Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 6 of last 6 quarters
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Sandisk's record quarter and massive NBM commitments underscore the accelerating demand for NAND in AI inference infrastructure. The shift to long-term contracts with hyperscalers and edge customers signals a structural change in how storage supply is secured, potentially reducing cyclicality and supporting sustained investment in AI data center buildout.
Sandisk delivered record revenue, gross margin, and EPS in Q4 FY2026, driven by strong pricing and volume, particularly in Datacenter. The company signed 5 additional NBMs (3 closed during the quarter, 2 after), bringing total to 8 customers with minimum revenue of $93.9B. Datacenter revenue grew 103% sequentially, while Edge grew 48% and Consumer declined 32%. The company repurchased $4.5B of stock and generated $5.035B in adjusted free cash flow (56% margin).
Management guided Q1 FY2027 revenue to $10.3B–$10.8B, with non-GAAP gross margin of 83%–85% and EPS of $44–$46. They expect NAND market revenue to exceed $300B in CY2026 and approach $500B in CY2027, with Datacenter share of TAM expanding to ~50% in CY2026. Bits remain on allocation beyond CY2027, and NBMs are expected to cover more than 50% of bits in FY2027 and ~2/3 in FY2028. CapEx will increase in dollars but decline to ~6% of revenue, with bit growth at mid-teens due to higher inventory days. The tone was confident, emphasizing durability, long-term visibility, and continued shareholder returns via buybacks.
“AI is fundamentally a memory-centric storage-intensive problem. And it is reshaping the demand equation for NAND.”
on AI driving NAND demand
“We expect our NBMs to represent more than 50% of our bits in fiscal year 2027, and approximately 2/3 of our bits in fiscal year 2028.”
on NBM coverage
“We already have customers coming back for the second round of NBMs a quarter in. And so that gives us an enormous amount of conviction that this franchise is set up for the long term.”
on Customer demand strength
Are NBM margins trending around 80%? And should we expect ~$5B quarterly buybacks?
Luis confirmed NBM margins are expected around 80%, with upside if prices rise. David said they plan to be 'very consistent' in executing buybacks, citing confidence in cash generation.
What drove Q4 volume/pricing split and why is Q1 guide lighter than expected?
Luis said Q4 growth was ~1/3 volume and 2/3 pricing. For Q1, they expect both bit growth and modest price increases to contribute, noting timing differences in price increases vs peers.
Why are gross margins guided lower despite pricing up? And why are you confident in NBM durability?
David explained they are prioritizing durability over maximizing margins, with mid-80s gross margin as a 'fair return.' He cited contractual commitments, $16.5B in financial guarantees, and deep strategic engagement with customers as reasons for confidence.