SanDisk Q4 Net Profit Hits $6.9 Billion, Turns Profitable Year-Over-Year; Full-Year Revenue Surpasses $20 Billion, Shares Fall 8% in After-Hours Trading

Deep News
08/06

SanDisk Corp. reported its financial results for the fourth quarter and full fiscal year of 2026, ending July 3, 2026. The company's Q4 revenue reached $8.97 billion, surging 51% quarter-over-quarter and 372% year-over-year. Approximately one-third of the sequential revenue growth came from higher shipment volumes, with the remaining two-thirds attributed to price increases.

GAAP net profit for the quarter was $6.90 billion, a 91% increase from the prior quarter, compared to a loss of $23 million in the same period last year. GAAP diluted earnings per share stood at $43.97, while non-GAAP diluted EPS was $39.25. The GAAP gross margin hit 84.6%, improving by 6.2 percentage points sequentially and 58.4 percentage points year-over-year. Operating expenses were $545 million, down 1% sequentially but up 14% year-over-year; non-GAAP operating expenses were $484 million, up 8% sequentially and 20% year-over-year. Operating profit came in at $7.037 billion, a 71% sequential increase, compared to $18 million in the year-ago period.

For the full fiscal year, total revenue was $20.25 billion, a 175% increase year-over-year. GAAP net profit reached $11.43 billion, a 797% surge, compared to a loss of $1.64 billion in the prior year. GAAP diluted EPS was $73.76, and non-GAAP diluted EPS was $70.88. The full-year GAAP gross margin was 71.5%, up 41.4 percentage points year-over-year. Operating expenses, excluding a prior-year goodwill impairment of $1.83 billion, were $2.08 billion, down 42%; non-GAAP operating expenses were $1.79 billion, up 16%. Operating profit for the year was $12.39 billion, versus a loss of $1.38 billion in the prior year.

Segment Performance

In the fourth quarter, data center revenue was $2.98 billion, up 103% sequentially and compared to $213 million in the year-ago period. Edge device revenue reached $5.43 billion, up 48% sequentially and 392% year-over-year. Consumer business revenue was $556 million, down 32% sequentially and 5% year-over-year. For the full year, data center revenue totaled $5.15 billion, up 437%; edge device revenue was $12.16 billion, up 195%; and consumer business revenue was $2.94 billion, up 29%.

Capital Allocation and Cash Flow

The company generated $7.13 billion in operating cash flow during Q4, with free cash flow of $7.08 billion and adjusted free cash flow of $5.04 billion. Full-year operating cash flow was $11.67 billion, free cash flow was $11.49 billion, and adjusted free cash flow was $8.74 billion. Capital expenditures were $43 million in Q4 and $177 million for the full year. The company repurchased $4.52 billion in common stock during the quarter. The board approved an additional $14 billion share repurchase program, bringing the total remaining authorization to $15.5 billion. Since the April earnings call, SanDisk Corp. has signed five additional new business model agreements, including three with new clients and two extensions of prior agreements.

Outlook for the First Quarter of Fiscal 2027

For the first quarter of fiscal 2027, SanDisk Corp. expects revenue between $10.3 billion and $10.8 billion. GAAP gross margin is projected at 83.0% to 84.9%, with non-GAAP gross margin at 83.0% to 85.0%. GAAP operating expenses are estimated at $574 million to $614 million, while non-GAAP operating expenses are expected to be $520 million to $540 million. Non-GAAP diluted EPS is forecasted at $44.00 to $46.00, with diluted shares outstanding of approximately 155 million. The non-GAAP tax rate is expected to be 15.0%. Following the report, shares fell 8% in after-hours trading.

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