Penguin Solutions' second-quarter results were met with a negative market reaction, as revenue came in below Wall Street’s expectations despite rising nearly 8% year over year. Management attributed the revenue shortfall mainly to the timing of large advanced computing deployments, with CEO Mark Adams noting, “Revenue recognition in advanced computing tends to be lumpy due to customer concentration and project timing.” Meanwhile, robust growth in the integrated memory segment and disciplined operating expense management helped deliver adjusted profits above consensus estimates.

Is now the time to buy PENG? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Penguin Solutions’s Q2 Earnings Call

• Kevin Cassidy (Rosen Securities) asked about the mix and timeline of new customer bookings; CEO Mark Adams explained hardware revenue is recognized upfront, with software and services recognized over time, and noted the 12–18 month sales cycle.

• Tom O'Malley (Barclays) questioned potential pull-forwards in memory demand; Adams responded that no significant pull-forwards were seen and that demand appears broad-based and stable, with a healthy Q4 pipeline.

• Samik Chatterjee (JPMorgan) probed advanced computing segment diversity and forward visibility; Adams said recent wins span several verticals beyond hyperscalers, but refrained from offering next-year guidance due to market dynamics.

• Nick Doyle (Needham) inquired about the CDW partnership and its difference from Dell; Adams said these partnerships are in early stages and are intended to scale Penguin’s reach, especially internationally.

• Denis Pyatchanin (Stifel) asked about hardware/software revenue mix for new customers; Adams described initial engagements as hardware-heavy with a gradual shift toward higher-margin software and services over the customer lifecycle.

Catalysts in Upcoming Quarters

In the coming quarters, our team will be watching (1) the pace of AI infrastructure adoption among enterprise customers, (2) the ramp-up of channel partnerships and their impact on revenue diversification, and (3) the resilience of the integrated memory business as new products like CXL gain traction. Execution on supply chain management and responses to ongoing tariff challenges will also be important indicators of Penguin Solutions’ ability to sustain growth and margin expansion.

Penguin Solutions currently trades at $24.77, up from $21.19 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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