Highlights

  • Penguin Solutions posted Q1 net sales of USD 343.1 million, up 1% from last year.
  • GAAP EPS declined to 0.04 USD, while non-GAAP EPS remained at 0.49 USD.
  • Company plans to divest remaining 19% stake in Brazil memory business for USD 46.08 million.

Penguin Solutions, Inc. (NASDAQ:PENG) reported total net sales of USD 343.1 million for Q1 fiscal 2026, representing a 1% increase compared to USD 341.1 million in the year-ago quarter. Segment-wise, Advanced Computing generated USD 151.5 million, up from USD 138.3 million in Q4-25 but down from USD 177.4 million in Q1-25. Integrated Memory contributed USD 136.5 million, showing growth from USD 96.7 million in Q1-25, while Optimized LED sales decreased to USD 55.1 million from USD 66.97 million in the same period last year.

Margins and Earnings
The company reported a GAAP gross margin of 28.0%, down 70 basis points compared to Q1 fiscal 2025, and a non-GAAP gross margin of 30.0%, down 80 basis points year-over-year. GAAP diluted EPS stood at 0.04 USD, lower than 0.10 USD in Q1-25. Non-GAAP diluted EPS remained stable at 0.49 USD, consistent with the prior-year quarter.

Operating income under GAAP reached USD 19.6 million, while non-GAAP operating income was USD 41.5 million. Net income attributable to Penguin Solutions was USD 5.3 million on a GAAP basis and USD 32.4 million on a non-GAAP basis.

Divestment of Brazil Memory Business
On December 29, 2025, Penguin Solutions’ indirect subsidiary, SMART Modular Technologies, entered into a Stock Transfer Agreement to sell its remaining 19% stake in Zilia Technologies to Lexar Europe B.V. for USD 46.08 million. Zilia Technologies manufactures standards-based memory modules for electronics devices sold in Brazil. The transaction is expected to close between March 30, 2026, and April 28, 2026, subject to customary closing conditions.

Fiscal 2026 Outlook
For fiscal 2026, Penguin Solutions projects GAAP net sales growth of approximately 6% year-over-year, with GAAP gross margin expected near 27% ±1%. Non-GAAP gross margin is forecasted at 29% ±1%, and diluted non-GAAP EPS is projected at USD 2.00 ±0.25. GAAP diluted EPS is estimated at USD 0.85 ±0.25, reflecting adjustments for stock-based compensation, amortization of acquisition-related intangibles, and other operating and non-operating factors.

Share Performance
PENG was trading at USD 21.55, up by 2.28% on 6 Jan 2025.