SanDisk Q3 FY26: Revenue Up 251% to $5.95B, $42B in Long-Term AI Storage Contracts and $6B Buyback (April 30, 2026)

SanDisk on April 30, 2026 reported fiscal Q3 2026 revenue of $5.95 billion, up 251% year-over-year and 97% sequentially, blowing past its own $4.4–$4.8 billion guidance. The company also disclosed three new multi-year supply contracts worth a combined $42 billion with AI hyperscalers, secured by $11 billion in collateral, and authorized a new $6 billion share buyback with no expiration date.

What Happened

Fiscal Q3 ended April 3, 2026. SanDisk reported GAAP net income of $3.615 billion, or $23.03 per diluted share, with non-GAAP diluted EPS of $23.41. Non-GAAP gross margin reached 78.4% — up roughly 56 percentage points year-over-year and 27 points sequentially — and non-GAAP operating income hit $4.218 billion. Adjusted free cash flow for the quarter was $2.955 billion.

The result is, by any historical measure, an extraordinary quarter for a NAND flash memory company. Data Center revenue alone was $1.467 billion, up 233% sequentially, with management attributing the surge to AI workloads pulling up TLC enterprise SSDs and to a coming product cycle in QLC "Stargate" solutions expected to begin shipping next quarter.

Key Details

• Revenue: $5.95 billion in fiscal Q3 2026, up 251% year-over-year, up 97% sequentially. Beat the high end of the guidance range by more than $1.1 billion.
• Profitability: Non-GAAP gross margin 78.4%, up 55.7 points year-over-year and 27.3 points sequentially. Non-GAAP operating income $4.218 billion.
• Earnings: GAAP net income $3.615 billion, $23.03 GAAP diluted EPS; non-GAAP EPS $23.41.
• Long-term contracts: Five long-term supply agreements signed, ranging from one to five years. Three of them, announced this quarter, total $42 billion in committed revenue and are backed by $11 billion of collateral and pre-payments — including $400 million already on the balance sheet.
• $6B buyback: Effective immediately, no expiration. Reflects net cash position after full repayment of the term loan B (TLB).
• Q4 guidance: Revenue $7.75–$8.25 billion, non-GAAP gross margin 79–81%, non-GAAP EPS $30–$33. Both the revenue and EPS midpoints sit roughly 30% above prior Wall Street consensus.

What Developers and Users Are Saying

On Hacker News and Reddit's r/hardware, the dominant reaction is shock at gross margins — 78.4% is more typical of a chip-design house like Nvidia than of a NAND flash supplier. Several commenters note that SanDisk's New Business Model (NBM) — long-term, collateralized supply agreements with hyperscalers — closely mirrors the take-or-pay structure that has carried foundry leaders like TSMC through cyclical downturns, and could materially reduce the boom-and-bust cycle that has historically defined NAND.

The skeptical thread on Seeking Alpha and the muted post-print stock reaction (shares were briefly down despite the beat) reflect concern that the AI capex cycle could moderate before SanDisk's QLC Stargate ramp catches up to demand. Bears argue that $42 billion of contracted backlog is impressive, but priced into the current valuation, while bulls point out that fiscal Q4 alone is now guided to nearly the entirety of fiscal 2024's annual revenue.

What This Means for the AI Industry

The combination of $42 billion in committed backlog and the New Business Model signals that hyperscalers are now willing to underwrite the storage layer the same way they have already underwritten GPUs and power. AI training and serving workloads — particularly long-context models and retrieval-augmented generation — are pulling enterprise SSD demand far above prior cycle peaks, and SanDisk's ability to lock in pricing and volume across one-to-five year horizons gives it both predictable revenue and the financial cover to invest in next-generation BiCS NAND and high-bandwidth flash (HBF) products.

For developers and infrastructure teams, the practical takeaway is that capacity is being reserved, not just sold spot. Buyers outside the largest hyperscalers may face tighter availability and firmer prices on enterprise QLC and TLC SSDs through the rest of calendar 2026.

What's Next

Management said two more long-term agreements are in negotiation and could be announced in the next quarter or two. QLC Stargate solutions begin shipping in fiscal Q4. The company plans an investor event later in 2026 to detail HBF roadmap and capacity additions. Apple, Meta, and Microsoft were not named directly, but several analysts on the call noted the size of the contracts implies a small set of hyperscale buyers.

Sources

• SanDisk Investor Relations — official Q3 FY26 press release and 8-K filing.
• Business Wire — full press release distribution.
• The Motley Fool — Q3 2026 earnings call transcript.
• 24/7 Wall St. — analysis of SanDisk's AI storage thesis.
• Investing.com — slide-deck summary and margin breakdown.
• IndexBox — independent industry context on AI-driven NAND demand.