SanDisk Q4 2026 Earnings Highlight AI Demand
SanDisk Q4 2026 earnings show record revenue and 84.6% gross margin from AI demand; NBMs trim near-term margins but underpin cash for buybacks.
KEY TAKEAWAYS
- Q4 revenue $8.97 billion with non-GAAP EPS $39.25 and 84.6% gross margin.
- Eight NBMs cover more than half of FY2027 and about two-thirds of FY2028 supply at above 80% margins.
- Operating cash flow $7.1 billion and stronger balance sheet support aggressive buybacks and the long-term AI storage case.
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On Aug. 5, 2026, SanDisk Corporation (NASDAQ: SNDK) reported fiscal fourth-quarter earnings that marked a profit inflection driven by AI-focused NAND demand and multiyear supply contracts. Management said the New Business Model (NBM) will modestly compress near-term margins.
Quarter Results and Guidance
SanDisk said in a press release that Q4 revenue reached $9.0 billion, a 51.0% sequential increase and a 372.0% jump from a year earlier. Adjusted earnings per share were $39.25, and adjusted gross margin was 84.6%. For fiscal 2026, the company reported revenue of $20.3 billion and GAAP net income of $11.4 billion, or GAAP diluted earnings of $73.76 a share. The release described the quarter as a fundamental inflection point for the business.
On the earnings call, management guided first-quarter revenue to $10.3 billion–$10.8 billion, adjusted gross margin to 83.0%–85.0%, and adjusted EPS to $44.00–$46.00, with non-GAAP operating expenses of $520 million–$540 million based on roughly 155 million diluted shares outstanding. For fiscal 2027, the company expects bit growth slightly below mid-to-high teens and capital expenditures to rise to support BiCS8 and BiCS10 technology ramps, even as capex falls to about 6.0% of revenue.
Operating cash flow in the quarter reached $7.1 billion, up 135.0% sequentially, reflecting strong cash conversion after the profit inflection. Data-center sales doubled to $3.0 billion from the prior quarter’s $1.5 billion, and full-year data-center revenue rose to $5.2 billion year-on-year, driven by enterprise SSD demand linked to AI workloads.
New Business Model and Strategic Context
Management said it has signed eight long-term NBM agreements with data-center and edge clients, covering more than half of fiscal 2027 supply and roughly two-thirds of fiscal 2028. These contracts carry gross margins above 80%. The company described these deals as providing "demand visibility exceeding four years."
The NBM represents a deliberate trade-off, sacrificing some near-term margin for firmer pricing discipline and longer earnings visibility. The FY2026 profit swing has strengthened the balance sheet, supporting aggressive share repurchases. Analysts have largely maintained Buy or Strong Buy ratings while noting valuation volatility and margin-compression risks.
Executives and market participants characterize the current cycle as an AI-storage super-cycle driven by AI storage demand. Some analyses project the global NAND market at about $300 billion in calendar 2026 and approaching $500 billion in 2027, with bits likely to remain on allocation beyond 2027. Multiyear contracts at contract-level margins, combined with renewed cash generation, support the longer-term bullish case despite guidance signaling modest near-term margin pressure under the NBM.
SanDisk management said the company has signed long-term agreements under the New Business Model with eight data-center and edge computing clients, providing demand visibility exceeding four years, whereas the NAND industry traditionally negotiated supply and pricing quarterly.
