Sandisk (SNDK) Q3 2026 earnings summary

Executive summary

• Q3 2026 revenue reached $5.95B, up 97% sequentially and 251% year-over-year, driven by strong datacenter and edge demand, higher-value customer mix, and improved pricing.

• Datacenter segment revenue surged 233% sequentially and 645% year-over-year, reflecting strategic focus on AI-driven infrastructure and enterprise SSDs.

• Signed five multi-year supply agreements (NBMs) with firm financial guarantees, securing over a third of FY27 bits and $42B in minimum contractual revenue.

• Completed spin-off from Western Digital in February 2025, now operating as an independent public company.

• Announced $6B share buyback program after repaying all outstanding debt, achieving a net cash position.

Financial highlights

• Q3 revenue: $5.95B (up 97% sequentially, 251% year-over-year), exceeding guidance.

• Gross margin: 78.4% (up 27.5 points sequentially and 55.9 points year-over-year).

• Non-GAAP operating margin: 70.9%; GAAP operating margin: 69.1%.

• Non-GAAP EPS: $23.41; GAAP EPS: $23.03.

• Adjusted free cash flow: $2.96B; cash and equivalents: $3.74B; zero long-term debt.

Outlook and guidance

• Q4 2026 revenue forecast: $7.75B–$8.25B, driven by bits growth and higher pricing.

• Non-GAAP gross margin guidance: 79%–81%.

• Non-GAAP EPS guidance: $30–$33, assuming 158M diluted shares.

• Continued investment in innovation and R&D, with operating expenses expected at $480M–$500M.

• Management expects favorable pricing and demand trends to persist through 2026 and beyond, driven by AI infrastructure growth.