Sandisk Just Guided to Turning Half Its Revenue Into Free Cash Flow Through 2030

Sandisk's fiscal 2028-2030 model targets adjusted free cash flow at about 50% of revenue, with non-GAAP gross margins near 80%.

New Business Model agreements cover about half of the company's expected bits in fiscal 2027 and about two-thirds in fiscal 2028.

Minimum contracted revenue under those agreements totals $93.9 billion at floor pricing.

Memory maker Sandisk (NASDAQ: SNDK) held its investor day on Thursday, and management used it to answer the question hanging over the stock all year: What does this business look like once the boom is no longer a surprise?

The company's new financial model for fiscal 2028 through 2030 calls for revenue growth in the mid-to-high teens, non-GAAP (adjusted) gross margins near 80%, operating margins near 75%, and adjusted free cash flow of about 50% of revenue.

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Investors liked the answer. Shares jumped about 14% on Thursday and trade near $1,528 as of this writing. Even so, the stock would need to climb more than 50% to revisit its 52-week high of $2,354.39.

A company converting half its revenue into free cash would rank among the most profitable large businesses in the world. Whether investors can trust the targets is another matter.