Q4 and full-year fiscal 2026
Filed Oct 6, 2026Record fourth-quarter and full-year results driven by AI-related data-center demand; fiscal 2027 outlook raised.
Fourth-quarter net sales grew 68% year over year to $566,685 thousand, GAAP operating income grew 458% to $69,462 thousand, and fiscal 2027 guidance calls for 40% YoY Growth +/-10% in net sales and non-GAAP diluted EPS of $4.45 +/- $0.70.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q4 fiscal 2026 total net salesGAAP | $566.7M | – | 68% |
| Q4 fiscal 2026 cost of salesGAAP | $410.8M | – | – |
| Q4 fiscal 2026 gross profitGAAP | $155.9M | – | – |
| Q4 fiscal 2026 gross marginGAAP | 27.5 % | – | – |
| Q4 fiscal 2026 gross profitnon-GAAP | $163.3M | – | – |
| Q4 fiscal 2026 gross marginnon-GAAP | 28.8 % | – | – |
| Q4 fiscal 2026 research and development expenseGAAP | $22.02M | – | – |
| Q4 fiscal 2026 selling, general and administrative expenseGAAP | $59.93M | – | – |
| Q4 fiscal 2026 total operating expensesGAAP | $86.44M | – | – |
| Q4 fiscal 2026 operating expensesnon-GAAP | $73.48M | – | – |
| Q4 fiscal 2026 operating incomeGAAP | $69.46M | – | 458% |
| Q4 fiscal 2026 operating marginGAAP | 12.3 % | – | – |
| Q4 fiscal 2026 operating incomenon-GAAP | $89.80M | – | 129% |
| Q4 fiscal 2026 operating marginnon-GAAP | 15.8 % | – | – |
| Q4 fiscal 2026 net income attributable to Penguin SolutionsGAAP | $93.20M | – | 888% |
| Q4 fiscal 2026 net income attributable to Penguin Solutionsnon-GAAP | $71.44M | – | – |
| Q4 fiscal 2026 diluted earnings per shareGAAP | $1.29 | – | 1,073% |
| Q4 fiscal 2026 diluted earnings per sharenon-GAAP | $1.00 | – | 133% |
| Q4 fiscal 2026 effective tax rateGAAP | (153.9) % | – | – |
| Q4 fiscal 2026 effective tax ratenon-GAAP | 20.0 % | – | – |
| Q4 fiscal 2026 adjusted EBITDAnon-GAAP | $93.27M | – | 115% |
| Q4 fiscal 2026 net cash provided by (used for) operating activitiesGAAP | −$163.1M | – | – |
| Q4 fiscal 2026 capital expenditures and deposits on equipmentGAAP | −$4.27M | – | – |
| Fiscal 2026 total net salesGAAP | $1.73B | – | 26% |
| Fiscal 2026 cost of salesGAAP | $1.25B | – | – |
| Fiscal 2026 gross profitGAAP | $478.9M | – | – |
| Fiscal 2026 gross marginGAAP | 27.7 % | – | – |
| Fiscal 2026 gross profitnon-GAAP | $507.9M | – | – |
| Fiscal 2026 gross marginnon-GAAP | 29.3 % | – | – |
| Fiscal 2026 research and development expenseGAAP | $81.68M | – | – |
| Fiscal 2026 selling, general and administrative expenseGAAP | $220.4M | – | – |
| Fiscal 2026 total operating expensesGAAP | $313.3M | – | – |
| Fiscal 2026 operating expensesnon-GAAP | $266.9M | – | – |
| Fiscal 2026 operating incomeGAAP | $165.6M | – | 185% |
| Fiscal 2026 operating marginGAAP | 9.6 % | – | – |
| Fiscal 2026 operating incomenon-GAAP | $241.0M | – | 44% |
| Fiscal 2026 operating marginnon-GAAP | 13.9 % | – | – |
| Fiscal 2026 net income attributable to Penguin SolutionsGAAP | $180.6M | – | 611% |
| Fiscal 2026 net income attributable to Penguin Solutionsnon-GAAP | $190.2M | – | – |
| Fiscal 2026 diluted earnings per shareGAAP | $2.60 | – | 829% |
| Fiscal 2026 diluted earnings per sharenon-GAAP | $2.87 | – | 51% |
| Fiscal 2026 effective tax rateGAAP | (22.3) % | – | – |
| Fiscal 2026 effective tax ratenon-GAAP | 20.0 % | – | – |
| Fiscal 2026 adjusted EBITDAnon-GAAP | $256.4M | – | 37% |
| Fiscal 2026 net cash provided by (used for) operating activitiesGAAP | −$151.9M | – | – |
| Fiscal 2026 capital expenditures and deposits on equipmentGAAP | −$11.57M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Q4 fiscal 2026 Advanced ComputingAI Infrastructure data center customer wins and deployments. | $154.0M | – | – |
| Q4 fiscal 2026 Integrated MemoryStrong AI-driven data center demand and strengthening bookings for CXL memory expansion products. | $340.8M | – | – |
| Q4 fiscal 2026 Optimized LEDNot separately stated. | $71.86M | – | – |
| Fiscal 2026 Advanced ComputingAI Infrastructure customer additions and expansions. | $558.8M | – | – |
| Fiscal 2026 Integrated MemoryAI-driven memory demand in the data center. | $924.0M | – | – |
| Fiscal 2026 Optimized LEDNot separately stated. | $248.7M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal year 2027 outlook
- Revenue40% YoY Growth +/-10%
- Gross marginGAAP: 27% +/- 2%; non-GAAP: 28% +/- 2%
- Operating expensesGAAP: $329 million +/- $10 million; non-GAAP: $275 million +/- $10 million
- NoteNet sales of approximately $2.43 billion at the midpoint
- NoteGAAP diluted earnings per share: $3.50 +/- $0.70
- NoteNon-GAAP diluted earnings per share: $4.45 +/- $0.70
- NoteDiluted shares: 63 million
- NoteOutlook adjustment to gross margin: 1%
- NoteOutlook adjustments to diluted earnings per share: $0.95
Capital returns
- Payments to acquire common stock: $(5,541) for Q4 fiscal 2026 and $(74,427) for fiscal 2026.
- Payment of preferred stock cash dividends: $(3,133) for Q4 fiscal 2026 and $(12,233) for fiscal 2026.
- Net cash paid for purchase of capped calls: $(49,125) for fiscal 2026.
What drove it
- The company won six new AI Infrastructure data center customers in Q4, including four neocloud providers.
- Across fiscal 2026, Penguin added seventeen new AI Infrastructure customers and twelve customers expanded their business with Penguin.
- A neocloud customer selected Penguin to deploy and operate a 36,000-GPU AI factory in Norway.
- Penguin closed an oversubscribed $750 million convertible senior notes offering due 2031 with a 0% coupon.
- The company established an additional AI Infrastructure supplier relationship and a new supply arrangement with a leading memory supplier.
Concerns
- GAAP gross margin was 27.5 % in Q4 fiscal 2026, compared with 28.6 % in Q4 fiscal 2025.
- Non-GAAP gross margin was 28.8 % in Q4 fiscal 2026, compared with 30.9 % in Q4 fiscal 2025.
- Fiscal 2026 net cash provided by (used for) operating activities was $(151,914), compared with $109,084 in fiscal 2025.
- Accounts receivable increased to $796,264 and inventories increased to $748,785 as of August 28, 2026.
- Q4 fiscal 2026 included $33,248 of inducement expense associated with conversions of the 2029 and 2030 Notes, while income tax (benefit) provision was $(57,595).
What to watch
- Conversion of AI Infrastructure customer wins, including multi-year neocloud engagements, into net sales.
- Execution against fiscal 2027 net sales guidance of approximately $2.43 billion at the midpoint.
- Gross-margin performance against GAAP guidance of 27% +/- 2% and non-GAAP guidance of 28% +/- 2%.
- Operating cash flow and working-capital movements in accounts receivable, inventories, accounts payable and accrued expenses.
- Component availability under the new AI Infrastructure supplier relationship and memory supply arrangement.
Balance sheet and cash flow
- Cash and cash equivalents were $647,208 as of August 28, 2026, versus $453,754 as of August 29, 2025.
- Accounts receivable, net were $796,264 as of August 28, 2026, versus $307,904 as of August 29, 2025.
- Inventories were $748,785 as of August 28, 2026, versus $255,182 as of August 29, 2025.
- Current debt was $53,418 as of August 28, 2026, versus $19,945 as of August 29, 2025.
- Long-term debt was $735,532 as of August 28, 2026, versus $441,893 as of August 29, 2025.
- Proceeds from debt were $750,000 for Q4 fiscal 2026 and fiscal 2026.
- Repayments of debt were $(295,454) for Q4 fiscal 2026 and $(315,454) for fiscal 2026.
- Net cash provided by (used for) financing activities was $337,062 for Q4 fiscal 2026 and $287,278 for fiscal 2026.
Analysis
Penguin Solutions reported record Q4 fiscal 2026 net sales of $566,685, up 68% year over year, following $478,713 in Q3 fiscal 2026. Fiscal 2026 net sales were $1,731,468, up 26% year over year. The quarter was led by Integrated Memory revenue of $340,784, while Advanced Computing contributed $154,039 and Optimized LED contributed $71,862. Management attributed the acceleration to AI-driven data center demand, its AI Factory Platform, and neocloud customer activity.
Profitability increased sharply from the prior-year quarter. GAAP operating income was $69,462, up 458% year over year, and non-GAAP operating income was $89,796, up 129%. GAAP operating margin reached 12.3 % and non-GAAP operating margin reached 15.8 %, compared with 3.7 % and 11.6 %, respectively, in Q4 fiscal 2025. However, GAAP gross margin of 27.5 % and non-GAAP gross margin of 28.8 % were below the 28.6 % and 30.9 % reported in the year-ago quarter.
GAAP net income attributable to Penguin Solutions was $93,204 and GAAP diluted earnings per share was $1.29. Non-GAAP net income attributable to Penguin Solutions was $71,438 and non-GAAP diluted earnings per share was $1.00. The quarter included $33,248 of inducement expense associated with conversions of the 2029 and 2030 Notes and an income tax benefit of $(57,595). Adjusted EBITDA was $93,268, up 115% year over year.
Cash conversion and working capital warrant attention. Q4 net cash provided by (used for) operating activities was $(163,136), and fiscal 2026 operating cash flow was $(151,914), versus $109,084 in fiscal 2025. As of August 28, 2026, accounts receivable were $796,264 and inventories were $748,785. The company closed a $750,000 convertible senior notes offering, repaid $(315,454) of debt during fiscal 2026, and ended the year with $647,208 of cash and cash equivalents.
For fiscal 2027, management raised its outlook to 40% YoY Growth +/-10% in net sales, or approximately $2.43 billion at the midpoint. It expects GAAP diluted earnings per share of $3.50 +/- $0.70 and non-GAAP diluted earnings per share of $4.45 +/- $0.70. The guide calls for GAAP gross margin of 27% +/- 2%, non-GAAP gross margin of 28% +/- 2%, GAAP operating expenses of $329 million +/- $10 million, and non-GAAP operating expenses of $275 million +/- $10 million. The outlook is supported by AI Infrastructure momentum, memory demand, customer expansion, and new supply arrangements.
Management, verbatim
Our company performance accelerated significantly in the second half of fiscal 2026 following the launch of our AI Factory Platform and increased focus on the data center market.
Kash Shaikh, president and CEO of Penguin Solutions
After relatively flat year-over-year net sales in the first half, growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%.
Kash Shaikh, president and CEO of Penguin Solutions
Based on this continued momentum, particularly the strength in AI Infrastructure, we are increasing our fiscal 2027 expectations for both net sales and non-GAAP diluted EPS beyond the preliminary growth view shared during the third-quarter earnings call, as we continue to drive strong operating leverage across the business.
Kash Shaikh, president and CEO of Penguin Solutions
Not in the filing
stated, not guessed- Free cash flow was not reported.
- A per-share common-stock dividend was not reported.
- Fiscal 2027 tax-rate guidance was not reported.
- Segment operating income, segment margin, and segment-specific growth rates were not reported.
- A prior earnings release outlook section was not provided for formal actual-versus-prior-guidance comparison.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.