Sandisk forecasts upbeat quarterly revenue on AI-driven demand

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Aug 5 : Sandisk forecast quarterly revenue above estimates on Wednesday, banking on rising demand for its memory chips used in AI data centers.

Shares of the Milpitas, California-based company fell nearly 8 per cent in extended trading, after the midpoint of its current quarter profit forecast beat LSEG estimates but fell below estimates from other data providers. The decline also follows a nearly 470 per cent rise in its share price this year.

In an interview with Reuters, CEO David Goeckeler said the company has shifted its sales toward long-term, rather than quarterly, purchase agreements. Sandisk said the median duration of those agreements is now four years.

The company has eight agreements in place with six customers worth at least $93.9 billion. In its fiscal year ending in July 2027, half of its production will be sold under those deals, and in fiscal 2028, two-thirds of Sandisk's output will be sold under such agreements.

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"That's light years ahead of where we were just three quarters ago," Goeckeler said.

Here are some more details:

• The company forecast first-quarter revenue between $10.30 billion and $10.80 billion, the midpoint of which is above analysts' average estimate of $10.47 billion, according to data compiled by LSEG.

• Quarterly adjusted profit is expected to be between $44 and $46 per share, above estimates of $43.12.

• Generative AI's rapid growth has been boosting demand for Sandisk's enterprise solid-state drives and flash memory chips, as data centers require more storage and computing capacity.

• The company's fourth-quarter data-center revenue more than doubled from the third quarter to $2.98 billion, capping a strong year for the company since separating from Western Digital in early 2025.

• Sandisk reported fourth-quarter revenue of $8.97 billion, beating estimates of $8.39 billion. Adjusted profit came in at $39.25 per share, exceeding estimates of $34.45.

• The company said it had signed five additional agreements under its new business model since April, including three with new customers and two expansions of existing deals.

• Sandisk's board approved an additional $14 billion share repurchase program, bringing its total remaining buyback authorization to $15.5 billion.

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