On Thursday, Sandisk projected fiscal third-quarter non-GAAP earnings per share of $12.00 to $14.00 and revenue between $4.4 billion and $4.8 billion, far exceeding consensus forecasts. Management attributed the upside to sustained AI-driven demand for enterprise SSDs and a disciplined approach to supply chain alignment. Gross margin is expected to expand to 65.0%–67.0% as higher-value, higher-margin products take a larger share of the mix. Analysts had modeled roughly $3.50 per share in earnings and top-line growth closer to 40% year-over-year, underscoring the scale of Sandisk’s forecast beat.

For the fiscal second quarter ended January 2, Sandisk reported non-GAAP revenue of $3.025 billion, up 61% from $1.876 billion a year earlier and 31% sequentially. Non-GAAP net income soared 443% year-over-year to $967 million, translating into $6.20 per diluted share, up from $1.23 a year ago. Gross margin widened by 18.6 percentage points to 51.1%, driven by a shift toward enterprise SSD deployments for cloud and hyperscale data centers. Datacenter revenue climbed 76% year-over-year to $440 million, while edge infrastructure and consumer segments each grew more than 60%.

Sandisk extended its multi-year supply pact with a leading NAND flash wafer supplier, securing additional capacity commitments through 2028. The deal covers both high-density QLC products for cloud workloads and next-generation TLC parts optimized for AI inference tasks. Under the terms, Sandisk has priority allocation on new production lines, shielding it from the tight industry supply environment and preserving pricing power. Management emphasized that this agreement supports targeted revenue growth of at least 30% annually over the next two fiscal years.

CEO David Goeckeler noted that Sandisk’s recent structural reset—realigning inventory levels, optimizing manufacturing footprints and accelerating enterprise SSD deployments—has created a lean cost base and improved operating leverage. Operating expenses declined 7% sequentially on a GAAP basis and non-GAAP operating expenses fell to $413 million. The company now expects to convert a higher percentage of incremental revenue into free cash flow, targeting a return on invested capital above 25% by fiscal 2027. Management will host a conference call today at 1:30 p.m. Pacific to discuss these results and strategic priorities.