Penguin is selling Cree LED. Its forecast still includes it.
The business being sold represents about a tenth of projected annual sales. Penguin plans to update its outlook after closing.
Penguin Solutions has agreed to sell Cree LED, but its reaffirmed fiscal 2027 forecast still includes a full year of that business. The company says Cree LED represents approximately 10% of projected annual sales.
The all-cash transaction, signed November 3 and announced November 4, would transfer the whole Optimized LED segment to an affiliate of Transom Capital Group. The price was not disclosed. Closing is expected in the first calendar quarter of 2027, subject to conditions.
The forecast comes before the sale
Penguin retained the outlook issued with its October 6 results: revenue growth of 30% to 50% and adjusted earnings of $3.75 to $5.15 a share. It expects to update those figures after the transaction closes to reflect the divestiture and its financial effects.
That makes the unchanged outlook a forecast for the current group, including Cree LED. Management says its underlying growth and demand expectations for the AI infrastructure and memory businesses are unchanged.
A smaller business with a distinct contribution
In fiscal 2026, Cree LED generated $248.7 million of sales, compared with $256.1 million a year earlier. Adjusted segment operating income increased to $17.7 million from $9.0 million. That measure excludes stock compensation, acquired-intangible amortization and other specified costs.
The wider company generated $1.731 billion of sales and $165.6 million of reported operating income. Memory and advanced computing accounted for the rest of the portfolio, with different demand and working-capital needs.
The cash baseline is from August
For the year ended August 28, 2026, operations used $151.9 million of cash, as inventories and receivables absorbed funding. Cash and cash equivalents ended that period at $647.2 million, alongside $53.4 million of current debt and $735.5 million of long-term debt.
That cash balance followed a July issue of $750 million in convertible notes due in 2031. The offering raised about $735.2 million after costs and helped refinance older notes and repay $100 million of revolving debt.
Research by Ticker Byline shows that a separate $93 million customer-funding repayment falls due in the first week of December 2026, before the expected sale closing. The money funded component purchases and had all been disbursed by August 28. Penguin said existing cash and available revolving credit were sufficient to fund its near-term obligations.
The announcement does not specify how Penguin will use the sale proceeds. The next forecast will show how removing Cree LED changes the expected size and earnings of the remaining business.
The Penguin Solutions, Inc. company profile follows the earnings, cash and financial position behind the announcement.