Free cash flow generation remains erratic, swinging from a $93.8 million surplus in 2025Q3 to a $70.3 million deficit in 2025Q4, largely driven by volatile working capital changes.
| Cash from Operations | 114.76M | 109.08M | 77.19M | 104.39M | 104.93M | 153.35M | 87.2M | 169.66M | 67.91M | -933K | 15.05M | 40.76M |
| Operating CF Margin % | - | 7.97% | 6.59% | 7.24% | 7.52% | 14.53% | 7.77% | 14% | 5.27% | -0.12% | 2.82% | 6.33% |
| Operating CF Growth % | -207.98% | 41.33% | -26.06% | -0.52% | -31.57% | 75.85% | -48.6% | 149.84% | 7378.35% | -106.2% | -63.08% | - |
| Net Income | 54.58M | 28.84M | -44.32M | 9.69M | 24.41M | -41.95M | -1.14M | 51.33M | 119.46M | -7.79M | -19.96M | -46.45M |
| Depreciation & Amortization | 52.79M | 56.22M | 65.72M | 71.63M | 46.66M | 34.94M | 36.43M | 29.21M | 26.18M | 33.24M | 31.48M | 50.15M |
| Stock-Based Compensation | 23.18M | 41.18M | 43.16M | 39.23M | 37.28M | 30.96M | 18.72M | 18.2M | 10.56M | 5.36M | 3.87M | 6.13M |
| Deferred Taxes | -73.75K | 0 | -11.04M | -63.6M | -20K | -1.98M | -2.12M | -719K | -2.82M | -2.39M | -1.42M | -2.46M |
| Other Non-Cash Items | -548.24K | 1.96M | -31M | 39.07M | 118.89M | 71.11M | 24.99M | 809K | 827K | 31.86M | 4.66M | 10.34M |
| Working Capital Changes | -17.08M | -19.1M | 54.67M | 8.37M | -122.3M | 60.28M | 10.32M | 70.83M | -86.3M | -61.21M | -3.58M | 23.06M |
| Change in Receivables | -44.39M | -56.16M | -32.49M | 162.51M | -97.8M | -47.77M | -12.35M | 35.24M | -55.3M | -40.43M | 44.92M | 8.6M |
| Change in Inventory | -127.64M | -101.61M | 23.77M | 95.22M | 30.73M | -99.91M | -51.84M | 102.08M | -42.44M | -21.85M | 31.33M | -19.99M |
| Change in Payables | -804.45K | 131.01M | 0 | 0 | -44.91M | 0 | 70.09M | -64.57M | 17.55M | -10.61M | -86.59M | 53.24M |
| Cash from Investing | 75.47M | 24.97M | 107.58M | -298.57M | -38.97M | -84.18M | -32.04M | -109.44M | -67.75M | -18.03M | -13.37M | -8.72M |
| Capital Expenditures | -6.51M | -9.01M | -19.42M | -39.42M | -20.36M | -16.67M | -32.45M | -33.43M | -25.74M | -18.68M | -13.84M | -31.66M |
| CapEx % of Revenue | 0.48% | 0.66% | 1.66% | 2.74% | 1.46% | 1.58% | 2.89% | 2.76% | 2% | 2.45% | 2.59% | 4.92% |
| Acquisitions | 0 | 0 | 0 | -213.07M | 0 | -35.68M | 0 | -76.09M | -42.32M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 24.49M | 26.69M | 118.12M | -16.91M | -18.61M | -31.83M | 404K | 81K | 305K | 651K | 475K | 22.95M |
| Cash from Financing | -313.86M | -63.46M | -210.1M | 236.42M | 73.88M | 2.85M | 12.59M | 100K | 7.94M | -16.98M | -10.91M | -32.65M |
| Debt Issued (Net) | -220.08M | -200.01M | -158.64M | 273.65M | 119.06M | 25M | 29.69M | -6.75M | 2.81M | 76.14M | -10.92M | 802K |
| Equity Issued (Net) | -27.81M | 139.81M | -11.5M | 18.37M | -45.09M | -33.59M | 4.73M | 6.85M | 5.91M | 63.51M | -124K | 12K |
| Dividends Paid | -4.05M | -7.86M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -40.2M | -60.18M | -21.31M | -24.67M | -57.23M | -48.51M | -749K | -520K | -1.59M | 0 | -124K | 0 |
| Other Financing | -61.75M | 4.61M | -39.96M | -55.61M | -86K | 11.44M | -21.82M | 0 | -768K | -156.62M | 133K | -5.12M |
| Net Change in Cash | -132.51M | 70.61M | -26.59M | 47M | 140.08M | 72.17M | 52.67M | 60.91M | 7.77M | -35.96M | -9.46M | -10M |
| Free Cash Flow | 105.01M | 100.07M | 57.76M | 64.97M | 84.57M | 136.68M | 54.76M | 136.22M | 42.17M | -19.61M | 1.21M | 9.1M |
| FCF Margin % | 7.79% | 7.31% | 4.93% | 4.51% | 6.06% | 12.95% | 4.88% | 11.24% | 3.27% | -2.58% | 0.23% | 1.41% |
| FCF Growth % | -23.98% | 73.25% | -11.09% | -23.18% | -38.12% | 149.6% | -59.8% | 223.04% | 315.03% | -1726.12% | -86.75% | - |
| FCF per Share | 1.97 | 1.84 | 1.10 | 1.27 | 1.55 | 2.65 | 1.14 | 2.90 | 0.91 | -0.62 | 0.03 | 0.22 |
| FCF Conversion (FCF/Net Income) | 1.92x | 5.06x | -1.47x | -0.56x | 1.58x | 7.20x | -76.29x | 3.31x | 0.57x | 0.12x | -0.75x | -0.88x |
| Interest Paid | 0 | 0 | 0 | 0 | 12.8M | 8.03M | 12.98M | 20.65M | 15.29M | 21.46M | 22.41M | 23.75M |
| Taxes Paid | 0 | 0 | 0 | 0 | 13.81M | 6.7M | 9.15M | 15.31M | 21.83M | 8.1M | 5.3M | 8M |
Working capital volatility
According to recent financial disclosures, PENG's operating cash flow to net income ratio has fluctuated wildly, reaching a high of 36.01 in 2025Q3 and a low of -7.11 in 2025Q4, suggesting that GAAP net income is a poor proxy for the company's actual cash-generating capacity.
The extreme variance in the OCF/NI ratio indicates that accruals and non-cash adjustments are significantly distorting the bottom line. Investors should interpret this as a signal that earnings quality is currently low, as cash generation appears decoupled from reported profitability metrics.
As reported in quarterly filings, PENG's free cash flow trajectory remains highly erratic, swinging from a peak of $93.8 million in 2025Q3 to a deficit of $70.3 million in 2025Q4, which highlights the inherent instability in the company's ability to sustain positive cash generation.
This lack of FCF predictability suggests that the company's business model is heavily reliant on the timing of large project milestones. The inability to maintain a stable FCF margin warrants further investigation into whether the company can achieve consistent cash conversion as it scales its AI infrastructure business.
Based on the provided cash flow statements, working capital changes have been the primary driver of liquidity, with a massive $96.2 million outflow in 2025Q4 followed by a $26.2 million inflow in 2026Q2, illustrating the significant impact of inventory and receivables management on cash flow.
These sharp reversals suggest that PENG is managing a complex supply chain where inventory build-ups and customer payment cycles create substantial quarterly noise. This volatility implies that the company's cash position is highly sensitive to operational execution and the timing of large-scale hardware deployments.
As indicated by historical data, PENG maintains a disciplined approach to capital expenditure, with CapEx/Revenue ratios consistently remaining below 2% over the last ten quarters, suggesting that the company's business model is not overly burdened by heavy investment in physical manufacturing infrastructure.
The low capital intensity appears to reflect a strategy focused on assembly and integration rather than high-cost semiconductor fabrication. While this preserves cash, it also suggests that the company's competitive moat is not built on proprietary manufacturing assets, which may limit its long-term pricing power.
According to reported figures, PENG has continued to execute share repurchases, including a $36.9 million buyback in 2026Q2, even as operating cash flow remains inconsistent, which may indicate a management preference for returning capital despite the underlying volatility in the company's cash generation profile.
The decision to prioritize buybacks while net income remains thin suggests a focus on supporting the share price, though this may limit the cash available for strategic reinvestment. Investors should monitor whether this capital allocation strategy is sustainable if the current volatility in operating cash flow persists.
Quick answers to the most common questions about buying PENG stock.
Penguin Solutions, Inc. (PENG) generated $109.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Penguin Solutions, Inc. (PENG) generated $100.1M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Penguin Solutions, Inc. (PENG) spent $9.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Penguin Solutions, Inc. (PENG) returned $7.9M to shareholders via cash dividends and spent $60.2M on share repurchases. This shows the company's commitment to returning capital to its equity investors.