Penguin Solutions reported a 68% jump in fiscal fourth-quarter sales and forecast roughly 40% growth for the coming year, citing demand for AI infrastructure and memory, according to the company's results and an earnings call transcript published by Investing.com Tuesday. Shares rose about 5% in after-hours trading.

What Happened

Net sales for the quarter ended Aug. 28 were $566.7 million. Integrated Memory brought in $340.8 million, up 158% from a year earlier, while Advanced Computing contributed $154.0 million and Optimized LED $71.9 million. Non-GAAP earnings were $1.00 a share, compared with analyst estimates of about 77 cents, and GAAP diluted earnings were $1.29 a share, up from 11 cents a year earlier.

Full-year sales were $1.73 billion, up 26%. The pace picked up sharply through the year: after roughly flat sales in the first half, growth reached 48% in the third quarter and 68% in the fourth. CEO Kash Shaikh said that produced 58% growth in the second half. The company said its AI-driven businesses, non-hyperscale AI infrastructure and Integrated Memory, accounted for 78% of fourth-quarter sales and grew 141%.

RelatedFirmus Pulls A$44 Billion ASX Listing After Weak Investor Demand

For fiscal 2027, Penguin guided to sales growth of about 40%, plus or minus 10 percentage points, putting the midpoint near $2.43 billion. It forecast non-GAAP earnings of about $4.45 a share and a non-GAAP gross margin of about 28%.

The stock gained 5.8% in the regular session to $64.21, then rose about 5% more after hours to around $67.50, Investing.com reported.

Why It Matters

Penguin, which renamed itself from SMART Global Holdings, sells two things AI buyers are short of: integration and operation of GPU clusters, and memory modules. Its AI infrastructure business targets customers below the hyperscale tier, chiefly neoclouds and enterprises.

Management named several neocloud wins on the call. A South Korean technology company picked Penguin for a multiyear engagement to deploy and run a platform based on Nvidia's GB300 NVL72 systems. A publicly traded neocloud with more than $3 billion in signed multiyear AI contracts chose the company for similar deployment and round-the-clock operations work, and another provider selected it to deploy and operate a 36,000-GPU AI factory in Norway. Penguin added six AI infrastructure customers in the quarter and 17 in the fiscal year.

On memory, Shaikh said growth came from both higher prices and higher volume, with inference workloads requiring more memory, and that backlog now runs at least four quarters.

Balance Sheet

Penguin closed a $750 million offering of 0% convertible notes due 2031, repaid a $100 million credit facility and ended the quarter with $647 million in cash. It bought back $74.4 million of stock during fiscal 2026. Operating cash flow was negative $163 million in the quarter, and negative $152 million for the full year, according to Investing.com.

What to Watch

The wide guidance range reflects how much depends on timing. Investors will track whether the neocloud contracts convert to revenue on schedule and whether memory pricing stays firm through 2027. Penguin expects Integrated Memory to grow about 50% and Advanced Computing about 40% in fiscal 2027, so a slowdown in either would show up quickly against those targets.