Sandisk reported QQ1 2016 revenue of $1.366 billion, up 2.5% year-over-year but down 11.5% quarter-over-quarter versus the prior quarter. The gross margin stood near 39.8% and operating margin at about 10.0%, delivering operating income of $137.1 million and net income of $78.4 million ($0.388 per share, GAAP; diluted $0.373). The quarter featured robust cash generation with $355.1 million of net cash provided by operating activities and free cash flow of $295.7 million, supporting a strong balance sheet with $9.51 billion in total assets and $3.27 billion of cash and equivalents at period-end. Net debt, defined as total debt minus cash and equivalents, stood at roughly $1.08 billion, leaving Sandisk with substantial liquidity to navigate NAND pricing cycles.
YoY improvements in profitability contrasted with QoQ revenue softness; the company benefited from favorable mix and cost discipline, but faced cyclical headwinds in NAND demand and pricing that pressured sequential top-line growth. The substantial cash balance provides optionality for strategic investments, share repurchases (if pursued), or accelerated product development across solid-state drives (SSDs), removable storage, embedded storage, and related NAND-based solutions. Investors should monitor NAND pricing dynamics, data-center storage demand, and the company’s ability to maintain margin resilience amid cyclical swings.
Overall, the QQ1 2016 results reflect a disciplined, cash-generative operation with improving profitability metrics and a strong liquidity posture, though the revenue line remains exposed to the episodic memory cycle and competitive pricing pressures.