What drove the large jump in Sandisk's revenue and margins this quarter?

According to management, the increase came from two sources: a mix shift toward higher-value customers, led by Datacenter revenue up 233% sequentially, and higher pricing. Gross margin rose to 78.4% from 50.9% in the prior quarter, reflecting the higher-value mix and pricing.

What is the New Business Model (NBM) and why does it matter?

The NBM is a strategy built on multi-year customer engagements backed by firm financial commitments. Management says it has signed three agreements through quarter-end and two more in fiscal Q4. If these commitments hold, they could make earnings more durable and predictable than a purely spot-market NAND business, though the filing does not quantify the terms.

How much is the $6 billion share repurchase program, and will Sandisk definitely buy back that much stock?

No. The $6 billion authorization (excluding fees and commissions) is a maximum framework, not a commitment. The company does not have to repurchase any shares and may suspend or end the program at any time. Purchases may be made in the open market, including under a Rule 10b5-1 plan, and are expected to be funded from operating cash flow, depending on market conditions.

What is the outlook for the fourth quarter of fiscal 2026?

The company guided revenue to $7.75–$8.25 billion, GAAP gross margin to 78.9%–80.9%, non-GAAP gross margin to 79.0%–81.0%, and non-GAAP diluted EPS to $30.00–$33.00, on about 158 million diluted shares. Non-GAAP operating expenses are guided to $480–$500 million, which excludes stock-based compensation and other items.

Are there any concerns in the financial results that investors should consider?

Yes. Accounts receivable rose to $2.73 billion from $1.07 billion at the June 2025 year-end, and income tax payable (non-current) climbed to $783 million from $131 million. These increases mean that some of the earnings have not yet converted to cash. Results are also sensitive to pricing, which can reverse in memory markets, and the figures are preliminary until the Form 10-Q is filed and reviewed.

SNDK 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 30, 2026. Cited figures are marked; the original filing is the authoritative source.

Sandisk (SNDK) reported fiscal third quarter 2026 results (quarter ended April 3, 2026) with revenue of $5.95 billion^a, up 97% sequentially and 251% year over year, and above its guidance range.

GAAP gross margin expanded to 78.4% from 50.9% in the prior quarter, driving GAAP operating income of $4.11 billion^b and GAAP net income of $3.62 billion, or $23.03 per diluted share. Non-GAAP diluted EPS was $23.41. Management attributed the outperformance to a mix shift toward higher-value customers, led by Datacenter revenue up 233% sequentially, as well as higher pricing.

Edge revenue rose 118% sequentially to $3.66 billion^c, while Consumer revenue declined 10% to $820 million. Management is also pointing to a structural change in the business. The company ended the quarter with three signed New Business Model (NBM) agreements, which it describes as multi-year customer engagements backed by firm financial commitments, and signed two more in the fiscal fourth quarter.

For fiscal Q4 2026, the company guided revenue to $7.75^d–$8.25 billion and non-GAAP diluted EPS to $30.00–$33.00 on roughly 158 million diluted shares. Balance sheet strength is also notable: the company reports zero debt, cash of $3.7 billion, and operating cash flow of $3.04 billion in the quarter. The Board approved a $6 billion share repurchase program, to be funded from operating cash flow and executed at management's discretion, with no obligation to buy back shares.

Investors should weigh the sharp margin expansion and the new contract structure against the fact that results rely heavily on pricing, which can reverse in NAND markets. Accounts receivable rose sharply to $2.7 billion and income tax payable increased substantially, so cash conversion in future quarters bears watching. The figures are preliminary and subject to completion of the Form 10-Q and auditor review.

02—Key points

Key Highlights

Q3 FY2026 revenue of $5.95B, up 97% sequentially and 251% year over year, above guidance; GAAP gross margin of 78.4% vs. 50.9% in Q2.
GAAP net income of $3.62B ($23.03 diluted EPS) vs. $803M in Q2; non-GAAP diluted EPS of $23.41.
Datacenter revenue rose 233% sequentially to $1.47B; Edge rose 118% to $3.66B; Consumer fell 10% to $820M.
Three NBM agreements signed by quarter-end and two more signed in fiscal Q4, shifting toward multi-year commitments.
Q4 FY2026 guidance: revenue of $7.75–$8.25B, non-GAAP gross margin of 79–81%, and non-GAAP diluted EPS of $30.00–$33.00.
Zero debt at quarter-end (down from $1.85B a year earlier), with $3.7B cash and $3.04B operating cash flow in the quarter.
$6B share repurchase authorization approved by the Board; execution is discretionary and may be suspended at any time.

03—Questions

Frequently Asked Questions

What drove the large jump in Sandisk's revenue and margins this quarter?
According to management, the increase came from two sources: a mix shift toward higher-value customers, led by Datacenter revenue up 233% sequentially, and higher pricing. Gross margin rose to 78.4% from 50.9% in the prior quarter, reflecting the higher-value mix and pricing.
What is the New Business Model (NBM) and why does it matter?
The NBM is a strategy built on multi-year customer engagements backed by firm financial commitments. Management says it has signed three agreements through quarter-end and two more in fiscal Q4. If these commitments hold, they could make earnings more durable and predictable than a purely spot-market NAND business, though the filing does not quantify the terms.
How much is the $6 billion share repurchase program, and will Sandisk definitely buy back that much stock?
No. The $6 billion authorization (excluding fees and commissions) is a maximum framework, not a commitment. The company does not have to repurchase any shares and may suspend or end the program at any time. Purchases may be made in the open market, including under a Rule 10b5-1 plan, and are expected to be funded from operating cash flow, depending on market conditions.
What is the outlook for the fourth quarter of fiscal 2026?
The company guided revenue to $7.75–$8.25 billion, GAAP gross margin to 78.9%–80.9%, non-GAAP gross margin to 79.0%–81.0%, and non-GAAP diluted EPS to $30.00–$33.00, on about 158 million diluted shares. Non-GAAP operating expenses are guided to $480–$500 million, which excludes stock-based compensation and other items.
Are there any concerns in the financial results that investors should consider?
Yes. Accounts receivable rose to $2.73 billion from $1.07 billion at the June 2025 year-end, and income tax payable (non-current) climbed to $783 million from $131 million. These increases mean that some of the earnings have not yet converted to cash. Results are also sensitive to pricing, which can reverse in memory markets, and the figures are preliminary until the Form 10-Q is filed and reviewed.

04—Continue

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