Sandisk | 10-Q: FY2026 Q3 Revenue Beats Estimate at USD 5.95 B

Revenue: As of FY2026 Q3, the actual value is USD 5.95 B, beating the estimate of USD 4.735 B.

EPS: As of FY2026 Q3, the actual value is USD 23.03, beating the estimate of USD 14.178.

EBIT: As of FY2026 Q3, the actual value is USD 4.105 B.

Sandisk Corporation’s net revenue for the three months ended April 3, 2026, increased by 251% to $5,950 million from $1,695 million in the comparable prior-year period, primarily driven by a 248% increase in average selling prices (ASP) per gigabyte . For the nine months ended April 3, 2026, net revenue rose by 107% to $11,283 million from $5,454 million in the prior year, attributed to a 76% increase in ASP per gigabyte and an 18% increase in exabytes sold .

Segment Revenue by End Market

Three Months Ended April 3, 2026 vs. March 28, 2025: Datacenter: Revenue increased by 645% to $1,467 million from $197 million, primarily due to a 186% increase in ASP per gigabyte and a 160% increase in exabytes sold . Edge: Revenue increased by 295% to $3,663 million from $927 million, primarily due to a 343% increase in ASP per gigabyte, partially offset by a 10% decrease in exabytes sold . Consumer: Revenue increased by 44% to $820 million from $571 million, primarily due to a 139% increase in ASP per gigabyte, partially offset by a 40% decrease in exabytes sold .

Nine Months Ended April 3, 2026 vs. March 28, 2025: Datacenter: Revenue increased by 191% to $2,176 million from $747 million, primarily due to a 79% increase in exabytes sold and a 63% increase in ASP per gigabyte . Edge: Revenue increased by 123% to $6,728 million from $3,024 million, primarily due to a 99% increase in ASP per gigabyte and a 12% increase in exabytes sold . Consumer: Revenue increased by 41% to $2,379 million from $1,683 million, primarily due to a 39% increase in ASP per gigabyte and a 2% increase in exabytes sold .

Segment Revenue by Geography

Three Months Ended April 3, 2026 vs. March 28, 2025: Asia: $4,272 million vs. $1,038 million . Americas: $1,209 million vs. $375 million . Europe, Middle East and Africa: $469 million vs. $282 million .

Nine Months Ended April 3, 2026 vs. March 28, 2025: Asia: $7,850 million vs. $3,274 million . Americas: $2,128 million vs. $1,207 million . Europe, Middle East and Africa: $1,305 million vs. $973 million .

Operational Metrics

Three Months Ended April 3, 2026 vs. March 28, 2025: Net Income (Loss): Sandisk Corporation reported a net income of $3,615 million, a significant improvement from a net loss of -$1,933 million in the prior-year period . Gross Profit: Gross profit increased to $4,662 million from $382 million . Gross Margin: Gross margin expanded to 78.4% from 22.5%, primarily due to a higher ASP that outpaced the movement in costs per gigabyte . Operating Income (Loss): Operating income was $4,111 million, compared to an operating loss of -$1,881 million in the prior-year period . Research and Development (R&D) Expenses: R&D expenses increased by $52 million to $337 million, primarily due to a $42 million increase in compensation and benefits and a $5 million increase in stock-based compensation . Selling, General and Administrative (SG&A) Expenses: SG&A expenses increased by $22 million to $161 million, mainly due to a $15 million increase in compensation and benefits and a $6 million increase in customer marketing engagements, partially offset by a $5 million decrease in materials . Goodwill Impairment: No goodwill impairment charge was recorded, compared to $1,830 million in the prior-year period . Loss on Debt Extinguishment: A loss of $46 million was recognized due to the early settlement of the Term Loan Facility . Business Separation Costs: Decreased by $2 million to $7 million . Interest and Other Income (Expense), Net: Decreased by $16 million to -$4 million . Income Tax Expense: Income tax expense was $492 million, up from $32 million . Effective Tax Rate: The effective tax rate was 12%, compared to -2% in the prior year .

Nine Months Ended April 3, 2026 vs. March 28, 2025: Net Income (Loss): Sandisk Corporation reported a net income of $4,530 million, a significant improvement from a net loss of -$1,618 million in the prior-year period . Gross Profit: Gross profit increased to $6,890 million from $1,714 million . Gross Margin: Gross margin expanded to 61.1% from 31.4%, primarily due to a higher ASP that outpaced the movement in costs per gigabyte . Operating Income (Loss): Operating income was $5,352 million, compared to an operating loss of -$1,395 million in the prior-year period . Research and Development (R&D) Expenses: R&D expenses increased by $133 million to $980 million, primarily due to an $88 million increase in compensation and benefits, a $19 million increase in R&D projects, and a $15 million increase in stock-based compensation . Selling, General and Administrative (SG&A) Expenses: SG&A expenses increased by $68 million to $479 million, mainly due to a $43 million increase in compensation and benefits, offset by a $35 million decrease in materials, with increases in customer marketing engagements ($22 million), stock-based compensation ($16 million), and outside service costs ($9 million) . Goodwill Impairment: No goodwill impairment charge was recorded, compared to $1,830 million in the prior-year period . Loss on Debt Extinguishment: A loss of $46 million was recognized due to the early settlement of the Term Loan Facility . Business Separation Costs: Decreased by $25 million to $25 million . Employee Termination and Other: Decreased by $7 million to -$2 million, as no restructuring actions were taken . (Gain) Loss on Business Divestiture: A loss of $10 million was recorded, compared to a gain of -$34 million in the prior year, primarily due to an adjustment for working capital support related to the sale of SanDisk Semiconductor (Shanghai) Co. Ltd. (SDSS) . Interest and Other Income (Expense), Net: Increased by $118 million to -$184 million, primarily due to the settlement of non-operating legal matters, increased interest expense from the Term Loan Facility, and an investment impairment, partially offset by increased interest income and a gain on investment sale . Income Tax Expense: Income tax expense was $638 million, up from $157 million . Effective Tax Rate: The effective tax rate was 12%, compared to -11% in the prior year .

Cash Flow (Nine Months Ended April 3, 2026 vs. March 28, 2025)

• Net cash provided by (used in) operating activities: $4,545 million vs. -$10 million . Net cash used from changes in operating assets and liabilities was $396 million, compared to $436 million in the prior year .
• Net cash provided by (used in) investing activities: -$263 million vs. $573 million . This included -$165 million in net issuances from Flash Ventures activity and -$134 million in capital expenditures, partially offset by $25 million in net proceeds from a subsidiary sale .
• Net cash provided by (used in) financing activities: -$2,025 million vs. $620 million . This included Term Loan Facility repayments of $1,900 million and $149 million in taxes paid on vested stock awards, partially offset by $24 million in stock issuances .

Unique Metrics

• Cash Conversion Cycle (Three Months Ended April 3, 2026 vs. March 28, 2025): The cash conversion cycle was 140 days, down from 150 days . Days sales outstanding (DSO) decreased by 11 days to 42 days, days in inventory (DIO) increased by 8 days to 158 days, and days payable outstanding (DPO) increased by 7 days to -60 days .
• Contract Liabilities: Total contract liabilities were $511 million as of April 3, 2026, driven by customer advances from long-term agreements . The transaction price allocated to remaining performance obligations was $41.6 billion, with approximately 15% expected to be recognized as revenue over the next twelve months .
• Flash Ventures Related Commitments (as of April 3, 2026): Notes receivable were $483 million, equity investments were $201 million, operating lease guarantees were $993 million, and inventory and prepayments totaled $1,290 million . The maximum estimable loss exposure was $2,967 million, and R&D commitments for the remaining three months of 2026 were $42 million .
• Tax Indemnification Liability: The liability was $131 million as of April 3, 2026 .
• Investment Commitment (Nanya Technology Corporation): As of April 3, 2026, Sandisk Corporation had a $972 million commitment to purchase shares of Nanya, which was satisfied on April 8, 2026, as part of a multi-year strategic supply arrangement for DRAM products .

Future Outlook and Strategy

Sandisk Corporation anticipates favorable pricing trends in high-performance storage products to continue through calendar year 2026 and beyond, driven by rapid AI infrastructure growth and NAND storage demand, which is expected to positively impact revenue and cash flows from operations . The company plans to invest in high-value opportunities for both short-term and long-term benefits . Additionally, the Board of Directors approved a $6 billion share repurchase program, expected to be funded by operating cash flows, with timing dependent on market conditions .