PENG Filings — Penguin Solutions, Inc. - FilingSpy
PENG
Penguin Solutions, Inc.
A technology company spanning AI and high-performance computing, specialty memory, and LED chips. Its Penguin name comes from Penguin Computing, an early supercomputing firm it bought, and it rebranded from SMART Global Holdings in 2024. It also owns the Cree LED brand, whose founders helped create the world's first commercially viable blue LED back in 1989 — a milestone behind today's white LED lighting.
Q3 FY2026 revenue rose 47.6% to $478.7M as Integrated Memory more than doubled on AI demand
Integrated Memory more than doubled and carried the quarter. rose 47.6% to $478.7M while fell to 27.8% from 29.3% as the Penguin Edge wind-down and lower-margin memory mix weighed, and rose 98.0% to $50.9M. The company is growing on AI-driven memory demand but is absorbing a margin shift and a -driven cash drop.
Key takeaways
Integrated Memory more than doubled to $275.1M, driving total revenue up 47.6% to $478.7M and up 39.6% from Q2's $343.0M, on AI-driven DRAM and Flash pricing and volume.
declined to 27.8% from 29.3% a year earlier, caused by the Penguin Edge wind-down and a business mix shift toward lower-margin Integrated Memory.
rose 98.0% to $50.9M and widened 3.1 points to 10.6%, while rose to $44.7M from $7.9M a year earlier.
Section summaries
Management's Discussion and Analysis
Integrated Memory drove 48% Q3 sales growth on AI demand, while Advanced Computing margins fell on mix shift and Penguin Edge wind-down.
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Total Q3 rose 47.6% to $478.7M, led by Integrated Memory which more than doubled to $275.1M on AI-driven DRAM and Flash pricing and volume.
Advanced Computing sales grew 3.8% to $137.6M as non-hyperscale AI strength offset the Penguin Edge wind-down; nine-month sales fell 20.6% on absent hyperscale deals.
fell to $11.2M as a $396M increase and $243M more than offset ; $150M became currently convertible.
rose 67% to $64.4M, with Integrated Memory up $49.7M and Advanced Computing swinging to a $1.9M loss on the Edge exit.
What changed
The remaining $4.7M Penguin Edge expected by end of calendar 2025 is not reported as a Q3 charge; the business wind-down continued to pressure to 27.8%.
Advanced Computing Q3 sales grew 3.8% to $137.6M, reversing the Q2 FY2026 42.2% decline and indicating the prior drop was tied to the Penguin Edge exit and non-recurring hyperscale sales rather than a cycle moderation.
Integrated Memory rose to $275.1M, accelerating from the 63.1% Q2 increase and confirming the DRAM/Flash gain held rather than cycling down.
Optimized LED was not separately quantified this quarter after the Q2 7.4% decline; tariff and demand weakness flagged in prior filings was not updated as a new factor.
fell 33.4% to $294.8M from Q2 and 53.9% after the FY2025 refinancing, lowering interest exposure versus the $441.9M year-end level.
What to watch
Q4 FY2026 Integrated Memory to see if the more-than-double Q3 level cycles down on DRAM supply or pricing.
Q4 as the $396M increase and $243M unwind or build further.
Whether the $150M currently are converted and funded from the $440.3M cash or $400M .
Q4 as the Penguin Edge wind-down completes and Integrated Memory mix pressure continues.
Advanced Computing Q3 sales grew 3.8% to $137.6M as non-hyperscale AI strength offset the Penguin Edge wind-down; nine-month sales fell 20.6% on absent hyperscale deals.
Overall declined to 27.8% from 29.3% due to the Penguin Edge wind-down and a shift in business mix toward lower-margin Integrated Memory.
rose 67% to $64.4M, with Integrated Memory up $49.7M, while Advanced Computing swung to a $1.9M loss on the Edge exit.
fell to $11.2M as a $396M increase in and $243M build more than offset , while $150M in convertible notes became currently convertible.
The company expects to fund operations and any note conversions with $440.3M cash, , and its $400M .
Quantitative and Qualitative Disclosures About Market Risk
Primary market risks are foreign exchange from global operations and interest rate exposure on variable-rate debt.
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A stronger U.S. dollar makes products relatively more expensive abroad, potentially reducing international sales and profitability.
Most customer pricing and material costs are U.S.-dollar based, so currency fluctuations mainly affect non-material cost of sales and operating expenses.
A 10% adverse currency move against the U.S. dollar would cause a $3.7 million non-operating loss on foreign-currency as of May 29, 2026.
The company has $100.0 million outstanding under its variable-rate ; a 1.0% rate increase would raise annual and reduce cash flows by $4.0 million if the full $400.0 million commitment were drawn.
Cash equivalents and short-duration fixed-income securities carry minimal fair-value sensitivity to interest rate changes due to their short-term nature.
For a discussion of legal proceedings, see “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Commitments and Contingencies” and “Item 1A. Risk Factors.”
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For a discussion of legal proceedings, see “PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Commitments and Contingencies” and “Item 1A. Risk Factors.”
There have been no material changes to the risks described in “PART I – Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended August 29, 2025 (the “2025 Annual Report”). You should carefully consider the risks and uncertainties and the other informat…
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There have been no material changes to the risks described in “PART I – Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended August 29, 2025 (the “2025 Annual Report”). You should carefully consider the risks and uncertainties and the other information in our 2025 Annual Report and in this Quarterly Report, including “PART I. Financial Information – Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occur and, as a result, the market price of our common stock could decline and you could lose all or part of your investment.
This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” for additional information. Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including the risks facing our Company described in our 2025 Annual Report.