What changed in this filing

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Item 1. Business

2025-10-21 compared with 2024-10-24 · 122 added, 111 removed, 224 unchanged (51% of the section changed)

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Penguin Solutions designs, builds, deploys and manages high-performance, high-availability enterprise solutions, allowing customers to achieve their breakthrough innovations.

We do this in partnership with our customers—customizing solutions while facilitating rapid time to production, optimized long-term performance, high availability and enhanced value.

We do this in partnership with our customers—customizing solutions while facilitating rapid time to value, optimized long-term performance, high availability, and greater return on investment.

As of the end of fiscal 2025, Penguin Solutions employed approximately 2,900 employees worldwide, with most located in the United States, China, and Malaysia.

We believe that our employees are the cornerstone of our success.

To support their efforts, we aim to provide diverse, inclusive and equitable workplaces that we maintain through ongoing intentional actions.

To support their efforts, we aim to provide inclusive and equitable workplaces maintained through ongoing intentional actions.

On October 15, 2024, we changed our corporate name from “SMART Global Holdings, Inc.” to “Penguin Solutions, Inc.” and changed our Nasdaq Global Select Market ticker symbol from “SGH” to “PENG.” The changes to the corporate name and ticker symbol did not have any impact on our legal entity structure, financial statements or previously reported financial information.

On June 30, 2025, we consummated the U.S.

Domestication of the parent company of our corporate group from the Cayman Islands to the State of Delaware in the United States.

For more information about the U.S.

Domestication, see “About This Annual Report” above.

Business Segments

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Along with the update of our company brand, we revised how we describe our business segments.

Today we have Advanced Computing, formerly known as Intelligent Platform Solutions, Integrated Memory, formerly known as Memory Solutions, and Optimized LED, formerly known as LED Solutions.

Today we have Advanced Computing, Integrated Memory and Optimized LED.

Divestiture of SMART Brazil

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GAAP, we have presented the balance sheets, results of operations and cash flows of SMART Brazil operations in this Annual Report, including in the accompanying consolidated financial statements and notes, as discontinued operations for all periods presented.

The SMART Brazil operations were previously reported as part of our Integrated Memory segment.

The SMART Brazil operations were previously reported as part

of our Integrated Memory segment.

Unless otherwise noted, discussion within this Annual Report relates solely to our continuing operations and excludes the SMART Brazil operations.

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Acquisition of Stratus Technologies

On August 29, 2022, we completed the acquisition of Storm Private Holdings I Ltd., a Cayman Islands exempted company (together with its subsidiaries, “Stratus Technologies”).

On August 29, 2022, we completed the acquisition of Stratus Technologies.

At the closing, we paid a cash purchase price of $225.0 million, subject to certain adjustments.

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Advanced Computing

Our Advanced Computing segment offers high-performance, high-availability, fault-tolerant integrated computing platforms and services for AI, accelerated computing, machine learning (“ML”) and the internet of things (“IoT”) that span the continuum of edge, core and cloud.

Within our Advanced Computing segment, we have two operating brands - Penguin Solutions, the umbrella brand for Penguin Computing ® and Penguin Edge™ products, and the Stratus ® brand.

Our Penguin Computing business focuses on technical computing for core and cloud environments via advanced high-performance computing (“HPC”) and AI solutions.

Through our Penguin Edge business, we offer edge computing solutions for embedded and wireless applications, specializing in high-performance products for customers in government, health care, manufacturing and telecommunications.

With our Stratus brand, we offer simplified, protected and autonomous fault-tolerant computing solutions in the data center and at the edge through its hardware, software and services offerings.

We provide these leading-edge solutions to customers in the education, energy, financial services, government, hyperscale and manufacturing markets.

Our Advanced Computing segment offers high-performance and high-availability computing platforms and services that span the continuum from core to edge to cloud.

Within our Advanced Computing segment, we offer products under the Penguin Solutions ® , Penguin Computing ® , Stratus ® , and our Penguin Edge TM product brands.

Our Penguin Solutions and Penguin Computing hardware, software, and services focus on technical computing for core and cloud environments via advanced high-performance computing (“HPC”) and AI solutions.

With our Stratus product brand, we offer simplified, protected, and autonomous fault-tolerant computing solutions in data centers and at the edge also through hardware, software, and services.

We provide these leading-edge advanced computing solutions to customers in the education, energy, financial services, healthcare life sciences, government, hyperscale, and manufacturing markets.

Our Advanced Computing segment had net sales of $648.4 million, $554.6 million and $749.7 million in 2025, 2024 and 2023, respectively.

Penguin Computing

Through our Penguin Computing business, we provide a robust portfolio of hardware (including solutions based on the Open Compute Project (“OCP”)), software and services offerings.

Our solutions are composed of servers, software, integrated turn-key clusters, enterprise-grade storage, networking hardware and software, as well as cloud-based solutions via our Penguin-On-Demand™ (“POD”) solution.

Our product offerings include our OCP-inspired Tundra ® Extreme Scale products to solve technical compute and density challenges.

Our rack-mount servers and graphics processing unit (“GPU”) accelerated computing platforms give our customers powerful tools for the development and implementation of AI, ML advanced modeling and HPC applications.

Complementing our compute, storage and networking hardware solutions is Penguin Solutions’ ClusterWare line of cloud and cluster management software.

These products provide advanced capabilities for management of AI and HPC clusters ranging in size from department-level systems to supercomputers.

Our products and services also enable customers to provide their own AI and HPC cloud with remote access via our proprietary browser-based Virtual Desktop Infrastructure (“VDI”) solution.

Our solution approach includes design, build, deploy, manage, software automation and end-to-end services.

Our Penguin Edge product portfolio brings together our SMART Embedded Computing™ (“SMART EC”) and SMART Wireless Computing™ (“SMART Wireless”) brands, both of which operate under the unified Penguin Edge product brand.

Penguin Edge products encompass system-on-modules (“SoMs”), single board computers (“SBCs”), peripheral component interconnect express (“PCIe”) accelerators and application-ready platforms including bladed edge servers.

These solutions allow for insight, intelligence and analytical capabilities closer to where the data is generated, optimizing a range of use cases across industries and rugged environments.

Target markets for Penguin Edge solutions include network edge computing, government, telecommunications infrastructure and manufacturing applications, as well as IoT endpoint applications such as smart city, digital health, digital signage and smart buildings.

In the second quarter of 2023, we initiated a plan to wind down manufacturing and discontinue the sale of legacy products offered through our Penguin Edge business by the end of 2025.

AI and HPC Data Centers

Penguin Solutions designs, builds, deploys, and manages HPC and AI infrastructure solutions that reliably enable the world’s most advanced, data intensive workloads f or more than 25 years.

Our expert insights and strong relationships with best-in-class compute, networking, storage and software technology partners result in highly efficient and scalable AI systems for our customers.

We aim to quickly deliver production-ready AI factories, seamlessly scale them to meet customers’ expanding AI needs, and continually optimize infrastructure performance to maximize customers’ return on investment throughout the lifecycle.

We can meet the needs of customers’ specific AI workloads across a broad range of industries from hyperscalers and government agencies to financial services firms and manufacturing companies.

Our solutions include Penguin Solutions OriginAI ® — an AI infrastructure solution for customers deploying GPUs at scale (hundreds to thousands of GPUs).

OriginAI can accelerate AI deployment and deliver predictable performance.

This is achieved through proven, pre-defined architectures integrated with validated technologies and backed by the Penguin Solutions ICE ClusterWare™ software platform and our expert services for designing, building, deploying, and managing AI infrastructure.

ICE ClusterWare is a hardware-agnostic, intelligent software platform for managing, scaling, and optimizing AI infrastructure.

It provides a unified cluster management environment, combining open-source, industry-standard and third-party tools with Penguin Solutions’ proprietary software innovations.

With these solutions and services, we seek to mitigate customers’ AI skill gaps, accelerate their AI deployments, optimize their AI systems, and maximize their return on investment.

Fault Tolerant Computing

Our Stratus brand products are designed to ensure the continuous availability of customers’ critical data and applications in data centers and edge locations.

Our Stratus zero-touch computing (ztC) platforms deliver fault tolerance that is simple to install, interoperable with existing systems, manageable by time-constrained IT or OT (operational technology) teams, and protected from interruptions and threats.

For over 40 years, our fault tolerant computing solutions have provided reliable and redundant computing that supports Fortune 500 companies as

well as small-to-medium sized businesses in securely and remotely turning critical data into actionable intelligence.

As a result, IT and OT professionals across financial services, oil and gas, transportation, healthcare, retail and discrete manufacturing rely on our platforms and services to mitigate operational, financial, and reputational risk and support “always on” availability.

Our solutions include the Stratus ztC Endurance™ compute platforms which are designed to deliver 99.99999% availability.

The Stratus ztC Endurance and its Automated Uptime Layer with Smart Exchange™ capability delivers intelligent, predictive fault tolerant computing within an easily serviced modular architecture.

These platforms evolve from the built-in fault tolerance and proactive health monitoring found in our fully integrated and continuously available Stratus ftServer ® platforms.

Additionally, the Stratus ftServer V series platforms deliver advanced availability, performance and scalability for high-volume, high-risk transaction processing.

The Stratus ztC Edge ® platform brings high availability and fault tolerance to IT constrained edge environments, such as retail locations and manufacturing sites, in a secure, highly automated Class 1, Div 2-certified computing platform.

Lastly, our Stratus everRun ® software protects virtualized workloads on third-party hardware.

Our Stratus platforms and software are backed by expert services professionals dedicated to customer success.

Discontinued Computing Solutions

By approximately the end of calendar 2025, we expect to fully discontinue our Penguin Edge product portfolio, which had brought together our SMART Embedded Computing™ (“SMART EC”) and SMART Wireless Computing™ (“SMART Wireless”) brands under the unified Penguin Edge brand.

Penguin Edge technology has become obsolete and is only sold to a small number of customers who we expected to phase out the technology.

See “PART II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Intangible Assets and Goodwill – Impairment of Penguin Edge Goodwill.”

Through our Stratus brand, we provide for the continuous availability of business-critical applications by delivering zero-touch computing platforms that are designed to be autonomous, simple to deploy and maintain and protected from interruptions and threats.

For 40 years, Stratus Technologies has provided reliable and redundant computing that has enabled global Fortune 500 companies and small-to-medium sized businesses to securely and remotely turn data into actionable intelligence at the edge, data center and cloud – focused on both uptime and efficiency.

As a result, IT and operational technology professionals across financial services, telecom, oil and gas, transportation, healthcare, retail and industrial automation rely on Stratus platforms and services to achieve greater productivity, efficiency, sustainability, safety, security and peace of mind.

Our high-availability and fault-tolerant platforms include our Stratus ztC Edge ® platform, a secure, purpose-built, highly automated computing platform for resource constrained and remote locations and rugged environments;

Stratus ztC Endurance ® and Stratus ftServer ® platforms, which offer fully integrated, fault-tolerant computing platforms for complex software workloads;

our Stratus ftServer V series platform, a market leader for continuously available processing of high volume, highly-sensitive transactions that leverages Stratus Technologies’ Virtual Operating System;

and Stratus everRun ® platform, a flexible software-only option for ensuring fault tolerance of third-party hardware.

These platforms are backed by expert customer, professional and managed services dedicated to customer success.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Intangible Assets and Goodwill.”

Integrated Memory

Our Integrated Memory segment enables high-performance, high-availability computing solutions through the design, development and advanced packaging of specialty memory and storage solutions.

Our Integrated Memory segment solves memory limitations experienced within high-performance, high-availability computing solutions through the design, development, and advanced packaging of specialty memory and storage solutions.

Within our Integrated Memory segment, we offer products under the SMART Modular Technologies ® product brand.

Products include dynamic random access memory (“DRAM”) modules, solid-state/flash storage and other advanced integrated memory solutions critical to networking and telecom, data analytics, AI and ML.

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Our Integrated Memory segment had net sales of $464.2 million, $356.4 million and $443.3 million in 2025, 2024 and 2023, respectively.

SMART Modular Technologies

Through its brand SMART Modular Technologies ® , Integrated Memory has been helping customers enable high-performance computing through the design, development and advanced packaging of specialty integrated memory solutions for over 30 years.

Our robust portfolio ranges from today’s leading-edge technologies to standard and legacy DRAM and Flash storage products.

We provide standard, ruggedized and custom memory and storage solutions that meet the needs of diverse applications in high-growth markets.

We collaborate closely with our global original equipment manufacturer (“OEM”) customers throughout their design process and across multiple projects to create solutions for demanding applications with differentiated requirements, such as specific form factors, higher density, lower power, specific firmware and greater durability and reliability compared to standard solutions.

We target opportunities where we believe we can be a primary supplier of longer-lifecycle solutions to OEM customers for diverse and growing end markets within industrial, government, networking and communications, enterprise storage and computing as well as in other vertical markets.

We offer an extensive portfolio of approximately 1,400 products available in standard and rugged formats.

Memory Products

Our SMART Modular Technologies memory solutions have been helping customers across diverse industries and demanding applications—including data centers, networking, industrial automation, rugged environments, and emerging AI and cloud infrastructure.

For over 30 years through innovative design, development, and advanced packaging of specialty integrated memory and storage solutions, our solutions have solved complex, cutting-edge memory challenges.

Our robust portfolio ranges from today’s leading-edge memory technologies to standard and DRAM and flash storage products, as well as ruggedized and custom memory and storage solutions for diverse applications in a wide range of markets.

We collaborate closely with global original equipment manufacturers (“OEM”) throughout their design process across multiple projects to create solutions for demanding applications with differentiated requirements.

This includes unique form factors, with specific firmware, higher density, lower power, specific and greater durability and reliability compared to standard solutions.

We are a primary supplier of longer-lifecycle solutions to OEM customers for diverse end markets within industrial, government, networking and communications, enterprise storage and computing as well as other vertical markets.

We offer an extensive portfolio of memory products available in standard and rugged form factors.

Our offerings include an extensive lineup of DRAM modules across a variety of DRAM technologies, including legacy synchronous DRAM, double data rate (“DDR”), DDR2, DDR3 and leading-edge, high-performance DDR4 and DDR5 DRAM devices.

These technologies are incorporated into standard memory, enterprise memory and

hybrid integrated memory solutions in both standard and rugged formats.

Our DRAM modules encompass a broad range of form factors and functions, including dual in-line memory modules (“DIMMs”), nonvolatile DIMMs, differential DIMMs (“DDIMM”), load reduced DIMMs, registered DIMMs, unbuffered DIMMs, small-outline DIMMs and mini-DIMMs for industrial, government, networking and communications, enterprise storage and computing and other vertical markets.

These technologies are incorporated into standard memory, enterprise memory, and hybrid integrated memory solutions in both standard and rugged formats.

Our DRAM modules encompass a broad range of form factors and functions, including dual in-line memory modules (“DIMMs”), differential DIMMs

(“DDIMM”), load reduced DIMMs, registered DIMMs, unbuffered DIMMs, small-outline DIMMs, and mini-DIMMs for industrial, government, networking and communications, enterprise storage and computing and other vertical markets.

These memory modules come in configurations of up to 288 pins and densities of up to 256 gigabytes.

We support leading-edge and emerging interconnect standards such as Compute Express Link (“CXL”).

\We utilize advanced printed circuit board and device packaging and stacking technologies to achieve cost-effective, high-density solutions.

Our products are designed to meet the quality requirements of enterprise class systems pursuant to the stringent specifications required for various high-speed applications.

We also design and manufacture embedded and removable Flash memory products in a variety of form factors and capacities, incorporated into storage and hybrid-integrated memory solutions in standard and rugged formats.

Our Flash memory products include solid-state drives (“SSDs”), Serial Advanced Technology Attachment (“SATA”) and PCIe NVMe products in 2.5" enclosures, M.2 and other module form factors.

We also offer Flash component products such as embedded MultiMediaCard (“eMMC”) and embedded and removable products in USB, CompactFlash and SD and microSD Card configurations.

Our Flash capabilities include application-specific and customized firmware development.

Our Integrated Memory segment also offers Zero Failure Rate (“Zefr ® ”) memory modules to support powerful HPC platforms that process massive amounts of data.

A Zefr memory module undergoes a rigid proprietary screening process which is performed on OEM original memory modules or SMART Modular Technologies memory modules to deliver ultra-high reliability for demanding workloads.

SMART Supply Chain Services

SMART Zefr aims to deliver the industry’s highest levels of memory uptime and reliability and, for example, enhances the reliability and uptime of our Stratus ztC Endurance platform.

Additionally, we support leading-edge and emerging interconnect standards such as Compute Express Link (“CXL”), an industry standard, open protocol for low latency GPU interconnects.

SMART CXL Memory is available as a memory expansion add-in-card (AIC) in our Penguin Solutions Altus ® AMD EPYC™ based servers, providing expansive memory for AI workloads.

We also design and manufacture embedded and removable flash memory products in a variety of form factors and capacities, incorporated into storage and hybrid-integrated memory solutions in standard and rugged formats.

Our flash memory products include solid-state drives (“SSDs”), Serial Advanced Technology Attachment (SATA) and PCIe NVMe products in 2.5" enclosures, M.2, EDSFF, and other module form factors.

We also offer flash component products such as embedded MultiMediaCard and embedded and removable USB products, and SD and microSD Card configurations.

Our flash memory capabilities include customized firmware development.

Supply Chain Services

We offer a wide array of supply chain services including procurement, logistics, inventory management, temporary warehousing, programming, kitting and packaging services.

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The Cree LED product offering includes both chips and packaged LED components.

Our Cree LED chip products include blue and green LED chips based on gallium nitride (“GaN”) and related materials.

Our Cree LED chip products include blue and green LED chips based on gallium nitride and related materials.

These chips are used in a number of applications and are available in a range of brightness levels, wavelengths (colors) and sizes.

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Our Cree LED XLamp ® , J Series ® and high-brightness product lines feature packaged LED components.

The XLamp and J Series components meet a broad range of market needs for lighting applications, including general

illumination (both indoor and outdoor applications), portable, architectural, signal and transportation lighting.

The XLamp and J Series components meet a broad range of market needs for lighting applications, including general illumination (both indoor and outdoor applications), portable, architectural, signal and transportation lighting.

Our high-brightness LED components consist of surface mount device (“SMD”) and through-hole packaged LED products.

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In each case, we use components and subassemblies acquired from a wide range of vendors.

For our Stratus brand, we primarily use third-party manufacturers for most products, with assembly in our Ireland facility for certain product lines.

For Penguin Computing products, we have developed capabilities for design and development of large-scale systems and dense HPC and AI clusters that have significant power and cooling requirements, with manufacturing and testing for HPC products conducted at our Fremont, California facility.

For our Penguin Edge product brand, we design and develop a wide range of embedded and wireless computing products that we manufacture, assemble and test at our manufacturing facilities in Newark, California and Tempe, Arizona.

For our fault tolerant products, we primarily use third-party manufacturers with assembly in our Ireland facility for certain product lines.

For our HPC and AI products, we have developed capabilities for design and development of large-scale systems and dense HPC and AI clusters that have significant power and cooling requirements, with manufacturing and testing conducted at our Fremont, California facility.

Our extensive experience in manufacturing and validating HPC and AI clusters has equipped us with the playbooks and best practices needed to move quickly.

The Penguin Edge products, which are expected to be discontinued by approximately the end of calendar 2025, are manufactured, assembled, and tested at our manufacturing facilities in Newark, California and Tempe, Arizona.

Integrated Memory

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For certain customers in our Integrated Memory segment, we employ extensive software-based electrical and thermal simulations and test our designs on high-end functional testers utilizing a broad array of test suites.

These tests are designed to meet the quality requirements of enterprise-class systems with stringent specifications required for various high-speed and high-compute applications.

These tests are designed to meet the quality requirements of enterprise-class systems with stringent specifications

required for various high-speed and high-compute applications.

We also conduct design verification testing of hardware, firmware, system integration and reliability.

We continually work to improve our test routines and associated software.

For our specialty memory products, we have developed a high-volume, fully automated

reliability testing and screening capability that substantially exceeds standard industry practices.

For our specialty memory products, we have developed a high-volume, fully automated reliability testing and screening capability that substantially exceeds standard industry practices.

These capabilities enable us to reduce the occurrence of early-life failures and weak module fallout, which can save our customers from the significant expenses associated with replacing products that fail after field deployment.

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We sell our products and solutions directly and through third-party channels, including distributors, value-added resellers, independent software vendors and systems integrators, to a diversified base of local and global OEM, enterprise and government customers.

In Advanced Computing, we sell Penguin Computing products to enterprise and government customers in AI cloud services, energy, hyperscale and education markets;

Penguin Edge products to OEM customers, system integrators and through distribution to government, telecom infrastructure, industrial, network edge computing and transportation markets;

and Stratus products and services to financial services, telecom, oil and gas, transportation, healthcare, retail and industrial automation customers.

We also offer IoT endpoint applications such as smart city, digital health, digital signage and smart buildings.

In our Integrated Memory segment, we sell to OEM customers in industrial, government, networking and communications, enterprise storage and other vertical markets.

In Advanced Computing, we sell our HPC and AI products to enterprise and government customers in AI cloud services, energy, financial services, hyperscale, and education;

fault-tolerant computing products and services to enterprise customers in financial services, telecom, energy, transportation, healthcare, retail and industrial automation;

and Penguin Edge products to OEM customers, system integrators and through distribution to government, telecom infrastructure, industrial, network edge computing and transportation.

In our Integrated Memory segment, we sell memory solutions to OEM customers in industrial, government, networking and communications, enterprise storage and compute, and other vertical markets.

Our Optimized LED segment sells LED chips and components to manufacturers and electronic component distributors.

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In 2025, 2024, and 2023, sales to our ten largest end customers (including sales to contract manufacturers and original design manufacturers (“ODMs”) at the direction of such end customers) accounted for 66% , 58%, and 60% of total net sales respectively.

See “PART II – Item 8.

See “Item 1A.

Risk Factors – Risks Related to Our Business – We depend on a select number of customers for a significant portion of our revenue” and “PART II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Concentrations.”

To address the needs of our customers, we have developed and maintained relationships with leading suppliers and contract manufacturers located in Asia, Europe and the Americas.

Our semiconductor suppliers include many of the world’s largest memory manufacturers, including Samsung Semiconductor, Inc., Micron Technology, Inc., SK hynix, Inc.

and Kioxia Holdings Corporation.

They also include some of the world’s largest providers of computing, communications and graphics processers, including Intel Corporation, Advanced Micro Devices, Inc.,

NVIDIA Corporation and TD Synnex Corporation;

as well as providers of subsystems including Intel and Giga-Byte Technology Co., Ltd.;

networking products including Juniper Networks, Inc.;

Our semiconductor suppliers include many

of the world’s largest memory manufacturers, including Samsung Semiconductor, Inc., Micron Technology, Inc., SK hynix, Inc., International Business Machines Corporation, and Kioxia Holdings Corporation.

They also include some of the world’s largest providers of computing, communications and graphics processers, including Intel Corporation (“Intel”), Advanced Micro Devices, Inc.

and TD SYNNEX Corporation;

as well as providers of subsystems including Intel;

networking products including Super Micro Computer, Inc.

and Juniper Networks, Inc.;

and suppliers of software products.

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We also work closely with our suppliers to better ensure that needed materials are available and delivered on time.

Our established global network of materials sourcing helps ensure that our pricing remains competitive and allows us to provide a stable source of supply for our customers.

Our established global network of materials sourcing is designed to help ensure that our pricing remains competitive and to allow us to provide a stable source of supply for our customers.

We believe that our longstanding relationships with leading suppliers put us in a favorable position to procure sufficient quantities of materials, including during periods of industry shortages.

Our flexible and responsive global manufacturing capabilities, inventory management systems and global IT system allow us to move materials from one site to another in a cost-efficient manner and often deploy what might otherwise be excess inventory among other products and customers.

Our flexible and responsive global manufacturing capabilities, inventory management systems and global IT systems allow us to move materials from one site to another in a cost-efficient manner and often deploy what might otherwise be excess inventory among other products and customers.

In our Advanced Computing and Integrated Memory segments, we purchase a significant portion of our materials from suppliers on a purchase order basis and generally do not have long-term commitments from our suppliers.

Our Optimized LED segment has a number of supply agreements with third-party providers for LED chips in wafer or discrete form.

Global macroeconomic headwinds have resulted in significant supply shortages across the supply chain.

These shortages have increased the cost of materials needed to manufacture our products and have impacted our ability to manufacture products for our customers.

Many of these issues relate to reduced investment in capacity by our suppliers as well as local government policies that have affected the ability of our suppliers’ employees to work.

Additionally, airline freight capacity limitations have increased our freight cost and affected the timeliness of some deliveries.

See “Item 1A.

Risk Factors – Risks Related to Our Business – We depend on a small number of sole or limited source suppliers.”

Global macroeconomic headwinds and evolving industry dynamics have contributed to supply constraints across our business segments.

These supply challenges, combined with geopolitical factors including tariffs, have increased material costs and, in some cases, affected delivery timelines.

Sales, Support and Marketing

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Our on-site FAEs work closely with our sales team to provide product design support to our customers.

Our FAEs collaborate with our customers, providing us insight into their business models and product roadmaps and enabling us to identify early-stage opportunities that can help grow our business.

Our FAEs collaborate with our customers, providing us with insight into their business models and product roadmaps and enabling us to identify early-stage opportunities that can help grow our business.

Our integrated sales network and FAEs together allow us to be more responsive to our customers and more successful in navigating each customer’s unique and often complex design qualification and/or bid proposal processes.

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and utilizing direct email solicitation.

We participate in many industry trade shows worldwide and have active memberships in a number of industry organizations, including the Joint Electron Device Engineering Council (“JEDEC”), SD Card Association, Storage Networking Industry Association, Gen-Z Consortium, CXL Consortium, Trusted Computing Group, Open Compute Project, Sensor Open Systems Architecture Consortium, Peripheral Component Interconnect Special Interest Group and Illuminating Engineering Society (“IES”).

We participate in many industry trade shows worldwide and have active memberships in a number of industry organizations, including the Joint Electron Device Engineering Council, SD Card Association, Storage Networking Industry Association, CXL Consortium, Trusted Computing Group, Open Compute Project, Sensor Open Systems Architecture Consortium, Peripheral Component Interconnect Special Interest Group and Illuminating Engineering Society.

Research and Development

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Our R&D activities focus on driving innovation in our products and services as well as continuous process improvement for procurement, test and manufacturing.

Our research and product development for Advanced Computing includes high-availability server architecture and design, high-availability software development (including virtualization, operating systems and systems

server selection and occasional design;

designs to enable integration of racks and clusters;

designs to enable integration of racks and clusters, including power and cooling design, evaluation, and deployment;

storage system design and evaluation;

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and embedded computer boards and systems.

Our product development in Integrated Memory includes innovations for next-generation DRAM products, including DDR5, mobile DRAM, hybrid memories such as hybrid volatile and non-volatile DRAM, emerging interconnect standards such as CXL, enterprise memory and Flash-based products, and associated firmware development.

R&D in our Optimized LED segment includes innovations for next-generation LED products, including chips, packages for high-power general illumination, next generation direct-view video displays and specialty applications such as horticulture lighting, architectural, torch and emergency vehicles.

We plan to continue R&D focused on the innovation and design of these and other new products that address the needs of our customers, with a focus on faster-growing markets.

Our product development in Integrated Memory includes innovations for next-generation DRAM products, including DDR5, DRAM, and emerging interconnect standards such as CXL, enterprise memory and flash-based products, as well as associated firmware development.

We continue to develop a broad offering of flash-based products for industrial, government, communications and enterprise storage and compute markets.

Our engineering team is focused on firmware development, systems engineering and integration, system and platform validation, applications, and product and reliability engineering for new products.

We plan to continue R&D focused on the innovation and design of these and other new products that address the needs of our customers, with a focus on faster-growing markets.

Our advanced engineering and design capabilities enable us to address our customers’ increasingly complex needs.

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• Embedded computing platforms and systems providers;

• Providers of SoMs and SBCs;

• Providers of System-on-Modules (SoMs) and Single-Board Computers (SBCs);

• LED product manufacturers;

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• Manufacturers of industrial computers.

With respect to our Advanced Computing segment, within our Stratus business we primarily compete with manufacturers of enterprise servers and industrial computers.

Our Penguin Computing business competes primarily with global manufacturers of HPC and AI products and services.

For Penguin Edge products, primary competitors include makers of ruggedized computer boards and systems as well as manufacturers of edge computing devices, SoMs and SBCs.

With respect to our Advanced Computing segment, with our fault tolerant solutions we primarily compete with manufacturers of enterprise servers and industrial computers.

Our HPC and AI business competes primarily with global manufacturers of HPC and AI products and services.

Within our Integrated Memory segment, we compete against memory module providers and, to a lesser extent, large semiconductor manufacturers that utilize a portion of their capacity to manufacture memory modules.

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While many of our products contain proprietary aspects and are protected by patents, some of our products are built around mature industry standards and have less patent protection.

For these products, we rely on trade secrets and know-how to protect our proprietary interests.

For these products, we rely on trade secret rights to protect our proprietary interests.

The absence of patent protection means that we cannot prevent our competitors from reverse-engineering and duplicating those products.

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Human Capital

At Penguin Solutions, we put people first by nurturing a culture that supports creativity and growth.

At Penguin Solutions, we aim to put people first by nurturing a culture that supports creativity and growth.

We value our employees and understand the importance of their contributions as well as personal development.

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As part of our “people first” mindset, we are dedicated to advancing our people strategy by developing our talent, maintaining an engaged workforce and offering programs and rewards that attract and retain the best talent.

At the core of our people

strategy is a commitment to maintaining a safe and inclusive culture and ensuring that our workforce represents the diversity of the communities where we work.

As of August 30, 2024, we had approximately 2,700 full-time employees (excluding contractors) in locations across the globe, including in the United States, China and Malaysia.

At the core of our people strategy is a commitment to maintaining a safe and inclusive culture where individuals can achieve their highest potential, regardless of background.

As of August 29, 2025, we had approx imately 2,900 full-time employees (excluding contractors) in locations across the globe, including in the United States, China and Malaysia.

We have never experienced a work stoppage at any of our locations and take pride in our good employee relations.

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Continuous growth requires ongoing investment in people, innovation and new opportunities.

We are always improving our communications between employees and management teams in order to advance our company goals and enhance the employee experience.

We are always working to improve our communications between employees and management teams in order to advance our company goals and enhance the employee experience.

We aim to develop capable leadership that can meet the challenges of business growth while instilling a supportive and inclusive company culture.

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We also provide employees with access to technical and leadership training and training on workplace culture and enrichment, covering topics such as harassment, healthy work environments, inclusion, and global ethics and compliance.

Diversity, Equity and Inclusion

We are committed to diversity, equity and inclusion, which we believe starts at the top with an executive team that includes leaders from different backgrounds.

We value diversity and inclusion and are proud that our employees represent various races, religious beliefs, genders, ages, national origins and points of view.

We know that our diverse teams bring valuable perspectives and insights that help us consistently raise the bar and drive innovation forward.

Inclusion and Belonging

We strive to promote a workforce where individuals feel welcome and included.

We know that a sense of belonging can help us to achieve our highest potential, helping to consistently raise the bar and drive innovation forward.

This philosophy applies to all levels of our organization, including our executive leadership team and our Board of Directors.

We are committed to providing employees with an inclusive and nondiscriminatory work environment, which is outlined in our non-discrimination policy.

Through this policy, we articulate people-oriented, fair treatment principles for the recruitment, promotion, performance evaluation, compensation, training and retirement of all employees.

We have established a Global Diversity Council (“GDC”) focused on creating a working environment that offers equal opportunity employment so that all workers are treated with fairness and respect.

The GDC enables us to expand on our strategy to nurture a diverse and inclusive work environment through initiatives such as employee resource groups and the recruitment of more diverse leadership.

Our commitment to providing employees with an inclusive and nondiscriminatory work environment is outlined in our non-discrimination policy, though for the avoidance of doubt such policy is not incorporated herein by reference.

Through this policy, we aim to articulate people-oriented, fair treatment principles for the recruitment, promotion, performance evaluation, compensation, training and retirement of all employees.

We have established a council comprised of employees from across the organization focused on creating a working environment that offers equal opportunity employment so that all workers are treated with fairness and respect.

The council enables us to expand on our strategy to nurture an inclusive work environment through initiatives such as employee resource groups which are open to individuals regardless of background, and efforts to recruit leadership from the widest pool of eligible talent.

Wellness, Health and Safety

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We offer compensation and benefits programs designed to motivate and reward our employees based on our pay-for-performance philosophy.

We are committed to paying market competitive wages to attract key talent and work to help to ensure pay equality across our diverse workforce.

We are committed to paying market competitive wages to attract key talent and work to help promote pay equality across equal quality and levels of work.

Our bonus program links employee compensation to Penguin Solutions’ business performance.

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Environmental Regulations

Our operations and properties are subject to various federal, state, local, foreign and international environmental laws and regulations that govern, among other things, environmental licensing and registries, protection of flora and fauna, air and noise emissions, use of water resources, wastewater discharges, management and disposal of

hazardous and non-hazardous materials and wastes, reverse logistics (take-back policy) and remediation of releases of hazardous materials.

We cannot be certain that future identification of environmental concerns or conditions, more vigorous regulatory enforcement, enactment of more stringent laws and regulations or other unanticipated events will not arise in the future.

We cannot be certain that future identification of environmental concerns or conditions, more vigorous regulatory enforcement, enactment of more stringent laws and regulations or other

unanticipated events will not arise in the future.

Additionally, certain environmental laws may impose liability without regard to fault or the legality of the original conduct.

These developments could give rise to material environmental liabilities and related costs that could have a material adverse effect on our business, financial condition and results of operations.

Available Information

Our address in the Cayman Islands is c/o Walkers Corporate Limited, 190 Elgin Avenue, George Town, Grand Cayman, Cayman Islands, KY1-9008.

Our principal U.S.

executive offices are located at 1390 McCarthy Boulevard, Milpitas, California 95035 and our telephone number at this address is (510) 623-1231.

Our address and principal U.S.

executive offices are located at 45800 Northport Loop West, Fremont, California 94538 and our telephone number at this address is (510) 623-1231.

Our principal website is www.penguinsolutions.com.

Information contained on or accessible through our website is not a part of this Annual Report.

Through our website, we make available free of charge our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Sections 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after they have been electronically filed with, or furnished to, the SEC.

Through our website, we make available free of charge our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Sections 13(a) or Section 15(d) of the Exchange Act, as soon as reasonably practicable after they have been electronically filed with, or furnished to, the SEC.

The SEC maintains a website (www.sec.gov) containing reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business