Penguin Solutions (Nasdaq: PENG) reported record fourth-quarter net sales of $567 million on 6 October 2026, up 68% year over year, in results furnished to the SEC. Among its business highlights, the company says it won a neocloud customer with $10 billion in contracted compute from a leading AI lab; the release says that customer selected Penguin to deploy and operate a 36,000-GPU AI factory in Norway.
The company also raised its fiscal 2027 outlook, and now expects net sales of approximately $2.43 billion at the midpoint, representing growth of approximately 40%, plus or minus 10 percentage points.
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The key insight: As we read it, Penguin’s year was carried by memory and its next story is neocloud services. The release shows Integrated Memory sales roughly doubling while Advanced Computing fell, and its customer highlights are neoclouds asking Penguin to deploy and operate GPU clusters, among them a 36,000-GPU AI factory in Norway. The customer behind that project holds $10 billion in contracted compute from a leading AI lab, according to the release.
For the fourth quarter, ended 28 August 2026, Penguin reports operating income of $69 million, up 458% year over year, and net income of $93 million, up 888%. Diluted EPS was $1.29 against $0.11 a year earlier.
For fiscal 2026, total net sales were $1,731.5 million against $1,368.8 million in fiscal 2025, according to the annual table in the release. Integrated Memory rose to $924.0 million from $464.2 million, while Advanced Computing fell to $558.8 million from $648.4 million and Optimized LED to $248.7 million from $256.1 million.
“After relatively flat year-over-year net sales in the first half, growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%,” said Kash Shaikh, president and CEO.
Penguin Solutions’ net sales by segment, fiscal 2025 vs fiscal 2026, in USD millions (rounded), from its results release of 6 October 2026: Advanced Computing $648M to $559M, Integrated Memory $464M to $924M, Optimized LED $256M to $249M.
The Customer Wins
Penguin says it won six new AI Infrastructure data center customers in the fourth quarter, including four neocloud providers, and added seventeen new AI Infrastructure customers across fiscal 2026.
Beyond the Norway project, the release lists a neocloud backed by a leading South Korean technology company that selected Penguin for an NVIDIA GB300 NVL72-based platform, a publicly traded neocloud with more than $3 billion in signed, multi-year contracts for deployment and 24×7 operations services, and Lektra, which selected the platform for distributed AI micro data centers.
Penguin’s fiscal 2026 net sales of $1.73 billion, the $2.17 billion fiscal 2027 midpoint implied by its third-quarter view, and the updated outlook of about $2.43 billion, all from its release of 6 October 2026. The outlook carries a band of plus or minus 10 points of growth.
The Outlook
The release says the preliminary view given on its third-quarter call implied fiscal 2027 net sales of $2.17 billion at the midpoint. The updated outlook of approximately $2.43 billion is above that, and the company expects diluted EPS of $3.50 and non-GAAP diluted EPS of $4.45.
Penguin’s outlook table puts GAAP gross margin at 27%, plus or minus 2 points, and operating expenses at $329 million, plus or minus $10 million.
The Structural Read
The growth is recent. Kash Shaikh says net sales were relatively flat year over year in the first half, then grew 48% in the third quarter and 68% in the fourth.
Operating income grew faster than sales: fourth-quarter net sales rose 68% and operating income 458%, according to the release. The 888% rise in net income is different: the release’s income statement shows a $57.6 million income tax benefit in the quarter, against income before taxes of $37.4 million.
The outlook moved up. The release says the third-quarter view implied about $2.17 billion of fiscal 2027 sales at the midpoint; the new outlook is about $2.43 billion, with a band of plus or minus 10 points of growth.
Kash Shaikh, President and CEO, Penguin Solutions
“After relatively flat year-over-year net sales in the first half, growth accelerated to 48% in Q3 and 68% in Q4, driving second-half growth of 58%.”
Three Implications
MEMORY CARRIED THE YEAR Integrated Memory sales rose to $924.0 million from $464.2 million, while Advanced Computing fell to $558.8 million, according to the release.
NEOCLOUDS ARE THE NEW CUSTOMERS Penguin says it added four neocloud providers among six new AI Infrastructure customers in the fourth quarter.
AN OUTLOOK, WITH A WIDE BAND The company expects fiscal 2027 net sales of about $2.43 billion at the midpoint, plus or minus 10 percentage points of growth.
The framework’s starting point: “the binding constraint on AI scaling has quietly shifted to High Bandwidth Memory (HBM).”
As we read it, Penguin’s segment table fits that picture: its Integrated Memory business roughly doubled in fiscal 2026 while its computing segment shrank, though the release does not break the memory sales down by product.
What Is Not Established
We read the results release furnished as Exhibit 99.1. In the release we read, Penguin does not name the leading AI lab or the Norway neocloud customer, and does not give the value of its own contract for the Norway project. We did not listen to the earnings call and did not contact Penguin.
The fiscal 2027 figures are the company’s outlook, and the release carries a forward-looking statements caution.
Business Engineer Framework
The AI Memory Chokepoint
A Business Engineer framework on why High Bandwidth Memory, not GPUs alone, has become the binding constraint on AI scaling.
Penguin Solutions reports record fourth-quarter net sales of $567 million, up 68%, with Integrated Memory sales roughly doubling over the year, and says a neocloud with $10 billion in contracted compute from a leading AI lab chose it to deploy and operate a 36,000-GPU AI factory in Norway. It now expects about $2.43 billion in fiscal 2027 sales at the midpoint.
A note on sourcing. We read Penguin Solutions’ results release of 6 October 2026, furnished to the SEC as Exhibit 99.1 to a Form 8-K, in full. All figures are the company’s; the fiscal 2027 numbers are its outlook. We did not listen to the earnings call or contact Penguin. Nothing here is a forecast, and nothing here is financial or investment advice.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
