Sandisk SNDK delivered third-quarter fiscal 2026 non-GAAP earnings of $23.41 per share, crushing the Zacks Consensus Estimate by 61.4%. The company posted a loss of 30 cents per share in the year-ago quarter.
Revenues surged 251% year over year to $5.95 billion and topped the Zacks Consensus Estimate by 43.3%. The top line rose 96.7% sequentially and landed well above management’s prior guidance range of $4.4-$4.8 billion. The year-over-year upside was driven by a mix shift toward higher-value customers and a stronger pricing environment.
SNDK’s Revenue Upside Shows Mix And Price Momentum
Operationally, bit shipments were flat year over year and down in the high teens sequentially as Sandisk built inventory. The company said the inventory increase was aimed at supporting the BiCS8 QLC “Stargate” ramp in the fourth quarter and preparing for recently signed multi-year supply partnerships.
Sandisk’s Datacenter revenues surged 233% sequentially and 644.7% year over year to $1.467 billion, reflecting what management described as a deliberate shift toward its most strategic and fastest-growing end market. The company said fiscal third-quarter results benefited from strong demand for its TLC-based enterprise SSD portfolio, which is used in performance-intensive compute workloads where latency and speed matter.
Sandisk Corporation Price, Consensus and EPS Surprise
Sandisk Corporation price-consensus-eps-surprise-chart | Sandisk Corporation Quote
Sandisk expects to begin shipping its QLC Stargate solutions for revenue in the fiscal fourth quarter. Management tied the Datacenter opportunity to AI infrastructure buildouts, citing rising requirements for low-latency flash storage as inference workloads scale and techniques like KV cache and retrieval-augmented generation increase flash demand.
SNDK’s Edge Gains Highlight Premium Device Shift
SNDK’s Edge revenue jumped 118.3% sequentially and 295.1% year over year to $3.663 billion. Management pointed to a continued shift toward premium PCs and smartphones, where on-device capabilities are driving higher storage requirements and supporting demand for high-performance solutions.
The company also emphasized that mix is moving toward higher-value configurations and customers who assign appropriate value to its technology. That mix orientation, along with stronger pricing, was a key contributor to the quarter’s broad-based financial step-up.
SNDK’s Consumer Trends Track Seasonality
Sandisk’s Consumer revenues came in at $820 million, down 9.6% sequentially but up 43.6% year over year, which the company said aligned with historical seasonality. Management noted that year-over-year growth in consumer revenues was broad-based across key storage categories and regions, supported by brand recognition and channel presence.
The company also highlighted recent product and marketing initiatives. In February, Sandisk launched a next-generation portable SSD portfolio designed for faster workflows and AI-enabled content creation, and it is rolling out its “Space to Hold More” campaign to deepen global consumer engagement through localized brand storytelling.
SNDK’s Profitability Jumps With Leverage And Execution
Profitability expanded sharply alongside the revenue surge. Non-GAAP gross margin was 78.4%, up from 51.1% in the previous quarter and 22.7% in the year-ago quarter, as pricing and mix shifted higher.
Non-GAAP operating expenses were $448 million, representing 7.5% of revenues, down from 13.7% in the prior quarter, driving meaningful operating leverage.
As a result, non-GAAP operating margin reached 70.9%, up from 37.5% in the prior quarter.
Sandisk’s Cash, Buyback And Q4 Guide Signal Confidence
Sandisk ended the quarter with $3.74 billion in cash and cash equivalents and generated $2.955 billion in adjusted free cash flow with a 49.7% margin. The company also announced a $6 billion share repurchase authorization, effective immediately, with no expiration date, following full debt repayment.
For the fourth quarter of fiscal 2026, Sandisk expects revenues of $7.75-$8.25 billion and non-GAAP earnings of $30-$33 per share. Management guided to a non-GAAP gross margin of 79%-81% and non-GAAP operating expenses of $480-$500 million, indicating continued investment in innovation alongside the company’s stronger earnings profile.
Zacks Rank & Other Stocks to Consider
Currently, Sandisk sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Fabrinet FN, Mistras Group MG and OptimizeRx OPRX. Each of the three stocks sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fabrinet, Mistras Group and OptimizeRx are set to report their respective quarterly results on May 4, 5 and 12, respectively. Year to date, shares of Fabrinet and Mistras Group have jumped 50.2% and 49.3%, respectively, while OptimizeRx dropped 49.2%.
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This article originally published on Zacks Investment Research (zacks.com).