Sandisk Corporation Common Stock Investor Day 2026
Review the key takeaways and the transcript of this earnings call.
- SanDisk reported $20 billion in revenue for the year, up 175% from the prior record in 2022, with gross margin improving from 30.3% to 71.6% and reaching 84.6% by year-end.
- Non-GAAP EPS rose to $39.25 from $0.29 the previous year, and adjusted free cash flow reached $8.7 billion, excluding NVMe prepayments and deposits.
- The company operates in a large, fast-growing market expected to triple to $300 billion in 2026 and approach $500 billion in 2027, with data center share increasing from 20% in early 2020s to 50% in 2024.
- SanDisk has eight multi-year new business model (NBM) contracts with strategic customers, including three U.S. hyperscalers, totaling $93.9 billion in contract value and $91.1 billion remaining performance obligation, with financial guarantees of $16.5 billion.
- The company’s NAND technology roadmap delivers 27% annual bit growth per wafer, supporting mid to high teens volume growth guidance for 2027 and beyond.
- SanDisk announced the tape-out of its first High Bandwidth Flash (Hbf) memory die, with samples expected to be delivered to customers in 2025.
- The company demonstrated industry-leading NAND technologies Bics 8, 9, and 10, with Bics 10 offering 65% more bits per wafer than Bics 8 and significant improvements in power efficiency and bandwidth.
- SanDisk’s capital intensity is 2.66 times lower than the industry average, producing 29% of industry bit output while spending only 13% of capital.
- The company’s AI infrastructure products include high-capacity QLC drives for fast data lakes, high-performance TLC SSDs for staging and checkpointing, and persistent KV cache SSDs for inference workloads.
- SanDisk’s new business models provide fast-growing, profitable, and less volatile revenue streams with multi-year visibility, replacing prior quarterly price negotiations.
- The company plans to grow revenue mid to high teens annually through 2030, with non-GAAP gross margin around 80%, operating margin around 75%, and adjusted free cash flow margin of 50%.
- SanDisk intends to return 100% of excess cash, defined as free cash flow minus reinvestment, to shareholders primarily through share buybacks, with $15.5 billion authorized for repurchases.
- SanDisk’s 3D matrix memory and High Bandwidth Flash technologies address the memory wall problem in AI, offering scalable, high-capacity, and high-bandwidth solutions for data center and edge AI workloads.
- SanDisk has formed an open ecosystem for Hbf, including a consortium with Google, Tencent, SK Hynix, and Meta, and has established a technical advisory board with industry luminaries including Jim Keller.
- SanDisk’s CEO emphasized the company’s strategic customer relationships, long-term contracts, and the transition from a volatile quarterly pricing model to multi-year agreements with significant financial guarantees.
- SanDisk’s technology and business model changes aim to reduce cyclicality, increase profitability, and sustain consistent revenue growth across consumer, edge, and data center markets.
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Transcript
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Thank you very much for joining us today. Before we begin, please note that today's presentation will contain forward-looking statements based on management's current assumptions and expectations, which are subject to various risks and uncertainties. These forward-looking statements include expectations regarding our technology and product roadmaps, our new business models and multi-year customer partnerships, our business plans and performance, market trends and opportunities, and our future financial results. Please refer to our most recent annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations. We will also make references to non-GAAP financial measures today.
Reconciliations between these non-GAAP measures and the most directly comparable GAAP measures are included in the earnings releases for the relevant periods and in the appendix to the presentation materials, which are posted in the investor relations section of our website. Please welcome Vice President, Investor Relations at SanDisk, Ivan Donaldson.
Thank you very much. I just want to say thank you to everyone for being here today. I've been in this industry for 22 years, and the journey with SanDisk has just been astounding. It's been an amazing ride. We have an amazing management team and board of directors, amazing employees across the globe, and we're just really excited to be here today. I'm going to talk a little bit about the agenda just really quick. We'll go over the, obviously, company overview, strategic vision, future for the company. Then we'll go through the technology roadmap, or really the way I think of it as our innovation engine in the company, which is just astounding. We'll also take a step and look at the industry transformation, what's happened, how we got here, essentially, which is pretty phenomenal.
Then we'll go into a deep dive of the AI infrastructure. Essentially, why? Why is this happening? Why are we seeing such a step change in demand, and where we see that going forward? What are some of the key variables and dynamics for that? Then followed by the financial model from Luis. Really trying to deliver that we have a tremendous opportunity to drive shareholder value well into the future, and we hope that's going to be the takeaway from today. Then at the end, Alper will come back up and talk about future innovation roadmap and where we see that going to conclude. Again, where we see some future technologies and emerging memory opportunities, followed by Q&A.
We tried to take into account a lot of your questions of the last year of what you guys are most interested in, so hopefully we'll get to all of those. Again, I appreciate everyone to be here.
Thanks for your support. SanDisk, the flash storage vendor, was added to the S&P 500.
With a look at SanDisk.
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SanDisk has more than doubled.
All right. SanDisk. Look at that chart on SanDisk.
SanDisk, the best stock in the S&P 500 this quarter.
Many on that conference call for SanDisk specifically. What do you want to ask?
I want to better understand how inferencing is going to help or impact SanDisk demand into next year. I want to know how SanDisk is going to be able to preserve margins.
Please welcome Chairman and Chief Executive Officer at SanDisk, David Goeckeler.
All right. Welcome. It's great to be back here in the room where we launched this company 18 months ago. A lot has changed in that time, and today we're going to talk about the company going forward. I can tell you, as I was talking to some of you as we were preparing or just this morning in gathering, we were talking through a lot of stories of stuff that has happened over the six and a half years, whether it's road shows or conversations we had about this franchise. I joined Western Digital, of course, in March of 2020. Actually, the same week that COVID started. People know about that a lot more than they know about me starting at Western Digital.
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