Enhanced EPS Outlook for Penguin Solutions: Anticipated at $1.80, Boosted by AI Infrastructure Progress; Maintains 17% Revenue Growth Objective
In a recent financial update, Penguin Solutions, Inc. (PENG) has reported its Q3 2025 performance, showcasing a mixed picture of growth and missed targets.
The technology giant, led by CEO Mark W. Adams, recorded a revenue of $324 million for Q3 2025, marking a 7.9% year-over-year increase compared to the same quarter last year. However, this figure fell short of analysts’ consensus estimate of $330.79 million.
The company's gross margins also saw a slight decrease. GAAP gross margin stood at 29.3%, down 30 basis points from the prior-year quarter, while non-GAAP gross margin was 31.7%, a decrease of 60 basis points year-over-year.
Despite the dip in gross margins, Penguin Solutions managed to deliver strong earnings. GAAP diluted EPS came in at -$0.01, a significant contrast to the $0.10 in the year-ago quarter. On the other hand, non-GAAP (adjusted) diluted EPS soared to $0.47, a notable 25–27% increase year-over-year and above the analyst consensus of $0.33.
Breaking down the revenue by segment, Advanced Computing contributed $132.5 million, Integrated Memory brought in $130.1 million, and Optimized LED generated $61.6 million.
Looking ahead, Penguin Solutions has maintained its guidance for 17% year-over-year revenue growth (±2%) and an adjusted EPS of $1.80 (±$0.05) for fiscal year 2025.
Management expressed ongoing focus on AI software and services capabilities, while also highlighting a strong non-GAAP performance underlying the reported GAAP negatives, largely due to significant one-time accounting adjustments.
In summary, Penguin Solutions, Inc. posted a mixed quarter, with earnings per share exceeding expectations but revenue falling short of consensus. The company's management remains optimistic, emphasizing their commitment to driving growth and innovation in the technology sector.
Mark W. Adams, the CEO of Penguin Solutions, Inc., is spearheading efforts to invest in artificial-intelligence software and services, indicating a strategic focus on technology within the company. Despite a decrease in gross margins quarter-over-quarter, the company's non-GAAP earnings have significantly increased, showcasing strength in the finance sector.
