Financials
Financials in One Page
SanDisk is a NAND flash memory pure-play that was spun out of Western Digital in February 2025. The financial story has three acts in only four fiscal years: a peak-cycle FY2022 ($9.8B revenue, 12% operating margin, $741M FCF), a deep memory bust through FY2023–FY2025 (cumulative ~$4.5B of operating losses, negative free cash flow every year), and an AI-driven up-cycle that began in fiscal Q3 2026 — the quarter ended April 3, 2026 — when revenue jumped 97% sequentially to $5.95B and GAAP operating income exploded to $4.1B at a 78.4% gross margin. Cash conversion has just turned on: trailing nine-month operating cash flow is $4.5B versus negative $10M a year earlier, the $1.9B term loan taken at separation has been fully repaid, and the company exited Q3 FY26 with $3.7B of cash and zero long-term debt. The single number that defines this stock now is the FY26 Q4 outlook of $7.75–$8.25B revenue and $30–$33 of non-GAAP EPS — at $1,980 a share, the market is paying for that guide to compound, not just to be hit.
Note: TTM = the last four reported quarters (Q4 FY25 through Q3 FY26). The cycle inflected in Q3 FY26, so TTM figures blend two cycle-bust quarters with two cycle-recovery quarters. Single-quarter Q3 FY26 gross margin was 78.4%.
Revenue (TTM, $M)
Operating Margin (TTM)
Free Cash Flow (TTM, $M)
Cash (Apr 3, 2026, $M)
Long-Term Debt (Apr 3, 2026, $M)
Share Price (Jun 12, 2026, $)
Gross Margin (FY25 Annual)
The financial story changed completely in Q3 FY2026. Every long-run ratio in this page is blended across a bust and an inflection — read every chart with the quarterly view first, then the annual view, never the other way round.
How to read this page
NAND memory is a commodity cycle. In a downturn, oversupply crushes pricing; cost of revenue stays fixed; gross profit and free cash flow flip negative. In an upturn, prices rise faster than cost; gross margin expands dramatically; operating income grows several times faster than revenue. SanDisk just lived through both halves of that pattern. The financial-statement work in this section is mostly about separating cycle from structure: what is repeatable earnings power, what was peak, what was trough, and what the market is paying for today.
Revenue, Margins, and Earnings Power
Annual revenue collapsed 38% from FY2022 to FY2023 as NAND oversupply hit, recovered 21% through FY2025 as the cycle bottomed, and then re-rated explosively starting in fiscal Q2 2026.
Three observations from the annual view. First, gross margin in FY2023 fell to 7.1% — that is the "below cash cost" point where every incremental unit shipped actually lost money. Second, the FY2025 reported operating loss is heavily distorted: the company took a non-cash goodwill impairment of $1.83B in Q3 FY2025 to mark down the carrying value of the legacy 2016 SanDisk acquisition that Western Digital had on its books. Strip that out and FY2025 operating income would have been roughly $453M positive at a 6% margin — modestly profitable, not catastrophically loss-making. Third, gross margin in FY2025 (30.1%) was already well above FY2024 (16.1%) before the AI step-up landed.
Quarterly view — where the inflection is
The annual chart hides the most important fact. The cycle bottomed in the early FY24 quarters and turned hard in mid-FY26.
The Q3 FY2026 print of 78.4% gross margin is exceptional and reflects three things stacked: realized NAND pricing up sharply because hyperscalers competed for limited capacity, the mix moved decisively toward Datacenter (up 233% sequentially), and the company began signing multi-year New Business Model (NBM) agreements with firm financial commitments. Three NBMs were signed in Q3, two more in Q4. NBMs are how a commodity supplier converts cycle pricing into a durable contract book — they are the most important structural change in the income statement.
Where earnings power lands next
Management guided Q4 FY26 revenue to $7.75–$8.25B with non-GAAP EPS of $30.00–$33.00 — meaning a single quarter of EPS is set to land at roughly the company's all-time fiscal-year operating income peak. If realized, FY2026 will close with the income statement showing roughly $19B of revenue and $30+ of EPS, against just $7.4B and a $(11.32) loss the prior year.
The annualized guide bar is illustrative — it shows what one Q4 FY26 quarter implies if simply multiplied by four. Management has said NBMs lock in higher pricing, but neither earnings power at this run rate nor mean-reversion below FY2022 levels is yet settled by the financial statements alone.
Cash Flow and Earnings Quality
Free cash flow is the cash the business produces after running working capital and after spending capital expenditures (capex). It is the only number that funds dividends, buybacks, debt repayment, or acquisitions. Operating cash flow (OCF) is the cash from ongoing operations before capex. Stock-based compensation (SBC) is a non-cash item added back inside OCF — it dilutes shareholders even though it is not a cash outflow.
For a single year in the bust phase (FY2023), the company burned $932M of free cash flow on $2.1B of GAAP loss — the gap is mostly working-capital release and a sharply lower capex pattern as the company stopped feeding the production line. In FY2025, the gap between the GAAP net loss of $1.6B and operating cash flow of just $84M is almost entirely explained by the $1.83B non-cash goodwill impairment. Cash earnings were quietly turning positive even while accounting earnings looked catastrophic.
The cash-flow inflection
The TTM cash-flow picture changed in Q3 FY26. Per the 10-Q cash-flow statement, the nine months ended April 3, 2026 produced $4.55B of operating cash flow against only $134M of capex — a roughly $4.4B nine-month free cash flow harvest after years of cash burn.
The mechanics of that swing are visible in the working-capital line items: accounts receivable rose $1.66B (real growth, billed but not yet collected), inventories rose $159M, but contract liabilities rose $486M (customer advances under the NBM contracts) and income taxes payable rose $640M (cash tax due on a sudden profit windfall). Net of all that, the $4.5B operating cash inflow lines up almost exactly with the $4.5B of GAAP net income year-to-date — i.e., cash earnings are tracking accounting earnings, not running ahead or behind them.
Quality flag: capex intensity is unusually low
Memory is a capital-intensive industry. NAND fabs cost tens of billions and SanDisk historically funded its share via the Kioxia joint venture (Flash Ventures). On the company's own balance sheet, capex has been just 2–4% of revenue for four straight years. That is not the picture of a fab-owning vertically integrated memory company; it is the picture of a flash-products and architecture company whose wafer supply is sourced from the JV. Understand this when comparing cash conversion versus Micron or SK hynix, whose capex-to-sales runs 30%+.
The asset-light capex profile is the most important durable feature of the income statement. It means a recovered margin drops mostly into free cash flow rather than being recycled into fabs. It also means SanDisk is structurally dependent on Flash Ventures for wafer supply — a risk discussed in the Business and Industry sections.
Balance Sheet and Financial Resilience
The balance sheet has been radically reshaped twice in 18 months: first by the spinoff (which loaded a $1.97B term loan onto SanDisk's books) and second by the AI-cycle cash flood (which retired all of it).
The FY2025 figures look misleading at first read. Cash jumped to $1.48B and total debt rose to $1.85B — those are the spinoff effects, recorded when Western Digital transferred SanDisk out as a standalone with a fresh term loan. By Q3 FY26 (April 3, 2026), the company has paid off all $1.9B of long-term debt and built cash to $3.7B, for a net cash position of roughly $3.7B. Per the CEO: "a zero-debt balance sheet."
Working capital and liquidity
The current ratio (current assets divided by current liabilities) above 3.5x and a quick ratio above 1.8x are levels consistent with an over-capitalised, low-stress balance sheet. The cash conversion cycle — the number of days between paying for inventory and collecting from customers — has stayed around 140 days even through the cycle turn, which is normal for a flash products company carrying ~5 months of inventory.
Goodwill is still the dominant intangible
Goodwill is the accounting plug left over when an acquirer pays more than the fair value of an acquired company. SanDisk still carries roughly $5B of goodwill on a $13B asset base. That goodwill traces to the 2016 Western Digital acquisition of legacy SanDisk and was already impaired by $1.83B in Q3 FY25 to reflect the depressed NAND cycle. A future cycle reversal would put another impairment on the table — but it would not affect cash.
On the cash-and-debt scorecard, SanDisk is now one of the cleanest balance sheets in semiconductor memory: net cash, zero long-term debt, no pension drag, no credit-rating overhang. Resilience is no longer a concern; capital deployment is.
Returns, Reinvestment, and Capital Allocation
A trailing returns view is currently uninformative — the denominator (capital) was reshaped by the spinoff and the numerator (NOPAT, net income) was lifted by the AI inflection.
The single year of reported positive returns was FY2022 — peak cycle — when ROIC ran 7.5% and ROE 4.1%. Both numbers are below the cost of capital. Even at peak earnings power on the legacy combined business with Western Digital, this set of assets did not generate equity returns above 10%. That is the historical signal a sober reader should hold onto: the FY2022 peak proves the business can produce strong cash but not, historically, high return-on-equity.
The capital allocation lever has changed
There were no buybacks, no dividends, and no acquisitions to discuss prior to FY2026 — SanDisk was inside Western Digital. Post-spin, with $3.7B of cash and a new repurchase authorisation announced alongside the Q3 FY26 print, capital allocation is now a live question.
In the first nine months of FY2026, every available cash dollar went to debt retirement. The $1.9B term loan was extinguished in full. Now, with leverage at zero, the next dollar choice is between (1) buybacks at a roughly $290B market cap, (2) capacity reinvestment into Flash Ventures, (3) M&A, and (4) initiation of a dividend. Management's commentary names buybacks first but explicitly preserves optionality.
Share count
Through three quarters of FY26 the share count has crept up only 2% from SBC vesting. Diluted shares (156–157M) are higher because of convertible notes and out-of-the-money options that are now in the money — investors should watch this gap. Importantly, the Q3 FY26 diluted EPS of $23.03 is on a fully diluted base of ~157M shares, so the dilution impact is already reflected in the headline EPS.
Segment and Unit Economics
SanDisk discloses revenue by three end markets — Cloud, Client, and Consumer — but does not publish segment-level operating income in the standardised financial files. The Q3 FY26 release identified Datacenter (Cloud + enterprise SSD) as the principal driver, up 233% sequentially. The implication is that segment economics are increasingly Datacenter-driven, but unit-economics granularity (revenue per gigabyte, per-customer ARPU, gross margin by segment) is not in the public quarterly data set.
The qualitative read is that Datacenter is the operating-leverage segment, Client is the cyclical commodity segment, and Consumer is steady but small. A future segment disclosure — particularly Cloud as a reportable operating segment — would materially raise the quality of forward earnings analysis.
Valuation and Market Expectations
At $1,980.10 (June 12, 2026) the equity is worth roughly $293B on 148M shares outstanding, and enterprise value (market cap less net cash) is approximately $289B. Against trailing twelve-month revenue of $13.2B and TTM operating income of $5.4B, the multiples look extreme. Against the Q4 FY26 guide, they look ordinary for a structural growth story.
The reader must understand the gap between TTM and forward multiples here. The trailing-twelve-month numerator was crushed by Q3 FY25 losses and only fully turned in Q3 FY26 — so TTM ratios overstate scarcity. The forward ratios are built on a single guided quarter of $7.75–$8.25B revenue and $30+ EPS, not yet on a full year of run-rate earnings.
Share price journey since the spin
The stock has compounded roughly 67x from the post-spin low of $29.62 (April 2025) to $1,980 (June 12, 2026), or ~40x from the IPO close (~$50, February 21, 2025). That move did not happen on TTM fundamentals — it happened in three steps as the market priced in higher NAND pricing (August 2025), the first Datacenter inflection (Q2 FY26 report in late January 2026), and then the Q3 FY26 NBM-led blowout (April 30, 2026).
Bear / Base / Bull on the financials
At $1,980, the equity needs the Base case to be a stepping-stone, not the destination. The Bull case requires the NBM model to deliver multi-year pricing protection beyond what any prior NAND cycle has shown. The Bear case is real and re-rates the multiple to a single-digit EV/EBITDA on a normalised cycle — that scenario is what the trailing multiples actually reflect.
Valuation is the soft spot. On TTM metrics this is the most expensive memory stock ever traded — by a large margin. The only valuation framework that makes the current price look reasonable is one that capitalises Q4 FY26 run-rate earnings as durable. That framework rests entirely on the NBM contracts holding their pricing through the next NAND down-cycle, which is a structural claim the financials cannot yet confirm.
Peer Financial Comparison
The relevant comparison set is the other US-listed NAND/SSD and storage names where standardised financials are available: Micron (NAND + DRAM), Western Digital (HDD + SSD, ex-parent), Seagate (HDD), Pure Storage (all-flash arrays), and NetApp (enterprise storage software/systems). SK hynix and Kioxia are added qualitatively.
Three patterns matter for the read. First, SanDisk's TTM operating margin (40.7%) already exceeds every peer — but that number is heavily weighted by the Q3 FY26 blowout quarter; the comparable cycle-average for peers is the right reference, not a single quarter. Second, the EV/Sales multiple of ~22x on TTM is at least 4x the next-most-expensive peer (Pure Storage at 5.9x), and at least 6x the memory peers (Micron 3.8x, WDC 2.6x). Third, SanDisk's reported price-to-book of 0.75x in the staged data is computed at the FY2025 close ($47.15 share price and $9.2B equity) and is therefore stale — at $1,980 with $13.8B of equity post-Q3 FY26, the real P/B today is approximately 21x, well above any peer.
The peer gap that matters most: SanDisk is being priced as if it has Micron's scale, Pure's gross margin durability, and NetApp's working-capital efficiency — simultaneously. If even one of those three breaks under cyclical pressure, the relative multiple should compress.
What to Watch in the Financials
Closing read
The financials confirm that SanDisk has built one of the cleanest balance sheets in semiconductor memory, that earnings power inflected hard in Q3 FY26, and that cash conversion is now tracking accounting earnings. They contradict the long-run quality story: ROIC has not been above the cost of capital in any year for which we have data, and one quarter of 78% gross margin does not yet prove the NBM contract book will compress cycle volatility. The first quarter of FY27 will be the cleanest read on whether NBM pricing actually anchors gross margin above the historical 35% peak, or whether the cycle reasserts itself.
The first financial metric to watch is gross margin in fiscal Q1 FY27. If it holds at 70% or above with Datacenter still over 50% of mix, the NBM-as-durable-moat thesis gets its first independent confirmation, and the forward multiple is no longer the only thing supporting the price.