SanDisk Corporation (NASDAQ:SNDK) on Thursday laid out a plan to lean harder on multi-year customer supply deals after posting better-than-expected fiscal third-quarter 2026 results.
In the earnings call, CEO David Goeckeler said the memory chip maker has signed five long-term supply agreements (referred to as new business models (NBMs), with three signed in the fiscal third quarter and two more added early in the fiscal fourth quarter.
The agreements, tailored to customer needs, vary in duration, with the longest extending up to five years.
How Multi-Year Contracts Transform Revenue Forecasts?
Chief financial officer Luis Felipe Visoso said the three third-quarter agreements imply “minimum contractual revenue of approximately $42 billion,” and added that the five deals together carry financial guarantees above $11 billion.
Those protections include prepayments and other tools arranged through outside financial institutions, and Visoso said $0.4 billion of prepayments appeared on the third-quarter balance sheet.
SanDisk said the five agreements cover more than one-third of the company’s bit volume expected in fiscal 2027. Goeckeler told analysts that he expects this share to climb and “definitely” could move past 50% over time.
Pricing Power Boosts SanDisk’s Market Position
This strategic shift towards multi-year contracts aligns with the improving conditions in the NAND market, as highlighted by Wedbush analyst Matt Bryson, who recently noted that SanDisk has been “successful in lifting pricing at a faster rate than the broader industry.”
Bryson set a price target of $1,200 for SanDisk, reflecting strong execution relative to peers and expectations for a 65% pricing increase this quarter, up from earlier guidance of 55%.
Stellar Q3 Earnings
SanDisk reported strong third-quarter results, with revenue surging to $5.95 billion, significantly surpassing the analyst consensus estimate of $4.68 billion. The company’s adjusted earnings per share of $23.41 exceeded expectations by 62.23%, fueled in part by a remarkable 233% increase in data center sales.
The company anticipates adjusted earnings per share for the fourth quarter to range between $30 and $33, which is significantly above the $22.01 analyst estimate, indicating strong expectations for continued growth.
Benzinga Edge Stock Rankings indicate that SNDK maintains a strong price trend in the short, median and long term, with a solid Momentum score in the 100th percentile.
Price Action: Sandisk’s shares, which have gained nearly 300% this year, were down 2.6% to $1036.20 in premarket trading on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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