Company: PENG
Filing Date: 2025-07-08
Form Type: 10-Q
Source: 0001628280-25-034541
Chunk: 179

Company: Penguin Solutions, Inc.
Filing Date: 2025-07-08
Form: 10-Q
Item: Part II, Item 8
Chunk 179
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continue the sale of certain products offered through our Penguin Edge business by approximately the end of calendar year 2025. In connection therewith and with the preparation of the financial statements included in this Quarterly Report, we assessed goodwill associated with our Penguin Edge business within our Advanced Computing segment and concluded it was partially impaired. As a result, we recorded charges of $5.3 million and $11.4 million in the third quarter and first nine of 2025, respectively, to impair the carrying value of Advanced Computing goodwill. We currently anticipate that the goodwill of the Penguin Edge reporting unit of $4.7 million as of May 30, 2025 will be fully impaired by the end of calendar 2025. For additional information regarding the goodwill impairment, refer to “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Intangible Assets and Goodwill.”

Other Operating (Income) Expense

There were no other operating expenses in the third quarter of 2025 and $0.5 million operating expenses attributable to restructuring charges in the third quarter of 2024. Other operating expense in the first nine months of 2025 and 2024 included restructuring charges of $1.0 million and $6.7 million, respectively. The restructuring charges for all periods presented were primarily for employee severance costs and other benefits resulting from workforce reductions, the elimination of certain projects across our businesses and other costs associated with the wind down of our Penguin Edge business. We anticipate that these activities will continue into future quarters and anticipate recording additional restructuring charges.

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Interest Expense, Net

Net interest expense decreased by $5.6 million and $15.8 million in the third quarter and first nine months of 2025, respectively, compared to the same periods in the prior year, primarily due to principal payments made on the Amended 2022 TLA (as defined below) during the last half of fiscal 2024.

Other Non-operating (Income) Expense

Other non-operating (income) expense in the third quarter and first nine months of 2025 and 2024 primarily reflected foreign currency gains (losses). See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Other Non-operating (Income) Expense.”

Income Tax Provision (Benefit)

Income tax provision in the third quarter and first nine months of 2025 increased by $8.6 million and by $16.9 million, respectively, as compared to the same periods in the prior year, primarily due to