Penguin Solutions, Inc. (NASDAQ: PENG)

Penguin Solutions, Inc. is an end to end technology company that solves complex challenges in computing memory and LED solutions. The firm designs builds deploys and manages high performance high availability enterprise solutions for customers seeking faster time to value and optimized long term performance. With over two decades of experience as trusted advisors Penguin Solutions serves a global base of enterprise government and OEM customers. As of the end of fiscal 2025 the company employed approximately 2 900 full time employees worldwide with the majority located in the United States China and Malaysia.

Penguin Solutions generates revenue through the sale of products and services across three operational segments. The Advanced Computing segment sells high performance high availability computing platforms and services including hardware software and support for technical computing AI and HPC workloads and fault tolerant systems. The Integrated Memory segment offers specialty memory and storage solutions such as DRAM modules flash storage and integrated memory products together with supply chain services that help customers manage procurement logistics and inventory. The Optimized LED segment provides application optimized LED chips and components that enable customers to develop lighting video display and specialty lighting products. Revenue is derived from direct sales and sales through third party channels including distributors value added resellers independent software vendors and systems integrators.

The company operates through the following segments: Advanced Computing Integrated Memory Optimized LED.

• Advanced Computing offers high performance high availability computing platforms and services that span core to edge to cloud environments. Products are marketed under the Penguin Solutions Penguin Computing Stratus and Penguin Edge brands. The segment focuses on technical computing for core and cloud using advanced high performance computing and AI solutions. Stratus brand delivers simplified protected autonomous fault tolerant computing solutions for data centers and edge locations. The segment serves customers in education energy financial services healthcare life sciences government hyperscale and manufacturing markets. Net sales were $648.4 million in 2025 $554.6 million in 2024 and $749.7 million in 2023.

• Integrated Memory solves memory limitations within high performance high availability computing solutions through the design development and advanced packaging of specialty memory and storage solutions. Products are sold under the SMART Modular Technologies brand and include DRAM modules solid state flash storage and other advanced integrated memory solutions for networking telecom data analytics AI and ML applications. The segment also provides SMART Supply Chain Services which offers customized procurement logistics inventory management programming kitting and packaging support. Net sales amounted to $464.2 million in 2025 $356.4 million in 2024 and $443.3 million in 2023.

• Optimized LED offers a broad portfolio of application optimized LEDs aimed at improving lumen density intensity efficacy optical control and reliability. Products are sold under the Cree LED brand and include LED chips and packaged LED components such as the XLamp J Series and high brightness lines. The segment serves customers in lighting video display and specialty lighting applications. Net sales were $256.1 million in 2025 $259.8 million in 2024 and $248.3 million in 2023.

Penguin Solutions competes with numerous global and local companies across its segments. Principal competitive factors include the ability to meet customer specific requirements high product quality strong technical support technologically advanced products and services advanced testing capabilities flexible global delivery options reliable supply and reasonable pricing. In Advanced Computing fault tolerant solutions compete with manufacturers of enterprise servers and industrial computers while the HPC and AI business rivals global providers of HPC and AI products and services. Integrated Memory faces competition from memory module providers and to a lesser extent large semiconductor manufacturers that allocate capacity to memory module production. Optimized LED competes with companies that manufacture and or sell nitride based LED chips and with manufacturers of LED components focused on indoor outdoor lighting specialty lighting signs signals and transportation. Some competitors are larger international firms with greater financial technical marketing distribution resources and longer standing relationships. The company believes that close collaboration with customers customer specific designs long lifecycle solutions superior products and proprietary supply chain services create significant customer loyalty that can provide an advantage when competing against larger rivals. In addition some of its competitors also act as suppliers or customers.

Penguin Solutions serves a diversified base of enterprise government and OEM customers. Advanced Computing sells HPC and AI products to enterprise and government customers in AI cloud services energy financial services hyperscale and education and fault tolerant computing products and services to enterprise customers in financial services telecom energy transportation healthcare retail and industrial automation. Penguin Edge products are offered to OEM customers system integrators and through distribution to government telecom infrastructure industrial network edge computing and transportation. Integrated Memory supplies memory solutions to OEM customers in industrial government networking communications enterprise storage compute and other vertical markets. Optimized LED sells LED chips and components to manufacturers and electronic component distributors and also sells finished LED products through channel and direct sales to a broad base of local and global OEM and contract manufacturers. Third party sales representatives that do not hold inventory are also used. A substantial portion of Optimized LED sales flows to distributors that stock inventory and resell to customers including value added resellers manufacturers that incorporate the products into their own goods and end users. In 2025 2024 and 2023 the ten largest end customers accounted for 66 percent 58 percent and 60 percent of total net sales respectively.