SanDisk's stock price rose 2.21%; propelled by a surge in demand for AI-driven storage technology, the company is on an explosive growth trajectory. Its quarterly financial results significantly surpassed Wall Street analysts' expectations and the company's own guidance.
During Thursday's analyst call, Chief Financial Officer Luis Visoso stated that despite revenue slightly exceeding $3 billion for the quarter, the company still could not meet market demand. The company anticipates that demand will continue to outstrip supply through 2026.
CEO David Goeckeler noted that SanDisk is currently in discussions with customers to transition from the existing quarterly negotiation model to long-term agreements, aiming to secure more stable supply and pricing terms. He added that the company still lacks a clear, comprehensive view of demand expectations.
Since its spin-off from Western Digital, robust market demand has driven a substantial surge in SanDisk's stock price over the past year. The stock began trading independently in February at $36 and closed at $539.40 on Thursday. Following the release of the latest earnings report and better-than-expected guidance, the stock gained an additional 11% in after-hours trading.
SanDisk reported on Thursday that net income for the quarter reached $803 million, or $5.15 per share, compared to a net income of just $104 million, or 72 cents per share, in the same period last year.
Excluding certain one-time items, adjusted earnings per share were $6.20, exceeding analyst expectations of $3.62.
The company had previously forecast adjusted earnings per share to be between $3.00 and $3.40.
Revenue saw substantial year-over-year growth, reaching $3.03 billion, compared to $1.88 billion in the prior-year period. Analysts had expected revenue of $2.69 billion, while SanDisk's previous guidance range was $2.55 billion to $2.65 billion.
The company stated that revenue from its data center business increased 64% year-over-year, benefiting from the large-scale deployment of artificial intelligence by technology companies.
"AI continues to drive demand to new levels, with system complexity and storage requirements expanding in both data center and edge computing scenarios," Goeckeler said on the call.
He added, "NAND flash memory is now universally recognized as an indispensable core component for global storage needs."
For the current third fiscal quarter, SanDisk expects revenue to be between $4.4 billion and $4.8 billion, with adjusted earnings per share between $12.00 and $14.00. This outlook is significantly higher than analyst expectations of $2.93 billion in revenue and adjusted earnings per share of $5.11.
The company also announced on Wednesday that it has extended the term of its joint venture with Japanese computer storage technology company Kioxia until 2034.
The NAND flash memory R&D and manufacturing joint venture, headquartered at Kioxia's Yokkaichi plant, was originally set to expire at the end of 2029. As part of the extension, SanDisk will pay Kioxia nearly $1.17 billion in manufacturing service fees, to be paid in installments between 2026 and 2029.
Goeckeler stated that this agreement will help both companies fully capitalize on opportunities in the NAND flash memory market, which is projected to reach $150 billion by 2026.
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