SNDK · Q2 2025 Earnings

Cautious

Sandisk

Reported August 14, 2025

30-second summary

Sandisk posted $1.90B in revenue, up 12% QoQ and 8% YoY, with non-GAAP EPS of $0.29, non-GAAP operating margin of 5.3%, and free cash flow of $49M after a brutal stretch. The Q1 FY2026 guide — $2.10B–$2.20B revenue and $0.70–$0.90 non-GAAP EPS — points to another double-digit sequential step-up and a sharp margin expansion to 28.5–29.5% non-GAAP gross. Demand is clearly inflecting, but the GAAP line is still in the red (-$0.16 EPS) and the full-year picture remains messy: FY revenue $7.36B with negative FCF and a GAAP operating margin of -18.7% (weighed down by a $1.83B goodwill impairment; non-GAAP FY operating margin was +9.4%).

Headline numbers

EPS

Q2 FY2025

$0.29

Revenue

Q2 FY2025

$1.90B

+8.0% YoY

Gross margin

Q2 FY2025

26.2%

Free cash flow

Q2 FY2025

$0.05B

Operating margin

Q2 FY2025

0.9%

Key financials

Q2 FY2025

Metric	Q2 FY2025	YoY
Revenue	$1.90B	+8.0%
EPS	$0.29	—
Gross margin	26.2%	—
Operating margin	0.9%	—
Free cash flow	$0.05B	—

Guidance

Prior quarter data unavailable — comparison not possible.

Product revenue

Q2 FY2025

Segment	Q2 FY2025	YoY
Cloud	$0.213B	+25.0%
Client	$1.103B	+3.0%
Consumer	$0.585B	+12.0%
Cloud Revenue Growth	25% YoY	—

Management tone

No transcript or prepared-remarks text was available for this print, so a tone analysis isn't possible this quarter. The press release language ("demand improving and industry fundamentals strengthening… well-positioned to drive sustainable growth, expand margins, and generate strong cash flow") reads as a confident inflection call, but without a call transcript to corroborate, treat it as marketing copy rather than evidence. Tone tracking will begin properly next quarter.

What to watch into next quarter

Whether non-GAAP gross margin actually hits the 28.5–29.5% Q1 FY2026 guide. A 210–310bps single-quarter expansion is the centerpiece of the bull case; missing the low end would call the entire margin-recovery narrative into question.

Cloud segment revenue trajectory. $213M growing 25% YoY needs to keep accelerating — watch for it to clear $250M and become a more material share of mix.

Client segment reacceleration. At $1.10B and only +3% YoY, this is the largest revenue line and the slowest growing; the Q1 FY2026 revenue guide ($2.10–$2.20B) effectively requires Client to inflect.

GAAP-to-non-GAAP reconciliation. GAAP EPS was -$0.16 vs. non-GAAP +$0.29 — a $0.45 gap. Watch whether that gap narrows as the cost base normalizes, or whether stock-based comp and one-timers keep GAAP in the red.

Full-year FY2026 guide. Management gave a Q1 number but no FY2026 framework — a full-year guide on next quarter's call would signal confidence in the durability of the recovery.

Sources

Sandisk Q4 FY2025 press release / 8-K exhibit 99.1, filed Aug 14, 2025: https://www.sec.gov/Archives/edgar/data/2023554/000119312525180782/d926236dex991.htm

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