Company: PENG
Filing Date: 2025-01-08
Form Type: 10-Q
Source: 0001628280-25-000944
Chunk: 49

Company: Penguin Solutions, Inc.
Filing Date: 2025-01-08
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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Amortization of acquisition-related intangibles9,755 10,008 Cost of sales-related restructuring(42)668 Diligence, acquisition and integration expense833 789 Restructuring charges109 2,939 Other1,376 — Non-GAAP operating income$40,918 $26,679 Non-GAAP operating income (loss) by segment:  Advanced Computing$30,117 $17,901 Integrated Memory7,116 7,195 Optimized LED3,685 1,583 Total non-GAAP operating income (loss) by segment$40,918 $26,679 

Advanced Computing operating income increased by $12.2 million, or 68.2%, in the first quarter of 2025 compared to same period in the prior year, primarily due to increased net revenue, as well as lower operating expenses, mainly driven by lower subcontract services.

Optimized LED operating income increased by $2.1 million, or 132.8%, in the first quarter of 2025 compared to the same period in the prior year, primarily due to higher gross profit, stemming from better factory leverage and more favorable product mix.

Operating and Non-operating (Income) Expense

Research and Development

Research and development expense decreased by $1.6 million, or 7.4%, in the first quarter of 2025 compared to the same period in the prior year, primarily due to lower personnel-related expenses mainly driven by headcount reductions, as well as lower subcontract services mainly driven by Penguin Computing.

Selling, General and Administrative

Selling, general and administrative expense increased by $3.3 million, or 5.8%, in the first quarter of 2025 compared to the same period in the prior year, primarily due to increased professional services as a result of our rebranding efforts, preferred share investment, and higher personnel-related expenses resulting from increased bonus achievement.

Impairment of Goodwill

During the second quarter of 2023, we initiated a plan pursuant to which we intend to wind down manufacturing and discontinue the sale of certain legacy products offered through our Penguin Edge business by approximately 

28

the end of 2025. We currently anticipate that the goodwill of the Penguin Edge reporting unit of $16.1 million as of November 29, 2024 may become further impaired in future periods.

Other Operating (Income) Expense

Other operating expense in the first quarter of 2025