Sandisk reported fiscal Q4 2026 after the close on August 5. Revenue was $8.97B, up 372% year over year and 51% sequentially. Non-GAAP diluted EPS was $39.25. GAAP diluted EPS was $43.97 — higher than the non-GAAP figure, which is not how that comparison usually runs. GAAP net income was $6.90B on a GAAP gross margin of 84.6%.
We previewed this print on July 30 and set three checkable bars. All three were cleared, two of them by margins that make the word "beat" do very little work.
The three bars, graded
| What we said to watch | What the print says |
|---|---|
| Whether Sandisk hits its guided $7.75B–$8.25B revenue range | Past the top of it. $8.97B — 8.7% above the high end. |
| Whether it hits $30.00–$33.00 non-GAAP EPS | Past the top of it. $39.25 — 19% above the high end, and ~15% above the ~$34 consensus. |
| Whether gross margin holds near 78% | It expanded. 84.6% GAAP, against 78.4% last quarter. |
A company that beats its own guidance high end by 8.7% on revenue five weeks after issuing it is telling you the guidance was written against a price deck that moved.
The ramp, in the house series
| Quarter | Revenue | QoQ | Diluted EPS | FCF | FCF margin |
|---|---|---|---|---|---|
| FY25 Q4 | $1,901M | — | $0.29 | $49M | 2.6% |
| FY26 Q1 | $2,310M | +21.5% | $1.22 | $438M | 19.0% |
| FY26 Q2 | $3,030M | +31.2% | $6.20 | $980M | 32.3% |
| FY26 Q3 | $5,950M | +96.4% | $23.41 | $2,993M | 50.3% |
| FY26 Q4 | $8,970M | +50.8% | $43.97 | not yet published | — |
Five quarters ago this was a $1.9B-a-quarter business earning twenty-nine cents a share. Full-year FY2026 revenue was $20.25B, up 175%, with GAAP EPS of $73.76 and non-GAAP of $70.88.
The quarterly free-cash-flow figure for FQ4 was not in the release; the cash-flow statement lands with the 10-K. On the trajectory of the four quarters above — 2.6% to 19.0% to 32.3% to 50.3% — the direction is not in doubt, but we will not print a number we cannot trace.
The Rule of 40 stops discriminating here
Sandisk's Rule of 40 score for the quarter is 372 of revenue growth plus whatever the cash half turns out to be. Last quarter, with 251% growth and a 50.3% free-cash-flow margin, it was above 300.
This is worth saying plainly, because it is the honest limit of the metric this site is named after: at a cyclical peak the Rule of 40 tells you nothing you did not already know. A score of 400 and a score of 300 both mean "NAND pricing is extraordinary right now." Neither says anything about the quarter in which it stops being extraordinary, which is the only question that matters for owning the stock.
The metric earns its keep by separating companies that grow and convert from companies that do one at the expense of the other. Sandisk is doing both, spectacularly, on a price cycle. Read the 84.6% gross margin instead: memory makers do not structurally earn eighty-four points of gross margin. Sandisk's own FY25 Q4 gross margin was in the twenties.
What the guidance says about the cycle
Q1 FY2027 guidance is $10.3B–$10.8B of revenue and $44.00–$46.00 of non-GAAP EPS — another 15–20% sequential step. The board also authorised an additional $14B of buyback.
Two readings, and the release does not settle between them. Either the long-term supply agreements Sandisk has been signing have locked in the pricing through the next several quarters, in which case the guide is a contracted number rather than a spot-price bet. Or the guide extrapolates a spot market that our preview flagged as the single biggest risk, with Chinese supply from YMTC and others arriving into 2027.
A $14B repurchase authorisation on a company whose quarterly revenue has gone up 4.7x in five quarters is a strong statement about which reading management holds. It is also the kind of capital allocation that is very hard to reverse if the second reading turns out to be right.
The Investor Day on August 13 is where the multi-year margin framework is supposed to arrive. That is now the more important date.
The GAAP-above-non-GAAP inversion
GAAP EPS of $43.97 exceeding non-GAAP EPS of $39.25 means the adjustments reduced earnings this quarter — the reverse of the usual pattern, where non-GAAP strips out charges to flatter the result. It most often signals a tax or discrete gain flowing through GAAP that the company excluded from its adjusted number.
We flag it rather than explain it, because the reconciliation table is in the release and the derivation belongs to the filing, not to us. But it is worth knowing that for once the conservative-looking number is the non-GAAP one — see GAAP vs adjusted EPS for why that direction is rare enough to be worth a second look.
The number to watch is not next quarter's revenue. It is the first quarter in which the sequential step goes negative, and what gross margin does on the way down.