PENG · Penguin Solutions, Inc.

Penguin Solutions reported a mixed second quarter for fiscal 2026, characterized by a significant divergence in segment performance. While total net sales declined 6% year-over-year to $343 million, the composition of revenue shifted materially. The Integrated Memory segment surged 63% year-over-year to $171.6 million, driven by strong demand for AI inference workloads. Conversely, the Advanced Computing segment faced headwinds, declining approximately 42% year-over-year to $115.7 million. This shift in mix, favoring the memory business, supported a 40 basis point expansion in Non-GAAP gross margin to 31.2%, despite a 130 basis point contraction in GAAP gross margin. GAAP net income rose substantially to $37.5 million, or $0.58 per diluted share, compared to $8.1 million, or $0.09 per share, in the prior year quarter. Non-GAAP diluted EPS remained flat year-over-year at $0.52. CEO Kash Shaikh highlighted the expanding AI/HPC pipeline and the addition of five new customers, including a Tier One financial institution deploying the company's MemoryAI CXL-based KV cache server. Reflecting confidence in memory demand and execution, management raised its full-year fiscal 2026 outlook. The company now guides for 12% year-over-year net sales growth, up from the previous 6% outlook, and lifted Non-GAAP diluted EPS guidance to $2.15 from $2.00. GAAP EPS guidance was also raised to $1.30 from $0.85.