Sandisk (SNDK) Q2 2026 earnings summary

Executive summary

• Revenue for Q2 2026 reached $3.03 billion, up 31% sequentially and 61% year-over-year, surpassing guidance, driven by higher pricing, increased exabytes sold, and strong AI-fueled datacenter demand.

• Non-GAAP EPS was $6.20, up from $1.22 in the prior quarter, with GAAP net income at $803 million ($5.15 per share), reflecting improved mix, lower costs, and operating leverage.

• The company completed its separation from Western Digital in February 2025 and now operates as an independent, publicly traded entity.

• Technology and product portfolios are well-aligned with evolving market dynamics, supporting a balanced portfolio and strong financial performance.

• AI-driven demand is transforming the NAND industry, with data center becoming the largest market segment by 2026.

Financial highlights

• Q2 revenue: $3.03 billion (31% QoQ, 61% YoY), beating guidance; non-GAAP gross margin: 51.1% (up from 29.9% prior quarter); GAAP gross margin: 50.9%.

• Non-GAAP operating margin: 37.5% (up from 10.6% prior quarter); GAAP operating margin: 35.2%.

• Adjusted free cash flow: $843 million; operating cash flow: $1.019 billion; cash and cash equivalents: $1.54 billion.

• Net income for the quarter was $803 million, up from $104 million in the prior year period.

• Non-GAAP operating expenses: $413 million (13.7% of revenue), down 7% sequentially.

Outlook and guidance

• Q3 2026 revenue guidance: $4.4–$4.8 billion; non-GAAP gross margin: 65–67%; non-GAAP EPS: $12–$14.

• Bit growth expected to be down mid-single digits due to seasonality, but data center strength to offset.

• Operating expenses (non-GAAP) forecasted at $450 to $470 million.

• Management expects the supply-demand imbalance in NAND to persist through 2026, with AI infrastructure growth driving continued demand.

• Capital expenditures are anticipated to increase in fiscal 2026 to support technology transitions and product portfolio needs.