FREMONT, Calif. - Penguin Solutions, Inc. (NASDAQ:PENG) reported third quarter fiscal 2026 results that exceeded analyst expectations, with adjusted earnings per share of $0.84 compared to the consensus estimate of $0.56, and revenue of $479 million versus the $421.4 million estimate.

Shares soared 9% after hours following the announcement, more than reversing the stock’s 7.3% decline on Tuesday.

The company’s net sales increased 48% YoY, driven by strong demand for AI infrastructure and memory solutions. Adjusted EPS rose 79% YoY from $0.47 in the prior-year quarter. Penguin Solutions raised its full-year fiscal 2026 outlook, now expecting net sales growth of 22% plus or minus 2%, GAAP EPS of $1.97 plus or minus $0.05, and adjusted EPS of $2.60 plus or minus $0.05. The midpoint of the adjusted EPS guidance of $2.60 is above the consensus estimate of $2.28.

The company’s Integrated Memory segment more than doubled YoY to $275.1 million, while Advanced Computing revenue reached $137.6 million, up 4% YoY.

"Penguin Solutions delivered a record quarter, exceeding expectations for both net sales and EPS," said Kash Shaikh, CEO. "This profitable growth acceleration reinforces our confidence that our AI Factory Platform strategy is working."

The company reported GAAP operating income of $51 million, up 417% YoY, and adjusted operating income of $64 million, up 67% YoY. GAAP diluted EPS was $0.68 compared to -$0.01 in the year-ago quarter.

Penguin Solutions added four new AI Infrastructure customer logos in the third quarter and continued executing its land-and-expand strategy across both business segments.

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