Company: PENG
Filing Date: 2025-04-02
Form Type: 10-Q
Source: 0001628280-25-016182
Chunk: 97

Company: Penguin Solutions, Inc.
Filing Date: 2025-04-02
Form: 10-Q
Item: Part II, Item 8
Chunk 97
---
LeasesWe have operating leases through which we utilize facilities, offices, and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions. Sublease income was not significant in any period presented. The components of operating lease expense were as follows:Three Months EndedSix Months EndedFebruary 28,2025March 1,2024February 28,2025March 1,2024Fixed lease cost$2,975 $3,181 $5,950 $6,686 Variable lease cost615 399 1,063 848 Short-term lease cost445 563 913 1,202  $4,035 $4,143 $7,926 $8,736 Cash flows from operating activities included payments for operating leases of $4.3 million and $4.5 million in the first six months of 2025 and 2024, respectively.As of February 28, 2025 and August 30, 2024, the weighted-average remaining lease term for our operating leases was 10.0 years and 10.1 years, respectively, and the weighted-average discount rate was 6.0% and 6.1%, respectively. Certain of our operating leases include one or more options to extend the lease term for periods from two to five years. In determining the present value of our operating lease liabilities, we have assumed we will not extend any lease terms.As of February 28, 2025, minimum payments of lease liabilities were as follows:Remainder of 2025$5,794 202610,250 20277,905 20287,840 20298,053 2030 and thereafter46,236 86,078 Less imputed interest(21,854)Present value of total lease liabilities$64,224 

Commitments and ContingenciesProduct Warranty and IndemnitiesWe generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective items or return of amounts paid for such items. Our warranty obligations are not material.We are party to a number of agreements in which we have agreed to defend, indemnify and hold harmless our customers and suppliers from damages and costs, which may arise from product defects as well as from any alleged infringement by our products of third-party