Penguin Solutions Posts Profit But Forecasts Slower Growth Ahead

• Quarterly Turnaround: The AI infrastructure company Penguin Solutions (PENG) reported a profit of $9.4 million (11 cents per share) in its fiscal fourth quarter, compared to a loss of $24.5 million (46 cents per share) the previous year.
• Earnings Beat Expectations: Adjusted earnings per share came in at 43 cents, surpassing analyst forecasts of 37 cents for the quarter.
• Revenue Miss: Fourth quarter sales reached $337.9 million, up 9% year-over-year but falling short of the $342.1 million analysts expected.
• Full Year Success: Fiscal 2025 revenue grew 17% compared to the prior year, showing strong annual momentum.

Fiscal 2026 Outlook Concerns

• Slower Growth Ahead: The company projects sales growth of approximately 6% (plus or minus 10%) for fiscal 2026, significantly below the 17% growth achieved in fiscal 2025.
• Revenue Guidance Below Estimates: Analysts had anticipated $1.51 billion in sales (about 10% growth), making the 6% forecast disappointing.
• Earnings Projection: Penguin expects adjusted earnings of $2.00 per share (plus or minus 25 cents), below analyst expectations of $2.12.

Market Reaction

• Stock Decline: Shares dropped 19.5% to $21.73 in pre-market trading following the guidance announcement.
• Year-to-Date Performance: Despite this decline, the stock remains up 41% for the year.
• CEO Commentary: Mark Adams emphasized the company's position as an emerging leader in enterprise AI implementations and infrastructure solutions.