Sandisk Corporation

What they do

Sandisk develops, manufactures, and sells NAND flash-based storage devices and solutions, including solid-state drives, embedded products, removable cards, USB drives, and wafers/components. It operates across three end markets: Cloud (datacenter and cloud service providers), Client (OEM and channel customers for PCs, mobile, gaming, automotive, and industrial), and Consumer (retail products leveraging strong brand recognition). The company holds approximately 7,900 granted patents and about 3,200 pending patent applications worldwide.

Revenue drivers

• Datacenter (Cloud) — Revenue of $5.15 billion in fiscal 2026, up 437% year-over-year; Q4 2026 revenue was $2.98 billion, up 103% sequentially. Focus on AI workloads and high-value customers.
• Edge (Client) — Revenue of $12.16 billion in fiscal 2026, up 195% year-over-year; Q4 2026 revenue was $5.43 billion, up 48% sequentially. Includes products for OEMs and channel customers across PC, mobile, gaming, and automotive.
• Consumer — Revenue of $2.9 billion in fiscal 2026 (implied from total and others); Q4 2026 revenue was $556 million, down 32% sequentially and 5% year-over-year. Retail and end-user products.

Recent performance

Fiscal Q4 2026 revenue was $8.97 billion, up 51% sequentially and 372% year-over-year. GAAP net income was $6.90 billion ($43.97 diluted EPS); Non-GAAP EPS was $39.25. For fiscal 2026, revenue was $20.25 billion, up 175% from the prior year, with GAAP net income of $11.43 billion ($73.76 diluted EPS) and Non-GAAP EPS of $70.88. Growth was driven by higher pricing (two-thirds of sequential revenue growth) and higher volumes, plus a mix shift toward datacenter customers.

Strategy

Management emphasizes expanding datacenter presence as a key growth pillar, with revenue there up 437% in fiscal 2026. The company is signing long-term 'New Business Model' agreements; since announcing five during the April earnings call, it has signed five more, including three with new customers. Sandisk highlighted deepening customer partnerships and a leading technology portfolio to generate growing and durable free cash flow. The company also expanded its share repurchase program, adding $14 billion to a total remaining authorization of $15.5 billion.

Risks

• Supply chain concentration — Heavy reliance on a limited number of suppliers, including Kioxia Corporation, for materials and components could disrupt operations.
• Pricing volatility — Declining average selling prices and volatile demand in the flash memory industry could pressure margins.
• Key customer concentration — Loss of revenue from a key customer or consolidation among customers could harm operating results.
• Post-separation execution — Ability to effectively operate as an independent company, including indemnification and tax issues, remains uncertain.

Outlook

Management expects fiscal Q1 2027 revenue between $10.30 billion and $10.80 billion, with Non-GAAP diluted EPS of $44.00 to $46.00. This guidance implies continued sequential growth, driven by strong datacenter demand and pricing. The company also continues to pursue additional NBM agreements and expand its capital return program.