Company: PENG
Filing Date: 2025-06-18
Form Type: CORRESP
Source: 0001193125-25-142901
Chunk: 4

Company: Penguin Solutions, Inc.
Filing Date: 2025-06-18
Form: CORRESP
Chunk 4
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 aspects of the                                                                      
 Penguin Edge reporting unit to be completed by approximately the end of 2025, and that the future impairment of the goodwill balance is probable. Please tell us the following: |

| • |     | whether you anticipate the full impairment of the remaining $10 million goodwill balance in                                                                  
 the foreseeable future. Explain your basis if you do not believe it should be fully impaired even after you complete the wind down of Penguin Edge business. |

| • |     | the methods and key assumptions you used to estimate the fair value of the Penguin Edge business in connection 
 with your goodwill impairment assessment during the second quarter of 2025. See guidance in ASC 350-10-50-2.   |

Response:We respectfully acknowledge the Staff’s comment. The Company anticipates that the remaining $10 million goodwill balance will be fully impaired upon the completion of the wind-down of the Penguin Edge business. Based on the Company’s current wind-down plan, the business is expected to materially cease operations by the end of calendar 2025.

Page 5 After determining that conditions existed suggesting that it was more likely than not that the fair value of the Penguin Edge reporting unit may be less than its carrying amount, the Company utilized a discounted cash flow model to assess the fair value of the Penguin Edge business and reporting unit for the purpose of goodwill impairment during the second quarter of fiscal 2025. The Penguin Edge technology is becoming obsolete and is only sold to a small number of customers who we expect to phase out the technology. Therefore, for purposes of its discounted cash flow model, the Company assumed that market participants would value the business based on expected future cash flows through the expected completion of the wind-down. The Company used this valuation approach because there were no comparable transactions in the marketplace of a similar business being sold while in the process of winding down. Further, since the Penguin Edge business has no expansion or product initiatives, those expected future cash flows incorporated expected revenues, the costs associated with fulfilling customer contracts, and the costs associated with winding down the Penguin Edge business. In the analysis for the period ended February 28, 2025, the Company applied a discount rate of 16.25%, which the Company believes reflects the return a market participant would require when purchasing the Penguin Edge business given the risk profile of the remaining operations and the limited future cash flows from winding down. However, given the short period of time associated with the remaining cash flows for the business, changes to the discount rate would not have produced a materially different fair value