2026, returns to his role as Vice President of Finance and Accounting. Source
New: Closed a $750 million convertible senior notes offering due 2031, described as oversubscribed, with a 0% coupon.
New: Entered a new supply arrangement with a leading memory supplier to improve supply availability for AI-driven memory demand.

Results and fiscal 2027 guidance

Fourth-quarter sales rose 68%: Net sales were $566.7 million, up from $478.7 million in the third quarter and $337.9 million a year earlier. GAAP operating income was $69.5 million, against $12.4 million a year earlier.
Fiscal 2026 sales rose 26%: Full-year net sales were $1.73 billion, up 26%. GAAP operating income was $166 million, and non-GAAP operating income was $241 million, up 44%.
Growth accelerated in second half: Management said first-half net sales were relatively flat year over year, then grew 48% in the third quarter, 68% in the fourth, and 58% across the second half.
Per-share earnings rose sharply: GAAP diluted EPS was $1.29 in the fourth quarter against $0.11 a year earlier, and non-GAAP diluted EPS was $1.00 against $0.43. Fiscal 2026 GAAP diluted EPS was $2.60.
Large non-operating items in GAAP results: GAAP fourth-quarter net income of $93.2 million included an income tax benefit of $57.6 million and $33.2 million of inducement expense on conversion of the 2029 and 2030 Notes.
Fiscal 2027 net sales guidance raised: Fiscal 2027 net sales midpoint is about $2.43 billion, up from the preliminary $2.17 billion, and non-GAAP diluted EPS midpoint is $4.45.

Segment sales

Integrated Memory led the growth: Integrated Memory net sales were $340.8 million in the fourth quarter, up from $275.1 million in the third quarter and $132.2 million a year earlier. Fiscal 2026 sales were $924.0 million, against $464.2 million.
Advanced Computing rose from third quarter: Advanced Computing net sales were $154.0 million in the fourth quarter, against $137.6 million in the third quarter and $138.3 million a year earlier. Fiscal 2026 sales were $558.8 million, down from $648.4 million.
Optimized LED sales higher than third quarter: Optimized LED net sales were $71.9 million in the fourth quarter, against $66.1 million in the third quarter and $67.4 million a year earlier. Fiscal 2026 sales were $248.7 million, down from $256.1 million.

“Our company performance accelerated significantly in the second half of fiscal 2026 following the launch of our AI Factory Platform and increased focus on the data center market.”
Kash Shaikh, president and CEO of Penguin Solutions

Customers and products

Six new AI infrastructure customers in Q4: The company won six new AI Infrastructure data center customers in the fourth quarter, four of them neocloud providers. Seventeen new AI Infrastructure customers were added across fiscal 2026.
Large multi-year contracts cited: Cited wins include a publicly traded neocloud with over $3 billion in signed multi-year contracts, and a neocloud with $10 billion in contracted compute for a 36,000-GPU AI factory in Norway.
Existing customers expanded purchases: Management described a land-and-expand strategy, under which twelve customers expanded their business with Penguin during fiscal 2026.
ClusterWareAI gained agentic features: ClusterWareAI added self-managing agentic AI capabilities that detect and remediate GPU performance issues across inference environments, building on the AI Factory Operations Agent.

Costs, margins and tax

Gross margin below year-earlier level: Fourth-quarter non-GAAP gross margin was 28.8%, against 28.1% in the third quarter and 30.9% a year earlier. Fiscal 2026 non-GAAP gross margin was 29.3%.
Non-GAAP operating expenses increased: Non-GAAP operating expenses were $73.5 million in the fourth quarter, against $70.4 million in the third quarter and $65.1 million a year earlier. GAAP operating expenses included $4.5 million of restructuring charges.
Non-GAAP operating margin rose: Non-GAAP operating margin was 15.8% in the fourth quarter, up from 13.4% in the third quarter and 11.6% a year earlier. GAAP operating margin was 12.3%.
GAAP tax rate negative in Q4: The GAAP effective tax rate was (153.9)% in the fourth quarter. The non-GAAP effective tax rate was 20.0%, compared with 17.3% in the third quarter.

“We enter fiscal 2027 with strong AI-driven momentum, meaningful operating leverage, and a clear strategy to scale our AI Factory Platform business,”
Kash Shaikh, President and CEO of Penguin Solutions

Demand and supply

CXL memory bookings described as strengthening: The company continued investing in new CXL memory expansion products, which it said support strengthening bookings.
Neocloud demand surge described: Management described a surge in demand from neocloud customers for the full-stack AI Factory Platform, which the company said drove its fourth-quarter wins.
New supplier arrangements added: The company added a supplier relationship to improve component availability and a memory supply arrangement to improve supply availability for data center memory demand.

Cash flow, balance sheet and capital

Operating cash flow negative in Q4: Operating cash flow was negative $163.1 million in the fourth quarter and negative $151.9 million for fiscal 2026, against $109.1 million provided in fiscal 2025. Receivable and inventory increases were the largest changes.
Receivables and inventories increased: Inventories were $748.8 million and receivables $796.3 million at August 28, 2026, up from $255.2 million and $307.9 million a year earlier. Cash was $647.2 million.
Capped calls and debt repayments in Q4: The company paid $49.1 million net for capped calls, repaid $295.5 million of debt and $100 million on its line of credit, and paid $14.8 million of debt issuance costs in the quarter.
Share purchases increased in fiscal 2026: Payments to acquire common stock were $74.4 million in fiscal 2026, against $52.3 million in fiscal 2025, and $5.5 million in the fourth quarter.
Equity investment sales in fiscal 2026: Proceeds from disposition of equity investments were $71.8 million in fiscal 2026, including $39.6 million in the third quarter. The company recorded a $30.9 million gain on disposition for the year.

Strategy and investment

Businesses aligned to data center demand: Management said it prioritized and aligned its AI Infrastructure and Memory businesses with data center demand, and increased investment in product innovation and go-to-market execution.
Plan to scale AI Factory Platform: Management stated a plan to scale the AI Factory Platform business, with operating leverage, and to translate growth into sustainable earnings and cash flow. Source

Leadership change

New CFO has public-company background: Cumming was previously CFO of Edgio, Cambium Networks, Kenandy and Atmel, and spent 21 years in the semiconductor industry at Atmel, Fairchild and National Semiconductor. Source
Management cites CFO's discipline: Management said the new CFO's public-company experience and operational rigor will strengthen the executive team in driving disciplined execution. Source

Figures management reported

Figure	Reported
Gross margin	GAAP 27.5% and non-GAAP 28.8% in the fourth quarter

Risks management discussed

Operational: Component and memory supply availability was discussed, and the company added supplier arrangements to address it.

Earlier plans management reported on

Ahead: Management said the updated fiscal 2027 guidance exceeds the preliminary view given on the third-quarter call.
Not stated: The company said the new ClusterWareAI capabilities build on the agent it introduced in the prior quarter.

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Penguin Solutions Appoints Stephen Cumming as Senior Vice President and Chief Financial Officer to Support Accelerated Growth

Penguin separately reports fourth quarter and fiscal 2026 results with multiple company records and raises full year fiscal 2027 outlook

FREMONT, Calif. - October 6, 2026 - Penguin Solutions, Inc. (“Penguin Solutions,” “Penguin,” or the “Company”) (Nasdaq: PENG), the AI Factory Platform Company, today announced the appointment of Stephen Cumming as Senior Vice President and Chief Financial Officer, effective immediately.

“We enter fiscal 2027 with strong AI-driven momentum, meaningful operating leverage, and a clear strategy to scale our AI Factory Platform business,” said Kash Shaikh, President and CEO of Penguin Solutions. “We are pleased to welcome Stephen at this exciting time for Penguin. Stephen’s extensive public-company experience and track record of operational rigor will strengthen our executive leadership team as we drive disciplined execution, pursue durable, profitable growth and remain obsessed with our customers’ success.”

Cumming is an experienced public company executive with a track record of financial leadership across public and private companies in the infrastructure systems, software, services, and semiconductor industries, most recently serving as the Chief Financial Officer of Edgio. Cumming has served as CFO of multiple public companies and brings deep expertise in operational scaling, financial strategy, and investor relations.

“I am excited to join Penguin Solutions at this important stage in its growth,” said Cumming. “The Company has built a differentiated position at the intersection of data center AI infrastructure and memory, with a significant opportunity ahead as customers scale production AI. I look forward to partnering with Kash and the team as we aim to execute on this opportunity, scale the business efficiently with strong financial discipline, and help translate growth into sustainable earnings, cash flow, and long-term shareholder value.”

Prior to Edgio, Cumming served as Chief Financial Officer of Cambium Networks, a global provider of networking solutions, where he successfully led the company through its initial public offering in 2019. He previously served as Chief Financial Officer of Kenandy, Inc., a cloud-based enterprise software company. He also spent 21 years in the semiconductor industry, serving as Chief Financial Officer of Atmel Corporation, and holding senior finance leadership roles at Fairchild Semiconductor and National Semiconductor. He received his Bachelor of Science in Business from the University of Surrey and is a UK Chartered Management Accountant. With Cumming’s appointment, Aaron Johnson, who has served as Interim CFO since July 2026, will return to his role as Vice President of Finance and Accounting.

Fourth Quarter and Fiscal Year 2026 Conference Call and Webcast Information

In a separate release today, Penguin Solutions reported its fourth quarter and full year fiscal 2026 financial results. Management will host a conference call and webcast today, October 6, 2026, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time).

Interested parties may access the call by registering online, after which they will receive dial-in information as well as a conference ID. The live webcast will also be available on the Penguin Solutions investor relations website, along with the related earnings press release and slide presentation.

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 Penguin Solutions’ business momentum and market position; statements regarding the expected contributions of executive leadership appointments; statements regarding AI-related demand, customer pipeline, market opportunities, industry trends and product performance; statements regarding the Company’s strategy to scale its AI Factory Platform business, operating leverage, and ability to translate growth into sustainable earnings, cash flow, and shareholder value; and statements regarding the business and financial outlook for fiscal year 2027.

Forward-looking statements notice

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, disruptions at our suppliers, 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 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; failure to achieve the intended benefits of the sale of Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda. (formerly SMART Modular Technologies do Brasil - Indústria e Comércio de Componentes Ltda.) and its business; 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.

About Penguin Solutions

Penguin Solutions is the AI Factory Platform Company. We design, build, and manage next-generation data centers for enterprises, sovereign AI initiatives, and neocloud providers.

With deep design expertise at the intersection of data center AI infrastructure and memory solutions, our Full-Stack AI Factory Platform combines differentiated infrastructure software, advanced memory, compute systems, end-to-end services, and industry-leading partner technologies to help customers accelerate deployment, optimize token economics, and maximize the return on their AI investments.

Learn more at PenguinSolutions.com.

Lerin O’Neill

Penguin Solutions

Corporate Communications pr@penguinsolutions.com

Lana Adair

Investor Relations ir@penguinsolutions.com