We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SNDK Q4 Earnings Beat Estimates, Revenues Rise on Datacenter Growth
Read MoreHide Full Article
Key Takeaways
Sandisk's fiscal Q4 revenues jumped 371.6% year over year to $8.97 billion.
Datacenter revenues surged 103% sequentially to $2.98 billion on hyperscale and AI demand.
SNDK authorized $14 billion more in buybacks and forecast Q1 revenues of $10.3-$10.8 billion.
Sandisk (SNDK - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $39.25 per share that beat the Zacks Consensus Estimate by 14.63% and jumped 68% sequentially. The company reported earnings of 29 cents per share in the year-ago quarter.
Revenues surged 371.6% year over year to $8.97 billion and beat the consensus mark by 8%. Sequentially, revenues surged 51%. Stronger pricing, higher volumes and rapid Datacenter growth drove the upside, with Datacenter revenues hitting $2.98 billion in the reported quarter.
Sandisk Corporation Price, Consensus and EPS Surprise
Sandisk said roughly one-third of the sequential increase came from higher volumes, while two-thirds came from higher pricing. The mix shift toward higher-value customers also supported the company’s revenue expansion. The top line also exceeded management’s prior guidance range of $7.75-$8.25 billion.
Datacenter revenues surged 103% sequentially. Growth reflected broader adoption of compute-focused TLC enterprise solid-state drives across hyperscale and AI infrastructure customers. Sandisk also began revenue shipments of its QLC Stargate platform, expanding its portfolio for high-capacity AI data lakes.
Edge revenues were $5.43 billion, up 48% sequentially and 392% year over year. Management highlighted demand shifting toward AI-enabled devices and premium configurations, which support higher storage content in smartphones and PCs. Consumer revenues fell 32% sequentially and 5% year over year to $556 million.
SNDK’s New Business Models Improve Visibility
Sandisk has signed new business model agreements with eight Datacenter and Edge customers. These contracts have a weighted average duration of more than four years and include fixed and variable pricing elements with floors and ceilings.
The agreements represent minimum contracted revenues of $93.9 billion at floor pricing. Remaining performance obligations were $59.8 billion at quarter-end and would have been $91.1 billion including two agreements signed afterward. Financial guarantees totaled $16.5 billion. Sandisk expects the contracts to cover more than half of fiscal 2027 bits and roughly two-thirds of fiscal 2028 bits.
Sandisk’s Margins Expand on Operating Leverage
Non-GAAP gross margin expanded to 84.6% from 78.4% in the previous quarter and 26.4% reported in the year-ago quarter. The result exceeded management’s 79-81% guidance range.
Non-GAAP operating expenses were $484 million, representing 5.4% of revenues, compared with 7.5% in the previous quarter. Year over year, operating expenses increased 20%.
Non-GAAP operating margin rose to 79.2% from 70.9%, reflecting strong revenue growth and cost leverage.
Sandisk’s Cash Flow Supports Larger Buybacks
Sandisk ended the quarter with $4.76 billion in cash and cash equivalents after repurchasing 2.836 million shares for $4.5 billion. The board authorized an additional $14 billion repurchase program, lifting remaining authorization to $15.5 billion.
Cash flow from operations was $7.13 billion. Adjusted free cash flow totaled $5.04 billion, excluding $1.94 billion of customer prepayments and deposits related to the new business models. Gross capital expenditures were $562 million, or 6.3% of revenues.
SNDK’s Q1 Outlook Calls for Further Growth
For the first quarter of fiscal 2027, Sandisk expects revenues of $10.3-$10.8 billion. Sequential growth is projected to come from both bit growth and modest price increases.
Non-GAAP gross margin is expected between 83% and 85%, with operating expenses of $520-$540 million. Non-GAAP earnings are expected at $44-$46 per share.
Sandisk expects fiscal 2027 sellable bit growth in the mid-teens as it carries higher inventory to support customer commitments.
Zacks Rank & Other Stocks to Consider
Currently, Sandisk sports a Zacks Rank #1 (Strong Buy).
Onto Innovation, Inuvo and Kimball Electronics are set to report their quarterly results on Aug. 6, 11 and 12, respectively. Year to date, shares of Kimball Electronics and Inuvo have dropped 3.7% and 56%, respectively, while Onto Innovation have jumped 74.8%.
View the Zacks #1 Rank List
Image: Bigstock
SNDK Q4 Earnings Beat Estimates, Revenues Rise on Datacenter Growth
Key Takeaways
Sandisk (SNDK - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $39.25 per share that beat the Zacks Consensus Estimate by 14.63% and jumped 68% sequentially. The company reported earnings of 29 cents per share in the year-ago quarter.
Revenues surged 371.6% year over year to $8.97 billion and beat the consensus mark by 8%. Sequentially, revenues surged 51%. Stronger pricing, higher volumes and rapid Datacenter growth drove the upside, with Datacenter revenues hitting $2.98 billion in the reported quarter.
Sandisk Corporation Price, Consensus and EPS Surprise
Sandisk Corporation price-consensus-eps-surprise-chart | Sandisk Corporation Quote
SNDK’s Revenue Growth Reflects Pricing Strength
Sandisk said roughly one-third of the sequential increase came from higher volumes, while two-thirds came from higher pricing. The mix shift toward higher-value customers also supported the company’s revenue expansion. The top line also exceeded management’s prior guidance range of $7.75-$8.25 billion.
Datacenter revenues surged 103% sequentially. Growth reflected broader adoption of compute-focused TLC enterprise solid-state drives across hyperscale and AI infrastructure customers. Sandisk also began revenue shipments of its QLC Stargate platform, expanding its portfolio for high-capacity AI data lakes.
Edge revenues were $5.43 billion, up 48% sequentially and 392% year over year. Management highlighted demand shifting toward AI-enabled devices and premium configurations, which support higher storage content in smartphones and PCs. Consumer revenues fell 32% sequentially and 5% year over year to $556 million.
SNDK’s New Business Models Improve Visibility
Sandisk has signed new business model agreements with eight Datacenter and Edge customers. These contracts have a weighted average duration of more than four years and include fixed and variable pricing elements with floors and ceilings.
The agreements represent minimum contracted revenues of $93.9 billion at floor pricing. Remaining performance obligations were $59.8 billion at quarter-end and would have been $91.1 billion including two agreements signed afterward. Financial guarantees totaled $16.5 billion. Sandisk expects the contracts to cover more than half of fiscal 2027 bits and roughly two-thirds of fiscal 2028 bits.
Sandisk’s Margins Expand on Operating Leverage
Non-GAAP gross margin expanded to 84.6% from 78.4% in the previous quarter and 26.4% reported in the year-ago quarter. The result exceeded management’s 79-81% guidance range.
Non-GAAP operating expenses were $484 million, representing 5.4% of revenues, compared with 7.5% in the previous quarter. Year over year, operating expenses increased 20%.
Non-GAAP operating margin rose to 79.2% from 70.9%, reflecting strong revenue growth and cost leverage.
Sandisk’s Cash Flow Supports Larger Buybacks
Sandisk ended the quarter with $4.76 billion in cash and cash equivalents after repurchasing 2.836 million shares for $4.5 billion. The board authorized an additional $14 billion repurchase program, lifting remaining authorization to $15.5 billion.
Cash flow from operations was $7.13 billion. Adjusted free cash flow totaled $5.04 billion, excluding $1.94 billion of customer prepayments and deposits related to the new business models. Gross capital expenditures were $562 million, or 6.3% of revenues.
SNDK’s Q1 Outlook Calls for Further Growth
For the first quarter of fiscal 2027, Sandisk expects revenues of $10.3-$10.8 billion. Sequential growth is projected to come from both bit growth and modest price increases.
Non-GAAP gross margin is expected between 83% and 85%, with operating expenses of $520-$540 million. Non-GAAP earnings are expected at $44-$46 per share.
Sandisk expects fiscal 2027 sellable bit growth in the mid-teens as it carries higher inventory to support customer commitments.
Zacks Rank & Other Stocks to Consider
Currently, Sandisk sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Onto Innovation (ONTO - Free Report) , Inuvo (INUV - Free Report) and Kimball Electronics (KE - Free Report) . Each of the three stocks sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Onto Innovation, Inuvo and Kimball Electronics are set to report their quarterly results on Aug. 6, 11 and 12, respectively. Year to date, shares of Kimball Electronics and Inuvo have dropped 3.7% and 56%, respectively, while Onto Innovation have jumped 74.8%.