Fiscal first quarter 2027
Filed Oct 29, 2026Sandisk Reports Fiscal First Quarter 2027 Financial Results
Revenue increased 23% sequentially and 378% year over year, with Datacenter revenue up 61% sequentially. GAAP gross margin was 85.0%, GAAP operating income was $8,780 million, and the company guided fiscal second-quarter revenue to $12,200 - $12,600 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, netGAAP | $11.03B | up 23% | up 378% |
| Gross profitGAAP | $9.38B | – | – |
| Cost of revenueGAAP | $1.65B | – | – |
| Gross marginGAAP | 85.0% | up 0.4 ppt | up 55.2 ppt |
| Gross profitnon-GAAP | $9.38B | – | – |
| Gross marginnon-GAAP | 85.1% | up 0.5 ppt | up 55.2 ppt |
| Research and developmentGAAP | $384M | – | – |
| Selling, general and administrativeGAAP | $214M | – | – |
| Total operating expensesGAAP | $598M | up 10% | up 17% |
| Operating expensesnon-GAAP | $513M | up 6% | up 15% |
| Operating incomeGAAP | $8.78B | up 25% | – |
| Operating incomenon-GAAP | $8.87B | up 25% | – |
| Operating marginGAAP | 79.6% | – | – |
| Operating marginnon-GAAP | 80.4% | – | – |
| Interest and other income (expense), netGAAP | $539M | – | – |
| Interest and other income (expense), netnon-GAAP | $29M | – | – |
| Income before taxesGAAP | $9.32B | – | – |
| Income tax expenseGAAP | $1.22B | – | – |
| Income tax expensenon-GAAP | $1.28B | – | – |
| Net incomeGAAP | $8.10B | up 17% | – |
| Net incomenon-GAAP | $7.62B | up 24% | – |
| Diluted net income per shareGAAP | $52.60 | up 20% | – |
| Diluted net income per sharenon-GAAP | $49.51 | up 26% | – |
| Basic net income per common shareGAAP | $55.49 | – | – |
| Diluted weighted average shares outstandingGAAP | 154M | – | – |
| Cash flow from operating activitiesGAAP | $6.36B | – | – |
| Free cash flownon-GAAP | $6.31B | – | – |
| Adjusted free cash flownon-GAAP | $5.70B | – | – |
| Operating cash flow marginnon-GAAP | 57.7% | – | – |
| Adjusted free cash flow marginnon-GAAP | 51.6% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| DatacenterRobust and growing demand for products drove outpaced growth in the data center business. | $4.80B | up 61% | – |
| EdgeNo specific driver reported. | $5.83B | up 7% | up 320% |
| ConsumerNo specific driver reported. | $397M | down 29% | down 39% |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Fiscal second quarter of 2027 outlook
- Revenue$12,200 - $12,600 million
- Gross marginGAAP 84.4% - 85.4%; Non-GAAP 84.5% - 85.5%
- Operating expensesGAAP $677 - $745 million; Non-GAAP $540 - $560 million
- Tax rate14.3% Non-GAAP tax expense
- NoteNon-GAAP diluted net income per share: $55.00 - $57.00
- NoteGAAP diluted net income per share: N/A
- NoteDiluted shares outstanding: ~ 151
- NoteNon-GAAP gross margin guidance excludes stock-based compensation expense totaling approximately $9 million to $12 million.
- NoteNon-GAAP operating expenses guidance excludes stock-based compensation expense totaling approximately $137 million to $185 million.
- NoteNon-GAAP diluted net income per share guidance excludes these items totaling $146 million to $197 million.
Capital returns
- Returned $5.0 billion to stockholders through the repurchase of approximately 3.2 million shares during the quarter.
- Repurchases of common stock were $(5,000) million.
- Over the past two fiscal quarters, repurchased 6.0 million shares, representing approximately 4% of total shares outstanding.
- Announced an eight-for-one forward stock split. Stockholders of record as of the close of business on November 9, 2026 will receive seven additional shares for each share held, to be issued after market close on Thursday, November 19, 2026.
- Trading is expected to begin on a post-split adjusted basis at the market open on Friday, November 20, 2026. All per-share information and metrics in the release are presented on a pre-split basis.
What drove it
- Revenue increased 23% sequentially to $11,031 million.
- Datacenter revenue increased 61% sequentially to $4,802 million.
- GAAP gross margin was 85.0%, up 0.4 ppt sequentially, while non-GAAP gross margin was 85.1%, up 0.5 ppt sequentially.
- GAAP operating income increased 25% sequentially to $8,780 million, and non-GAAP operating income increased 25% sequentially to $8,871 million.
- GAAP net income included a $513 million gain on equity securities, net. Non-GAAP net income excluded that gain.
- The company cited technology leadership, deep customer partnerships, and disciplined financial management as supporting growing and durable free cash flow.
Concerns
- Consumer revenue was $397 million, down 29% sequentially and down 39% year over year.
- Cash flow from operating activities was $6,363 million, below $7,126 million in the prior quarter.
- Operating cash flow margin was 57.7%, below 79.5% in the prior quarter.
- Accounts receivable, net increased to $6,585 million from $4,708 million as of July 3, 2026.
- The company identified volatility in demand, pricing trends and fluctuations in average selling prices, product ramps, manufacturing or supply-chain disruption, and customer deployment timing among its risks.
What to watch
- Fiscal second-quarter revenue guidance of $12,200 - $12,600 million.
- Fiscal second-quarter non-GAAP diluted net income per share guidance of $55.00 - $57.00 on a pre-split basis.
- Fiscal second-quarter GAAP gross margin guidance of 84.4% - 85.4% and non-GAAP gross margin guidance of 84.5% - 85.5%.
- Whether Datacenter growth remains the primary source of revenue expansion and whether Consumer revenue stabilizes.
- Fiscal second-quarter GAAP operating expenses guidance of $677 - $745 million and non-GAAP operating expenses guidance of $540 - $560 million.
- The expected post-split adjusted trading commencement on November 20, 2026.
Balance sheet and cash flow
- Cash and cash equivalents: $5,136 million as of October 2, 2026, compared with $4,762 million as of July 3, 2026.
- Marketable equity securities: $2,289 million as of October 2, 2026, compared with $1,777 million as of July 3, 2026.
- Accounts receivable, net: $6,585 million as of October 2, 2026, compared with $4,708 million as of July 3, 2026.
- Inventories: $3,016 million as of October 2, 2026, compared with $2,698 million as of July 3, 2026.
- Total current assets: $15,352 million as of October 2, 2026, compared with $12,780 million as of July 3, 2026.
- Property, plant and equipment, net: $705 million as of October 2, 2026, compared with $674 million as of July 3, 2026.
- Total assets: $25,793 million as of October 2, 2026, compared with $22,507 million as of July 3, 2026.
- Total current liabilities: $5,951 million as of October 2, 2026, compared with $5,581 million as of July 3, 2026.
- Total liabilities: $7,659 million as of October 2, 2026, compared with $6,771 million as of July 3, 2026.
- Total shareholders’ equity: $18,134 million as of October 2, 2026, compared with $15,736 million as of July 3, 2026.
- Purchases of property, plant and equipment: $(54) million, compared with $(50) million in the prior-year period.
- Net cash used in investing activities: $(238) million, compared with $(15) million in the prior-year period.
- Net cash used in financing activities: $(5,755) million, compared with $(515) million in the prior-year period.
- Net increase in cash and cash equivalents: $374 million, compared with a net decrease of $(39) million in the prior-year period.
- Activity related to Flash Ventures, net: $(148) million, compared with $(110) million in the prior quarter and $10 million in the prior-year period.
- Impact of NBM prepayments and deposits: $(465) million, compared with $(1,938) million in the prior quarter.
Analysis
Sandisk opened fiscal 2027 with $11,031 million of revenue, up 23% sequentially and 378% year over year. The revenue profile was led by Datacenter, which generated $4,802 million and increased 61% sequentially. Edge contributed $5,832 million, up 7% sequentially and 320% year over year. Consumer was the clear offset, falling 29% sequentially to $397 million and declining 39% year over year.
Profitability remained exceptionally high in the reported period. GAAP gross margin was 85.0%, up 0.4 ppt sequentially and 55.2 ppt year over year, while non-GAAP gross margin was 85.1%. GAAP operating income was $8,780 million and non-GAAP operating income was $8,871 million, both up 25% sequentially. GAAP net income of $8,101 million included a $513 million gain on equity securities, net; non-GAAP net income was $7,624 million after excluding this and other adjustments.
Cash generation remained substantial, with cash flow from operating activities of $6,363 million, free cash flow of $6,309 million, and adjusted free cash flow of $5,696 million. Operating cash flow was lower than $7,126 million in the prior quarter, and operating cash flow margin declined to 57.7% from 79.5%. The balance sheet ended the quarter with $5,136 million of cash and cash equivalents, while accounts receivable, net increased to $6,585 million from $4,708 million at the prior fiscal year-end.
Capital allocation was dominated by $5.0 billion of common-stock repurchases during the quarter, covering approximately 3.2 million shares. The company also announced an eight-for-one forward stock split, with additional shares scheduled to be issued after market close on November 19, 2026. The second-quarter outlook calls for $12,200 - $12,600 million of revenue, GAAP gross margin of 84.4% - 85.4%, and non-GAAP diluted net income per share of $55.00 - $57.00 on a pre-split basis. The guidance indicates continued revenue growth with gross-margin ranges near the first-quarter result, while the Consumer decline and lower sequential operating cash flow margin remain the principal reported items to monitor.
Management, verbatim
We have started fiscal year 2027 with another quarter of strong performance, with robust and growing demand for our products driving outpaced growth in our data center business.
David Goeckeler, Chairman and Chief Executive Officer of Sandisk
We are executing on the strategy that we outlined at Investor Day, delivering growing and durable free cash flow through our technology leadership, deep customer partnerships, and disciplined financial management.
David Goeckeler, Chairman and Chief Executive Officer of Sandisk
Not in the filing
stated, not guessed- Prior fiscal-quarter values for research and development and selling, general and administrative expense were not reported.
- Year-over-year percentage changes for operating income, net income, and diluted net income per share were not reported because the release labeled them not meaningful.
- A GAAP diluted net income per share outlook was not provided and is listed as N/A.
- A GAAP tax-rate outlook was not provided.
- A debt balance was not reported in the condensed consolidated balance sheet.
- Dividend payments or dividend guidance were not reported.
- Previous-release outlook was not provided, so no comparison with prior guidance is available.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.