Sandisk Tops Outlook as Datacenter Revenue Doubles
Non-GAAP earnings of $39.25 a share beat the company’s forecast by $6.25.
Sandisk (SNDK), the flash-memory maker, reported fiscal fourth-quarter revenue that rose 372% from a year earlier as stronger pricing and datacenter demand extended its recent growth run.
Revenue climbed 51% sequentially to $8.965 billion, slowing from 97% growth in the third quarter while remaining above the increases recorded in the preceding three quarters. The result exceeded the high end of Sandisk’s previous guidance by $715 million.
GAAP net income rose 91% sequentially to $6.903 billion, or $43.97 a diluted share, from $3.615 billion, or $23.01 a share. Sandisk had recorded a $23 million loss, or 16 cents a share, a year earlier. Non-GAAP earnings increased 68% sequentially to $39.25 a share, extending a climb from 29 cents a share in the prior-year quarter.
Higher pricing accounted for about two-thirds of the sequential revenue increase, while higher volumes contributed the balance. GAAP gross margin widened to 84.6% from 78.4% in the third quarter and 26.2% a year earlier, exceeding the high end of the company’s prior forecast by 3.7 percentage points.
Datacenter revenue more than doubled sequentially to $2.977 billion and reached nearly 14 times its year-earlier level. Edge revenue rose 48% from the third quarter to $5.432 billion, while Consumer revenue fell 32% to $556 million, sharpening the shift in Sandisk’s sales mix toward datacenter customers.
Free cash flow increased to $7.083 billion from $2.993 billion in the third quarter. Adjusted free cash flow rose to $5.035 billion as prepayments and deposits tied to NBM agreements climbed to $1.938 billion. Sandisk added five NBM agreements, including three with new customers and two expansions with existing customers.
For the fiscal first quarter, Sandisk expects revenue of $10.30 billion to $10.80 billion and non-GAAP earnings of $44 to $46 a share. Its projected non-GAAP gross margin of 83% to 85% points to margins holding roughly steady or easing modestly from the fourth quarter.
The board authorized an additional $14 billion of share repurchases, lifting the company’s remaining authorization to $15.5 billion as Sandisk entered the new fiscal year with higher revenue guidance and a datacenter-heavy sales mix.