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.
Key Performance Indicators
Revenue
Increasing
1.37B
QoQ: -11.50% | YoY: 2.51%
Gross Profit
Decreasing
543.33M
39.78% margin
QoQ: -13.05% | YoY: -0.31%
Operating Income
Increasing
137.11M
QoQ: -37.14% | YoY: 139.76%
Net Income
Increasing
78.35M
QoQ: -42.16% | YoY: 100.78%
EPS
Increasing
0.39
QoQ: -41.15% | YoY: 110.22%
Revenue Trend
Margin Analysis
Financial Highlights
- Revenue: $1,365.736 million; YoY +2.51%; QoQ -11.50%.
- Gross Profit: $543.325 million; Gross Margin 39.78%; YoY -0.31%; QoQ -13.05%.
- Operating Income: $137.111 million; Operating Margin 10.04%; YoY +139.76%; QoQ -37.14%.
- Net Income: $78.354 million; Net Margin 5.74%; YoY +100.78%; QoQ -42.16%.
- EPS (GAAP): $0.388; EPS (Diluted): $0.373; YoY +110.22%; QoQ -41.15%.
- EBITDA: $264.846 million; EBITDA Margin 19.39%.
- Cash Flow: Operating cash flow $355.143 million; Capex $59.458 million; Free cash flow $295.685 million.
- Balance Sheet (as of QQ1 2016): Total assets $9.512B; Cash & equivalents $3.271B; Total current assets $6.153B; Total current liabilities $3.692B; Total debt $4.351B; Net debt $1.079B; Total stockholders’ equity $5.330B; Net working capital swing reflected in cash flow (change in working capital approx. -$1.199B) indicating working capital dynamics around vendor payments and other current assets/liabilities.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.37B
2.51%
-11.50%
Gross Profit
543.33M
-0.31%
-13.05%
Operating Income
137.11M
139.76%
-37.14%
Net Income
78.35M
100.78%
-42.16%
EPS
0.39
110.22%
-41.15%
Key Financial Ratios
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