Company: PENG
Filing Date: 2025-07-08
Form Type: 10-Q
Source: 0001628280-25-034541
Chunk: 114

Company: Penguin Solutions, Inc.
Filing Date: 2025-07-08
Form: 10-Q
Item: Part I, Item 1
Chunk 114
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9%, in the first nine months of 2025, compared to the same period in the prior year, primarily due to higher hardware sales driven by increased demand for AI solutions and high-performance computing within the first half of 2025. Integrated Memory net sales increased by $71.5 million, or 27.4%, in the first nine months of 2025, compared to the same period in the prior year, primarily due to higher sales volumes of DRAM and Flash storage products stemmi

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ng from improved market demand. Optimized LED net sales decreased by $5.2 million, or 2.7%, in the first nine months of 2025, compared to the same period in the prior year, primarily due to lower direct sales across China and Europe.

Cost of sales increased by $17.5 million, or 8.3%, and $127.4 million, or 21.0%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in the prior year. The increase was primarily driven by increased product sales from our Integrated Memory segment in the third quarter and first nine months of 2025, along with increased product sales from our Advanced Computing segment in the first nine months of 2025.

Gross margin decreased to 29.3% in the third quarter of 2025 compared to 29.6% in the same period in 2024, and to 28.9% in the first nine months of 2025 compared to 29.5% in the same period of 2024, primarily due to unfavorable mix from higher product revenue in our Advanced Computing business.

Non-GAAP Measure of Segment Operating Income

Below is a table of our operating income, measured on a non-GAAP basis, which Penguin Solutions management uses to supplement Penguin Solutions’ financial results under GAAP to analyze its operations and make decisions as to future operational plans and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing our past and future operating performance. These non-GAAP measures exclude certain items, such as share-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships, trademarks/trade names and backlog acquired in connection with business combinations); acquisition-related inventory adjustments; diligence, acquisition and integration expense; restructuring charges; impairment of goodwill; changes in the fair value of contingent consideration; redomiciliation costs; and other infrequent or unusual items. While