Company: PENG
Filing Date: 2025-04-02
Form Type: 10-Q
Source: 0001628280-25-016182
Chunk: 70

Company: Penguin Solutions, Inc.
Filing Date: 2025-04-02
Form: 10-Q
Item: Part I, Item 1
Chunk 70
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 second quarter and first six months of 2025, respectively, compared to the same periods in the prior year. These increases are due to higher sales from our Advanced Computing and Integrated Memory business segments. Advanced Computing net sales increased by $58.8 million, or 41.5%, and $117.4 million, or 45.1%, in the second quarter and first six months of 2025, respectively, compared to the same periods in the prior year, primarily due to higher hardware sales driven by increased demand for AI solutions and high-performance computing. Integrated Memory net sales increased by $22.0 million, or 26.4%, and $33.0 million, or 19.5%, in the second quarter and first six months of 2025, respectively, compared to the same periods in the prior year, primarily due to higher sales volumes of DRAM products stemming from improved market demand, partially offset by lower supply chain services. Optimized LED net sales were flat in the second quarter and decreased by $2.8 million, or 2.2%, in the first six months of 2025, compared to the same periods in the prior year, primarily due to lower direct sales across China and Europe.

Cost of sales increased by $58.0 million, or 28.6%, and $109.9 million, or 27.9%, in the second quarter and first six months of 2025, respectively, compared to the same periods in the prior year, primarily driven by increased product sales from our Advanced Computing and Integrated Memory segments as noted above.

Gross margin decreased to 28.6% in the second quarter of 2025 compared to 28.8% in the same period in 2024, and to 28.7% in the first six 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.

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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