SanDisk Reveals $93.9 Billion in Contracted Revenue as Customer Deals Shift From 3-Month to 4-Year Visibility
Investor Day, August 13, 2026 — CEO David Goeckeler outlines new contract economics, a 100% capital return policy, and the first taped-out High-Bandwidth Flash chip
SanDisk used its second Investor Day since separating from Western Digital to disclose, for the first time in detail, the financial architecture behind its New Business Model (NBM) contracts with data center customers — arrangements CEO David Goeckeler said have already moved the company from three months of demand visibility to more than four years in the span of two quarters. Chief Financial Officer Luis Visoso disclosed that the eight NBM agreements signed to date carry a combined Total Contract Value of $93.9 billion, with $91.1 billion still to be recognized as Remaining Performance Obligation, all based on floor pricing that management says still yields roughly 80% gross margin. The company has also secured $16.5 billion in financial guarantees behind those contracts, the bulk of it held by third-party financial institutions rather than customer deposits.
Multi-Year Contracts Replace Quarterly Price Negotiation
The eight NBM customers include three U.S. hyperscalers, and Visoso noted that two have already returned to either extend contract length or add volume just months after signing — the earliest deal dates to January 2026. Average contract duration now exceeds four years, with the longest running five years, and management said conversations require board-level approval and direct engagement with customer CFOs and treasurers rather than the transactional, quarter-by-quarter procurement that has historically defined the NAND industry. Goeckeler was blunt about the shift: "It's an incredible business. We come into a quarter, we're still negotiating with our customers on what they're going to take and what the price is going to be. We have like three months of visibility. And we're making investments that are 10 or 15 years long." He said the market is "adapting very quickly" to the new structure, with customers now proposing terms rather than SanDisk having to sell them on the idea.
100% of Excess Cash Committed to Buybacks
Visoso confirmed that SanDisk will return 100% of excess cash to shareholders through share repurchases, defining excess cash simply as cash generated minus reinvestment needs. In the fiscal fourth quarter, the company generated $5 billion in free cash flow and returned $4.5 billion to shareholders. The board authorized an additional $14 billion buyback program on top of $1.5 billion remaining from the prior $6 billion authorization, bringing total unspent authorization to $15.5 billion. The company carries no debt, has an unused revolver, and holds a BB+ credit rating that management intends to keep improving.
Long-Term Model: 80% Gross Margin, 50% Free Cash Flow Conversion
For fiscal 2028 through 2030, SanDisk guided to mid-to-high-teens revenue growth in line with bit growth, non-GAAP gross margin around 80%, non-GAAP operating margin of 75%, and adjusted free cash flow margin of 50%, assuming mid-single-digit capital intensity as a percentage of revenue. For fiscal 2027 specifically, the company expects mid-teens bit growth and only modest sequential price increases. This compares with fiscal third-quarter 2025 results of $1.7 billion in revenue and a $0.30 non-GAAP loss per share — the starting point right after the Western Digital separation — versus the $9 billion in quarterly revenue, $39.25 non-GAAP EPS, and $5 billion in adjusted free cash flow reported last week for the most recent quarter, excluding NBM prepayments.
High-Bandwidth Flash Chip Has Taped Out
Chief Technology Officer Alper Ilkbahar disclosed that SanDisk's first High-Bandwidth Flash (HBF) memory die has taped out, with customer samples targeted for next year. HBF is designed to match HBM's read bandwidth while offering 8x to 16x the capacity, targeting AI inference workloads that rely on large KV caches. Meta has joined the Open Compute Project consortium developing the open HBF standard, alongside Google, Tenstorrent, and SK Hynix, and the group released its first public specification last week. Legendary chip architect Jim Keller, now CEO of Tenstorrent, joined SanDisk's Technical Advisory Board and appeared on stage to discuss simulation work his company has run using HBF-equipped GPUs. In an internal SanDisk lab benchmark simulating agentic coding workloads on a 490-billion-parameter model, a single HBF-equipped GPU matched the minimum viable configuration of eight conventional HBM GPUs, while four HBF GPUs matched the token throughput of eight HBM GPUs — implying roughly 2x capital efficiency at peak output or up to 8x efficiency for smaller deployments. Keller offered a candid explanation of why this matters: "The fungibility of compute and memory is amazing. Who knew compute would be so expensive that we should compute it and save the results of the computation in that big format... With HBF, it's now effective to save that for a very long amount of time. And that unlocks the ability to balance compute and memory in a new way." Notably, HBF revenue is not yet included in any of the financial guidance provided, with management treating it purely as an option embedded in existing capital and R&D spending.
BiCS9 Uses Hybrid Bonding to Skip a Node
SanDisk disclosed a new derivative technology track alongside its mainline BiCS NAND roadmap. BiCS9, announced just a day before the event (after BiCS10 was announced weeks earlier), pairs the mature BiCS8 memory array with next-generation CMOS logic through the company's hybrid-bonding process, delivering a substantial performance upgrade with minimal incremental capital spending. Ilkbahar said the approach was designed specifically to meet hyperscale customer specifications for immediate performance gains without waiting for a full node transition, and the product is already part of signed NBM agreements. Separately, BiCS10's 2-terabit QLC die was described as the highest-density memory chip in the world, delivering more than 60% density improvement, more than double the read/write bandwidth, and 75% better power efficiency versus BiCS8.
Capital Efficiency Argument Against "NAND Is a Commodity"
Management pushed back directly on the idea that NAND is easily replicable. Ilkbahar presented data showing SanDisk and joint-venture partner Kioxia produced 29% of industry bit output between 2021 and 2025 while spending only 13% of industry capital, translating into roughly 2.66 times better capital efficiency than the industry average and about 2x that of the nearest competitor. Goeckeler tied this to the underlying BiCS technology roadmap, noting that five node generations launched between 2020 and 2030 have delivered a 54% average bit-per-wafer improvement each generation, or a 27% compound annual productivity growth rate — comfortably ahead of the mid-to-high-teens volume growth the company is committing to. "Growth is primarily driven in this business by the application of intellectual capital, not financial capital," Goeckeler said, arguing this explains why wafer starts have actually declined even as output has grown.
KV Cache Sized at 35% of Flash Market by 2030
Market intelligence director Eric Cherrstrom presented a forecast for the flash industry to reach $300 billion in calendar 2026 and approach $500 billion in 2027, though he cautioned those figures include China and should not be read as a direct SanDisk revenue forecast. Data center share of total flash bit demand is expected to hit 50% this year, up from 30% last year and 20% in the early 2020s. Chief Product Officer Khurram Ismail detailed the company's KV cache sizing methodology — driven by session volume, retention duration, cache miss ratio, and token storage requirements — arriving at an estimated 1 zettabyte installed base of persistent KV cache by 2030, representing 35% of the total flash market that year. Internal testing showed systems using SSDs for KV cache storage consumed 75% less energy and delivered 75% higher token throughput than systems relying solely on volatile memory, a result Ismail attributed to avoiding expensive recomputation when capacity runs out.
Management Pushes Back on Cyclicality Skepticism
Analysts pressed hard on whether the NBM structure will hold up in a downturn, drawing comparisons to past industry cycles where long-term commitments failed to survive demand corrections. Goeckeler acknowledged the risk directly but argued the counterparties have changed: "Those people could be just pulling the wool over our eyes... That's not my calculus of what's the most likely thing to happen. Those people are officers of public companies just like I am. They have responsibilities." He also noted that DRAM capacity in AI servers may shrink further than already announced — referencing Nvidia's Vera Rubin platform cutting SOCAMM DRAM in half — with Ismail adding that SanDisk's own lab testing suggests system DRAM needs could be reduced even further when paired with eSSD and HBM. On customer mix, Goeckeler confirmed data center will keep rising as a share of the business but declined to give a specific target, saying the company intends to keep its consumer and edge franchises intact as a cyclicality buffer even as data center growth outpaces them.