Sandisk Corp 10-Q for FY2027 Q1

Sandisk Corp (SNDK)

10-Q 2026-10-30 For: 2026-10-02

Added on October 30, 2026

About this 10-Q

Sandisk Corp filed this 10-Q on October 30, 2026, covering the quarter ended October 2, 2026 (FY2027 Q1).

Sandisk Corporation reported revenue, net of 11,031 and net income of 8,101 for the three months ended October 2, 2026; operating activities provided 6,363 in cash. The company repurchased 3 million shares for 5.0 billion, leaving 10.5 billion available. AI summary

Headline figures

Quarter ended October 2, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.03B; up 377.9% from $2.31B a year earlier
Net income: $8.1B; up 7133.0% from net income of $112M a year earlier
Diluted EPS: $52.60; up 6913.3% from $0.75 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	SNDK	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)


		PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets — As of October 2, 2026 and July 3, 2026	5
	Condensed Consolidated Statements of Operations — Three Months Ended October 2, 2026 and October 3, 2025	6
	Condensed Consolidated Statements of Comprehensive Income — Three Months Ended October 2, 2026 and October 3, 2025	7
	Condensed Consolidated Statements of Cash Flows — Three Months Ended October 2, 2026 and October 3, 2025	8
	Condensed Consolidated Statements of Changes in Shareholders’ Equity — Three Months Ended October 2, 2026 and October 3, 2025	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 5.	Other Information	43
Item 6.	Exhibits	44


	October 2, 2026		July 3, 2026
ASSETS
Current assets:
Cash and cash equivalents	$	5,136	$	4,762
Accounts receivable, net	6,585		4,708
Inventories	3,016		2,698
Income tax receivable	41		22
Other current assets	574		590

Total current assets	15,352		12,780
Marketable equity securities	2,289		1,777
Property, plant and equipment, net	705		674
Notes receivable and investments in Flash Ventures	827		678
Goodwill	4,995		4,994
Income tax receivable, non-current	186		169
Deferred tax assets	69		66
Other non-current assets	1,370		1,369
Total assets	$	25,793	$	22,507
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	736	$	516
Accounts payable to related parties	549		460
Accrued expenses	329		313
Accrued compensation	447		657
Refund liabilities	1,597		1,500
Contract liabilities	777		849
Income tax payable, current	1,516		1,286


Total current liabilities	5,951		5,581
Non-current contract liabilities	752		393
Deferred tax liabilities	144		161
Income tax payable, non-current	431		258
Other liabilities	381		378
Total liabilities	7,659		6,771
Commitments and contingencies (Notes 10, 11, 14 and 15)
Shareholders’ equity:
Common stock, $0.01 par value; authorized — 450 shares; issued — 150 shares and outstanding — 144 shares (as of July 3, 2026 issued — 149 shares and outstanding — 146 shares)	$	2	$	1
Treasury stock	(9,581)		(4,537)
Additional paid-in capital	10,211		10,879

Accumulated other comprehensive loss	(248)		(256)
Retained earnings	17,750		9,649
Total shareholders’ equity	18,134		15,736
Total liabilities and shareholders’ equity	$	25,793	$	22,507


	Three Months Ended
	October 2, 2026		October 3, 2025
Revenue, net	$	11,031	$	2,308
Cost of revenue	1,653		1,621
Gross profit	9,378		687
Operating expenses:
Research and development	384		316
Selling, general and administrative	214		179


Business separation costs	—		9
Employee termination and other	—		(3)
Loss on business divestiture	—		10
Total operating expenses	598		511
Operating income	8,780		176
Interest and other income (expense), net:
Gain on equity securities, net	513		—
Interest income	51		16
Interest expense	(2)		(40)
Other income (expense), net	(23)		(28)
Total interest and other income (expense), net	539		(52)
Income before taxes	9,319		124
Income tax expense	1,218		12
Net income	$	8,101	$	112

Net income per common share:
Basic	$	55.49	$	0.77
Diluted	$	52.60	$	0.75

Weighted average shares outstanding:
Basic	146		146
Diluted	154		149


	Three Months Ended
	October 2, 2026		October 3, 2025
Net income	$	8,101	$	112
Other comprehensive income, before tax
Foreign currency translation adjustment	8		(14)
Net unrealized gain on derivative contracts	—		39
Total other comprehensive income, before tax	8		25
Income tax expense related to items of other comprehensive income, before tax	—		(10)
Other comprehensive income, net of tax	8		15
Total comprehensive income	$	8,109	$	127


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Common Stock*			Treasury Stock
	Shares	Amount		Shares	Amount		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total*
Balance at July 3, 2026	149	$	1	(3)	$	(4,537)	$	10,879	$	9,649	$	(256)	$	15,736
Net income	—	—		—	—		—		8,101		—		8,101
Employee stock plans	1	—		—	—		(759)		—		—		(758)
Repurchases of common stock	—	—		(3)	(5,044)		—		—		—		(5,044)
Foreign currency translation adjustment	—	—		—	—		—		—		8		8
Net unrealized gain on derivative contracts	—	—		—	—		—		—		—		—
Stock-based compensation	—	—		—	—		91		—		—		91
Balance at October 2, 2026*	150	$	2	(6)	$	(9,581)	$	10,211	$	17,750	$	(248)	$	18,134


	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at June 27, 2025	146	$	1	—	$	—	$	11,248	$	(1,784)	$	(249)	$	9,216
Net income	—	—		—	—		—		112		—		112
Employee stock plans	1	—		—	—		(15)		—		—		(15)
Repurchases of common stock	—	—		—	—		—		—		—		—
Foreign currency translation adjustment	—	—		—	—		—		—		(14)		(14)
Net unrealized gain on derivative contracts	—	—		—	—		—		—		29		29
Stock-based compensation	—	—		—	—		53		—		—		53
Balance at October 3, 2025	147	$	1	—	$	—	$	11,286	$	(1,672)	$	(234)	$	9,381


	October 2, 2026		July 3, 2026
	(in millions)
Inventories:
Raw materials and component parts	$	2,386	$	1,938
Work-in-process	286		313
Finished goods	344		447
Total inventories	$	3,016	$	2,698



	October 2, 2026
	(in millions)
Warranty accrual, beginning of period	$	48
Charges to operations	7
Utilization	(4)
Changes in estimate related to pre-existing warranties	(11)
Warranty accrual, end of period	$	40


	October 2, 2026
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents - Money market funds	$	2,188	$	—	$	—	$	2,188
Marketable equity securities	2,289		—		—		2,289
Short-term investments (included in Other current assets)	—		70		—		70
Foreign exchange contracts (included in Other current assets)	—		2		—		2
Total assets at fair value	$	4,477	$	72	$	—	$	4,549
Liabilities:
Foreign exchange contracts (included in Accrued expenses)	$	—	$	9	$	—	$	9
Total liabilities at fair value	$	—	$	9	$	—	$	9


	July 3, 2026
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents - Money market funds	$	2,863	$	—	$	—	$	2,863
Marketable equity securities	1,777		—		—		1,777
Short-term investments (included in Other current assets)	—		—		—		—
Foreign exchange contracts (included in Other current assets)	—		6		—		6
Total assets at fair value	$	4,640	$	6	$	—	$	4,646
Liabilities:
Foreign exchange contracts (included in Accrued expenses)	$	—	$	2	$	—	$	2
Total liabilities at fair value	$	—	$	2	$	—	$	2


	October 2, 2026
	(in millions)
Notes receivable	$	727
Equity investments	100
Operating lease guarantees	838
Inventory and prepayments	1,279
Maximum estimable loss exposure	$	2,944


	Lease Amounts
	(Japanese yen, in billions)		(U.S. dollar, in millions)
Total guarantee obligations	¥	132	$	838


	Three Months Ended
	October 2, 2026		October 3, 2025
	(in millions)
Revenue by end market:
Datacenter	$	4,802	$	269
Edge	5,832		1,387
Consumer	397		652
Total revenue	$	11,031	$	2,308

Revenue by geography:
Asia	$	7,216	$	1,515
Americas	3,257		406
Europe, Middle East and Africa	558		387
Total revenue	$	11,031	$	2,308


Annual Installments	Payment of Principal Amortization		Purchase Option Exercise Price at Final Lease Terms		Guarantee Amount
	(in millions)

2027	$	205	$	74	$	279
2028	158		93		251
2029	79		50		129
2030	41		58		99
2031	10		70		80
Total guarantee obligations	$	493	$	345	$	838


	October 2, 2026		October 3, 2025
Weighted average remaining lease term in years	10.4		10.9
Weighted average discount rate	7.4	%	7.3	%


	Lease Amounts
	(in millions)
Minimum lease payments by fiscal year:
Remaining nine months of 2027	$	28
2028	30
2029	27
2030	23
2031	23
Thereafter	166
Total future minimum lease payments	297
Less: Imputed interest	96
Present value of lease liabilities	$	201


	Long-term commitments
	(in millions)
Fiscal year:
Remaining nine months of 2027	$	1,408
2028	1,986
2029	2,271
2030	1,038
2031	20
Thereafter	71
Total	$	6,794


	Number of Shares	Weighted Average Grant Date Fair Value
	(in millions)
RSUs and PSUs outstanding at July 3, 2026	6.6	$	53.99
Granted	0.4	1,652.24
Vested	(1.3)	44.49
Canceled/forfeited	—	62.05
RSUs and PSUs outstanding at October 2, 2026	5.7	$	—


	Unamortized Compensation Costs		Weighted average service period
	(in millions)		(years)
RSUs and PSUs	$	1,298	2.48
ESPP	52		0.75
Total unamortized compensation cost	$	1,350


	(in millions)
Accrual balance at July 3, 2026	$	323
Gross increases related to prior year tax positions	3
Gross increases related to current year tax positions	24
Gross decrease related to prior year tax positions	—



Accrual balance at October 2, 2026	$	350


	Pro Forma (Unaudited)
	Three Months Ended
	October 2, 2026		October 3, 2025
	(in millions)
Net income	$	8,101	$	112

Weighted average shares outstanding:
Basic	1,168		1,168
Diluted	1,232		1,192

Net income per common share:
Basic	$	6.94	$	0.10
Diluted	$	6.58	$	0.09


	Three Months Ended
	October 2, 2026				October 3, 2025				$ Change		% Change
	(in millions, except percentages)
Revenue, net	$	11,031	100.0	%	$	2,308	100.0	%	$	8,723	378	%
Cost of revenue	1,653		15.0		1,621		70.2		32		2
Gross profit	9,378		85.0		687		29.8		8,691		1265
Operating expenses:
Research and development	384		3.5		316		13.7		68		22
Selling, general and administrative	214		1.9		179		7.8		35		20
Business separation costs	—		—		9		0.4		(9)		(100)
Employee termination and other	—		—		(3)		(0.1)		3		(100)
Loss on business divestiture	—		—		10		0.4		(10)		(100)
Total operating expenses	598		5.4		511		22.2		87		17
Operating income	8,780		79.6		176		7.6		8,604		4889
Interest and other income (expense), net:
Gain on equity securities, net	513		4.7		—		—		513		100
Interest income	51		0.5		16		0.7		35		219
Interest expense	(2)		—		(40)		(1.7)		38		(95)
Other income (expense), net	(23)		(0.2)		(28)		(1.2)		5		(18)
Total interest and other income (expense), net	539		4.9		(52)		(2.2)		591		(1137)
Income before taxes	9,319		84.5		124		5.4		9,195		7415
Income tax expense	1,218		11.0		12		0.5		1,206		10050
Net income	$	8,101	73.5		$	112	4.9		$	7,989	7133


	Total		Remaining nine months of 2027		2-3 Years (2028 - 2029)		4-5 Years (2030 - 2031)		More than 5 Years (Beyond 2031)
	(in millions)
Flash Ventures related commitments (1)	$	7,141	$	2,481	$	2,975	$	1,504	$	181
Purchase obligations and other commitments(2)	5,628		1,191		3,721		716		—
Operating leases	297		28		57		46		166
Total	$	13,066	$	3,700	$	6,753	$	2,266	$	347


	Total Number of Shares Purchased	Average Price Paid per Share(1)		Total Number of Shares Purchased As Part of Publicly Announced Program(2)	Maximum Approximate Value of Shares that May Yet be Purchased Under the Program(2)(3) (in millions)
Jul. 4, 2026 – Jul. 31, 2026	—	$	—	—	$	—
Aug. 1, 2026 – Aug. 28, 2026	1,851,864	$	1,551.37	1,851,864	$	12,627
Aug. 29, 2026 – Oct. 2, 2026	1,298,505	$	1,638.10	1,298,505	$	10,500
Total for quarter ended Oct. 2, 2026	3,150,369			3,150,369


Exhibit Number						Description
2.1						Separation and Distribution Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
3.1						Amended and Restated Certificate of Incorporation of Sandisk Corporation dated as of January 28, 2025 (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)
3.2						Amended and Restated Bylaws of the Company (Filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 14, 2025)
10.1						Amendment No. 1 dated as of September 9, 2026 by and among Sandisk Corporation, Sandisk Technologies, Inc., each lender party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on September 11, 2026)#
10.2						FY27 Form of Performance Stock Unit Award Agreement+†
31.1						Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
31.2						Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document**
101.SCH						XBRL Taxonomy Extension Schema Document**
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document**
101.LAB						XBRL Taxonomy Extension Label Linkbase Document**
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document**
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document**
104						Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101**


			Sandisk Corporation

			By:			/s/ Michael R. Pokorny
						Michael R. Pokorny
						Vice President, Chief Accounting Officer
						(Principal Accounting Officer and Duly Authorized Officer)


Name of Participant:
Employee ID
Grant Date:
Grant Number
Target Number of PSUs:
Vesting Schedule:			The vesting date of the PSUs is [ ] (the “Vesting Date”). Vesting shall be subject to Participant’s Continuous Service from the Grant Date through the Vesting Date, unless provided otherwise under Section 2 of the Standard Terms and Conditions.
Performance Period and Measurement Periods:			The PSUs shall be eligible to vest based on performance during the three-year Performance Period, which spans the First, Second and Third Measurement Periods (the “Annual Measurement Periods”). The Performance Period begins on the first day of the First Measurement Period and ends on the last day of the Third Measurement Period. First Measurement Period begins [ ] and ends [ ]. Second Measurement Period begins [ ] and ends [ ]. Third Measurement Period begins [ ] and ends [ ]. The actual number of PSUs that may become eligible to vest on the Vesting Date is based on the achievement of financial metrics over each Annual Measurement Period and may range from [0]% to [200]% of the Target Number of PSUs, subject to forfeiture as provided in the Standard Terms and Conditions, and further subject to adjustment upon a Relative TSR Modifier measured over the Performance Period, all as determined in accordance with Exhibit B.


			/s/ David V. Goeckeler
			David V. Goeckeler
			Chief Executive Officer (Principal Executive Officer)


			/s/ Luis F. Visoso
			Luis F. Visoso
			Executive Vice President and Chief Financial Officer (Principal Financial Officer)