Sandisk Corp Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: C.J. Muse - Cantor Fitzgerald LP - Analyst : I guess I was hoping to spend a little bit of time giving more depth on gross margins. Obviously, great guide, 260 bps higher, but I think less than expectations. So if you could kind of walk through underutilization cost downs mix, anything that could be helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2025 / 8:30PM, SNDK.OQ - Q4 2025 Sandisk Corp Earnings Call

Question: Joseph Moore - Morgan Stanley - Analyst : Great. I wonder if you could give us a little bit more color on the high bandwidth flash partnership, I guess, what's the thought process behind partnering? And how do you extract the most value working with Hynix on that?

Question: Joseph Moore - Morgan Stanley - Analyst : Great. And your confidence in this kind of being commercially viable next year from a sampling perspective, is this how speculative should we view these investments as being at this point?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : I guess I want to go back to C.J.'s question a little bit, appreciating the inputs in the gross margin. I know, Luis, you had mentioned that the start-up cost of $60 million, it looks like it's up from the $42 million this last quarter. But you did suggest that, that should decline significantly going forward. Any kind of glide path of how we should think about that $60 million as we look out over the next couple of quarters? And then I guess, also tied to the gross margin. I guess if I back those items out, I adjust, it looks like your rate of cost down relative to the BiCS 8 ramp. I'm just curious like that seems to be a bit of a headwind. When do we start to see maybe that cost curve start to normalize and you start to see the benefits of that cost down from BiCS 8.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : That does. And then real quickly, you mentioned growing bit growth consistent with the broader demand of the market. Can you just remind us of what that growth is the broader market demand?

Question: Wamsi Mohan - Bofa Merrill Lynch Asset Holdings Inc - Analyst : How are you thinking about the growth in client in the second half of the calendar year, given some of the dynamics of PC demand pull forward and maybe some in smartphones as well that seem to have happened here in the first half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2025 / 8:30PM, SNDK.OQ - Q4 2025 Sandisk Corp Earnings Call

Question: Wamsi Mohan - Bofa Merrill Lynch Asset Holdings Inc - Analyst : You also just mentioned tariffs, can you talk about how you're thinking strategically about tariffs on semis, particularly given that your fab footprint is kind of all Japan. So how are you thinking about navigating that given some of the comments (inaudible) were lately.

Question: Vijay Rakesh - Mizuho Securities USA LLC - Analyst : Just a quick question on the data center side. Obviously, it looks like you're ramping your [20, 26] gig QLC SSD, you target family, can you talk to how the road map looks? You obviously have a second hyperscale earlier qualifying, but what's the target that you're trying to get to like by the, let's say, end of fiscal '26 in terms of a number of hyperscalers, mix of data center revenue side. I think you mentioned 12% of bits. Or where do you see that going?

Question: Vijay Rakesh - Mizuho Securities USA LLC - Analyst : Got it. And then just a quick follow-up for Luis. I think you mentioned an asked the previous question 300 bps underutilization. Should we expect that to completely come off by your fiscal Q3? So over the next two quarters, I guess, you should see a pricing tailwind to margins and that underutilization coming down. Is that how we should look at it.

Question: Karl Ackerman - BNP Paribas - Analyst : I have two, if I may. Could you talk about the average capacity trends you're seeing across flagship mobile in the second half of this calendar year as well as content growth of conventional Windows 11 PCs and AI-enabled PCs that support your view for demand to outstrip supply into fiscal '26.

Question: Karl Ackerman - BNP Paribas - Analyst : Very helpful. David, for my quick follow-up, given the comments that you made about within enterprise SSD, should we expect your data center SSD business to grow more than twice the demand you expect overall in fiscal '26 given the cloud investment and visibility they may be giving you today?

Question: Steven Fox - Fox Advisors LLC - Analyst : I was just wondering if you could talk a little bit more about the start-up costs in the quarter, what they're related to, how quickly you get the return? And if it's any different than the expectation was 90 days ago in terms of the $60 million for the fiscal Q1?

Question: Asiya Merchant - Citigroup - Analyst : Great. If I may, at the Analyst Day, I think you guys talked about perhaps mid-teens kind of a CAGR as you think about maybe it was through cycle. So I'm just wondering, just given the high SSD, the ultra QLC that you're talking about, how does that kind of affect the way you're thinking about the NAND market and the bit growth that we should be expecting? And is this something, you're coming out of a market that saw some perhaps some pull forward in the first half of this year, how we should think about the demand upside if Ultra QLC or high SSDs materialize into significant AI workloads?

Question: Asiya Merchant - Citigroup - Analyst : And if I may, you have a pretty aggressive Chinese competitor in this market. I know you talked a little bit about undersupply, and it takes a few months maybe a couple of quarters for production adjustments to affect supply. Just anything you can share on, when you look at the competitive moves that are happening, how you're thinking about that particular competitor in terms of affecting the, a nice tight supply-demand environment that you're talking about?

Question: Mark Miller - Benchmark Company LLC - Analyst : I was just wondering if you could give us some more color on where you're seeing allocations.

Question: Mark Miller - Benchmark Company LLC - Analyst : Are you seeing any major share changes in the data center market?