Sandisk Corp
For the period ended Apr 3, 2026. Filed May 1, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 3, 2026 · Filed May 1, 2026
SNDK$835.06+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-01-02; filed 2026-01-30.
0001628280-26-004407
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-03; filed 2026-05-01.
0001628280-26-029401
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 115 current paragraphs.
55 unchanged; 43 reworded; 17 added; 12 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment of $46 million resulting from the write-off of the remaining unamortized issuance costs.
Current report
Datacenter revenue increased 645% in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 186% increase in ASP per gigabyte and a 160% increase in exabytes sold.
Current report
Edge revenue increased 295% in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 343% increase in ASP per gigabyte, partially offset by a 10% decrease in exabytes sold.
Current report
Edge revenue increased 123% in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 99% increase in ASP per gigabyte and a 12% increase in exabytes sold.
Current report
Consumer revenue increased 44% in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 139% increase in ASP per gigabyte, partially offset by a 40% decrease in exabytes sold.
Current report
Consumer revenue increased 41% in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 39% increase in ASP per gigabyte and a 2% increase in exabytes sold.
Current report
Goodwill impairment
Current report
Goodwill impairment decreased $1.8 billion in the three and nine months ended April 3, 2026 from the comparable period in the prior year. In the three and nine months ended March 28, 2025, we recorded an impairment charge resulting from the difference between the carrying value of our reporting unit and its fair value in the prior year. No such impairment charge was incurred during the current year.
Current report
Loss on debt extinguishment
Current report
Loss on debt extinguishment increased $46 million in the three and nine months ended April 3, 2026 from the comparable period in the prior year due to the write-off of the remaining unamortized issuance costs in connection with the early settlement of the Company’s Term Loan Facility.
Current report
Interest and Other Income (Expense), net
Current report
(2)On April 8, 2026, the Company satisfied its payment obligation under the Private Placement Subscription Agreement (the “Equity Investment Agreement”) with Nanya Technology Corporation (“Nanya”) by remitting the purchase price of $972 million to fully subscribe for 138,685,000 shares of Nanya, that were received on April 28, 2026, upon completion of the share issuance procedures, as set forth in the Equity Investment Agreement.
Current report
On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment of $46 million resulting from the write-off of the remaining unamortized issuance costs.
Current report
Long-Term Agreements
Current report
In connection with entering into long-term agreements during the third quarter of fiscal 2026 with certain customers, we received customer advances that increased our available cash and cash equivalents. We record these customer payments as contract liabilities in advance of performance under the contract. As of April 3, 2026, our contract liabilities were $511 million, which primarily relates to the remaining performance obligations under these long-term agreements. See Part I, Item 1, Note 4, Revenueof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our contract liabilities.
Current report
Share Repurchase Authorization
Current report
On April 30, 2026, we announced that our Board of Directors has approved a $6 billion (exclusive of fees and commissions) share repurchase program (the “Repurchase Program”). The acquisition of shares under the Repurchase Program may be effected from time to time through open market purchases (including under a plan adopted pursuant to Rule 10b5-1 promulgated under the Securities Exchange Act of 1934) or other methods of acquiring shares, in each case on such terms and at such times as shall be permitted by applicable securities laws and determined by our management. We expect shares repurchased under the Repurchase Program to be funded by operating cash flows. The amount and timing of share repurchases will depend on market conditions and other relevant factors. We may suspend or discontinue the Repurchase Program at any time. The approval of the Repurchase Program does not obligate us to repurchase any common shares.
Removed paragraphs (12)
Previous report
SanDisk Semiconductor (Shanghai) Co. Ltd. (“SDSS”)
Previous report
As discussed in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, on September 28, 2024, prior to the separation, WDC’s wholly-owned subsidiary, SanDisk China Limited (“SanDisk China”) completed the sale of 80% of its equity interest in SDSS (the “Transaction”) to JCET Management Co., Ltd. (“JCET”), a wholly-owned subsidiary of JCET Group Co., Ltd., a Chinese publicly listed company, thereby forming a venture between SanDisk China and JCET (the “SDSS Venture”). The Transaction resulted in a pre-tax gain of $34 million.
Previous report
Subsequent to, and in connection with, the sale of SDSS, the Company entered into a five-year supply agreement with SDSS to purchase certain flash-based products with a minimum annual commitment of $550 million. The Supply Agreement contains specific penalties the Company must pay if it fails to meet its minimum annual commitment. The Supply Agreement also provides that if the Company’s purchases exceed the minimum annual commitment in any of the two years immediately succeeding any annual period where a shortfall has been paid, SDSS shall reimburse the Company an amount not exceeding the previously paid penalty amount. The Supply Agreement expires on September 28, 2029, and automatically renews for additional one-year terms unless earlier terminated by either of the parties. The Company also entered into an agreement to grant SDSS certain intellectual property rights on a royalty-free basis for use in manufacturing products on the Company’s behalf for the term of and under the Supply Agreement. As a result of this Transaction, we expect to incur a modest reduction in annual operating expenses and a reduction in annual capital expenditures related to the assembly and testing of flash-based products. We also anticipate that the transition to a contract manufacturing model through SDSS will result in a small increase in our annual cost of revenue for flash-based products.
Previous report
Datacenter revenue increased 76%in thethree months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 90% increase inexabytes sold, partially offset by an 8% decrease in ASP per gigabyte.
Previous report
Datacenter revenue increased 29%in thesix months ended January 2, 2026 from the comparable period in the prior year, primarily due toa 41% increase inexabytes sold, partially offset by a 9% decrease in ASP per gigabyte .
Previous report
Edge revenue increased 63%in the three months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 55% increase in ASP per gigabyte and a 10% increase in exabytes sold.
Previous report
Edge revenue increased 46%in thesix months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 24% increase in exabytes sold and an 18% increase in ASP per gigabyte.
Previous report
Consumer revenue increased 52%in the three months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 30% increase in ASP per gigabyte and a 17% increase in exabytes sold.
Previous report
(Gain) loss on business divestiture decreased $34 million in the three months ended January 2, 2026 from the comparable period in the prior year as a result of the closing of the sale of SDSS that took place on September 28, 2024, for which there was no comparable transaction in the current period.
Previous report
Interest and Other Expense, net
Previous report
(1) Principal portion of debt, excluding issuance costs.
Previous report
(3)Interest varies based on (x) the Adjusted Term SOFR Rate (as defined in the Loan Agreement) plus an interest rate margin of 3.00% per annum or (y) a base rate plus an interest rate margin of 2.00% per annum, and additional principal prepayments.
Reworded paragraphs (43)
Previous wording
Our fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year 2025, which ended on June 27, 2025, was comprised of 52 weeks, with each fiscal quarter consisting of 13 weeks. Fiscal year 2026 will be comprised of 53 weeks and will end on July 3, 2026, with the first fiscal quarter consisting of 14 weeks.
Current wording
Our fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year 2025, which ended on June 27, 2025, was comprised of 52 weeks, with each fiscal quarter consisting of 13 weeks. Fiscal year 2026 is comprised of 53 weeks and ends on July 3, 2026, with the first fiscal quarter consisting of 14 weeks.
Previous wording
On October 30, 2023, Western Digital Corporation (“WDC”) announced that its board of directors (the “WDC Board of Directors”) authorized management to pursue a plan to separate the Company into an independent public company. The separation received final approval by the WDC Board of Directors and was completed on February 21, 2025. Prior to February 21, 2025, the Company was wholly owned by WDC.
Current wording
On October 30, 2023, Western Digital Corporation (“WDC”) announced that its board of directors (the “WDC Board of Directors”) authorized WDC management to pursue a plan to separate the Company into an independent public company (the “separation” or the “spin-off”). The separation received final approval by the WDC Board of Directors and was completed on February 21, 2025. Prior to February 21, 2025, the Company was wholly owned by WDC.
Previous wording
On June 9, 2025, WDC disposed of 21,314,768, or 14.6%, of our common stock through an exchange of our common stock for WDC debt held by WDC creditors, which shares were sold by affiliates of the WDC creditors in a registered public offering by the Company. All expenses for the offering were paid for by us. As of January 2, 2026, WDC retained 7,513,019, or 5.1%, of the outstanding shares of the Company’s common stock, which WDC is expected to divest within twelve months following the separation.
Current wording
On June 9, 2025, WDC disposed of 21,314,768, or 14.6%, of our common stock through an exchange of our common stock for WDC debt held by WDC creditors, which shares were sold by affiliates of the WDC creditors in a registered public offering by the Company. On February 18, 2026, WDC disposed of 5,821,135 outstanding shares of the Company through an exchange of Sandisk’s common stock for WDC debt held by WDC creditors, which shares were sold by affiliates of the WDC creditors in a registered public offering by us. All expenses for these offerings were paid for by us. Following this transaction, WDC continued to retain 1,691,884 of the outstanding shares of the Company’s common stock and, as of March 19, 2026, the sale of such shares is no longer subject to restriction.
Previous wording
Prior to the separation, the Company received financing from certain of WDC’s subsidiaries in the form of borrowings under intercompany revolving credit agreements and promissory notes to fund activities primarily related to Flash Ventures. Additional information regarding our outstanding notes due to (from) Western Digital Corporation is included in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
Prior to the separation, the Company received financing from certain of WDC’s subsidiaries in the form of borrowings under revolving credit agreements and promissory notes to fund activities primarily related to Flash Ventures. Additional information regarding our outstanding notes due to (from) Western Digital Corporation is included in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Previous wording
As of January 2, 2026, the Company has drawnno amounts under the Revolving Credit Facility.
Current wording
As of April 3, 2026, the Company has drawn no amounts under the Revolving Credit Facility.
Previous wording
In the second quarter, we generally saw demand for our NAND continue to outpace supply, leading to improved revenues when compared to prior periods. We expect this imbalance of supply and demand to persist through calendar year 2026 and beyond. The rapid growth of AI infrastructure is driving demand for high-performance storage products, and AI adoption is driving the need for NAND storage to support these workloads.
Current wording
In the third quarter, we continued to observe that the rapid growth of AI infrastructure is driving demand for high-performance storage products, and AI adoption is driving the need for NAND storage to support these workloads, leading to increased revenues when compared to prior periods. The current demand environment has led to pricing shifts that have positively impacted our business, and we expect these favorable pricing trends to have a positive impact on our revenue and cash flows from operations. We expect these conditions to persist through calendar year 2026 and beyond. Accordingly, we expect to invest in, and allocate resources to, high-value opportunities for both the short-term and long-term benefit of our customers and the Company.
Previous wording
In 2025, the U.S. began enacting a number of changes in U.S. trade policy, including increased tariffs on imported goods. Currently, the majority of our products sold in the U.S. are exempt from tariffs, but additional tariff increases, or the loss of applicable exemptions, would increase the cost of goods sold for our products sold in the U.S., which could negatively impact our margins and financial performance. Increases in the price of our products in response to increased costs may adversely impact demand for those products in the U.S., which could also negatively impact our performance and financial results.
Current wording
The Trump Administration has made a number of changes in U.S. trade policy, including the imposition of tariffs under the authority of the International Emergency Economic Powers Act, which the U.S. Supreme Court found unlawful in February 2026, the creation of a refund process for such tariff duties, and the imposition of new tariffs under other statutory authorities. Currently, the majority of our products sold in the U.S. are exempt from tariffs, but additional tariff increases, or the loss of applicable exemptions, would increase the cost of goods sold for our products sold in the U.S., which could negatively impact our margins and financial performance. Increases in the price of our products in response to increased costs may adversely impact demand for those products in the U.S., which could also negatively impact our performance and financial results. Future trade policies and regulations in the U.S. and other countries, the terms of any trade arrangements that may be negotiated between the U.S. and other countries, the scope, amount, or duration of tariffs that may be imposed by any country, and the impact of these factors on our business are uncertain and may contribute to increased costs and reduced demand for our products, each of which could harm our financial performance.
Previous wording
Net revenue increased 61% in the three months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 36% increase in average selling prices (“ASP”) per gigabyte and a 22% increase in exabytes sold due to stronger demand in our data storage products.
Current wording
Net revenue increased 251% in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 248% increase in average selling prices (“ASP”) per gigabyte. The exabytes sold remained flat from the comparable period in the prior year.
Previous wording
Net revenue increased 42% in the six months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 26% increase in exabytes sold due to stronger demand in our data storage products and a 13% increase in ASP per gigabyte.
Current wording
Net revenue increased 107% in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 76% increase in ASP per gigabyte and an 18% increase in exabytes sold due to stronger demand for our data storage products.
Previous wording
Consumer revenue increased 40%in thesix months ended January 2, 2026 from the comparable period in the prior year, primarily due to a 24% increase in exabytes sold and a 13% increase in ASP per gigabyte.
Current wording
Datacenter revenue increased 191% in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a 79% increase in exabytes sold and a 63% increase in ASP per gigabyte.
Previous wording
The changes in net revenue by geography in thethree and six months ended January 2, 2026 from the comparable period in the prior year primarily reflected higher revenue in the Asia region from Edge customers, partially offset by lower revenue in Europe, Middle East and Africa from Datacenter customers.
Current wording
The changes in net revenue by geography in the three and nine months ended April 3, 2026 from the comparable period in the prior year primarily reflected higher revenue in the Asia and Americas regions from Edge and Datacenter customers.
Previous wording
Consistent with standard industry practice, we offer sales incentive and marketing programs that provide customers with price protection and other incentives or reimbursements that are recorded as a reduction to gross revenue. For the three months ended January 2, 2026 and December 27, 2024, these programs represented 14% and 22%, respectively, of gross revenues. For thesix months ended January 2, 2026 and December 27, 2024, these programs represented 14% and 19%, respectively, of gross revenues. The amounts attributed to our sales incentive and marketing programs generally vary according to several factors, including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix and overall availability of products. Changes in future customer demand and market conditions may require us to adjust our incentive programs as a percentage of gross revenue.
Current wording
Consistent with standard industry practice, we offer sales incentive and marketing programs that provide customers with price protection and other incentives or reimbursements that are recorded as a reduction to gross revenue. For the three months ended April 3, 2026 and March 28, 2025, these programs represented 12% and 19%, respectively, of gross revenues. For the nine months ended April 3, 2026 and March 28, 2025, these programs represented 13% and 19%, respectively, of gross revenues. The amounts attributed to our sales incentive and marketing programs generally vary according to several factors, including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix and overall availability of products. Changes in future customer demand and market conditions may require us to adjust our incentive programs as a percentage of gross revenue.
Previous wording
Gross profit increased by $935 million and $896 million, respectively, for the three and six months ended January 2, 2026 from the comparable period in the prior year, primarily due to a higher ASP and an increase in exabytes sold.
Current wording
Gross profit increased by $4,280 million and $5,176 million, respectively, for the three and nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a higher ASP and an increase in exabytes sold.
Previous wording
Gross margin increased by 1,900 basis points and 600 basis points, respectively, for the three and six months ended January 2, 2026 from the comparable period in the prior year, primarily due to a higher ASP and an increase in exabytes sold.
Current wording
Gross margin increased by 5,600 basis points and 3,000 basis points, respectively, for the three and nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a higher ASP and an increase in exabytes sold.
Previous wording
The higher ASP was primarily driven by favorable pricing conditions in the industry. As a result, for the three and six months ended January 2, 2026, the increase in ASP has outpaced the movement in costs per gigabyte, inclusive of the $11 million underutilization charges incurred in the first fiscal quarter of 2026, resulting in positive margins from the comparable period in the prior year.
Current wording
The higher ASP was primarily driven by favorable pricing conditions in the industry. As a result, for the three and nine months ended April 3, 2026, the increase in ASP has outpaced the movement in costs per gigabyte.
Previous wording
Research and development (“R&D”) expenses increased $48 million in the three months ended January 2, 2026 from the comparable period in the prior year, primarily due to a$30 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount and an$8 million increase in stock-based compensation.
Current wording
Research and development (“R&D”) expenses increased $52 million in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a $42 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount and a $5 million increase in stock-based compensation.
Previous wording
R&D expenses increased $81 million in the six months ended January 2, 2026 from the comparable period in the prior year, primarily due to a$46 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount, a$10 million increase instock-based compensation, a$9 million increase in spending for R&D projects as we continue to invest in innovation and a $4 million increase in datacenter program material purchases.
Current wording
R&D expenses increased $133 million in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to an $88 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount, a $19 million increase in spending for R&D projects as we continue to invest in innovation and a $15 million increase in stock-based compensation.
Previous wording
Selling, general and administrative expenses decreased $3 million in the three months ended January 2, 2026 from the comparable period in the prior year, primarily due to a $40 million decrease in materials due to a change in business practice for the launch of new products, whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The cost of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period, partially offset by an $18 million increase in outside service costs supporting operation and a $16 million increase in compensation and benefits mainly due to variable compensation associated with company performance and increased headcount.
Current wording
Selling, general and administrative expenses increased $22 million in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a $15 million increase in compensation and benefits, mainly due to variable compensation associated with company performance and increased headcount, and a $6 million increase in customer marketing engagements, offset by a $5 million decrease in materials due to a change in business practice for the launch of new products whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The costs of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period, partially offset by a $4 million increase in stock-based compensation.
Previous wording
Selling, general and administrative expenses increased $46 million in the six months ended January 2, 2026 from the comparable period in the prior year, primarily due to a $30 million decrease in materials due to a change in business practice for the launch of new products, whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The cost of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period, partially offset by a $28 million increase in compensation and benefits and employee-related costs mainly due to variable compensation associated with company performance and increase in headcount, a $26 million increase in outside service costs supporting operations and a $12 million increase in stock-based compensation.
Current wording
Selling, general and administrative expenses increased $68 million in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a $43 million increase in compensation and benefits and employee-related costs mainly due to variable compensation associated with company performance and an increase in headcount, offset by a $35 million decrease in materials due to a change in business practice for the launch of new products whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The costs of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period, partially offset by a $22 million increase in customer marketing engagements, a $16 million increase in stock-based compensation and a $9 million increase in outside service costs supporting operations.
Previous wording
Employee termination and other charges decreased $7 million in the six months ended January 2, 2026 from the comparable period in the prior year, as there were no restructuring actions taken in the current period.
Current wording
Employee termination and other charges decreased $7 million in the nine months ended April 3, 2026 from the comparable period in the prior year as there were no restructuring actions taken in the current period.
Previous wording
Business separation costs decreased $12 million in the three months ended January 2, 2026 from the comparable period in the prior year due to post-separation-related costs decreasing.
Current wording
Business separation costs decreased $2 million in the three months ended April 3, 2026 from the comparable period in the prior year due to post-separation-related costs decreasing.
Previous wording
Business separation costs decreased $23 million in the six months ended January 2, 2026 from the comparable period in the prior year due to post-separation-related costs decreasing.
Current wording
Business separation costs decreased $25 million in the nine months ended April 3, 2026 from the comparable period in the prior year due to post-separation-related costs decreasing.
Previous wording
(Gain) loss on business divestiture decreased $44 million in the six months ended January 2, 2026 from the comparable period in the prior year as a result of the closing of the sale of SDSS on September 28, 2024 and an amendment to the Amended and Restated Equity Purchase Agreement with JCET, related to our prior sale of SDSS, in the current period that resulted in a loss. On September 25, 2025, SanDisk China and JCET entered into an Amendment No. 1 to the Amended and Restated Equity Purchase Agreement that included a $10 million provision for working capital support, resulting in a reduction of the September 28, 2025 installment payment from JCET. The Company recognized the adjustment as a Loss on business divestiture for the six months ended January 2, 2026, as discussed in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies—Flash Venturesof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
(Gain) loss on business divestiture decreased $44 million in the nine months ended April 3, 2026 from the comparable period in the prior year as a result of the closing of the sale of SDSS on September 28, 2024 and an amendment to the Amended and Restated Equity Purchase Agreement with JCET, related to our prior sale of SDSS, in the current period that resulted in a loss. On September 25, 2025, SanDisk China and JCET entered into an Amendment No. 1 to the Amended and Restated Equity Purchase Agreement that included a $10 million provision for working capital support, resulting in a reduction of the September 28, 2025 installment payment from JCET. The Company recognized the adjustment as a loss on business divestiture for the nine months ended April 3, 2026, as discussed in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies—Flash Venturesof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Previous wording
Interest and other expense, net increased $134 million in the six months ended January 2, 2026 from the comparable period in the prior year, primarily due to the settlement of certain non-operating legal matters, an increase in interest expense from our Term Loan Facility, and the impairment of an investment, partially offset by an increase in interest income related to cash and investment accounts and a gain on sale of investment.
Current wording
Interest and other income (expense), net decreased $16 million in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due a decrease in interest expense from our Term Loan Facility, and the impairment of an investment, partially offset by an increase in interest income related to cash and investment accounts.
Previous wording
Interest and other expense, net increased $106 million in the three months ended January 2, 2026 from the comparable period in the prior year, primarily due to the settlement of certain non-operating legal matters, an increase in interest expense from our Term Loan Facility, and the impairment of an investment, partially offset by an increase in interest income related to cash and investment accounts and a gain on sale of investment.
Current wording
Interest and other income (expense), net increased $118 million in the nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to the settlement of certain non-operating legal matters, an increase in interest expense from our Term Loan Facility, and the impairment of an investment, partially offset by an increase in interest income related to cash and investment accounts and a gain on sale of investment.
Previous wording
H.R.1, more widely known as the One Big Beautiful Bill Act (“OBBBA”), was signed into law on July 4, 2025. It reversed the requirement for capitalization of U.S. research and development expenditures that came into law under the Tax Cuts and Jobs Act of 2017, but the mandatory requirement of capitalization of foreign research and development expenditures remains. The tax rates for income earned by our foreign subsidiaries will also be changed under H.R. 1, which applies to our fiscal years 2027 and onwards. Depending on our operating results, these changes can materially impact our effective tax rate and operating cash flows. During the three and six months ended January 2, 2026, we recorded a $10 million tax benefit in relation to the OBBBA’s impact on the Company’s 2025 tax provision.
Current wording
H.R. 1, more widely known as the One Big Beautiful Bill Act (“OBBBA”), was signed into law on July 4, 2025. It reversed the requirement for capitalization of U.S. research and development expenditures that came into law under the Tax Cuts and Jobs Act of 2017, but the mandatory requirement of capitalization of foreign research and development expenditures remains. The tax rates for income earned by our foreign subsidiaries will also be changed under H.R. 1, which applies to our fiscal years 2027 and onward. Depending on our operating results, these changes can materially impact our effective tax rate and operating cash flows. During the nine months ended April 3, 2026, we recorded a $10 million tax benefit in relation to the OBBBA’s impact on the Company’s 2025 tax provision.
Previous wording
On December 20, 2021, the Organization for Economic Co-operation and Development G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two (“Pillar Two”). Pillar Two is currently effective in most of the jurisdictions in which we operate. Accordingly, these taxes are included in the Company’s Income tax expense for the three and six months ended January 2, 2026.
Current wording
On December 20, 2021, the Organisation for Economic Co-operation and Development G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two (“Pillar Two”). Pillar Two is currently effective in most of the jurisdictions in which we operate. Accordingly, these taxes are included in the Company’s Income tax expense for the three and nine months ended April 3, 2026.
Previous wording
The relative mix of earnings and losses by jurisdiction credits and tax holidays in Malaysia that will expire at various dates during years 2028 through 2031 resulted in decreases to the effective tax rate below the U.S. statutory rate for the three and six months ended January 2, 2026.
Current wording
The relative mix of earnings and losses by jurisdiction, credits and tax holidays in Malaysia that will expire at various dates during years 2028 through 2031 resulted in decreases to the effective tax rate below the U.S. statutory rate for the three and nine months ended April 3, 2026.
Previous wording
The following table summarizes our Condensed Consolidated Statements of Cash Flows of January 2, 2026 and December 27, 2024:
Current wording
The following table summarizes our Condensed Consolidated Statements of Cash Flows for the periods ended April 3, 2026 and March 28, 2025:
Previous wording
In alignment with market conditions, we maintained what we believe to be a conservative capital expenditure strategy for fiscal year 2025. For fiscal year 2026, we anticipate increased capital investments as we transition to newer nodes to meet the demand and technology needs of our product portfolio.
Current wording
In alignment with market conditions, we maintained what we believe to be a conservative capital expenditure strategy for fiscal year 2025. For fiscal year 2026, we increased our capital investments as we transition to newer nodes to meet the demand and technology needs of our product portfolio.
Previous wording
We believe our cash and cash equivalents will be sufficient to meet our working capital, debt and capital expenditure needs for at least the next twelve months and for the foreseeable future thereafter. We believe we can also access the various capital markets to further supplement our liquidity position if necessary. Our ability to sustain our working capital position is subject to a number of risks that we discuss under the heading “Risk Factors” included in Part I, Item 1A., Risk Factors included in our Annual Report on Form 10-K.
Current wording
We believe our cash and cash equivalents will be sufficient to meet our working capital and, capital expenditure needs, as well as to fund any repurchases of our shares under the Repurchase Program, for at least the next twelve months and for the foreseeable future thereafter. We believe we can also access the various capital markets to further supplement our liquidity position if necessary. Our ability to sustain our working capital position is subject to a number of risks that we discuss under the heading “Risk Factors” included in Part I, Item 1A. Risk Factors included in our Annual Report on Form 10-K.
Previous wording
A total of $476 million and $692 million of our cash and cash equivalents were held outside of the U.S. as of January 2, 2026 and June 27, 2025, respectively. There are no material tax consequences that were not previously accrued for the repatriation of this cash. Our cash equivalents are primarily invested in money market funds that invest in U.S. Treasury securities and U.S. Government agency securities.
Current wording
A total of$2,001 million and $692 million of our cash and cash equivalents were held outside of the U.S. as of April 3, 2026 and June 27, 2025, respectively. There are no material tax consequences that were not previously accrued for the repatriation of this cash. Our cash equivalents are primarily invested in money market funds that invest in U.S. Treasury securities and U.S. Government agency securities.
Previous wording
Net cash provided by operating activities primarily consists of net income or loss, adjusted for non-cash charges, plus or minus changes in operating assets and liabilities. Net cash provided as a result of changes in operating assets and liabilities was $313 million in the six months ended January 2, 2026, as compared to $487 million net cash used in the six months ended December 27, 2024, reflecting an increase in the volume of our business, as discussed above.
Current wording
Net cash provided by operating activities primarily consists of net income or loss, adjusted for non-cash charges, plus or minus changes in operating assets and liabilities. Net cash used as a result of changes in operating assets and liabilities was $396 million in the nine months ended April 3, 2026, as compared to $436 million net cash used in the nine months ended March 28, 2025, reflecting an increase in the volume of our business, as discussed above.
Previous wording
For the three months ended January 2, 2026, DSO decreased 7 days primarily due to higher revenue during the period and continued strong receivables collections. During the three months ended January 2, 2026, DIO decreased 35 days over the three months ended December 27, 2024, primarily due to an increase in petabytes shipped. DPO increased 4 days over the comparable period in the prior year, primarily due to routine variations in the timing of purchases and payments during the period.
Current wording
For the three months ended April 3, 2026, DSO decreased 11 days primarily due to higher revenue during the period and continued strong receivables collections. During the three months ended April 3, 2026, DIO increased 8 days over the three months ended March 28, 2025, primarily due to inventory builds to meet demand. DPO increased 7 days over the comparable period in the prior year, primarily due to routine variations in the timing of purchases and payments during the period.
Previous wording
Net cash used in investing activities in the six months ended January 2, 2026 primarily consisted of $89 million in capital expenditures, partially offset by $25 million in net proceeds from our sale of a majority interest in one of our subsidiaries, coupled with $127 million in net issuances from activity related to Flash Ventures. Net cash used in investing activities in the six months ended December 27, 2024 primarily consisted of $191 million in net proceeds from our sale of a majority interest in one of our subsidiaries and $92 million in net proceeds from activity related to Flash Ventures, partially offset by $115 million in capital expenditures.
Current wording
Net cash used in investing activities in the nine months ended April 3, 2026 primarily consisted of $165 million in net issuances from activity related to Flash Ventures and $134 million in capital expenditures, partially offset by $25 million in net proceeds from our sale of a majority interest in one of our subsidiaries. Net cash provided by investing activities in the nine months ended March 28, 2025 primarily consisted of $401 million in net proceeds from our sale of a majority interest in one of our subsidiaries and $330 million in net proceeds from activity related to Flash Ventures, partially offset by $159 million in capital expenditures.
Previous wording
Net cash used in financing activities in the six months ended January 2, 2026 primarily consisted of Term Loan Facility repayments totaling $1,250 million and $47 million of taxes paid on vested stock awards. Net cash provided by financing activities in the six months ended December 27, 2024 primarily consisted of primarily consisted of $550 million in proceeds from borrowings on notes due to WDC and $101 million in proceeds from repayments on notes due from WDC, partially offset by $231 million transferred from WDC and $76 million in net repayments on notes due to WDC.
Current wording
Net cash used in financing activities in the nine months ended April 3, 2026 primarily consisted of Term Loan Facility repayments totaling $1,900 million and $149 million of taxes paid on vested stock awards, partially offset by $24 million in stock issuances under employee stock plans. Net cash provided by financing activities in the nine months ended March 28, 2025 primarily consisted of $1,970 million in proceeds from borrowings from the Term Loan Facility, $550 million in proceeds from borrowings on notes due to WDC, and $101 million in proceeds from repayments on notes due from WDC, partially offset by $1,887 million transferred from WDC, $76 million in net repayments on notes due to WDC and a $32 million debt issuance discount.
Previous wording
Other than the Flash Ventures and SDSS-related commitments incurred in the normal course of business and certain indemnification provisions (see “Short-and-Long-term Liquidity - Purchase Obligations and Other Commitments” below), we do not have any other material off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or any other obligations arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned subsidiaries that are not included in the Condensed Consolidated Financial Statements. Additionally, with the exception of Flash Ventures, the SDSS Venture, and the Unis Venture, we do not have an interest in, or relationships with, any variable interest entities. For additional information regarding our off-balance sheet arrangements, see Part I, Item I, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
Other than the Flash Ventures, SDSS and Nanya-related commitments incurred in the normal course of business and certain indemnification provisions (see “Short-and-Long-term Liquidity — Purchase Obligations and Other Commitments” below), we do not have any other material off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or any other obligations arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned subsidiaries that are not included in the Condensed Consolidated Financial Statements. Additionally, with the exception of Flash Ventures, the SDSS Venture, and the Unis Venture, we do not have an interest in, or relationships with, any variable interest entities. For additional information regarding our off-balance sheet arrangements, see Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Previous wording
(2) Includes reimbursement for depreciation and lease payments on owned and committed equipment, funding commitments for loans and equity investments and payments for other committed expenses, including research and development and building depreciation. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments.
Current wording
(1) Includes Flash Ventures reimbursement for depreciation and lease payments on owned and committed equipment, funding commitments for loans and equity investments and payments for other committed expenses, including research and development and building depreciation and payments made directly to Kioxia in consideration for the manufacturing services and continued availability of supply. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments.
Previous wording
In connection with the separation, on February 21, 2025, the Company entered into a loan agreement comprised of a $1.5 billion revolving credit facility, which was undrawn at the separation date, and a $2.0 billion term loan facility due in 2032. The Company used a portion of the proceeds received from the term loan facility, as well as cash on hand, to make a net distribution payment of $1.5 billion to WDC in exchange for assets, liabilities and certain legal entities of WDC associated with the Company.
Current wording
In connection with the separation, on February 21, 2025, the Company entered into a loan agreement comprised of a $1.5 billion revolving credit facility, which was undrawn at the separation date, and a $2.0 billion term loan facility (the “Term Loan Facility”) due in 2032. The Company used a portion of the proceeds received from the Term Loan Facility, as well as cash on hand, to make a net distribution payment of $1.5 billion to WDC in exchange for assets, liabilities and certain legal entities of WDC associated with the Company.
Previous wording
As of January 2, 2026, the Company wasin compliance with the loan agreement financial covenant that prohibits the Company from exceeding a maximum Leverage Ratio. Additional information regarding our indebtedness, including information about availability under our revolving credit facility and the principal repayment terms, interest rates, covenants, collateral and other key terms of our outstanding indebtedness, is included in Part I, Item INote 8, Debt of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
As of April 3, 2026, the Company wasin compliance with the loan agreement financial covenant that prohibits the Company from exceeding a maximum Leverage Ratio. Additional information regarding our indebtedness, including information about availability under our revolving credit facility and the principal repayment terms, interest rates, covenants, collateral and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 8, Debt of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
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Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
On September 25, 2025, SanDisk China and JCET entered into an Amendment No. 1 to the Amended and Restated Equity Purchase Agreement that included a $10 million provision for working capital support, resulting in a reduction of the September 28, 2025 installment payment from JCET. The Company recognized the adjustment as a Loss on business divestiture during the six months ended January 2, 2026 and the amendment reduced the September 28, 2025 installment to $27 million, as discussed in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies—Flash Ventures of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Previous report — wording carried elsewhere
We continue to manage our supply to match market demand. In doing so, we expect to invest in, and allocate resources to, high-value opportunities for both the short-term and long-term benefit of our customers and the Company.
Previous report — wording carried elsewhere
Future trade policies and regulations in the U.S. and other countries, the terms of any trade arrangements that may be negotiated between the U.S. and other countries, the scope, amount, or duration of tariffs that may be imposed by any country, and the impact of these factors on our business are uncertain and may contribute to increased costs and reduced demand for our products, each of which could harm our financial performance.
Previous report — wording carried elsewhere
Employee termination and other charges decreased $2 million in the three months ended January 2, 2026 from the comparable period in the prior year, as there were no restructuring actions taken in the current period.