Penguin Solutions Inc. reported fiscal 2026 second‑quarter revenue of $343 million, a 6% decline from the $365.5 million earned in the same period a year earlier. The decline was driven by a 42% year‑over‑year drop in Advanced Computing sales, which fell to $116 million, while Integrated Memory grew 63% to $172 million, offsetting the weakness in the legacy segment.
Non‑GAAP earnings per share reached $0.52, beating the consensus estimate of $0.43 by $0.09, or 20.9%. GAAP EPS was $0.58, up from $0.09 a year earlier. Non‑GAAP gross margin expanded to 31.2% from 30.8% YoY, while GAAP gross margin contracted to 27.3% from 28.6% a year earlier, reflecting a mix shift toward higher‑margin memory products and a reduction in lower‑margin Advanced Computing revenue.
Management highlighted that the company’s transition to an AI‑infrastructure model is gaining traction. CEO Kash Shaikh said, "Enterprises, governments, and neocloud providers are racing to build AI factories, as platforms scale to power the next generation of inference workloads." CFO Nate Olmstead noted, "We currently project lower gross margins in the second half, driven by a higher mix of lower‑margin AI hardware and memory sales, rising memory costs in our AI factory solutions and less tariff cost recovery in LED." The company also added five new AI/HPC customers, including a Tier One financial institution deploying its MemoryAI™ CXL‑based KV cache server.
Penguin Solutions raised its full‑year revenue guidance to a 12% net sales growth at the midpoint, up from the prior 6% outlook, and lifted adjusted EPS guidance to $2.15 at the midpoint, compared with the previous $2.00 guidance. The guidance increase reflects strong demand for memory products, favorable pricing dynamics, and a diversified customer mix across enterprise, neocloud, and sovereign markets.
Investors reacted positively to the results, citing the raised guidance, the robust growth in Integrated Memory, and the EPS beat. The company’s ability to maintain profitability amid a revenue decline and to strengthen its AI‑infrastructure positioning signals confidence in its strategic pivot and long‑term growth prospects.
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