Sandisk Corporation

Record Q4 performance + FY26 momentum (strong upside vs guidance) - Q4 revenue: $8,965M, +51% sequentially and +372% YoY; above guidance of $7,750M–$8,250M. - Mix drivers: sequential growth came ~1/3 from higher volumes and ~2/3 from higher pricing. - Profitability: non-GAAP gross margin 84.6% (vs 78.4% prior qtr; 26.4% prior year). non-GAAP EPS $39.25 (vs $23.41 prior qtr; $0.29 prior year). - FY26 highlights: revenue $20.248B (+175% YoY); bits growth mid-teens; end markets FY26 revenue: Datacenter $5.153B (+437%), Edge $12.160B (+195%), Consumer $2.935B (+29%). - Surprising/positive: call repeatedly emphasized that Q4 was the “clearest proof point yet” that the new model is working (record revenue/gross margin/EPS all above the high end of guidance).

New Business Models (NBMs) = major visibility shift; margin “floor” expectations - NBM agreements: total 8 Datacenter/Edge customers; weighted average duration >4 years, with length up to ~5 years. - Progress since April: announced 5 NBMs in April; then 5 additional agreements signed (3 new customers, 2 expansions). 3 closed before quarter-end; 2 after. - Coverage forecasts: NBMs expected to be >50% of bits in FY27 and ~2/3 in FY28. - Economics: management indicated ~80% gross margin “around” level for NBMs (not a single number, but “around 80%”; upside possible if pricing continues to rise). - Financial backing / downside protection: NBM revenue assumptions include floor pricing; total expected NBM revenue signed is min $93.9B (under floor assumptions). RPO at quarter-end: $59.8B (would be $91.1B including the 2 deals signed after quarter end). Customer performance guarantees: $16.5B in deposits/financial instruments (intended to protect Sandisk if purchase obligations aren’t met).

Guidance for FY27 Q1 + forward demand outlook (AI inference tailwind) - NAND market outlook: company expects NAND revenue to exceed $300B in calendar 2026 (~3x YoY) and approach ~$500B in calendar 2027. - Bits allocation beyond 2027: management expects bits to remain on allocation beyond calendar year 2027 (demand growing faster than supply). - Q1 FY27 guidance (non-GAAP): - Revenue: $10.3B–$10.8B (sequential growth from bit growth + higher pricing). - Non-GAAP gross margin: 83%–85% (slightly lower than Q4, but still very high). - Non-GAAP OpEx: $520M–$540M. - Non-GAAP EPS: $44–$46 on 155M fully diluted shares. - Capital intensity note: despite higher dollar CapEx (node transitions + ramp), CapEx as % of revenue expected ~~6% for FY27; inventory days planned to be higher to support NBMs.