We calculate basic earnings per common share (“EPS”) pursuant to the two-class method as a result of the issuance of the Issued Cayman CPS on December 13, 2024. The two-class method is an earnings allocation formula that determines EPS for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all current period earnings, distributed and undistributed, are allocated to common stock and participating securities based on their respective rights to receive dividends. The Issued CPS is considered a participating security. The Issued CPS is not included in the computation of basic

With respect to the Issued CPS, diluted EPS is calculated using the more dilutive of the two-class method or if-converted method. The two-class method uses net income available to common stockholders and assumes conversion of all potential shares other than the participating securities. The if-converted method uses net income and assumes conversion of all potential shares including the participating securities.


Year ended	August 28, 2026		August 29, 2025		August 30, 2024
Net income (loss) from continuing operations	$	180,615	$	25,391	$	(44,324)
Net loss from discontinued operations	—		—		(8,148)
Net income (loss) attributable to Penguin Solutions – Basic and Diluted	$	180,615	$	25,391	$	(52,472)
Less: Preferred stock dividends	12,133		8,667		—
Income available for distribution	168,482		16,724		(52,472)
Income allocated to participating securities	17,394		1,263		—
Net income (loss) available to common stockholders	$	151,088	$	15,461	$	(52,472)

Weighted-average shares outstanding – Basic	52,952		53,154		52,428
Dilutive effect of equity plans and Convertible Senior Notes	5,873		1,214		—
Weighted-average shares outstanding – Diluted	58,825		54,368		52,428

Earnings (loss) per common share:
Basic	$	2.85	$	0.29	$	(0.85)
Discontinued operations	—		—		(0.15)
	$	2.85	$	0.29	$	(1.00)

Method used:	Two-Class		Two-Class
Diluted earnings (loss) per common share:
Continuing operations	$	2.60	$	0.28	$	(0.85)
Discontinued operations	—		—		(0.15)
	$	2.60	$	0.28	$	(1.00)






Unweighted anti-dilutive shares:
Equity plans	288		945		5,184

Preferred stock	6,096		6,096		—
	6,384		7,041		5,184

Upon any conversion of our convertible notes, we will be required to pay cash in an amount at least equal to the principal portion. We will settle any amount in excess of principal with respect to conversions of the 2026 Notes in common stock, and we have the option to settle in cash and/or common stock for the 2029 Notes, 2030 Notes, and 2031 Notes. As a result, only the amounts expected to be settled in excess of the principal portion are considered in calculating diluted earnings per share under the if-converted method.