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Penguin Solutions (PENG) is under heavy pressure after reporting its Q4 (Aug) results last night. This AI infrastructure provider delivered another EPS beat, though the upside was narrower than recent quarters, while the company missed revenue expectations for the second consecutive quarter, extending a streak of softer top-line performance.

• Q4 revenue rose 9% yr/yr to $338 mln; Advanced Computing fell 7% to $138 mln, while Integrated Memory jumped 38% to $132 mln.
• New AI infrastructure wins included major financial institutions and an international deployment for SK Telecom, with non-hyperscaler HPC/AI revenue up 75% yr/yr, reflecting strong enterprise adoption and customer diversification.
• FY26 revenue guidance calls for about 6% revenue growth (+/-10%), and assumes no hyperscale hardware revenue and the wind-down of the Penguin Edge business, creating roughly a 14-point drag on growth.
• Advanced Computing sales guided for -15% to +15%, while gross margin is expected to ease to around 29.5% (+/-100 bps) versus 31% in FY25 as the company winds down its higher-margin Edge business.
• PENG announced a $75 mln expansion to its share repurchase authorization, though the move is not helping boost sentiment today.

Briefing.com Analyst Insight

Overall, while PENG delivered a strong FY25 with solid top- and bottom-line momentum, the Q4 revenue miss and cautious FY26 guidance are weighing heavily on sentiment. The absence of hyperscaler hardware revenue, lower gross margin, and a more uneven sales cadence highlight the lumpiness of its business. As an AI-focused name that reached multi-year highs before this report, the tempered growth outlook in FY26 is proving hard for investors to digest.