Sandisk (NASDAQ:SNDK) reported fiscal third quarter results that surpassed Wall Street expectations on both revenue and earnings, as demand tied to AI-driven data center growth boosted performance.
The company posted adjusted earnings per share of $23.41, well above estimates of $14.66, while revenue reached $5.95 billion, exceeding expectations of $4.73 billion. Revenue rose 97% sequentially and 251% year over year.
GAAP net income totaled $3.62 billion, or $23.03 per diluted share, compared with $803 million, or $5.15 per share, in the prior quarter. On a non-GAAP basis, earnings per share increased from $6.20 in the second quarter.
Gross margin expanded to 78.4%, up from 50.9% in the prior quarter and 22.5% a year earlier. Operating income climbed to $4.11 billion from $1.07 billion in the previous quarter, while operating expenses rose modestly.
The company said results were driven by a shift toward higher-value customers, particularly in datacenter markets, alongside stronger pricing. Datacenter revenue rose 233% sequentially to $1.47 billion and increased 645% from a year earlier. Edge segment revenue grew 118% quarter over quarter to $3.66 billion, while consumer revenue declined 10% sequentially but remained 44% higher year over year.
During the quarter, Sandisk signed three agreements under its New Business Model (NBM), which focuses on multi-year customer engagements with firm financial commitments. Two additional agreements were signed early in the fourth quarter.
“This quarter marks a fundamental inflection point for Sandisk — where our technology leadership is enabling a deliberate shift in our mix toward the highest-value end markets, led by Datacenter,” Sandisk CEO David Goeckeler said in a statement.
He added that the transition to the new model is contributing to “structurally higher and more durable earnings power.”
Shares of Sandisk were down more than 4% following the report, with the decline attributed to profit-taking.