Penguin Solutions Beats Big on AI Memory Demand and Raises Its Fiscal 2027 Bar

Penguin Solutions just put up the kind of quarter that forces the skeptics to recalculate. The AI infrastructure and memory company reported adjusted earnings of $1.00 a share on record revenue of $567 million for its fiscal fourth quarter — both comfortably ahead of Wall Street's expectations — and then raised its fiscal 2027 outlook to a level analysts had not modeled.

The print, reported after Tuesday's close, was emphatic. Adjusted earnings of $1.00 a share, up 133% from a year ago, against a FactSet consensus of $0.77. Revenue of $567 million rose 68% and beat the $521 million consensus. On a GAAP basis, earnings were $1.29 a share versus $0.11 a year earlier, with net income of $93 million up 888% and operating income of $69 million up 458% — all company records.

The memory engine

Integrated memory is now Penguin's biggest business and its growth engine. Segment sales hit a record $340.8 million in the quarter — 60% of total revenue — up 158% from a year earlier and 24% sequentially. For the full fiscal year, memory sales nearly doubled to $924 million, rising to 53% of revenue from 34% the year before. Management told analysts the memory backlog now stretches at least four quarters beyond recognized revenue, and pointed to CXL memory-expansion wins including business with a global AI server manufacturer.

CEO Kash Shaikh credited the second-half acceleration to the company's AI Factory Platform launch and a sharper data-center focus: sales growth went from roughly flat in the first half to 48% in the third quarter and 68% in the fourth.

TickerGrove's read: this is a memory-supercycle quarter wearing an AI-infrastructure costume — or the reverse. Either way, a four-quarter backlog in the segment driving three-fifths of sales is the kind of visibility most hardware companies would pay dearly for.

The AI factory bet

Beyond memory, the AI infrastructure business is landing neocloud customers at a striking pace: six new AI data-center customers in the fourth quarter, four of them neocloud providers, bringing the fiscal-year total to 17 new customers with 12 expansions. Standout wins include a South Korean-backed neocloud customer deploying Nvidia GB300 NVL72-based platforms and a 36,000-GPU AI factory in Norway backed by $10 billion in contracted compute. The company also rolled out agentic AI capabilities for its ClusterWareAI software aimed at GPU uptime.

The guide

For fiscal 2027, Penguin expects revenue to grow about 40% at the midpoint — roughly $2.43 billion — with non-GAAP earnings of $4.45 a share, up 55%, and GAAP earnings of $3.50 a share, up 35%. Both sit above the preliminary view management shared last quarter and above the Street: analysts had modeled about $3.39 a share on $2.21 billion in revenue, per IBD. For the fiscal year just ended, adjusted earnings were $2.87 a share, up 51%, on revenue of $1.73 billion, up 26%.

The stock

Investors liked it. Shares rose more than 6% in premarket trading Wednesday, per Barron's, after closing Tuesday up 5.7% at $64.21. The stock is up 228% this year — its best annual run on record — but had fallen 21% from its July 9 record close of $81.39, according to Dow Jones Market Data. This print is the bull case for the rally's second act.

The other side of the ledger

The growth is expensive to fund. Inventory nearly tripled to $749 million as the company stocked up to support demand, and fiscal 2026 consumed about $152 million of operating cash versus $109 million generated the year before, per Barron's. Margins remain under pressure despite the beat — the cost of growing this fast.