Sandisk (SNDK) investor relations material

Executive summary

• Revenue reached $3.03 billion for Q2 2026, up 31% sequentially and 61% year-over-year, driven by strong demand across all end markets, especially data center and AI infrastructure.

• Non-GAAP EPS was $6.20, up from $1.22 in the prior quarter, and GAAP net income was $803 million, reflecting improved margins and operating leverage.

• The company completed its separation from Western Digital in February 2025 and now operates as an independent, publicly traded entity.

• Technology and product portfolios are well-aligned with evolving market dynamics, supporting a balanced portfolio and strong financial performance.

• The NAND industry is undergoing a structural shift, with multi-year supply agreements and longer planning horizons replacing traditional quarterly negotiations.

Financial highlights

• Non-GAAP gross margin was 51.1%, up from 29.9% in the prior quarter, with higher pricing as the main driver.

• Adjusted free cash flow was $843 million, with operating cash flow at $1.019 billion and cash and cash equivalents at $1.54 billion.

• Paid down $750 million in debt, ending with a net cash position of $936 million.

• Operating income increased to $1.07 billion, representing 35.2% of revenue.

• Non-GAAP operating expenses were $413 million, down 7% sequentially.

Outlook and guidance

• Q3 2026 revenue guidance: $4.4–$4.8 billion, with non-GAAP gross margin of 65–67% and non-GAAP EPS forecasted at $12–$14.

• Non-GAAP operating expenses expected between $450–$470 million.

• Bits expected to be down mid-single digits due to seasonality, but data center strength to offset.

• Long-term bit growth planned in the mid- to high-teens annually, with capital spending aligned to sustained, profitable demand.

• Management expects the supply-demand imbalance in NAND to persist through 2026, with AI infrastructure growth driving continued demand.