Penguin is selling Cree LED. Its forecast still includes it.
Penguin agreed to sell Cree LED while retaining a forecast that includes the business. The distinction matters for its next annual outlook.
Ticker Byline
Penguin Solutions, Inc.
Penguin Solutions supplies advanced computing systems, memory products and LED technology, with services supporting customer technology infrastructure.
- Ticker
- PENG
- Exchange
- XNAS
- SEC CIK
- 0001616533
The latest reported year
| Measure | 2026 | 2025 |
|---|---|---|
| Revenue | $1,731.5 | $1,368.8 |
| Operating income | $165.6 | $58.1 |
| Operating cash flow | -$151.9 | $109.1 |
| Cree LED revenue | $248.7 | $256.1 |
| Adjusted Cree LED segment operating income | $17.7 | $9.0 |
The adjusted segment measure excludes stock compensation, acquired-intangible amortization and other specified costs. At August 28, cash and cash equivalents were $647.2 million, inventory was $748.8 million, and receivables were $796.3 million. Current debt was $53.4 million and long-term debt $735.5 million.
A separate $93 million customer component-funding advance must be repaid in the first week of December 2026, before the expected sale closing. The company had already disbursed all of that funding by August 28; the obligation is recorded separately from debt.
Financing and available credit
In July, Penguin issued $750 million of convertible notes due in 2031, raising approximately $735.2 million after costs. Part of the proceeds funded exchanges of older notes and a $100 million revolving-loan repayment. At August 28, available revolving credit was $398.7 million.
At that date, older notes with $54.5 million of face value were eligible for conversion through November 27. Penguin must pay the principal in cash if holders convert.
An earlier portfolio exit
On March 30, Penguin completed the sale of its remaining 19% stake in Zilia, formerly SMART Brazil, and its related deferred-payment rights. The transaction brought $39.6 million in cash after withholding taxes.
The planned portfolio change
Penguin agreed to sell the entire Optimized LED segment in an all-cash transaction expected to close in the first calendar quarter of 2027. Consideration and intended use of proceeds were not disclosed in the announcement.
The fiscal 2027 outlook still includes a full year of Cree LED, approximately 10% of projected sales. It calls for revenue growth of 30% to 50% and adjusted EPS of $3.75 to $5.15. Adjusted earnings exclude specified stock-compensation, amortization, restructuring and other items. The company plans to update its outlook after closing.
Read our analysis of Penguin's Cree LED sale and cash obligations.
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