Sandisk Corporation (SNDK) Earnings & Analysis

Latest quarter

Sandisk reported Q4 FY2026 revenue of $9.0 billion, which exceeded the consensus of $8.3 billion. The company reported adjusted EPS, as the consensus counts it, of $39.25, above the consensus of $34.24.

The company reported revenue growth of 371.6% from Q4 FY2025 revenue of $1.9 billion. Sandisk reported diluted EPS of $43.97 for Q4 FY2026, compared with −$0.16 a year earlier. The company reported gross margin of 84.6%, up 58.4 percentage points year over year, and operating margin of 78.5%, up 77.5 percentage points. Sandisk reported free cash flow of $7.1 billion, compared with $49.0 million a year earlier.

Luis, Sandisk’s chief financial officer, said Q4 revenue was above the company’s prior guidance of $7.8 billion to $8.3 billion, while gross margin exceeded its prior 79.0% to 81.0% outlook. He also said non-GAAP EPS of $39.25 exceeded the company’s prior guidance of $30.00 to $33.00.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

David, Sandisk’s chief executive officer, said AI inference is increasing demand for NAND storage and that large technology companies are making long-term infrastructure investments. He said the company began shipping its QLC Stargate platform for revenue during the quarter and described data center as the company’s fastest-growing end market. David said Sandisk expects PCs and smartphones to return to growth in calendar year 2027, while the company expects higher storage content per device over future refresh cycles.

Luis said Q4 revenue growth came approximately one-third from higher volumes and two-thirds from higher pricing. He said Sandisk had signed five additional agreements since its April call, taking its new business models, or NBMs, to eight data-center and edge customers. Luis said these agreements have a weighted average duration of more than four years, signed agreements carry minimum expected revenue of $93.9 billion at floor pricing, and remaining performance obligations were $59.8 billion at quarter-end. He said the agreements include $16.5 billion in financial guarantees intended to protect Sandisk if customers do not satisfy purchase obligations.

On margins, Luis said the company expects its NBMs to generate gross margin of around 80%. When an analyst asked whether NBMs could pressure margins, Luis said the company’s Q1 non-GAAP gross-margin outlook reflects mix, the guidance range and assumptions on component costs. David said the company is focused on durability, a return for its products and greater visibility alongside margins.

Luis said fiscal 2027 capital spending will rise year over year as Sandisk runs BICS 8 and BICS 10, although investment relative to revenue is expected to be approximately 6.00% for the full year. He also said Sandisk plans to hold higher inventory days to support NBMs and account for higher component costs.

When analysts asked about the customer agreements, Luis said Sandisk would not disclose contract-specific details. David said customers are providing demand signals through the end of the decade and that Sandisk will use customer discussions to inform investment decisions. Luis said pricing for non-NBM business will fluctuate with the market.

Guidance

Sandisk expects Q1 FY2027 revenue of $10.3 billion to $10.8 billion and non-GAAP EPS of $44.00 to $46.00. Luis said the company expects Q1 FY2027 non-GAAP gross margin of 83.0% to 85.0%. He said Sandisk expects capital spending to be approximately 6.00% of revenue for FY2027.