Revenue up by 24% vs. Q1 FY24, highlighted by
49% growth in Advanced Computing
Penguin Solutions, Inc. (“Penguin Solutions,” “we,” “us,” or the
“Company”) (Nasdaq: PENG) today reported financial results for the
first quarter of fiscal 2025.
First Quarter Fiscal 2025 Highlights
- Net sales of $341 million, up 24.4% versus the year-ago
quarter
- GAAP gross margin of 28.7%, down 150 basis points versus the
year-ago quarter
- Non-GAAP gross margin of 30.8%, down 250 basis points versus
the year-ago quarter
- GAAP diluted EPS of $0.10 versus $(0.23) in the year-ago
quarter
- Non-GAAP diluted EPS of $0.49 versus $0.24 in the year-ago
quarter
“Our strong performance this quarter, highlighted by a 49%
year-over-year increase in Advanced Computing revenue, reflects the
continued execution of our strategy to support customers navigating
the complexities of AI infrastructure implementation,” said Mark
Adams, CEO of Penguin Solutions. “Our approach as a provider of
differentiated hardware, software and managed services enables us
to serve as a trusted advisor for our large enterprise customers.
Based on our positive start to the year, we are pleased to affirm
our outlook for the full fiscal year,” concluded Adams.
Quarterly Financial Results
GAAP (1)
Non-GAAP (2)
(in thousands, except per share
amounts)
Q1 FY25
Q4 FY24
Q1 FY24
Q1 FY25
Q4 FY24
Q1 FY24
Net sales:
Advanced Computing
$
177,426
$
149,355
$
118,824
$
177,426
$
149,355
$
118,824
Integrated Memory
96,706
95,832
85,668
96,706
95,832
85,668
Optimized LED
66,970
65,961
69,755
66,970
65,961
69,755
Total net sales
$
341,102
$
311,148
$
274,247
$
341,102
$
311,148
$
274,247
Gross profit
$
97,812
$
87,086
$
82,850
$
105,122
$
96,007
$
91,277
Operating income
17,356
8,791
1,305
40,918
33,739
26,679
Net income (loss) attributable to Penguin
Solutions
5,217
(24,547
)
(11,773
)
26,518
20,007
12,538
Diluted earnings (loss) per share
$
0.10
$
(0.46
)
$
(0.23
)
$
0.49
$
0.37
$
0.24
(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 is included within this press release.
Business Outlook
As of January 8, 2025, Penguin Solutions is providing the
following financial outlook for fiscal year 2025:
GAAP Outlook
Adjustments
Non-GAAP
Outlook
Net sales
15% YoY Growth +/- 5%
—
15% YoY Growth +/- 5%
Gross margin
30% +/- 1%
2%
(A)
32% +/- 1%
Operating expenses
$335 million +/- $15 million
($60) million
(B)(C)
$275 million +/- $15 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
First Quarter Fiscal 2025 Earnings Conference Call and
Webcast Details
Penguin Solutions will hold a conference call and webcast to
discuss the first quarter of fiscal 2025 results and related
matters today, January 8, 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 +1-929-526-1599
from international locations, using the access code 213238. The
earnings presentation and a live webcast of the conference call can
be accessed from the Company’s investor relations website
(https://ir.penguinsolutions.com/investors/default.aspx) where they
will remain available for approximately one year.
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; and statements
regarding the business and financial outlook for the next fiscal
year 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 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 rebranding and related
strategy, any 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; 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; 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
November 29,
2024
August 30, 2024
December 1,
2023
Net sales:
Advanced Computing
$
177,426
$
149,355
$
118,824
Integrated Memory
96,706
95,832
85,668
Optimized LED
66,970
65,961
69,755
Total net sales
341,102
311,148
274,247
Cost of sales
243,290
224,062
191,397
Gross profit
97,812
87,086
82,850
Operating expenses:
Research and development
19,811
19,941
21,389
Selling, general and administrative
60,536
58,029
57,217
Other operating (income) expense
109
325
2,939
Total operating expenses
80,456
78,295
81,545
Operating income (loss)
17,356
8,791
1,305
Non-operating (income) expense:
Interest expense, net
4,396
5,403
9,559
Other non-operating (income) expense
636
20,971
(576
)
Total non-operating (income) expense
5,032
26,374
8,983
Income (loss) before taxes
12,324
(17,583
)
(7,678
)
Income tax provision
6,360
6,209
3,534
Net income (loss) from continuing
operations
5,964
(23,792
)
(11,212
)
Net loss from discontinued operations
—
—
(8,148
)
Net income (loss)
5,964
(23,792
)
(19,360
)
Net income attributable to noncontrolling
interest
747
755
561
Net income (loss) attributable to Penguin
Solutions
$
5,217
$
(24,547
)
$
(19,921
)
Basic earnings (loss) per share:
Continuing operations
$
0.10
$
(0.46
)
$
(0.23
)
Discontinued operations
—
—
(0.15
)
$
0.10
$
(0.46
)
$
(0.38
)
Diluted earnings (loss) per share:
Continuing operations
$
0.10
$
(0.46
)
$
(0.23
)
Discontinued operations
—
—
(0.15
)
$
0.10
$
(0.46
)
$
(0.38
)
Shares used in per share calculations:
Basic
53,482
53,071
52,068
Diluted
54,312
53,071
52,068
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP
Measures
(In thousands, except percentages)
(Unaudited)
Three Months Ended
November 29,
2024
August 30, 2024
December 1,
2023
GAAP gross profit
$
97,812
$
87,086
$
82,850
Share-based compensation expense
1,643
1,847
1,815
Amortization of acquisition-related
intangibles
5,909
5,909
5,944
Cost of sales-related restructuring
(42
)
865
668
Other
(200
)
300
—
Non-GAAP gross profit
$
105,122
$
96,007
$
91,277
GAAP gross margin
28.7
%
28.0
%
30.2
%
Effect of adjustments
2.1
%
2.9
%
3.1
%
Non-GAAP gross margin
30.8
%
30.9
%
33.3
%
GAAP operating expenses
$
80,456
$
78,295
$
81,545
Share-based compensation expense
(9,888
)
(8,512
)
(9,155
)
Amortization of acquisition-related
intangibles
(3,846
)
(3,838
)
(4,064
)
Diligence, acquisition and integration
expense
(833
)
(2,094
)
(789
)
Restructuring charges
(109
)
(325
)
(2,939
)
Other
(1,576
)
(1,258
)
—
Non-GAAP operating expenses
$
64,204
$
62,268
$
64,598
GAAP operating income
$
17,356
$
8,791
$
1,305
Share-based compensation expense
11,531
10,359
10,970
Amortization of acquisition-related
intangibles
9,755
9,747
10,008
Cost of sales-related restructuring
(42
)
865
668
Diligence, acquisition and integration
expense
833
2,094
789
Restructuring charges
109
325
2,939
Other
1,376
1,558
—
Non-GAAP operating income
$
40,918
$
33,739
$
26,679
Penguin Solutions, Inc.
Reconciliation of GAAP to Non-GAAP
Measures
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended
November 29,
2024
August 30, 2024
December 1,
2023
GAAP net income (loss) attributable to
Penguin Solutions
$
5,217
$
(24,547
)
$
(11,773
)
Share-based compensation expense
11,531
10,359
10,970
Amortization of acquisition-related
intangibles
9,755
9,747
10,008
Cost of sales-related restructuring
(42
)
865
668
Diligence, acquisition and integration
expense
833
2,094
789
Restructuring charges
109
325
2,939
Amortization of debt issuance costs
953
897
1,042
Loss (gain) on extinguishment or
prepayment of debt
—
21,646
—
Foreign currency (gains) losses
1,028
(1,072
)
(546
)
Other
1,376
1,558
—
Income tax effects
(4,242
)
(1,865
)
(1,559
)
Non-GAAP net income attributable to
Penguin Solutions
$
26,518
$
20,007
$
12,538
Weighted-average shares outstanding -
Diluted:
GAAP weighted-average shares
outstanding
54,312
53,071
52,068
Adjustment for dilutive securities and
capped calls
—
1,434
1,213
Non-GAAP weighted-average shares
outstanding
54,312
54,505
53,281
Diluted earnings (loss) per share from
continuing operations:
GAAP diluted earnings (loss) per share
$
0.10
$
(0.46
)
$
(0.23
)
Effect of adjustments
0.39
0.83
0.47
Non-GAAP diluted earnings per share
$
0.49
$
0.37
$
0.24
Net income (loss) attributable to
Penguin Solutions
$
5,217
$
(24,547
)
$
(11,773
)
Interest expense, net
4,396
5,403
9,559
Income tax provision (benefit)
6,360
6,209
3,534
Depreciation expense and amortization of
intangible assets
14,961
15,381
17,654
Share-based compensation expense
11,531
10,359
10,970
Cost of sales-related restructuring
(42
)
865
668
Diligence, acquisition and integration
expense
833
2,094
789
Restructuring charges
109
325
2,939
Loss on extinguishment of debt
—
21,646
—
Other
1,376
1,558
—
Adjusted EBITDA
$
44,741
$
39,293
$
34,340
Penguin Solutions, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of
November 29,
2024
August 30, 2024
Assets
Cash and cash equivalents
$
370,295
$
383,147
Short-term investments
23,430
6,337
Accounts receivable, net
275,629
251,743
Inventories
246,952
151,213
Other current assets
79,273
75,264
Total current assets
995,579
867,704
Property and equipment, net
100,239
106,548
Operating lease right-of-use assets
58,317
60,349
Intangible assets, net
111,926
121,454
Goodwill
161,958
161,958
Deferred tax assets
84,934
85,078
Other noncurrent assets
70,062
71,415
Total assets
$
1,583,015
$
1,474,506
Liabilities and Equity
Accounts payable and accrued expenses
$
284,636
$
219,090
Deferred revenue
41,326
63,954
Other current liabilities
100,924
44,552
Total current liabilities
426,886
327,596
Long-term debt
658,070
657,347
Noncurrent operating lease liabilities
58,611
60,542
Other noncurrent liabilities
30,499
29,813
Total liabilities
1,174,066
1,075,298
Commitments and contingencies
Penguin Solutions shareholders’
equity:
Preferred shares
—
—
Ordinary shares
1,832
1,807
Additional paid-in capital
528,201
513,335
Retained earnings
35,202
29,985
Treasury shares
(164,879
)
(153,756
)
Accumulated other comprehensive income
(loss)
19
10
Total Penguin Solutions shareholders’
equity
400,375
391,381
Noncontrolling interest in subsidiary
8,574
7,827
Total equity
408,949
399,208
Total liabilities and equity
$
1,583,015
$
1,474,506
Penguin Solutions, Inc.
Consolidated Statements of Cash
Flows
(In thousands)
(Unaudited)
Three Months Ended
November 29,
2024
August 30, 2024
December 1,
2023
Cash flows from operating
activities
Net income (loss)
$
5,964
$
(23,792
)
$
(19,360
)
Net loss from discontinued operations
—
—
(8,148
)
Net income (loss) from continuing
operations
5,964
(23,792
)
(11,212
)
Adjustments to reconcile net income (loss)
from continuing operations to cash provided by (used for) operating
activities
Depreciation expense and amortization of
intangible assets
14,961
15,381
17,654
Amortization of debt issuance costs
953
897
1,042
Share-based compensation expense
11,531
10,359
10,970
Loss on extinguishment or prepayment of
debt
—
21,646
—
Deferred income taxes, net
211
(7,396
)
(282
)
Other
(712
)
83
664
Changes in operating assets and
liabilities:
Accounts receivable
(23,885
)
(39,901
)
48,658
Inventories
(93,380
)
26,086
(33,464
)
Other assets
705
14,801
2,102
Accounts payable and accrued expenses and
other liabilities
97,471
(30,320
)
23,581
Net cash provided by (used for) operating
activities from continuing operations
13,819
(12,156
)
59,713
Net cash used for operating activities
from discontinued operations
—
—
(28,235
)
Net cash provided by (used for) operating
activities
13,819
(12,156
)
31,478
Cash flows from investing
activities
Capital expenditures and deposits on
equipment
(1,836
)
(5,795
)
(4,648
)
Proceeds from maturities of investment
securities
3,780
7,525
9,665
Purchases of held-to-maturity investment
securities
(20,723
)
—
(8,469
)
Purchases of non-marketable
investments
—
(10,000
)
—
Other
(143
)
(8
)
(188
)
Net cash used for investing activities
from continuing operations
(18,922
)
(8,278
)
(3,640
)
Net cash provided by investing activities
from discontinued operations
—
—
118,938
Net cash provided by (used for) investing
activities
$
(18,922
)
$
(8,278
)
$
115,298
Penguin Solutions, Inc.
Consolidated Statements of Cash Flows,
Continued
(In thousands)
(Unaudited)
Three Months Ended
November 29,
2024
August 30, 2024
December 1,
2023
Cash flows from financing
activities
Repayments of debt
$
—
$
(224,703
)
$
(14,423
)
Payments to acquire ordinary shares
(11,123
)
(3,318
)
(13,130
)
Net cash paid for settlement and purchase
of capped calls
—
(16,300
)
—
Distribution to noncontrolling
interest
—
—
(1,470
)
Proceeds from debt
—
192,694
—
Proceeds from issuance of ordinary
shares
3,360
1,745
3,455
Other
—
2
(582
)
Net cash used for financing activities
from continuing operations
(7,763
)
(49,880
)
(26,150
)
Net cash used for financing activities
from discontinued operations
—
—
(606
)
Net cash used for financing activities
(7,763
)
(49,880
)
(26,756
)
Effect of changes in currency exchange
rates
—
—
(1,025
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(12,866
)
(70,314
)
118,995
Cash, cash equivalents and restricted cash
at beginning of period
383,477
453,791
410,064
Cash, cash equivalents and restricted cash
at end of period
$
370,611
$
383,477
$
529,059
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250108278908/en/
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
Pengiun Solutions (NASDAQ:PENG)
Graphique Historique de l'Action
De Déc 2024 à Jan 2025
Pengiun Solutions (NASDAQ:PENG)
Graphique Historique de l'Action
De Jan 2024 à Jan 2025
