Penguin Solutions, Inc.PENG

Penguin Solutions, Inc. Fair Value Disclosure

10-KFiled Oct 21, 20251 min read
Fair Value Measurements
 
August 29, 2025
August 30, 2024
As ofFair ValueCarrying ValueFair ValueCarrying Value
Assets:
Derivative financial instruments$4,223 $4,223 $3,929 $3,929 
Liabilities:
Amended 2022 TLA$— $— $300,015 $297,297 
2030 Notes224,048 193,906 199,160 192,778 
2029 Notes197,363 147,987 178,760 147,439 
2026 Notes25,713 19,945 23,918 19,833 
The deferred cash adjustment resulting from the divestiture of an 81% interest in SMART Brazil is accounted for as a derivative financial instrument and is revalued at the end of each reporting period. The asset’s fair value, as measured on a recurring basis, was based on Level 2 measurements, including market-based observable inputs of interest rates and credit-risk spreads.
The fair value of the Amended 2022 TLA, as measured on a non-recurring basis, was estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours. The fair values of our convertible notes, as measured on a non-recurring basis, were determined based on Level 2 measurements, including the trading prices of the notes.

Historical Timeline

Fiscal YearFiled
2025Oct 21, 2025Showing above
2024Oct 24, 2024
2023Oct 20, 2023
2022Oct 14, 2022
2021Oct 25, 2021
2020Oct 22, 2020
2019Nov 6, 2019

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance