Penguin Solutions beats Q3 estimates, raises full-year outlook on AI demand

Penguin Solutions reported Q3 revenue of $479 million and EPS of $0.84, beating consensus estimates by 33 percent.

"The results validate our AI Factory Platform strategy," Kash Shaikh, CEO of Penguin Solutions, said in a statement. "Integrated Memory net sales more than doubled year over year, and our AI Infrastructure business continued to build momentum, reflecting strong demand and execution across our memory and AI Infrastructure portfolio."

Revenue of $479 million topped the $424.09 million consensus estimate and rose 48 percent from $324.3 million a year earlier. Non-GAAP EPS of $0.84 compared with $0.47 in the year-ago quarter and beat the Zacks Consensus Estimate of $0.63. GAAP operating income reached $51 million, up 417 percent from $9.8 million a year ago. Non-GAAP operating income rose 67 percent to $64 million. The company has beaten EPS estimates in six consecutive quarters.

Integrated Memory, the company's largest segment, generated $275 million in revenue, more than double the prior year's $130 million. Advanced Computing contributed $138 million, up from $132 million, while Optimized LED added $66 million versus $62 million a year earlier. Penguin added 16 new Integrated Memory logos over the trailing four quarters, with five customers expanding their business. The AI Infrastructure unit added four new logos in Q3 alone, with 13 new logos added over the trailing year and seven expanding their relationships.

Penguin raised its full-year fiscal 2026 outlook, now expecting net sales growth of 22 percent plus or minus 2 percent, up from a prior forecast of 12 percent growth. The company guided for non-GAAP EPS of $2.60 plus or minus 5 cents, compared with the previous $2.15 midpoint. GAAP EPS is expected at $1.97 plus or minus 5 cents. The company also highlighted two industry recognitions: being named Dell Technologies Global Alliances Americas AI Partner of the Year and becoming an NVIDIA AI Factory Specialized Partner. Penguin expanded its ClusterWareAI operating system with a new AI Factory Operations Agent that uses natural language queries for cluster management.

The guidance raise shows management expects AI-driven demand for memory and AI infrastructure to continue accelerating. Shares fell 6.96 percent to $63.00 ahead of the release; investors will watch the post-earnings call for updated margin commentary and segment-level guidance.

This article is for informational purposes only and does not constitute investment advice.