Shares of Penguin Solutions, Inc. (PENG) tumbled 7.98% in a 24-hour period following the release of its third-quarter fiscal 2025 financial results. The stock's sharp decline reflects investor disappointment with the company's performance, particularly in its key Advanced Computing segment.

While Penguin Solutions reported adjusted earnings per share of $0.47, surpassing analyst expectations of $0.33, the company's revenue fell short of estimates. Net sales for the quarter came in at $324.25 million, missing the projected $328.81 million. The Advanced Computing segment, which represents the largest share of Penguin's revenue, saw a significant decline, with sales falling to $132.5 million from $145 million in the prior-year period.

Chief Financial Officer Nate Olmstead cited supply chain constraints and a challenging macroeconomic environment as factors impacting the company's performance. These issues are creating longer lead times for certain components, affecting Penguin's ability to ramp up existing and new customer projects. Despite raising its full-year adjusted earnings guidance, the revenue miss and concerns about the company's core business segment appear to have overshadowed the positive aspects of the report, leading to the substantial stock price decline.