# Sandisk Corp: Form 10-K for the period ended Jul 3, 2026 - Company: [Sandisk Corp](/companies/sndk.md) (CIK 2023554) - Form: 10-K - Filed: 2026-08-17 - Accepted by EDGAR: Aug 17, 2026, 16:50 ET - Period: 2026-07-03 - Accession: 0001628280-26-057406 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/2023554/000162828026057406/sndk-20260703.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/2023554/000162828026057406/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2026-07-03. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 12 months, 2025-06-28 to 2026-07-03 | $20.25bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Cost of revenue | 12 months, 2025-06-28 to 2026-07-03 | $5.78bn | us-gaap:CostOfGoodsAndServicesSold | | Gross profit | 12 months, 2025-06-28 to 2026-07-03 | $14.47bn | us-gaap:GrossProfit | | Research and development | 12 months, 2025-06-28 to 2026-07-03 | $1.33bn | us-gaap:ResearchAndDevelopmentExpense | | Selling, general and administrative | 12 months, 2025-06-28 to 2026-07-03 | $676.0m | us-gaap:SellingGeneralAndAdministrativeExpense | | Operating income | 12 months, 2025-06-28 to 2026-07-03 | $12.39bn | us-gaap:OperatingIncomeLoss | | Interest expense | 12 months, 2025-06-28 to 2026-07-03 | $73.0m | us-gaap:InterestExpenseNonoperating | | Income tax | 12 months, 2025-06-28 to 2026-07-03 | $1.58bn | us-gaap:IncomeTaxExpenseBenefit | | Net income | 12 months, 2025-06-28 to 2026-07-03 | $11.43bn | us-gaap:NetIncomeLoss | | Diluted EPS | 12 months, 2025-06-28 to 2026-07-03 | $73.76 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 12 months, 2025-06-28 to 2026-07-03 | $77.78 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 12 months, 2025-06-28 to 2026-07-03 | 155,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 12 months, 2025-06-28 to 2026-07-03 | $11.67bn | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 12 months, 2025-06-28 to 2026-07-03 | $177.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | | Share repurchases | 12 months, 2025-06-28 to 2026-07-03 | $4.52bn | us-gaap:PaymentsForRepurchaseOfCommonStock | | Cash and equivalents | at 2026-07-03 | $4.76bn | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2026-07-03 | $12.78bn | us-gaap:AssetsCurrent | | Total assets | at 2026-07-03 | $22.51bn | us-gaap:Assets | | Current liabilities | at 2026-07-03 | $5.58bn | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2026-07-03 | $6.77bn | us-gaap:Liabilities | | Long-term debt | at 2026-07-03 | $0 | us-gaap:LongTermDebtNoncurrent | | Current portion of debt | at 2026-07-03 | $0 | us-gaap:LongTermDebtCurrent | | Shareholders' equity | at 2026-07-03 | $15.74bn | us-gaap:StockholdersEquity | ## Business As filed, 36,572 characters. ### Separation from Western Digital Corporation Prior to February 21, 2025, we were wholly owned by Western Digital Corporation (“WDC”). As of February 21, 2025, we separated from WDC (the “separation”) and became a standalone publicly traded company, trading under the stock symbol “SNDK” on the Nasdaq Global Select Market. For more information about the separation, see Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8., Note 1, *Organization, Basis of Presentation and Summary of Significant Accounting Policies* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### General Sandisk is a leading global semiconductor memory company with more than 30 years of innovation in NAND flash technology. We are a vertically integrated solutions provider with ownership of chip-level design and IP, front and back-end manufacturing, as well as systems engineering and design. With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful flash storage solutions for artificial intelligence (“AI”) workloads in datacenters, edge devices, and consumer applications. Our technologies enable everyone from students, gamers, and home offices to the largest enterprises and public clouds to produce, analyze, and store data. Our solutions include a broad range of solid-state drives (“SSDs”), embedded products, removable cards, universal serial bus drives and wafers and components. Our broad portfolio of technology and products addresses multiple end markets of “Datacenter”(formerly referred to as “Cloud”), “Edge” (formerly referred to as “Client”), and “Consumer.” The Datacenter end market is comprised primarily of products for datacenters, cloud service providers, and private cloud customers. Through the Edge end market, we provide our original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, physical AI, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast presence around the world. We hold valuable patent portfolios containing approximately 8,000 granted patents and approximately 3,000 pending patent applications worldwide that support our products across all end markets. We have extensive customer, partner and channel relationships across a number of end-markets and geographies and have a rich heritage of innovation and operational excellence, a wide range of intellectual property assets, broad research and development (“R&D”) capabilities and large-scale, efficient manufacturing supply chains. The strong growth in the amount, value and use of data continues, creating a global need for larger, faster, and more capable storage solutions. We are a customer-focused organization that has developed deep relationships with industry leaders with the goal of delivering innovative solutions to help users capture, store and transform data across a boundless range of applications. We help OEMs address storage opportunities and solutions to capture and transform data into a myriad of devices and edge technologies. We have also built strong consumer brands with tools to manage vast libraries of personal content and to push the limits of what’s possible for storage. At Sandisk, we strive to continuously transform ourselves to address the growth in data by providing what we believe to be the broadest range of storage technologies in the industry with a comprehensive product portfolio and global reach. ### Industry We operate in the semiconductor memory chip and data storage industries. The ability to access, store and share data from anywhere on any device is increasingly important to our customers and end users. From the intelligent edge to the cloud, data storage is a fundamental component underpinning the global technology architecture, inclusive of AI. Our strengths in innovation and cost leadership, diversified product portfolio and broad routes to market provide a foundation upon which we are solidifying our position as an essential building block of the digital economy. We believe there is a tremendous market opportunity flowing from the rapid global adoption of the technology architecture built with cloud infrastructure tied to intelligent endpoints all connected by high-performance networks. The value and urgency of data storage at every point across this architecture have never been clearer. The increase in computing complexity and advancements in AI, along with growth in cloud computing applications, connected mobile devices and Internet-connected products, and edge devices are driving substantial growth in the volume of digital content to be stored and used. We believe our expertise and innovation in flash technology enable us to bring powerful solutions to a broader range of applications. We continuously monitor the full array of flash-based storage technologies, including reviewing these technologies with our customers, to ensure we are appropriately resourced to meet our customers’ storage needs. ### Flash Technology Flash products provide non-volatile data storage based on flash technology. We develop and manufacture solid state storage products for a variety of applications, including enterprise or cloud storage, client storage, automotive, mobile devices and removable memory devices. Over time, we have successfully developed and commercialized successive generations of two- and three-dimensional flash technologies with increased numbers of storage bits per cell in an increasingly smaller form factor, further driving cost reductions. We devote significant R&D resources to the development of highly reliable, high-performance, cost-effective flash-based technology and are continually pursuing developments in next-generation flash-based technology capacities. We are leveraging our expertise, resources and strategic investments in non-volatile memories to explore a wide spectrum of persistent memory and storage class memory technologies. We have also initiated, defined and developed standards to meet new market needs and to promote wide acceptance of flash storage standards through interoperability and ease of use. ### Our Data Solutions Our broad portfolio of technology and products addresses multiple end markets of “Datacenter,” “Edge” and “Consumer” and are comprised of the Sandisk™ brand. Certain of our products will also be sold for a limited transitional period under the Western Digital®, WD® and other brands under license from WDC. Datacenter represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers. We provide the Datacenter end market with an array of high-performance enterprise SSDs. Our high-performance enterprise class SSDs include high-performance flash-based SSDs and software solutions that are optimized for performance applications providing a range of capacity and performance levels primarily for use in enterprise servers and supporting high-volume online transactions, AI-related workloads, data analysis and other enterprise applications. Through the Edge end market, we provide numerous data solutions that we incorporate into our client’s devices, which consist of SSDs for desktop and notebook PCs, gaming consoles and set top boxes, as well as flash-based embedded storage products for mobile phones, tablets, notebook PCs and other portable and wearable devices, automotive applications, Internet of Things, and industrial and connected home applications. Our SSDs are designed for use in devices requiring high performance, reliability and capacity with various attributes such as low cost per gigabyte, quiet acoustics, low power consumption and protection against shocks. We serve the Consumer end market with a portfolio of SSDs and removable flash products, including cards and universal serial bus flash drives, through our retail and channel routes to market. We offer client portable SSDs with a range of capacities and performance characteristics to address a broad spectrum of the client storage market. Our removable cards are designed primarily for use in consumer devices, such as mobile phones, tablets, imaging systems, gaming devices, cameras and smart video systems. Our universal serial bus flash drives are used in the computing and consumer markets and are designed for high performance and reliability. ### Competition Our industry is highly competitive. We believe we are well positioned with our leading flash product portfolio, premium consumer brand, differentiated semiconductor innovation engine and leadership in driving cost efficiency. Nevertheless, we face strong competition from other manufacturers of flash in the Datacenter, Edge and Consumer end markets. We compete with vertically-integrated suppliers such as Kioxia, Micron Technology, Inc., Samsung Electronics Co., Ltd., SK Hynix, Inc., Yangtze Memory Technologies Co., Ltd. and numerous smaller companies that assemble flash into products. ### Business Strategy Our overall strategy is to leverage our innovation, technology and execution capabilities to be an industry-leading and broad-based global semiconductor memory company that supports the infrastructure that has enabled the unabated proliferation of data. We strive to successfully execute our strategy through the following foundational elements in order to create long-term value for our customers, partners, investors and employees: - *Technology Innovation and Manufacturing Leadership:* We leverage our innovative R&D and intellectual property at the chip and system level coupled with advanced manufacturing scale and expertise to drive technology leadership, accelerate innovation, and deliver cost-efficient memory solutions. These capabilities enable us to meet growing customer requirements for performance and capacity delivered by our mission-critical technology enabling AI deployment and diversification across Datacenter, Edge and Consumer markets. - *Broad Product Portfolio:* We leverage our capabilities in firmware, software and systems to deliver compelling and differentiated integrated storage solutions to our customers that offer the best combinations of performance, cost, power consumption, form factor, quality and reliability, while creating new use cases for our solutions in emerging markets. - *Operational Excellence*: We are focused on delivering the best value for our customers in Datacenter, Edge and Consumer end markets through a relentless focus on appropriately scaling our operations to efficiently support business growth; achieving best in class capital efficiency, quality and cycle-time; maintaining industry leading manufacturing capabilities; and having a competitive advantage in supply-chain management, - *Durable and Predictable Business Model:* We are transforming our financial model through long-term customer engagement frameworks and New Business Model (“NBMs”) agreements that provide greater visibility, improve production planning and inventory management, support sustained innovation investments, and enhance the predictability of revenue, profitability and cash flow generation, while reducing exposure to industry cyclicality. Our strategy provides the following benefits, which distinguish us in the dynamic and competitive data storage industry: - a broad product portfolio that establishes us as a leading developer and manufacturer of integrated flash NAND products and solutions, making us a key strategic supply partner to our customers; - efficient and flexible manufacturing capabilities, allowing us to leverage our flash R&D and capital expenditures to deliver innovative and cost-effective storage solutions to multiple end markets; - deep relationships with industry leaders across the data ecosystems that give us the broadest routes to market; and - industry leading consumer brand awareness and global retail distribution presence. ### Research and Development We devote substantial resources to the R&D of new products and the improvement of existing products. We focus our engineering efforts on optimizing our product design and manufacturing processes to bring our products to market in a cost-effective and timely manner. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Patents, Licenses and Proprietary Information We rely on a combination of patents, trademarks, copyright and trade secret laws, confidentiality procedures and licensing arrangements to protect our intellectual property rights. We have approximately 8,000 granted patents and approximately 3,000 pending patent applications worldwide. We continually seek additional United States (“U.S.”) and international patents on our technology. We believe that, although our active patents and patent applications have considerable value, the successful manufacturing and marketing of our products also depend upon the technical and managerial competence of our staff. Accordingly, the patents held and applied for cannot alone ensure our future success. In addition to patent protection of certain intellectual property rights, we consider elements of our product designs and processes to be proprietary and confidential. We believe that our non-patented IP, particularly some of our process technology, is an important factor in our success. We rely upon non-disclosure agreements, contractual provisions and a system of internal safeguards to protect our proprietary information. Despite these safeguards, there is a risk that competitors may obtain and use such information. The laws of foreign jurisdictions in which we conduct business may provide less protection for confidential information than the laws of the U.S. We rely on certain technology that we license from other parties to manufacture and sell our products. We believe that we have adequate cross-licenses and other agreements in place in addition to our own intellectual property portfolio to compete successfully in the storage industry. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Manufacturing We believe that we have significant know-how, unique product manufacturing processes, test and tooling, execution skills, human resources and training to continue to be successful and to adjust our manufacturing operations as necessary. We strive to maintain manufacturing flexibility, high manufacturing yields, reliable products and high-quality components. The critical elements of our production are high volume and utilization, low-cost assembly and testing, strict adherence to quality metrics and maintaining close relationships with our strategic component suppliers to access best-in-class technology and manufacturing capacity. We continually monitor our manufacturing capabilities to respond to the changing requirements of our customers and maintain our competitiveness and position as a data technology leader. Flash manufacturing requires complex processes involving the production and assembly of precision components with narrow tolerances and rigorous testing. The manufacturing processes involve a number of steps that are dependent on each other and occur in “clean room” environments. These processes require skill in process engineering and efficient space utilization in order to keep the operating costs of these specialized manufacturing environments under control. We continually evaluate our manufacturing processes in an effort to increase productivity, sustain and improve quality and decrease manufacturing costs. We continually evaluate which steps in the manufacturing process would benefit from automation and how automated manufacturing processes can improve productivity and reduce manufacturing costs. We also leverage contract manufacturers when strategically advantageous. ### Operations Our flash offerings consist of flash-based memory, controllers and firmware and other components. All of our flash-based memory is obtained from our joint ventures with Kioxia, which provide us with leading-edge, high-quality flash memory wafers. Controllers are primarily designed in-house and manufactured by third-party foundries or acquired from third-party suppliers. Our assembly and test operations comprise in-house assembly and test facilities located in Penang, Malaysia, facilities operated by other contract manufacturers, and the assembly and test facility owned and operated by SDSS, a venture that is owned 20% by Sandisk and 80% by JCET Management Co., Ltd. We believe the use of our in-house assembly and test facilities and manufacturing partners provide flexibility and give us access to increased production capacity. We and Kioxia currently operate three business ventures, Flash Partners Ltd., Flash Alliance Ltd. and Flash Forward Ltd., (collectively, “Flash Ventures”) across eight flash-based manufacturing facilities in Japan, six of which are located in Yokkaichi, Japan and two of which are located in Kitakami, Japan. Through Flash Ventures, we and Kioxia collaborate in the development and manufacture of flash-based memory wafers using semiconductor manufacturing equipment owned or leased by each of the Flash Ventures entities. We co-develop flash technologies (including process technology and memory design) with Kioxia for Flash Ventures’ use. We and Kioxia jointly own these co-developed flash technologies. We and Kioxia also contribute to the collaboration and license to each other technologies that are independently developed and owned by each of us and are reasonably necessary to our joint development or manufacture of flash-based memory. We hold a 49.9% ownership position in each of the Flash Ventures entities. We jointly control the operations of Flash Ventures with Kioxia, and we believe our participation in Flash Ventures helps us reduce product costs, increases our ability to control the quality of our products and speeds delivery of our products to our customers. Kioxia owns the facilities and provides wafer manufacturing services to Flash Ventures at cost using manufacturing equipment owned or leased by Flash Ventures and process technologies co-owned or contributed by us and Kioxia. Flash Ventures accounts for approximately 80% of the total manufacturing capacity in the facilities owned by Kioxia. We and Kioxia are entitled to purchase a share of Flash Ventures’ output, which generally equals 50% each. The price that we and Kioxia pay Flash Ventures for flash memory wafers is cost plus a small markup. We are obligated to pay for variable costs incurred in producing our share of Flash Ventures’ flash-based memory wafer supply based on a rolling forecast. In addition, we are obligated to pay for half of Flash Ventures’ fixed costs regardless of the output we choose to purchase. We recognize the Company’s 49.9% interest in the earnings of the Flash Ventures entities one quarter in arrears, reported in Other income (expense), net in the Consolidated Statements of Operations. While Flash Ventures is operating, we and Kioxia are restricted from working with third parties to manufacture flash-based memory or from fabricating flash-based memory beyond the capacity specified in our agreements with Kioxia. In addition, we may not manufacture flash-based memory ourselves except to the extent that we acquire the manufacturing capacity of a Flash Ventures entity as a result of such entity’s dissolution or termination of its joint venture agreements or upon our acquisition of all the ownership interests in such entity. The agreements governing the operations of the Flash Ventures entities also set out a framework for any investment by the joint venture partners in flash manufacturing capacity. We have jointly invested, and intend to continue to jointly invest, with Kioxia in the manufacturing equipment needed to support Flash Ventures’ flash manufacturing operations. In addition, we are obligated to fund 49.9% to 50.0% of capital investments that a Flash Ventures entity decides to make to the extent that Flash Ventures entity’s operating cash flow is insufficient to fund these investments. Each Flash Ventures entity operates for a set amount of time as agreed between us and Kioxia. Since the start of Flash Ventures, we and Kioxia have extended the term for all three of the Flash Ventures entities. On January 29, 2026, Sandisk entered into an FAL Second Commitment and Extension Agreement (the “FAL Second Extension Agreement”) by and among Sandisk, Kioxia, SanDisk LLC (“SanDisk LLC”), and SanDisk (Ireland) Limited (“SanDisk Ireland”), under which the parties thereto extended the term of Flash Alliance from December 31, 2029 to December 31, 2034. On the same date, Sandisk entered into an FPL Second Commitment and Extension Agreement (the “FPL Second Extension Agreement”, and together with the FAL Second Extension Agreement, collectively, the “Extension Agreements”) by and among Sandisk, Kioxia, SanDisk LLC, and SanDisk (Cayman) Limited (“SanDisk Cayman”), under which the parties thereto extended the term of Flash Partners from December 31, 2029 to December 31, 2034. Following the execution of the Extension Agreements, all three of the joint ventures that comprise the Flash Ventures are scheduled to co-terminate on December 31, 2034. Each Flash Ventures entity’s joint venture agreements may also be terminated earlier upon the occurrence of certain specified events, including earlier dissolution by agreement of the parties or an event of default or bankruptcy. Upon the expiration of a Flash Ventures entity’s joint venture agreements, the applicable Flash Ventures entity will commence a wind-up process and be dissolved. Net proceeds from the dissolution will be distributed in kind or cash to us and Kioxia on a pro rata basis based on our respective ownership positions. The applicable Flash Venture entity will continue to operate during the period of winding up. In connection with the Extension Agreements, on January 29, 2026, Sandisk entered into an Agreement to Enhance Collaboration by and among Sandisk, Kioxia, Sandisk Technologies, Inc. (“Sandisk Technologies”), SanDisk LLC, SanDisk Ireland and SanDisk Cayman, under which Sandisk Technologies will make certain payments directly to Kioxia totaling $1.2 billion over the years 2026 through 2029 in consideration of Kioxia’s manufacturing services and the continued availability of supply, from execution through December 31, 2034. On January 24, 2025, the Company and WDC entered into an equity transfer agreement (the “Equity Transfer Agreement”) that transferred WDC’s entire equity interest in Unisplendour Corporation Limited and Unissoft (Wuxi) Group Co. Ltd. (“Unis”), referred to as the “Unis Venture,” to the Company. The Unis Venture is 48% owned by the Company and 52% owned by Unis. The Unis Venture markets and sells the Company’s products in China. Prior to the execution of the Equity Transfer Agreement, the Unis Venture was not historically managed as a component of the Company and as such, the related equity method investment was not reflected in our Consolidated Financial Statements. Following the execution of the Equity Transfer Agreement, the Company accounts for its investment in the Unis Venture under the equity method of accounting. The Company’s 48% interest in the earnings of the Unis Venture will be recognized one quarter in arrears from the date the Unis Venture was transferred to the Company and will be reported in Other income (expense), net in the Consolidated Statements of Operations. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Materials and Supplies Our products consist of flash-based memory, controllers and firmware and other components. Following our separation from Western Digital, the Company has independently maintained strategic relationships with Flash Ventures and other key suppliers, and our supply relationships are now governed independently under the Company’s standalone procurement structure. We continue to source flash memory and components primarily through these partnerships, while independently managing our supplier portfolio to balance business continuity, cost efficiency, and risk mitigation. All of our flash memory wafers are currently obtained from Flash Ventures. Controllers are primarily designed in-house and manufactured by third-party foundries or acquired from third-party suppliers. We believe the use of our assembly and test facilities, as well as contract manufacturers, provides flexibility and gives us access to increased production capacity. We generally retain multiple suppliers for our component requirements, but for business or technology reasons we source some of our components from a limited number of sole or single source providers. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Sales and Distribution We sell our products to computer manufacturers and OEMs, cloud service providers, resellers, distributors and retailers throughout the world. We maintain sales offices in selected parts of the world including the major geographies of the Americas, Asia Pacific, Europe and the Middle East. Our international sales, which include sales to foreign subsidiaries of U.S. companies but do not include sales to U.S. subsidiaries of foreign companies, represented 82%, 80% and 86% of our net revenue for 2026, 2025 and 2024, respectively. Sales to international customers are subject to certain risks not normally encountered in domestic operations, including exposure to tariffs and various trade and other regulations. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. We perform our marketing and advertising functions both internally and through outside firms utilizing both consumer media and trade publications targeting various reseller and end-user markets. We also maintain customer relationships through direct communication and by providing information and support through our website. In accordance with standard storage industry practice, we provide distributors and retailers with limited price protection and programs under which we reimburse certain marketing expenditures. We also provide distributors, resellers and OEMs with other sales incentive programs. For 2026, 2025 and 2024, no customer accounted for more than 10% of our net revenue. ### Seasonality Historically, we have experienced seasonal fluctuations in our business with higher levels of demand in the first and second fiscal quarters as a result of increased customer spending. Seasonality can also be impacted by cyclicality in the industry and macroeconomic conditions. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Service and Warranty We generally warrant our newly manufactured products against defects in materials and workmanship from one to five years from the date of sale, depending on the type of product, with a small number of products having a warranty ranging up to ten years or more. Our warranty obligation is generally limited to repair or replacement. We have engaged third parties in various countries in multiple regions to provide various levels of testing, processing or recertification of returned products for our customers. For additional information regarding our service and warranty policy, see Part II, Item 8., Note 1, *Organization, Basis of Presentation and Summary of Significant Accounting Policies* and Note 5, *Supplemental Financial Statement Data* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Human Capital Management ### Our People Data drives how we move, create, and discover. It enables our teams to unlock potential, power breakthrough technologies for our customers, and deliver meaningful impact for our stakeholders. We believe data should inspire every person to move, create, discover, share, and unlock their potential. Our investment in our people seeks to empower our employees to develop breakthrough Flash memory solutions for our customers and drive meaningful impact for our stakeholders. As of July 2026, our global team includes approximately 11,100 employees across 33 countries— 74% in Asia Pacific, 19% in the Americas, and 7% in Europe, the Middle East, and Africa. We believe our global presence allows us to access a broad range of perspectives, remain agile, and stay culturally attuned to the markets we serve. ### Belonging To attract and retain top talent, we are committed to building a culture where every voice matters and every individual feels a sense of belonging, respect, and collaboration. Through our BE@Sandisk program, we foster connection through employee-led communities and learnings that reflect our employees’ unique identities, interests, and aspirations. These communities—over a dozen and growing, with chapters in countries around the world—create opportunities to connect and engage, enabling our people to bring their full selves to work and contribute to our culture. Together, they reinforce our core values: Innovation, Collaboration, Winning, Agility, and Openness. ### Talent Attraction & Development At Sandisk, we believe growth is fueled by curiosity, continuous learning, and meaningful career opportunities. Through Sandisk SPARK, our unified learning ecosystem, employees are empowered to take ownership of their development through personalized, on-demand learning journeys that build critical skills, expand capabilities, and support career growth. Sandisk SPARK combines self-directed learning, curated development pathways, and assigned training to foster a culture of continuous learning and adaptability. Our commitment to development is further reinforced through a performance-based philosophy, which connects individual goals, ongoing feedback, and performance outcomes. Employees receive transparent, actionable feedback that helps them build strengths, accelerate growth, and navigate their careers with confidence. Beyond professional development, Sandisk invests in the future readiness of our workforce through targeted upskilling and reskilling initiatives, particularly within our manufacturing and technical organizations. Through hands-on training and workshops, we help employees develop the skills needed to thrive in a rapidly changing industry and contribute to Sandisk’s long-term innovation and success. ### Compensation & Benefits Attracting, retaining, and motivating top talent is essential in the dynamic and rapidly evolving semiconductor industry. Our approach to compensation is designed to be competitive, flexible, and responsive to the needs of our workforce and the local markets in which we operate. Our Total Rewards strategy extends beyond base compensation to include a mix of salary, short- and long-term incentives, and regionally tailored benefits. These offerings are informed by third-party market benchmarking, as well as employee feedback gathered through focus groups and surveys, allowing us to align with employee expectations while providing clear leveling and pathways for advancement. We also invest in the well-being of our employees through benefits that support physical, mental, and financial health. Depending on location, these benefits may include health coverage, life and disability insurance, retirement plans, paid time off, employee assistance programs, and an employee stock purchase plan. Together, these programs empower employees to make informed choices that support their personal and professional goals. ### Health & Safety Sandisk is committed to maintaining safe and healthy work environments across all our operations. We provide comprehensive health and safety resources and training for all employees, with additional specialized training for those in manufacturing and operational roles. Managing health and safety through standardized processes and integrated systems enables us to monitor performance and take actions to promote a safe, productive, and well-managed organization where the health and safety of our employees remain a top priority. ### Government Regulation Our worldwide business activities are subject to various laws, rules and regulations of the U.S. as well as of foreign governments. Compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, the environment, consumer and data protection, employee health and safety and taxes, could have a material impact on our capital expenditures, earnings, competitive position and overall business in subsequent periods. For a discussion of associated risks, see Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Corporate Responsibility and Sustainability We recognize that sustainability is a strategic driver of long-term business success. Integrating responsible business practices into our operations and decision-making strengthens our ability to manage risk, drive innovation, improve efficiency, and create lasting value for our stakeholders. Our commitment to operating responsibly underlies how we support our people, steward natural resources, engage with our communities, and conduct business with integrity. Sustainability is embedded in both our day-to-day operations and long-term business strategy. Through initiatives that foster a high-performing workplace, optimize the use of materials and energy, strengthen supply chain resilience, and uphold ethics and compliance policies and practices for our global operations, we enhance our competitiveness and deliver positive environmental and social outcomes. We know that aligning sustainability with our business objectives, ensures a more resilient, responsible, and successful company for the future. - We strive to protect the human rights and civil liberties of our employees and partners through policies, procedures and programs that avoid and address risks of compulsory and child labor, both within our company and throughout our supply chain. - We foster a workplace of dignity, respect, and growth through our recruiting, professional development and advancement practices, internal communications and employee engagement initiatives. - We strive to educate our employees at least annually on relevant ethics and compliance topics, publish accessible guidance on ethics and compliance-related issues and available company resources in our Global Code of Conduct and encourage reporting of ethical concerns through any of several global and local reporting channels. - We use a robust integrated management system, with associated policies and procedures, to evaluate and manage occupational health and safety risks, environmental compliance requirements and chemical and hazardous materials risks. - We seek to minimize our impact on the environment and strengthen operational resiliency through emissions reduction targets, climate risk assessments and mitigation, and other initiatives. - We continuously innovate to identify opportunities to reduce the energy used in our operations, by our products, and the types of materials required to source energy and manufacture our products. ### Available Information We maintain an Internet website at www.sandisk.com. The information on our website is not incorporated in this Annual Report on Form 10-K. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, are available on our website at www.sandisk.com, free of charge, as soon as reasonably practicable after the electronic filing of these reports with, or furnishing of these reports to, the U.S. Securities and Exchange Commission (the “SEC”). The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. ## Risk factors As filed, 114,699 characters. ### Summary of Risk Factors An investment in our common stock is subject to a number of risks, including market, financial, regulatory and operational risks related to our business, our separation from Western Digital Corporation (“WDC”) and our common stock. The following is a summary of certain key risk factors for investors in our securities. You should read this summary together with the more detailed description of risks and uncertainties discussed below. ### RISKS RELATED TO OUR BUSINESS ### Operational Risks - Adverse global or regional conditions could harm our business. - Disruption in our supply chain, other inability to source our supply requirements, or an increase in the costs of materials or components could negatively affect our business. - Our operations are subject to a substantial risk of damage or disruption. - Our inability to attract, retain and develop highly skilled management and technical talent could negatively impact our business prospects. - Product defects could subject us to costly warranty claims, litigation, indemnification claims or termination of long-term sales agreements. - The compromise, damage or interruption of our technology infrastructure, systems or products from cybersecurity incidents, data security breaches or other related problems could have a material negative impact on our business. - We may be adversely affected by risks and challenges associated with the use of artificial intelligence (“AI”). ### Business and Strategic Risks - We rely substantially on strategic relationships that subject us to risks and uncertainties. - Competitive conditions, including declining average selling prices, volatile demand, technological change, industry consolidation, lengthy product qualifications, and supply constraints, in our industry can negatively impact our business. - Failure to properly manage technology transitions and product development and introduction could harm our competitiveness and operating results. - Our operating results may fluctuate due to changes in demand, industry cycles and the timing of customer deployments, including AI-related data center investments, and our ability to accurately forecast demand as a result of these changing market conditions. - Failure to successfully execute on strategic initiatives may negatively impact our future results. - Loss of revenue from a key customer, or customer base consolidation, could harm our operating results. - Long-term agreements, which we also refer to as New Business Models or “NBMs”, expose us to certain execution, financial, and market risks, which could be significant. ### Financial Risks - Our guarantees of certain obligations of Flash Ventures may negatively impact our financial position, and terms and conditions of our revolving credit facility may restrict our operations and ability to respond to future business opportunities. - Fluctuations in currency exchange rates may negatively affect our operating results. - Increases in our customers’ credit risk could result in credit losses and term extensions under existing contracts with customers with credit losses could result in an increase in our operating costs. - Our share repurchase program may not enhance shareholder value and could affect the price of our common stock and reduce our financial flexibility. ### Legal and Compliance Risks - Our failure to comply with laws, rules and regulations related to data use and security could subject us to legal proceedings, penalties, significant liability, loss of customers, loss of revenue or reputational harm. - We are or may be subject to legal and regulatory requirements as well as customer, industry and coalition standards, and compliance with those requirements could increase our operating costs and failure to comply may harm our business. - Our aspirations, disclosures and actions related to sustainability and governance matters expose us to risks that could adversely affect our reputation and performance. - We and certain of our officers may at times be involved in litigation, investigations and governmental proceedings, which may be costly and could result in adverse court rulings, fines or penalties. - Our industry’s and our company’s reliance on intellectual property and other proprietary information subjects us to the risk that key components of our business could be copied and also subjects us and our suppliers, customers and partners to the risk of significant litigation. ### RISKS RELATED TO THE SPIN-OFF - Failure to ensure compliance with Section 404 of the Sarbanes-Oxley Act or ineffective internal control over financial reporting could result in uncertainties regarding our financial statements and lead our stock price to suffer. - Our historical financial information is not necessarily representative of the results that we would have achieved as a separate, public company and may not be reliable as to our future results. - Mutual indemnification obligations between WDC and us for certain liabilities in connection with the spin-off may not provide the protection we expect and could result in significant liabilities that could adversely affect our financial results. - If the distribution of our shares does not continue to qualify for the Intended Tax Treatment or if we fail to preserve such treatment, we, WDC and WDC stockholders could be subject to significant United States (“U.S.”) federal income tax liabilities, and we could be required to indemnify WDC. - We may be unable to implement, on a timely or cost-effective basis, the systems, internal controls, and governance structures necessary to operate effectively as an independent company. ### RISKS RELATED TO OUR COMMON STOCK - Our stock price may fluctuate significantly, which may make it difficult to resell our common stock. - Provisions of Delaware law, our certificate of incorporation and our bylaws may prevent or delay an acquisition of our company, which could decrease the market price of our common stock. - Our certificate of incorporation contains an exclusive forum provision that could impact stockholder’s ability and interest in bringing lawsuits against us and any of our directors, officers or other employees. - Tax matters may materially affect our financial position and results of operations. - Provisions in our joint venture agreements with Kioxia Corporation (“Kioxia”) may deter, prevent or delay an acquisition of us, which could decrease the market price of our common stock and limit our future strategic opportunities. ### RISKS RELATED TO OUR BUSINESS ### OPERATIONAL RISKS ### Adverse global or regional conditions could harm our business. A large portion of our revenue is derived from our international operations, and substantially all of our products are produced overseas. As a result, our business depends significantly on global and regional conditions. Adverse changes in global or regional economic conditions, including, but not limited to, volatility in the financial markets, tighter credit, recession, inflation, rising interest rates, slower growth in certain geographic regions, political uncertainty, geopolitical tensions or conflicts, trade war, other macroeconomic factors, or changes to social conditions and regulations, could significantly harm demand for our products, increase credit and collectability risks, result in revenue reductions, reduce profitability as a result of underutilization of our assets, cause us to change our business practices, increase manufacturing and operating costs or result in impairment charges or other expenses. Public health crises and related government responses, including widespread disease outbreaks, quarantines, travel restrictions or business shutdowns, can also contribute to volatility in the financial markets, tighter credit conditions, reduced consumer and business spending and other adverse macroeconomic factors, any of which may negatively impact demand for our products and our financial performance. We are subject to risks and regulatory obligations associated with our global manufacturing operations and global sales efforts, as well as risks and regulatory obligations associated with our utilization of global suppliers, including: - obtaining governmental approvals and compliance with evolving domestic and foreign regulations; - the need to comply with regulations on international business, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, the anti-bribery laws of other countries and rules regarding conflict minerals; - the impacts of social, political, immigration, and tax and trade policies in the U.S. and abroad; - exchange, currency and tax controls and reallocations; - the continued evolution and implementation of complex global and local tax regimes; - varying levels of protection of intellectual property rights; - policies and financial incentives by governments in China, the U.S. and countries in Europe and Asia designed to reduce dependence on foreign semiconductor manufacturing capabilities; - trade barriers, such as export controls, export bans, import restrictions, embargoes, sanctions, license and certification requirements (including semiconductor, encryption and other technology), tariffs and complex customs regulations; - difficulties in managing international operations, including appropriate internal controls; and - financial volatility and disruptions to supply chain resulting from public health crises. For example, there are pending and ongoing investigations initiated by the United States under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 that may impact tariff rates for Sandisk products. We continue to monitor changes to the U.S. tariff regime to assess potential implications on the Company. Though the majority of our products sold in the U.S. are currently exempt from tariffs, additional tariff increases or the loss of applicable exemptions would increase the cost of goods sold for our products sold in the U.S., which could negatively impact our margins and financial performance. Increases in the price of our products in response to increased costs may adversely impact demand for those products in the U.S., which could also negatively impact our performance and financial results. Future trade policies and regulations in the U.S. and other countries, the terms of any trade arrangements that may be negotiated between the U.S. and other countries, the scope, amount, or duration of tariffs that may be imposed by any country, and the impact of these factors on our business, either directly or as a result of the impact on the business of our customers, are uncertain and may contribute to increased costs and reduced demand for our products, each of which could harm our financial performance. As a result of these risks, our business could be harmed. ***We are dependent on a limited number of qualified suppliers who provide critical services, materials or components, and a disruption in our supply chain or other inability to source our supply requirements, or an increase in the costs of materials or components, could negatively affect our business.*** We depend on an external supply base for technologies, software (including firmware), controllers, dynamic random-access memory (“DRAM”), components, equipment and materials for use in our product design and manufacturing. We also depend on suppliers for a portion of our wafer testing, chip assembly, product assembly and product testing and on service suppliers for providing technical support for our products. In addition, we use logistics partners to manage our worldwide just-in-time hubs and distribution centers and to meet our freight needs. Many of the components and much of the equipment we acquire must be specifically designed for use in our products or for developing and manufacturing our products and are only available from a limited number of suppliers, some of whom are our sole-source suppliers. We therefore depend on these suppliers to meet our business needs, including dedicating adequate engineering resources to develop components that can be successfully integrated into our products. For example, many of our enterprise-grade SSD products incorporate DRAM, which is a commodity component that has experienced supply constraints and may remain in short supply for extended periods. If we are unable to obtain sufficient quantities of DRAM on commercially reasonable terms, we may be required to allocate available flash memory and other resources to products that require less or no DRAM rather than to strategic products that may offer higher margins or stronger long-term growth opportunities. Such constraints could adversely affect our product mix, revenues, gross margins, customer relationships and competitive position. Our suppliers have in the past been, and may in the future be, unable or unwilling to meet our requirements, including as a result of events outside of their control such as trade restrictions (including tariffs, quotas, sanctions, and embargoes), supply chain shortages, labor disputes, geopolitical conflicts, industrial accidents, cybersecurity incidents, public health emergencies or natural disasters. If we are unable to purchase sufficient quantities from our current suppliers or qualify and engage additional suppliers, or if we cannot purchase materials at a reasonable price, we may not be able to meet demand for our products. Trade restrictions, including tariffs, quotas and embargoes, demand from other high-volume industries for materials or components used in our products, disruptions in supplier relationships or shortages in other components and materials used in our customers’ products could result in increased costs to us, longer lead times, or decreased demand for our products, which could negatively impact our business. Delays, shortages or cost increases experienced by our suppliers in developing or sourcing materials and components for use in our products or incompatibility or quality issues relating to our products could also harm our business. We do not have long-term contracts with some of our existing suppliers, nor do we always have guaranteed manufacturing capacity with many of our suppliers, so we cannot guarantee that they will devote sufficient resources or capacity to manufacturing our products. Any significant problems that occur at our suppliers could lead to product shortages or quality assurance problems. When we do have contractual commitments with suppliers in an effort to stabilize the supply of our components, those commitments may require us to buy a substantial number of components or make significant cash advances to the supplier and may not result in a satisfactory supply of our components. Additionally, if such suppliers were to experience operational or financial difficulties, be acquired by a competitor, or fail to perform required obligations under our supply agreements, our ability to source critical components could be impaired, potentially disrupting our product manufacturing and harming our business. We may also cancel or defer outstanding purchase commitments with certain suppliers due to changes in actual and forecasted demand, which may result in fees, penalties and other associated charges. Such cancellations or deferments may also negatively impact our relationships with certain suppliers or lead to a decline in the financial performance of certain suppliers, each of which could result in even more limited availability of components needed for our products. In addition, our supply base has experienced industry consolidation. Our suppliers may be acquired by our competitors, decide to exit the industry or redirect their investments and increase costs to us. In addition, some of our suppliers have experienced a decline in financial performance, including as a result of canceled or deferred purchase commitments. Where we rely on a limited number of suppliers or a single supplier, the risk of supplier loss due to industry consolidation or a decline in financial performance is increased. Some of our suppliers may also be competitors in other areas of our or their business, which could lead to difficulties in price negotiations or meeting our supply requirements. ***Our operations, and those of certain of our suppliers and customers, are subject to substantial risk of damage or disruption.*** We conduct our operations at large, high-volume, purpose-built facilities in Japan, Malaysia and other locations in Asia. The facilities of many of our customers, our suppliers and our customers’ suppliers are also concentrated in certain geographic locations throughout Asia and elsewhere. If a fire (including a climate change-related fire), flood, earthquake, tsunami or other natural disaster, condition or event such as power outage, contamination event, water scarcity, terrorist attack, cybersecurity incident, physical security breach, political instability, act of war, civil unrest, localized labor unrest, or a public health crisis or epidemic negatively affects any of these facilities or regions, it could significantly disrupt the supply of wafers, components, equipment or services; impair customer demand; significantly affect our ability to manufacture or sell our products; or otherwise materially adversely affect our business and financial results. Possible impacts include work and equipment stoppages and damage to or closure of our facilities, or those of our suppliers or customers, for an indefinite period of time. Impacts of any of these events may also include closures of our manufacturing facilities, under-absorbed overhead, increased logistics, component and other costs, decreased demand for our products, and manufacturing challenges, delays in production ramps, and interruptions or inefficiencies in our operations. Climate change has in the past increased and is expected to continue to increase, the incidence and severity of certain natural disasters, including wildfires and adverse weather events. In addition, the geographic concentration of our manufacturing sites could exacerbate the negative impacts resulting from any of these problems. We may incur losses beyond the limits of, or outside the scope of, the coverage of our insurance policies. There can be no assurance that in the future we will be able to maintain existing insurance coverage or that premiums will not increase substantially. Due to market availability, pricing or other reasons, we may elect not to purchase insurance coverage or to purchase only limited coverage. We maintain limited insurance coverage and, in some cases, no coverage at all, for natural disasters and damage to our facilities, as these types of insurance are sometimes not available or available only at a prohibitive cost. Climate change may reduce the availability or increase the cost of certain types of insurance by contributing to an increase in the incidence and severity of certain natural disasters. We depend upon Kioxia to obtain and maintain sufficient property, business interruption and other insurance for Flash Ventures. If Kioxia fails to do so, we could suffer significant unreimbursable losses, and such failure could also cause Flash Ventures to breach various financing covenants. ***Our success depends on our ability to attract, retain and develop highly skilled management and technical talent.*** The success of our business depends on our ability to attract, retain, and develop highly skilled management and technical talent capable of advancing NAND technology in an increasingly complex and competitive global environment. The rapid pace of innovation driven by AI, global research and development competition, evolving models of work, and intensifying customer demands for faster, more efficient solutions has significantly raised the bar for the technical expertise required to power current and next-generation technologies. As a result, acquiring and retaining such talent has become increasingly difficult. If we are unable to hire and retain key talent and to effectively manage succession planning for key leadership roles, our operating results could be harmed. Constraints on global talent mobility and hiring, including changes in immigration laws and policies, travel restrictions, work permits regulation and administration, government restrictions to contain the spread of infectious disease, and limitations on the ability of employees to enter, leave, or return to jurisdictions in which we operate, may also affect our ability to attract and retain the specialized skills needed to support our business and may disrupt our operations. As part of our compensation program, we grant equity incentives to our senior leaders to align their interests with stockholder interests and incentivize these leaders to further deliver stockholder value. The unvested value of these awards has appreciated materially as a result of our stock price performance in fiscal 2026. These awards generally vest either in February 2028 or September 2028. If the value of these awards at such time remains materially appreciated above their grant date values, we could experience attrition among these leaders when the awards vest. While our Board of Directors (the “Board”) and management are focused on continued incentives for, and retention of, this group, if we were to lose one or more of our senior leaders following the vest date of these awards, we could experience difficulties in finding qualified successors, competing effectively, executing our business plan and implementing our business strategy, which could adversely impact our operations and operating results. While we continue to invest in employee development, workforce planning, and structural agility, the speed and complexity of technological change and market demands create ongoing people-related risks that may impact our ability to sustain long-term innovation and operational performance. ***We are subject to risks related to product defects, which could result in product recalls or epidemic failures and could subject us to warranty claims in excess of our warranty provisions or which are greater than anticipated, litigation or indemnification claims.*** We provide warranties on the majority of our products for periods of one to five years. We test our products in our manufacturing facilities through a variety of means. However, our testing may fail to reveal defects in our products that may not become apparent until after the products have been sold into the market. In addition, our products may be used in a manner that is not intended or anticipated by us, resulting in potential liability. Accordingly, there is a risk that product defects will occur, including as a result of third-party components or applications that we incorporate in our products, which could require a product recall. Product recalls can be expensive to implement. As part of a product recall, we may be required or choose to replace the defective product. Moreover, there is a risk that product defects may trigger an epidemic failure clause in a customer agreement. If an epidemic failure occurs, we may face termination of long-term sales agreements and may be required to replace or refund the value of the defective product and to cover certain other costs associated with the consequences of the epidemic failure. In addition, product defects, product recalls or epidemic failures may cause damage to our reputation or customer relationships, lost revenue, indemnification for a recall of our customers’ products, warranty claims, litigation or loss of market share with our customers, including our OEMs and OEM customers. Our business liability insurance may be inadequate or future coverage may be unavailable on acceptable terms, which could negatively impact our operating results and financial condition. Our standard warranty provisions attempt to put limits on damages and exclude liability for consequential damages and for misuse, improper installation, alteration, accident or mishandling while in the possession of someone other than us, but may be unenforceable or fail to limit our liability as intended. We record estimated warranty costs at the time revenue is recognized and subsequently review and adjust those estimates as additional information becomes available. We may incur additional expenses if our warranty provisions do not reflect the actual cost of resolving issues related to defects in our products, whether as a result of a product recall, epidemic failure or otherwise. If these additional expenses are significant, they could harm our business. ***The compromise, damage or interruption of our technology infrastructure, systems or products by cybersecurity incidents, data security breaches, other security problems, design defects or system failures could have a material negative impact on our business.*** We experience cybersecurity incidents of varying degrees on our technology infrastructure and systems and, as a result, unauthorized parties may obtain access to our computer systems and networks, including cloud-based platforms. In addition, the technology infrastructure and systems of some of our suppliers, vendors, service providers, contract manufacturers, cloud solution providers and partners have in the past experienced, and may in the future experience, such incidents. Cybersecurity incidents can be caused by ransomware, computer denial-of-service attacks, data exfiltration, worms and other malicious software programs or other attacks, including the covert introduction of malware to computers and networks, and the use of techniques or processes that change frequently, may be disguised or difficult to detect, or are designed to remain dormant until a triggering event, and may continue undetected for an extended period of time. Cybersecurity incidents may result from social engineering or impersonation of authorized users, and may also result from efforts to discover and exploit any design flaws, bugs, security vulnerabilities or security weaknesses, intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage. In some instances, efforts to correct vulnerabilities or prevent incidents may reduce the functionality or performance of our computer systems and networks, which could negatively impact our business. We believe malicious cybersecurity acts are increasing in number and that cybersecurity threat actors are increasingly organized and well-financed or supported by state actors, and are developing increasingly sophisticated systems and means to not only infiltrate systems, but also to evade detection or to obscure their activities. Geopolitical tensions or conflicts may create heightened risk of cybersecurity incidents. Our increasing use of AI, including generative AI, agentic AI and AI-enabled automation technologies, may elevate the risk of cybersecurity incidents, whether through our authorized use of such technologies to perform business or operational tasks with limited human oversight or through malicious use by threat actors to automate, scale or adapt attacks against our systems, products, employees, customers, suppliers or partners. These technologies may be leveraged by threat actors to generate more convincing phishing or social engineering content, identify and exploit vulnerabilities more efficiently, create malicious code that is more difficult to detect, or automate, scale, adapt or obscure cyberattacks. In addition, AI systems may inadvertently expose sensitive information if not properly secured, governed, configured, monitored, or connected to systems or data containing confidential information. As AI tools become more accessible and sophisticated, the potential for their misuse increases, further complicating efforts to detect, prevent, and respond to cybersecurity threats. Our products are also targets for malicious cybersecurity acts. While some of our products contain encryption or security algorithms to protect third-party content or user-generated data stored on our products, these products could still be hacked or the encryption schemes could be compromised, breached or circumvented by motivated and sophisticated attackers, which could harm our business by exposing us to litigation and indemnification claims and hurting our reputation. In addition, our products themselves may contain vulnerabilities, whether due to design flaws, implementation errors, or integration with third-party components, that could be exploited to gain unauthorized access to or disrupt functionality of the product. These vulnerabilities may be identified internally or disclosed by external security researchers, independent entities, or other third parties, including in the form of previously unknown or zero-day exploits. If efforts to breach our infrastructure, systems or products are successful or we are unable to protect against these risks, we could suffer interruptions, delays or cessation of operations of our systems, and loss or misuse of proprietary or confidential information, IP or sensitive or personal information. Compromises of our infrastructure, systems or products could also cause our customers and other affected third parties to suffer loss or misuse of proprietary or confidential information, IP or sensitive or personal information, and could harm our relationships with customers and other third parties and subject us to liability. As a result of actual or perceived breaches, we may experience additional costs, notification requirements, civil and administrative fines and penalties, indemnification claims, litigation or damage to our brand and reputation. All of these consequences could harm our reputation and our business and materially and negatively impact our operating results and financial condition. ***We may be adversely affected by the risks, challenges, and evolving regulatory landscape associated with the use of AI in our operations, product development, and business practices.*** We are increasingly leveraging AI technologies, including generative AI applications and tools, to support and enhance our various operational processes. While AI may promote efficiency and offer analytical advantages, it is complex and rapidly-changing, and its implementation carries inherent risks. Implementation of AI technologies can be costly and time-consuming, and the effectiveness or potential benefits of such technologies may vary depending on use case, integration, and oversight. The incorporation of AI algorithms or training methodologies into our operations or decision-making processes may result in flawed, irrelevant, insufficient, inaccurate, biased or non-compliant outputs, potentially impacting our strategic choices, operational effectiveness, and regulatory compliance. These inaccuracies can arise from limitations in training data, algorithmic design, or unintended consequences of machine learning models. Actual or perceived deficiencies, failures or misuse in our implementation or use of AI could result in competitive disadvantages, operational inefficiencies, regulatory action, legal liability, brand or reputational harm, and negative financial results. In addition, the use of AI in the development of our products could potentially lead to ambiguities in intellectual property ownership, infringement or misappropriation risks, which could impact our competitive position and expose us to litigation, monetary penalties, or operational disruptions. The unauthorized or unapproved use of generative AI tools by our employees, contractors, or other third parties, as well as overreliance on AI automation or agentic AI without appropriate human oversight, may lead to the inadvertent disclosure of confidential, proprietary, or personal information, flawed or unauthorized actions, or other adverse consequences, including disruptions to business operations, exposing us to data security, privacy, legal, regulatory, and reputational risks. Misuse of such tools can also result in violations of applicable laws and regulations, including data protection and intellectual property laws. As legal and regulatory frameworks surrounding AI continue to evolve, we may be required to adapt our practices, policies, or systems, which could increase operational costs, limit innovation, or expose us to liability. This could materially affect our operations, financial condition, and ability to achieve our strategic objectives. ### BUSINESS AND STRATEGIC RISKS ***We rely substantially on strategic relationships with various partners, including Kioxia, which subjects us to risks and uncertainties that could harm our business.*** We have entered into and expect to continue to enter into strategic relationships with various partners for product development, manufacturing, sales growth and the supply of technologies, components, equipment and materials for use in our product design and manufacturing, including our business ventures with Kioxia. We depend on Flash Ventures for the development and manufacture of flash-based memory. Our strategic relationships, including Flash Ventures, are subject to various risks that could harm the value of our investments, our revenue and costs, our future rate of spending, our technology plans and our future growth opportunities. The terms of our agreements with Kioxia with respect to Flash Ventures require that substantially all of our flash-based memory be obtained from Flash Ventures, which limits our ability to respond to market demand and supply changes and makes our financial results particularly susceptible to variations from our forecasts and expectations. For example, we are contractually obligated to pay for 50% of the fixed costs of Flash Ventures regardless of whether we order any flash-based memory, and our orders placed with Flash Ventures on a rolling basis are binding. As a result, a failure to accurately forecast supply and demand could cause us to over-invest or under-invest in inventory, technology transitions or the expansion of Flash Ventures’ capacity. Over-investment by us or our competitors can result in excess supply and lead to significant decreases in our product prices, significant excess, obsolete inventory or inventory write-downs or underutilization charges, and the potential impairment of our investments in Flash Ventures. For example, in 2023, WDC incurred $296 million in charges for unabsorbed manufacturing overhead costs as a result of reduced utilization of its manufacturing capacity and $108 million in charges to write down its inventory as a result of decreases in market pricing. In 2025, we incurred $75 million in charges as a result of underutilization of our manufacturing capacity and $24 million in charges to write down our inventory. These charges were attributable to a significant imbalance of supply and demand and actions taken in response thereto. On the other hand, if we under-invest in Flash Ventures, or otherwise grow or transition Flash Ventures’ capacity too slowly, we may not have enough supply of flash-based memory, or the right type of flash-based memory, to meet demand on a timely and cost effective basis, and we may lose opportunities for revenue, gross margin and market share as a result. If our supply is limited, we might make strategic decisions with respect to the allocation of our supply among our products and customers, which could result in less favorable gross margins or damage customer relationships. In addition, while Flash Ventures is operating, our agreements with Kioxia contain certain limitations on our ability to work with third parties to manufacture flash-based memory or to fabricate flash-based memory beyond the capacity specified in the agreements, or to manufacture flash-based memory ourselves except to the extent that we acquire any manufacturing capacity of a Flash Ventures entity as a result of that entity’s dissolution, termination of its joint venture agreements or acquisition by us. This could also impair our ability to consolidate with other industry participants who manufacture flash-based memory. Our control over the operations of our business ventures may be limited, and our interests could diverge from our strategic partners’ interests regarding ongoing and future activities. For example, each Flash Ventures entity operates for a defined period of time agreed upon between the joint venture partners. Absent further extensions as mutually agreed between us and Kioxia, Flash Partners Ltd., Flash Alliance Ltd. and Flash Forward Ltd. are currently set to expire on December 31, 2034. Each Flash Ventures entity’s joint venture agreements may also earlier terminate upon the occurrence of certain specified events, including earlier dissolution by agreement of the parties or an event of default or bankruptcy. Upon the expiration of a Flash Ventures entity’s joint venture agreements, the applicable Flash Ventures entity will commence a wind-up process and be dissolved. Net proceeds from the dissolution will be distributed in kind or cash to us and Kioxia on a pro rata basis based on our respective ownership positions. The applicable Flash Venture entity will continue to operate during the period of winding up. Although we and Kioxia have agreed to extend the operating period for each Flash Ventures entity since the start of Flash Ventures, there is a risk that we and Kioxia will be unable to agree on a further extension of one or more of the Flash Ventures entities. Additionally, under the Flash Ventures agreements, we cannot unilaterally direct most of Flash Ventures’ activities, and we have some limitations on our ability to source flash outside of Flash Ventures. Flash Ventures requires significant investments by both Kioxia and us for technology transitions and capacity expansions, and our business could be harmed if our technology roadmap and investment plans are not sufficiently aligned with Kioxia’s. Lack of alignment with Kioxia with respect to Flash Ventures could negatively impact our ability to react quickly to changes in the market, or to stay at the forefront of technological advancement. Misalignment could arise due to changes in Kioxia’s strategic priorities, management, ownership or access to capital, which have changed in recent years and could continue to change. Kioxia’s stakeholders may include, or have included in the past, competitors, customers, a private equity firm, government entities or public stockholders. Kioxia’s management changes, ownership and capital structure could lead to delays in decision-making, disputes or changes in strategic direction that could negatively impact the strategic partnership, and therefore us. There may exist conflicts of interest between Kioxia’s stakeholders and Flash Ventures or us with respect to, among other things, protecting and growing Flash Ventures’ business, intellectual property and competitively sensitive confidential information. Together with Kioxia, we have funded, and may continue to fund, a portion of the investments required for Flash Ventures through lease financings. Continued availability of lease financings for Flash Ventures is not guaranteed and could be limited by several factors, including investor capacity and risk allocation policies, our or Kioxia’s financial performance, changes to our or Kioxia’s financing strategy, business, ownership or corporate structure and the availability of tools and equipment eligible for lease financing. To the extent that lease financings are not accessible on favorable terms or at all, more cash would be required to fund investments. Our strategic relationships are subject to additional risks that could harm our business, including, but not limited to, the following: - failure by our strategic partners to comply with applicable laws or employ effective internal controls; - difficulties and delays in product and technology development at, ramping production at and transferring technology to, our strategic partners; - declining financial performance of our strategic partners, including failure by our strategic partners to timely fund capital investments with us or otherwise meet their commitments, including paying amounts owed to us or third parties when due; - we may lose the rights to, or ability to independently manufacture, certain technology or products being developed or manufactured by strategic partners, including if any of them is acquired by another company, files for bankruptcy or experiences financial or other losses; - a bankruptcy event involving a strategic partner could result in structural changes to or termination of the strategic partnership; and - changes in tax or regulatory requirements may necessitate changes to the agreements governing our strategic partnerships. ***We participate in a highly competitive industry that has been, and may continue to be, subject to declining average selling prices, volatile demand, rapid technological change and industry consolidation, as well as lengthy product qualifications, all of which can negatively impact our business.*** Demand for our devices, software and solutions, which we refer to in this “Risk Factors” section as our “products,” depends in large part on the demand for systems manufactured by our customers and on storage upgrades to existing systems. The demand for systems has been volatile in the past and often has had an exaggerated effect on the demand for our products in any given period. Demand for and prices of our products are influenced by, among other factors, actual and projected data growth, the balance between supply and demand in the storage market, including the effects of new fab capacity, macroeconomic factors and geopolitical tensions, including tariffs or trade restrictions, business conditions, technology transitions and other actions taken by us or our competitors. The storage market has in the past experienced, and may continue to experience, periods of excess capacity leading to liquidation of excess inventories, inventory write-downs, underutilization charges, significant reductions in average selling prices and negative impacts on our revenue and gross margins, and volatile product life cycles that harm our ability to recover the cost of product development. Further, our average selling prices and gross margins tend to decline when there is a meaningful shift in the mix of product sales to lower priced products. We have faced declining gross margins relating to our business in the past, and may face potential gross margin pressures in the future, resulting from our average selling prices declining more rapidly than our cost of revenue. Rapid technological changes have reduced, and may reduce in the future, the volume and profitability of sales of existing products and increase the risk of inventory obsolescence and write-downs. Finally, the semiconductor memory chip and data storage industries have experienced consolidation over the past several years, which could enhance the resources and lower the cost structure of some competitors. These factors could result in a substantial decrease in our market share and harm our business. As we compete in new product areas, the overall complexity of our business may increase and may result in increases in research and development expenses and substantial investments in manufacturing capability, technology enhancements and go-to-market capability. We must also qualify our products with customers through potentially lengthy testing processes with uncertain results. Some of our competitors offer products that we do not offer (including DRAM), which may allow them to win sales from us or to more efficiently maintain product availability, pricing, and margins on products that incorporate DRAM, such as enterprise-grade SSDs. Some of our customers may also be developing storage solutions internally, which may reduce their demand for our products or shift their demand to potentially lower-margin component products. We expect that competition will continue to be intense, and our competitors may be able to gain a product offering or cost structure advantage over us, which would harm our business. Further, our competitors may utilize pricing strategies, including through aggressive expansion of their output capacities, which may allow them to offer products at prices at levels that we may be unable to competitively match. We may also have difficulty effectively competing with manufacturers benefiting from governmental investments and may be subject to increased complexity and reduced efficiency in our supply chain as a result of governmental efforts to promote domestic semiconductor industries in various jurisdictions. ***If we do not properly manage technology transitions and product development and introduction, our competitiveness and operating results may be negatively affected.*** The markets for our products continuously undergo technology transitions that may impact our product roadmaps and that we must anticipate in order to adapt our existing products or develop new products effectively. Additionally, advances in NAND technology, including higher-capacity and higher-layer architectures, as well as increasing customer requirements for performance, reliability, security, and power efficiency, may increase the complexity of our product development, qualification, manufacturing, and commercialization. If we fail to adapt to or implement new technologies or develop new products desired by our customers quickly and cost-effectively, or if technology transitions negatively impact our existing product roadmaps, our business may be harmed. In addition, the success of our technology transitions and product development depends on a number of other factors, including: - research and development expenses and results; - difficulties faced in manufacturing ramp; - market acceptance/qualification; - effective management of inventory levels in line with anticipated product demand; - the vertical integration of some of our products, which may result in more capital expenditures and greater fixed costs than if we were not vertically integrated; - our ability to cost effectively respond to customer requests for new products or features (including requests for more efficient and efficiently produced products with reduced environmental impacts) and software associated with our products; - our ability to increase our software development capability; and - the effectiveness of our go-to-market capability in selling new products. Moving to new technologies and products may require us to align to, and build, a new supply base. Our success in new product areas may depend on our ability to enter into favorable supply agreements. In addition, if our customers choose to delay transition to new technologies, if demand for the products that we develop is lower than expected or if the supporting technologies to implement these new technologies are not available, we may be unable to achieve the cost structure required to support our profit objectives or may be unable to grow or maintain our market position. Additionally, new technologies could impact demand for our products in unforeseen or unexpected ways that could harm our business. For example, new products could substitute for our current products and make them obsolete, or new technologies could reduce the importance of and demand for our technology. In particular, demand for our products depends increasingly on the use of NAND flash memory in AI infrastructure, and new or alternative technologies could emerge that perform these functions more efficiently or reduce the storage required per unit of AI compute. If adopted at scale, such technologies could rapidly reduce or eliminate the importance of, and demand for, our technology in the AI infrastructure. We also develop products to meet certain industry and technical standards, which may change and cause us to incur substantial costs as we adapt to new standards or invest in different manufacturing processes to remain competitive. ***Our operating results may fluctuate due to changes in demand, industry cycles and the timing of customer deployments, including AI-related data center investments, and our ability to accurately forecast demand as a result of these changing market conditions.*** Sales of certain of our products tend to be seasonal and subject to supply-demand cycles. As our business has increasingly shifted toward enterprise and datacenter applications, and as we have entered into multi-year agreements with certain customers that provide greater visibility into future demand, the impact of traditional seasonality and certain supply-demand fluctuations has been reduced. Nonetheless, our business remains subject to changes in seasonal and cyclical supply and demand patterns, which have made it, and could continue to make it, more difficult for us to forecast demand. Additionally, demand for certain of our products is increasingly influenced by AI-related deployments and our customers’ and partners’ ability to timely build complex data center infrastructure. AI as a new demand driver is evolving rapidly, and the expected timing and magnitude of demand related to AI are difficult to predict. Delays in data center build-outs could result in excess inventory, underutilization of capacity, or other costs if anticipated demand does not materialize or is not sustained. As a result of the above or other factors, our forecast of financial results for a given quarter may differ materially from our actual financial results. The variety and volume of products we manufacture are based in part on accurately forecasting market and customer demand for our products. While multi-year agreements with certain customers provide increased visibility into future demand and may reduce forecasting uncertainty for portions of our business, our ability, as well as our customers’ and suppliers’ ability, to accurately forecast demand, remains difficult due to volatility in global economic conditions, evolving end market dynamics, customer deployment schedules, and industry consolidation. Further, for many of our OEM customers utilizing just-in-time inventory, we do not generally require firm order commitments and instead receive a periodic forecast of requirements, which may prove to be inaccurate. In addition, because our products are designed to be largely interchangeable with competitors’ products, our demand forecasts may be impacted significantly by the strategic actions of our competitors. Inaccurate demand forecasts could result in periods of product oversupply or undersupply, with the consequences described above under the “We rely substantially on strategic relationships with various partners, including Kioxia” and “We participate in a highly competitive industry” risk factors. If market demand increases significantly beyond our forecasts or beyond our ability to add manufacturing capacity, then we may not be able to satisfy customer product needs, possibly resulting in a loss of market share if our competitors are able to meet customer demands. In addition, some of our components have long lead-times, requiring us to place orders several months in advance of anticipated demand. Such long lead-times increase the risk of excess inventory, potentially resulting in inventory write-downs or loss of sales in the event our forecasts vary substantially from actual demand. ***Failure to successfully execute on strategic initiatives including acquisitions, divestitures or cost saving measures may negatively impact our future results.*** We may make acquisitions and divestitures and engage in cost saving measures. In order to successfully execute on strategic initiatives, we must successfully complete attractive transactions, some of which may be large and complex, and manage post-closing issues such as integration of an acquired company or employees and integration of processes and systems. We may not be able to identify or complete appealing acquisition or investment opportunities given the intense competition for these transactions. Even if we identify and complete suitable corporate transactions, we may not be able to successfully address any integration challenges in a timely manner, or at all. There may be difficulties with implementing new systems and processes or with integrating systems and processes of companies with complex operations, which may result in inconsistencies in standards, controls, procedures and policies and may increase the risk that our internal controls are found to be ineffective. Failing to successfully integrate or realign our business to take advantage of efficiencies or reduce redundancies of an acquisition may result in not realizing all or any of the anticipated benefits of the acquisition. In addition, failing to achieve the financial model projections for an acquisition or changes in technology development and related roadmaps following an acquisition may result in the incurrence of impairment charges (including goodwill impairments or other asset write-downs) and other expenses, both of which could negatively impact our results of operations or financial condition. Acquisitions and investments may also result in the issuance of equity securities that may be dilutive to our stockholders as well as earn-out or other contingent consideration payments and the issuance of additional indebtedness that would put additional pressure on liquidity. Furthermore, we may agree to provide continuing service obligations or enter into other agreements in order to obtain certain regulatory approvals of our corporate transactions, and failure to satisfy these additional obligations could result in our failing to obtain regulatory approvals or the imposition of additional obligations on us, any of which could negatively affect our business. In addition, new legislation or additional regulations may affect or impair our ability to invest with or in certain other countries or require us to obtain regulatory approvals to do so, including investments in joint ventures, minority investments and outbound technology transfers to certain countries. In March 2026, we made an equity investment in Nanya Technology Corporation (“Nanya”).The value of our investment could be impaired by adverse changes in Nanya’s financial performance, operating results, or market conditions, which could result in losses or impairment charges that adversely affect our results of operations. Similarly, increases in the value of our investment could influence our financial results in accordance with GAAP accounting in a manner that is not representative of our core business, and regulatory restrictions on cross-border semiconductor investments, including potential outbound investment screening requirements, could constrain our ability to realize the full value of this investment. Cost saving measures, restructurings and divestitures may result in workforce reduction or consolidation of our manufacturing or other facilities. As a result of these actions, we may experience a loss of continuity, loss of accumulated knowledge, disruptions to our operations and inefficiency during transitional periods. These actions could also impact employee retention. In addition, we cannot be sure that these actions will be as successful in reducing our overall expenses as we expect, that additional costs will not offset any such reductions or consolidations or that we will not forgo future business opportunities as a result of these actions. Acquisitions and alliance activities inherently involve other risks as well. Additional risks we may encounter include those associated with: - disruption to our business and the continued successful execution of our company strategy, goals and responsibilities; - increased capital and research and development expenses and resource allocation; - assimilation and integration of different business operations, corporate cultures, personnel, infrastructures and technologies or solutions acquired or licensed, while maintaining quality, and designing and implementing appropriate risk management measures; - the incurrence of significant transaction fees and costs; - the potential for unknown liabilities within the acquired or combined business that we may not become aware of until after the completion of the acquisition; and - the possibility of conflict with joint venture or alliance partners regarding strategic direction, prioritization of objectives and goals, governance matters or operations. ***Loss of revenue from a key customer, or consolidation among our customer base, could harm our operating results.*** For 2026, 2025, and 2024, 44%, 40% and 41%, respectively, of our total revenue came from sales to our top ten customers. These customers have a variety of suppliers to choose from and therefore can make substantial demands on us, including demands on product pricing, contractual terms and the environmental impact and attributes of our products, often resulting in the allocation of risk or increased costs to us as the supplier. Our ability to maintain strong relationships with our principal customers is essential to our future performance. We may experience events such as the loss of a key customer, prohibition or restriction of sales to a key customer by law, regulation or other government action, reductions in sales to or orders by a key customer, reductions in customer demand due to technological changes, or customer requirements to reduce our prices before we are able to reduce costs or the acquisition of a key customer by one of our competitors. These events may impact our operating results and financial condition. Further, government authorities may implement laws or regulations or take other actions that could result in significant changes to the business or operating models of our customers. Such changes could negatively impact our operating results. Additionally, if there is consolidation among our customer base, our customers may be able to command increased leverage in negotiating prices and other terms of sale, which could negatively impact our profitability. Consolidation among our customer base may also lead to reduced demand for our products, increased customer pressure on our prices, replacement of our products by the combined entity with those of our competitors and cancellations of orders, each of which could harm our operating results. Also, the storage ecosystem is constantly evolving, and our traditional customer base is changing. Fewer companies now hold greater market share for certain applications and services, such as cloud storage and computing platforms, mobile, social media, shopping and streaming media. As a result, the competitive landscape is changing, giving these companies increased leverage in negotiating prices and other terms of sale, which could negatively impact our profitability. In addition, the changes in our evolving customer base create new selling and distribution patterns to which we must adapt. To remain competitive, we must respond to these changes by ensuring we have proper scale in this evolving market, as well as offer products that meet the technological requirements of this customer base at competitive pricing points. To the extent we are not successful in adequately responding to these changes, our operating results and financial condition could be harmed. ***Long-term agreements, which we also refer to as New Business Models or “NBMs”, expose us to certain execution, financial, and market risks, which could be significant.*** We have entered into long-term agreements with certain customers, which we also refer to as New Business Models or “NBMs”, that commit us to deliver, and our customers to purchase, a stated volume of products, mostly over multi-year periods. Our ability to fulfill our obligations under these agreements depends on a number of factors, including our manufacturing capacity, production yields, supply chain performance, and the availability of raw materials and other critical inputs. If we are unable to deliver products in the quantities, at the times, or meeting the specifications required under these agreements, we may face contractual damages, other financial penalties, or early termination. There can be no assurance that we will be able to perform these contractual obligations throughout the contract terms without disruption or shortfall. Any failure to perform could harm our customer relationships, damage our reputation, and, in the aggregate, might have a material adverse effect on our results of operations and financial condition. If a customer were to breach its purchase obligations, or if we were to breach our obligations and a customer were to terminate or reduce its volume commitments, we may need to find alternative customers for any affected product volumes. Depending on market conditions at the time, we may be unable to resell those products at comparable prices, or at all, which could result in reduced revenue, lower margins, excess inventory, or manufacturing underutilization or asset impairment charges. Additionally, a customer’s failure to satisfy its contractual purchase commitments may require us to enforce our contractual rights or pursue other remedies, and any resulting disputes, litigation, arbitration, or other proceedings could be costly, time-consuming, and could adversely affect our business or customer relationships. Any such disputes, lost sales, reduced pricing, or operational inefficiencies resulting from such contractual breach could have a material adverse effect on our business, results of operations, and financial condition. In addition, these long-term agreements may constrain a portion of our available supply and limit our flexibility to respond to changes in market conditions, including shifts in demand, pricing opportunities, or customer requirements. As a result, we may be unable to allocate product volumes to other customers or market opportunities that could be more favorable, which could adversely affect our business, results of operations, and financial condition. Each agreement includes certain financial guarantees that are intended to protect us if the customer fails to perform its purchase obligations. In such event, these financial guarantees are intended to offset a portion of revenue that may be lost due to the customer’s failure to perform its purchase obligations, but they may not fully offset such lost revenue depending on the specific circumstances of such failure to perform, when during the contract term the customer’s failure to perform were to occur and other factors. ### FINANCIAL RISKS ***Our guarantees of certain obligations of Flash Ventures could negatively impact our financial position, and the loan agreement governing our revolving credit facility contains various covenants and restrictions that may restrict our operations and ability to respond to future business opportunities.*** We guarantee a significant amount of lease and other financial obligations of Flash Ventures owed to third parties. In particular, Flash Ventures sells to and leases back a portion of its equipment from a consortium of financial institutions. All of the lease obligations are guaranteed 50% by us and 50% by Kioxia. The leases are subject to customary covenants and cancellation events that relate to Flash Ventures and each of the guarantors. If a cancellation event were to occur, Flash Ventures would be required to negotiate a resolution with the other parties to the lease transactions to avoid cancellation and acceleration of the lease obligations. Such resolution could include, among other things, supplementary security to be supplied by us, increased interest rates or waiver fees. If a resolution is not reached, we may be required to pay all of the outstanding lease obligations covered by our guarantees, which would significantly reduce our cash position and may force us to seek additional financing, which may not be available on terms acceptable to us, if at all. The loan agreement governing our existing revolving credit facility includes: - limitations on our ability to obtain additional financing for working capital, capital expenditures, acquisitions, capital contributions to Flash Ventures or other general corporate purposes; and - the imposition of financial and other restrictive covenants on our operations and limitations on our ability to (i) declare or pay dividends or repurchase shares of our common stock; (ii) purchase assets, make investments, complete acquisitions, consolidate or merge with or into, or sell all or substantially all of our assets to, another person; (iii) enter into sale/leaseback transactions or certain transactions with affiliates; (iv) incur additional indebtedness; and (v) incur liens. Our ability to comply with our debt covenants will depend on our financial performance, which may be affected by financial, business, economic and other factors. Debt incurred under our revolving credit facility is subject to an applicable margin that is determined by reference to our consolidated leverage ratio. As a result, an increase in our consolidated leverage ratio could result in increased interest expense and debt service obligations in the event that we draw on the revolving credit facility. ***Fluctuations in currency exchange rates as a result of our international operations may negatively affect our operating results.*** Because we manufacture our products overseas and sell a large portion of our products abroad, fluctuations in foreign currency exchange rates affect our revenue, cost of revenue, margins, operating costs and cash flows. If the U.S. dollar experiences sustained weakness against certain foreign currencies, the U.S. dollar equivalents of unhedged manufacturing costs could increase because a significant portion of our production costs are foreign-currency denominated. Conversely, there would not be an offsetting impact to revenues since revenues are substantially U.S. dollar denominated. Additionally, we negotiate and procure some of our component requirements in U.S. dollars from non-U.S. based vendors. If the U.S. dollar weakens against other foreign currencies, some of our component suppliers may increase the price they charge for their components in order to maintain an equivalent profit margin. In addition, our purchases of flash-based memory from Flash Ventures and our investment in Flash Ventures are denominated in Japanese yen. If the Japanese yen appreciates against the U.S. dollar, our cost of purchasing flash-based memory wafers and the cost to us of future capital funding of Flash Ventures would increase. When such events occur, they have had, and may in the future have, a negative impact on our business. Prices for our products are substantially U.S. dollar denominated, even when sold to customers that are located outside the U.S. Therefore, as a substantial portion of our sales are from countries outside the U.S., fluctuations in currency exchanges rates, most notably the strengthening of the U.S. dollar against other foreign currencies, contribute to variations in sales of products in impacted jurisdictions and could negatively impact demand and revenue growth. In addition, currency variations may adversely affect margins on sales of our products in countries outside the U.S. We have historically attempted to manage the impact of foreign currency exchange rate changes by, among other things, entering into short-term foreign exchange contracts. The effectiveness of this hedging strategy is highly dependent on business, market and global economic conditions. We do not hedge all of our foreign currency exchange rate exposure, and even when used for hedging purposes, foreign exchange contracts can be canceled by the counterparty if currency controls are put in place and may actually harm our operating results. Further, the ability to enter into foreign exchange contracts with financial institutions is based upon our available credit from such institutions and compliance with covenants and other restrictions. Operating losses, third-party downgrades of our credit rating or instability in the worldwide financial markets could impact our ability to effectively manage our foreign currency exchange rate risk. Hedging also exposes us to the credit risk of our counterparty financial institutions. ***Increases in our customers’ credit risk could result in credit losses and term extensions under existing contracts with customers with credit losses could result in an increase in our operating costs.*** Some of our OEM customers have adopted a subcontractor model that requires us to contract directly with companies, such as original design manufacturers, that provide manufacturing and fulfillment services to our OEM customers. Because these subcontractors are generally not as well capitalized as our direct OEM customers, this subcontractor model exposes us to increased credit risks. Our agreements with our OEM customers may not permit us to increase our product prices to alleviate this increased credit risk. Additionally, as we attempt to expand our OEM and distribution channel sales into emerging economies, the customers with the most success in these regions may have relatively short operating histories, making it more difficult for us to accurately assess the associated credit risks. Our customers’ credit risk may also be exacerbated by an economic downturn or other adverse global or regional economic conditions. Any credit losses we may suffer as a result of these increased risks, or as a result of credit losses from any significant customer, especially in situations where there are term extensions under existing contracts with such customers, would increase our operating costs, which may negatively impact our operating results. ***The amount and timing of our share repurchases may fluctuate, and share repurchases may not enhance shareholder value and could affect the price of our common stock and reduce our financial flexibility.*** In April 2026, our Board authorized a share repurchase program of up to $6.0 billion of our common stock, and in August 2026, the Board authorized an additional share repurchase program of up to $14.0 billion of our common stock. The Board may continue to authorize further repurchase programs from time to time. The authorization does not obligate us to repurchase any particular amount of stock and may be modified, suspended, or terminated at any time. The amount and timing of repurchases will depend on a variety of factors, including general market conditions; our financial condition and operating results; tax regulations impacting share repurchases; the share price of our common stock; contractual restrictions, such as financial or operating covenants in our debt arrangements; our level of cash flow; other priorities for use of cash; and alternative investment opportunities. We cannot guarantee that repurchases under the program will enhance shareholder value. Repurchases may be made at prices that exceed future market prices and may not result in efficient use of capital. In addition, funds used for share repurchases will reduce the cash available for other purposes, including investments in our business, technology development, capacity expansion, acquisitions, working capital needs, and debt repayment. The existence of the repurchase program may create expectations among investors regarding the level, timing, and continuity of repurchases. Any reduction, suspension, or discontinuation of repurchases, or any failure to repurchase shares at levels anticipated by investors, could negatively affect the market price of our common stock. Repurchase activity may also increase volatility in the trading price of our common stock. ### LEGAL AND COMPLIANCE RISKS ***We are subject to laws, rules and regulations relating to the collection, use, transfer, sharing and security of data, including personal data, and our failure to comply with these laws, rules and regulations could subject us to proceedings by governmental entities or others and cause us to incur penalties, significant legal liability or loss of customers, loss of revenue and reputational harm.*** We are subject to privacy laws, rules and regulations relating to how we collect, use, transfer, and secure third-party data, including data that relates to or identifies an individual person. We are also subject to the terms of our privacy policies and obligations to third parties related to privacy, data protection and cybersecurity. In many cases, these requirements apply not only to third-party transactions, but also to transfers of information between us and our subsidiaries, and among us, our subsidiaries and other parties with which we have commercial relations. Our possession and use of third-party personal data, including customer and employee personal data used in conducting our business, subjects us to legal and regulatory burdens that require us to notify vendors, customers, employees, or other parties with which we have commercial relations of a data security breach and to respond to regulatory inquiries and to enforcement proceedings. Privacy laws and regulations relating to the collection, use, transfer, and security of third-party personal data change over time and new laws and regulations become effective from time to time. We are subject to notice and privacy policy requirements, as well as obligations to respond to requests to know and access personal information, correct personal information, delete personal information and say no to the sale of personal information. Global privacy and data protection legislation, enforcement and policy activity in this area are rapidly expanding and evolving and may be inconsistent from jurisdiction to jurisdiction. We may also be subject to restrictions on cross-border data transfers and requirements for localized storage of data that could increase our compliance costs and risks and affect the ability of our global operations to coordinate activities and respond to customers. Compliance requirements or even our inadvertent failure to comply with applicable laws may cause us to incur substantial costs, subject us to proceedings by governmental entities or others, and cause us to incur penalties or other significant legal liability or lead us to change our business practices. ***We are or may in the future be subject to state, federal and international legal and regulatory requirements, such as environmental, labor, health and safety, trade and public-company reporting and disclosure regulations, customers’ standards of corporate citizenship and industry and coalition standards, such as those established by the Responsible Business Alliance (“RBA”), and compliance with those regulations and requirements could cause an increase in our operating costs and failure to comply may harm our business.*** We are subject to, and may become subject to additional, U.S. state and federal, and international laws and regulations governing our environmental, labor, trade, financial transactions, health and safety practices and public-company reporting and disclosures requirements. These laws and regulations, particularly those applicable to our international operations, are or may be complex, extensive and subject to change. Implementing compliance with such laws and regulations may result in an increase in our operating costs, and failure to comply with such laws and regulations could also lead to significant liabilities. Legislation has been, and may in the future be, enacted in locations where we manufacture, ship or sell our products, which could impair our ability to conduct business in certain jurisdictions or with certain customers and harm our operating results. In addition, climate change and financial reform legislation is a significant topic of discussion and has generated and may continue to generate federal, international or other regulatory responses in the near future, which could substantially increase the complexity of our disclosure requirements and our compliance and operating costs. If we or our suppliers, customers or partners fail to timely comply with applicable legislation, certain customers may refuse to purchase our products or we may face increased operating costs as a result of taxes, fines or penalties, or legal liability and reputational damage, which could harm our business. In connection with our compliance with environmental laws and regulations, as well as our compliance with industry and coalition environmental initiatives, such as those established by the RBA, the standards of business conduct required by some of our customers, and our commitment to sound corporate citizenship in all aspects of our business, we could incur substantial compliance and operating costs and be subject to disruptions to our operations and logistics. In addition, if we or our suppliers, customers or partners were found to be in violation of these laws or noncompliant with these initiatives or standards of conduct, we could be subject to governmental fines, liability to our customers and damage to our reputation and corporate brand, which could cause our financial condition and operating results to suffer. ***Our aspirations, disclosures and actions related to sustainability and governance matters expose us to risks that could adversely affect our reputation and performance.*** In addition to Sandisk’s commitment and actions to operate responsibly, there is demonstrated interest from customers, investors, business partners, associates, and other stakeholders regarding Sandisk’s assessment and management of relevant sustainability and governance matters. Where matters, or aspects of a matter, are determined to be material, we may announce initiatives and goals to mitigate such risks from time to time, for example, our intentions regarding operational energy use and efficiency as reflected in Sandisk’s commitment to net zero emissions by 2040. These goals reflect our current plans and aspirations; they are not guarantees that we will be able to achieve them. Our ability to achieve any sustainability objective is subject to numerous factors, including risks, many of which may be outside of our control. These may include availability and cost of clean energy sources, the evolving regulatory and reporting requirements affecting sustainability practices and disclosures, where and how our products are used and any related implications of associated greenhouse gas emissions, and successful execution of our business strategy. Our failure to achieve our goals or accurately track and report on our performance in a timely basis, or in accordance with regulatory requirements, and the potential added costs involved, could adversely affect our reputation; financial performance and growth; and our attractiveness as a business partner or supplier, and could expose us to increased litigation risk, as well as increased scrutiny from the investment community and enforcement authorities. ***We and certain of our officers may at times be involved in litigation, investigations and governmental proceedings, which may be costly, may divert the efforts of our key personnel and could result in adverse court rulings, fines or penalties, which could materially harm our business.*** From time to time, we may be involved in litigation, including antitrust and commercial matters, putative securities class action suits and other actions. We may be the plaintiff in some of these actions and the defendant in others. Some of the actions may seek injunctive relief, including injunctions against the sale of our products, and substantial monetary damages, which if granted or awarded, could materially harm our business. From time to time, we may also be the subject of inquiries, requests for information, investigations and actions by government and regulatory agencies regarding our business. Any such matters could result in material adverse consequences to our results of operations, financial condition or ability to conduct our business, including fines, penalties or restrictions on our business activities. Litigation is subject to inherent risks and uncertainties that may cause actual results to differ materially from our expectations. In the event of an adverse outcome in any litigation, investigation or governmental proceeding, we could be required to pay substantial damages, fines or penalties and cease certain practices or activities, including the manufacture, use and sale of products. With or without merit, such matters may be complex, may extend for a protracted period of time, may be very expensive, and the expense may be unpredictable. Litigation initiated by us could also result in counter-claims against us, which could increase the costs associated with the litigation and result in our payment of damages or other judgments against us. In addition, litigation, investigations or governmental proceedings and any related publicity may divert the efforts and attention of some of our key personnel, affect demand for our products and harm the market prices of our securities. We may be obligated to indemnify our current or former directors or employees, or former directors or employees of companies that we have acquired, in connection with litigation, investigations or governmental proceedings. These liabilities could be substantial and may include, among other things: the costs of defending lawsuits against these individuals; the cost of defending shareholder derivative suits; the cost of governmental, law enforcement or regulatory investigations or proceedings; civil or criminal fines and penalties; legal and other expenses; and expenses associated with the remedial measures, if any, which may be imposed. ***The nature of our industry and its reliance on intellectual property and other proprietary information subjects us and our suppliers, customers and partners to the risk of significant litigation.*** The data storage industry has been characterized by significant litigation. This includes litigation relating to patent and other intellectual property rights, product liability claims and other types of litigation. We have historically been involved in frequent disputes regarding patent and other intellectual property rights, and we and our customers have in the past received, and we and our customers may in the future receive, communications from third parties asserting that certain of our products, processes or technologies infringe upon their patent rights, copyrights, trademark rights or other intellectual property rights. Even if we believe that such claims are without merit, they may be time-consuming and costly to defend against and may divert management’s attention and resources away from our business. We may also receive claims of potential infringement if we attempt to license intellectual property to others. Intellectual property risks increase when we enter into new markets where we have little or no intellectual property protection as a deterrent against litigation. The complexity of the technology involved and the uncertainty of intellectual property litigation increase the intellectual property risks we face. Litigation may be expensive, lengthy and disruptive to normal business operations. Moreover, the results of litigation are inherently uncertain and may result in adverse rulings or decisions. We may be subject to injunctions, enter into settlements or be subject to judgments that may harm our business. If we incorporate third-party technology into our products or if claims or actions are asserted against us for alleged infringement of the intellectual property of others, we may be required to obtain a license or cross-license, modify our existing technology or design a new non-infringing technology. Such licenses or design modifications may be extremely costly. We evaluate notices of alleged patent infringement and notices of patents from patent holders that we receive from time to time. We may decide to settle a claim or action against us, which settlement could be costly. We may also be liable for past infringement. If there is an adverse ruling against us in an infringement lawsuit, an injunction could be issued barring production or sale of any infringing product. It could also result in a damage award equal to a reasonable royalty or lost profits or, if there is a finding of willful infringement, treble damages. Any of these results would increase our costs and harm our operating results. In addition, our suppliers, customers and partners are subject to similar risks of litigation, and a material, adverse ruling against a supplier, customer or partner could negatively impact our business. Moreover, from time to time, we agree to indemnify certain of our suppliers and customers for alleged intellectual property infringement. The scope of such indemnity varies but may include indemnification for direct and consequential damages and expenses, including attorneys’ fees. We may be engaged in litigation as a result of these indemnification obligations. We do not maintain insurance coverage for third-party patent infringement claims. A future obligation to indemnify our customers or suppliers may harm our business. ***Our reliance on intellectual property and other proprietary information subjects us to the risk that these key components of our business could be copied by competitors.*** Our success depends, in significant part, on the proprietary nature of our technology, including non-patentable intellectual property such as our process technology. If we fail to protect our technology, intellectual property or contract rights, our customers and others may seek to use our technology and intellectual property without the payment of license fees and royalties, which could weaken our competitive position, reduce our operating results and increase the likelihood of costly litigation. We primarily rely on patent, copyright, trademark and trade secret laws, as well as non-disclosure agreements and other methods, to protect our proprietary technologies and processes. There can be no assurance that our existing patents will continue to be held valid, if challenged, or that they will have sufficient scope or strength to protect us. It is also possible that competitors or other unauthorized third parties may obtain, copy, use or disclose, illegally or otherwise, our proprietary technologies and processes, despite our efforts to protect our proprietary technologies and processes. If a competitor is able to reproduce or otherwise capitalize on our technology despite the safeguards we have in place, it may be difficult, expensive or impossible for us to obtain necessary legal protection. There are entities whom we believe may infringe our IP. Enforcement of our rights often requires litigation. If we bring a patent infringement action and are not successful, our competitors may be able to use similar technology to compete with us. Moreover, the defendant in such an action may successfully countersue us for infringement of their patents or assert a counterclaim that our patents are invalid or unenforceable. Also, the laws of some foreign countries do not protect our intellectual property to the same extent as do U.S. laws. In addition to patent protection of intellectual property rights, we consider elements of our product designs and processes to be proprietary and confidential. We rely upon employee, consultant and vendor non-disclosure agreements and contractual provisions and a system of internal safeguards to protect our proprietary information. However, we cannot be certain that these contracts and safeguards have not been and will not be breached, that we will be able to timely detect unauthorized use or transfer of our technology and intellectual property, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or be independently discovered by competitors. Any of our registered or unregistered intellectual property rights may be challenged or exploited by others in the industry, which could harm our operating results. Maintaining and strengthening our brands are important to maintaining and expanding our business, as well as to our ability to enter into new markets for our technologies, products and services. The success of our brands depends in part on the positive image that consumers have of our brands. We believe the popularity of our brands makes them a target of counterfeiting or imitation, with third parties attempting to pass off counterfeit products as our products. Any occurrence of counterfeiting, imitation or confusion with our brands could negatively affect our reputation and impair the value of our brands, which in turn could negatively impact sales of our branded products, our share and our gross margin, as well as increase our administrative costs related to brand protection and counterfeit detection and prosecution. Additionally, our ability to prevent unauthorized uses of our brands and technologies would be negatively impacted if our trademark registrations were successfully challenged or overturned in the jurisdictions where we do business. We also have trademark applications pending in a number of jurisdictions that may not ultimately be granted, or if granted, may be challenged or invalidated, in which case we would be unable to prevent unauthorized use of our brands and logos in such jurisdictions. We have not filed trademark registrations in all jurisdictions where our brands or logos may be used. ### RISKS RELATED TO THE SPIN-OFF ***If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned, and our stock price may suffer.*** Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting. We and our independent registered public accounting firm are required to formally attest to the effectiveness of our internal control over financial reporting for the first time in connection with this annual report on Form 10-K. To comply with this statute, we are required to annually document and test our internal control procedures, our management is required to assess and issue a report concerning our internal control over financial reporting and our independent registered public accounting firm is required to issue an opinion on our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. If our management concludes that our internal control over financial reporting is not effective, or we identify material weaknesses in our internal controls, any remedial actions required could divert internal resources and take a significant amount of time and effort to complete, and could result in us incurring additional costs that we did not anticipate, including the hiring of outside consultants. Further, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which could lead to weakened investor confidence in our financial results, and our stock price may suffer. ***We were spun off from our former parent company, WDC, and our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and therefore may not be a reliable indicator of our future results.*** We were spun off from WDC, our former parent company, and have only operated as an independent, publicly traded company since February 21, 2025. Some of the historical information about us in this annual report on Form 10-K refers to our business as part of pre-spin-off WDC. Our historical financial information included in this annual report on Form 10-K is derived from the consolidated financial statements of Sandisk and the combined financial statements and accounting records of WDC. Accordingly, the historical financial information included in this annual report on Form 10-K does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future. For example, in preparing our financial statements, pre-spin-off WDC made allocations of costs and corporate expenses deemed to be attributable to our business. However, these costs and expenses reflect the costs and expenses attributable to how our business operated as part of a larger organization and do not necessarily reflect costs and expenses that would be incurred by us had we been operating independently. As a result, our historical financial information may not be a reliable indicator of future results. For additional information about the past financial performance of our business and the basis of presentation of the current and historical financial statements, see the sections of this annual report on Form 10-K entitled “*Financial Statements and Supplementary Data”* and “*Management’s Discussion and Analysis of Financial Condition and Results of Operations.”* ***In connection with our spin-off from WDC, we and WDC have assumed certain indemnification obligations. These indemnification obligations may not provide the protection we expect and could result in significant liabilities that could adversely affect our financial results.*** Pursuant to agreements entered into in connection with our separation from WDC, WDC has agreed to indemnify us for certain liabilities, and we have agreed to assume, and indemnify WDC for, certain liabilities, as discussed further in the section of this annual report on Form 10-K entitled “*Transactions with Western Digital Corporation—Separation and Distribution Agreement and Other Transactions with WDC.”* Third parties could also seek to hold us responsible for liabilities that WDC has agreed to retain, and there can be no assurance that the indemnity from WDC will be sufficient to protect us against the full amount of such liabilities, or that WDC will be able to fully satisfy its indemnification obligations. In addition, WDC’s insurers may attempt to deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the spin-off. Similarly, if we are required to make payments pursuant to our indemnification obligations to WDC, such payments could be significant and could adversely affect our business, financial condition, results of operations and cash flows, particularly indemnities relating to our actions that could impact the tax-free nature of the distribution. As a result, indemnification arrangements related to the spin-off may subject us to substantial liabilities and financial obligations that could materially and adversely affect our business and financial results. ***If the distribution of our shares, together with certain related transactions, does not continue to qualify for the Intended Tax Treatment, Sandisk, WDC and WDC stockholders could be subject to significant U.S. federal income tax liabilities and, in certain circumstances, we could be required to indemnify WDC for material taxes pursuant to indemnification obligations under the tax matters agreement. We are also restricted from taking certain actions that could adversely impact the Intended Tax Treatment to preserve the tax-free treatment to WDC and its stockholders and to comply with the tax matters agreement.*** As a condition to the completion of the distribution, WDC received an opinion of counsel (the “Tax Opinion”) that, among other things, the distribution, together with certain related transactions, qualifies for the Intended Tax Treatment. The Tax Opinion was based on and relies on certain facts, assumptions, representations and undertakings from WDC and us, including those regarding the past and future conduct of the companies’ respective businesses and other matters. Nevertheless, an opinion of counsel neither binds the Internal Revenue Service (the “IRS”) nor precludes the IRS or the courts from adopting a contrary position. Therefore, notwithstanding the Tax Opinion, the IRS could determine that the distribution or any such related transaction is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated, or that the distribution should be taxable for other reasons, including if the IRS were to disagree with the conclusions in the Tax Opinion. If the distribution or certain related transactions failed to qualify for the Intended Tax Treatment, in general, for U.S. federal income tax purposes, WDC would recognize taxable gain as if it had sold the shares of our stock in a taxable sale for their fair market value and WDC stockholders that received shares of our stock in the distribution or receive shares of our stock in a clean-up distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares. In addition, WDC and Sandisk could incur significant U.S. federal income tax obligations, whether under applicable law or under the tax matters agreement that we entered into with WDC. Further, to preserve the tax-free treatment to WDC and its stockholders of the distribution and certain related transactions, under the tax matters agreement that we entered into with WDC, we are restricted from taking certain actions that could adversely impact the Intended Tax Treatment of the distribution, together with certain related transactions. Failure to adhere to any such restrictions, including in certain circumstances that may be outside of our control, could result in tax being imposed on WDC for which we could bear responsibility and for which we could be obligated to indemnify WDC. In addition, even if we are not responsible for tax liabilities of WDC under the tax matters agreement, we nonetheless could potentially be liable under applicable tax law for such liabilities if WDC were to fail to pay such taxes. The terms of the tax matters agreement, furthermore, restrict us from taking certain actions, particularly for the two years following the spin-off, including (among other things) the ability to freely issue stock, to merge or agree to merge with a third party, to be acquired or agree to be acquired by certain parties and to raise additional equity capital. Such restrictions could impair our ability to implement strategic initiatives. Also, any indemnity obligation to WDC might discourage, delay or prevent a change of control that we or our stockholders may otherwise consider favorable. These restrictions may limit our ability to enter into certain strategic transactions or other transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business, which could negatively impact our stock price performance. In addition, under the tax matters agreement, we are required to indemnify WDC against certain tax liabilities as a result of the acquisition of our stock or assets, even if we did not participate in or otherwise facilitate the acquisition. For a discussion of the tax matters agreement, see the section of this annual report on Form 10-K entitled “*Transactions with Western Digital Corporation—Separation and Distribution Agreement and Other Transactions with WDC.”* ***We may be unable to implement, on a timely or cost-effective basis, the systems, internal controls, and governance structures necessary to operate effectively as an independent company.*** In connection with our separation from WDC, we have established, and are continuing to develop and refine, the standalone financial, administrative, governance, public company compliance, information technology, and other organizations, systems, and processes necessary to operate as an independent, publicly traded company. Building and maturing these functions is a complex, multi-phase undertaking, and we cannot assure you that we will complete it on a timely or cost-effective basis. The changes in our personnel, systems, and processes associated with operating independently have resulted, and may continue to result, in a loss of institutional knowledge, gaps in continuity, disruptions to our operations, and inefficiencies as our standalone organizations and systems mature. If we fail to effectively implement these initiatives—including integrating our governance structures, establishing and maintaining sufficient internal controls and corporate policies, fully developing our standalone teams and capabilities, and aligning stakeholder expectations—we may experience operational disruptions, material weaknesses or other deficiencies in our internal control over financial reporting, regulatory non-compliance, weakened stakeholder relationships, reputational harm, loss of business opportunities, and an inability to realize the anticipated benefits of the separation. In addition, we are in the process of implementing a new version of an enterprise resource planning (“ERP”) system. Implementing a new ERP system is costly and complex, requires significant management attention and resources, and may introduce quality, control, or cybersecurity issues into our systems, particularly during the transition. Any disruption in, or failure to successfully implement, our new ERP system or other key information systems could adversely affect our business and operations, impair our internal control over financial reporting, and harm our ability to meet our financial reporting obligations on a timely and accurate basis. ### RISKS RELATED TO OUR COMMON STOCK ***Our stock price may fluctuate significantly, which may make it difficult for you to resell the common stock when you want or at prices you find attractive.*** The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including: - our quarterly or annual earnings, or those of other companies in its industry; - actual or anticipated fluctuations in our operating results; - changes in earnings estimates by securities analysts or our ability to meet those estimates; - our ability to meet our forward looking guidance; - the operating and stock price performance of other comparable companies; - overall market fluctuations and domestic and worldwide economic conditions, including adverse geopolitical conditions; and - other factors described in these “Risk Factors” and elsewhere in this annual report on Form 10-K. Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. Broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a company’s securities, shareholder derivative lawsuits and/or securities class action litigation has often been instituted against such company. Such litigation, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources. ***Provisions of Delaware law, our certificate of incorporation and our bylaws may prevent or delay an acquisition of our company, which could decrease the market price of our common stock.*** Delaware law, our certificate of incorporation and our bylaws each contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with our Board rather than to attempt a hostile takeover. These provisions may also prevent or discourage attempts to remove and replace incumbent directors. These provisions include, among others: - our Board has the sole power to set the number of directors and to fill any vacancies on our Board, whether such vacancy occurs as a result of an increase in the number of directors or otherwise; - no cumulative voting; - the inability of our stockholders to act by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; - our Board has the authority to designate a series of preferred stock, determine its rights and preferences and fix the number of shares constituting any such series; - advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings; and - only our Board, the Chair of the Board or our Chief Executive Officer may call special meetings of stockholders, and stockholders do not have the authority to call a special meeting of stockholders. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or a change in our management and Board, and public stockholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is considered favorable to stockholders, which may adversely affect the market price of our common stock and the ability of stockholders to realize any potential change of control premium. In addition, we are subject to Section 203 of the DGCL, which generally prohibits a publicly held Delaware corporation from engaging in a broad range of business combinations with any stockholder who has acquired 15% or more of its outstanding voting stock for a period of three years following the date on which such stockholder became an interested stockholder, unless the business combination or the transaction in which the stockholder became an interested stockholder is approved in a prescribed manner. This provision may discourage, delay or prevent a change of control of our Company. We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our Board and by providing our Board with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions will apply even if any offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board determines is not in the best interests of us and our stockholders. ***Our certificate of incorporation contains an exclusive forum provision that could limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is favorable for such disputes and may discourage lawsuits against us and any of our directors, officers or other employees.*** Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction, the federal district court of the State of Delaware) is the sole and exclusive forum for (i) any derivative action brought on our behalf, (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine (the “Delaware Exclusive Forum Provision”). Our certificate of incorporation further provides that the federal district courts of the United States shall be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”). These exclusive forum provisions do not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The exclusive forum provisions in our certificate of incorporation will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders are not deemed to have waived our compliance with these laws, rules and regulations. These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the Company or its directors, officers or other employees. In addition, stockholders who do bring a claim in the Court of Chancery of the State of Delaware pursuant to the Delaware Exclusive Forum Provision could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The court in the designated forum under our exclusive forum provisions may also reach different judgments or results than would other courts, including courts where a stockholder would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. Further, if a court were to find all or any part of our exclusive forum provisions to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions. ***Tax matters may materially affect our financial position and results of operations.*** Changes in tax laws in the United States, the European Union and around the globe have impacted and will continue to impact our effective worldwide tax rate, which may materially affect our financial position and results of operations. Further, the majority of countries in the G20 and Organization for Economic Cooperation and Development Inclusive Framework on Base Erosion and Profit Shifting have agreed to adopt a two-pillar approach to taxation, which includes the implementation of a global corporate minimum tax rate of 15%, which has become effective in certain jurisdictions and materially increase our tax obligations in these countries. On January 5, 2026, the OECD/G20 inclusive framework released a “Side-by-Side” Safe Harbor which exempted U.S. parented companies from the Undertaxed Profit Rule (UTPR) and the Income Inclusion Rule (IIR); however, the Qualified Domestic Minimum Top-Up Taxes (QDMTT) still remain in effect. Additionally, we expect to be subject to Corporate Alternative Minimum Tax (“CAMT”) next year. CAMT, which was enacted under the Inflation Reduction Act of 2022, imposes a 15% minimum tax on the adjusted financial statement income. Due to the large scale of our U.S. and international business activities, many of these enacted and proposed changes to the taxation of our activities, including cash movements, could increase our worldwide effective tax rate and harm our business. Depending on our operating results, these changes can materially impact our effective tax rate and our operating cash flows. Additionally, portions of our operations are subject to a reduced tax rate or are free of tax under tax holidays that expire in whole or in part from time to time, or may be terminated if certain conditions are not met. Although these holidays may be extended when certain conditions are met, we may not be able to meet such conditions. If the tax holidays are not extended, or if we fail to satisfy the conditions of the reduced tax rate, then our effective tax rate could increase in the future. Our determination of our tax liability in the U.S. and other jurisdictions is subject to review by applicable domestic and foreign tax authorities. Although we believe our tax positions are properly supported, the final timing and resolution of any tax examinations are subject to significant uncertainty and could result in litigation or the payment of significant amounts to the applicable tax authority in order to resolve examination of our tax positions, which could result in an increase of our current estimate of unrecognized tax benefits and may harm our business. ***Provisions in our joint venture agreements with Kioxia may deter, prevent or delay an acquisition of us, which could decrease the market price of our common stock and limit our future strategic opportunities.*** The joint venture agreements with Kioxia contain provisions that may deter, prevent or delay third parties from acquiring us. These provisions include, among others: - restrictions limiting our ability and the ability of any of our affiliates to manufacture or have a third party fabricate flash memory outside of Flash Ventures’ Yokkaichi and Kitakami facilities; - restrictions limiting our ability and the ability of any of our affiliates to fabricate flash memory beyond our share of Flash Ventures’ manufacturing capacity; and - restrictions limiting our ability to transfer equity in the Flash Ventures entities or their assets, particularly partial transfers. If we nevertheless wanted to pursue a transaction providing for our acquisition by a third party, the provisions in our joint venture agreements with Kioxia could deter, prevent or delay a potential acquiror from pursuing such a transaction, even if the transaction is considered favorable to our stockholders. We may seek a waiver of applicable provisions of the joint venture agreements from Kioxia or Kioxia’s consent with respect to such a transaction, but there is no guarantee that we will successfully obtain Kioxia’s consent or waiver. The provisions in our joint venture agreements with Kioxia could substantially impede the ability of public stockholders to benefit from future strategic transactions, including an acquisition of Sandisk and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium. ## Cybersecurity As filed, 8,491 characters. ### Risk Management and Strategy At Sandisk, our management team is charged with managing risk and bringing to our Board of Directors’ attention all material risk exposures to our company. Our enterprise risk management (“ERM”) process is designed to facilitate the identification, assessment, management, reporting and monitoring of material risks our company may face over the short-term and long-term and promote regular communication with our Board of Directors and its committees regarding these risks. Through our ERM process, we have determined that the compromise, damage or interruption of our technology infrastructure, information systems or products by cybersecurity incidents is a key risk to our company that may have a material negative impact on our business. To help mitigate the potential impact of cybersecurity incidents on our business and protect against cybersecurity threats, we have established organizational structures, procedural measures and response plans that define roles and responsibilities related to cybersecurity risk management. Sandisk’s Information Security organization addresses cybersecurity risks with a broad spectrum of technologies, controls, and processes that focus on mitigating these risks. Our cybersecurity strategy is designed to be dynamic and adaptive to combat the rapidly-evolving cybersecurity threat landscape and is influenced by commonly leveraged frameworks such as the NIST-CSF (National Institute of Standards and Technology – Cybersecurity Framework). Our program includes, but is not limited to, endpoint protection and response systems, network security protocols, electronic communications protections, vulnerability management programs, least-privilege access controls, third-party risk management procedures, workforce education and training exercises, and compliance programs. Our dedicated 24x7 Security Operations Center incorporates specialized systems and processes for handling cybersecurity incidents into its regular work and operates a robust, modern security infrastructure with appropriate security sensors and event monitoring capabilities. Upon detection of a cybersecurity incident, the Security Operations Center determines the severity of the incident in accordance with a pre-established incident severity matrix, initiates the appropriate notification and escalation protocols and begins triage. Predefined severity tiers serve as a guide to match our response to each incident’s determined severity or risk level. Additionally, we have established a Cybersecurity Incident Response Plan that follows the structure of the Incident Handling Guide published by the U.S. National Institute of Standards and Technology (SP 800-61r3) and that serves as an operational guide for handling cybersecurity incidents at Sandisk. Our Cybersecurity Incident Response Plan provides procedural and strategic guidance that is designed to be flexible enough to apply to a variety of different incidents, but also specific enough to provide guidelines for incident prevention, detection, analysis, escalation and notification, and containment, eradication and recovery. As part of our ongoing information security program, the Company periodically utilizes independent third-party experts to conduct assessments of our program’s effectiveness. These experts are also leveraged to design and orchestrate tabletop exercises where multiple business functions and leadership levels navigate incident scenarios based on industry trends and relevant threats, to help determine our level of preparedness for various cybersecurity incidents. As part of our business operations, the Company engages with a number of third parties, including but not limited to, online software service providers, vendors, consultants, and partners. These third parties are analyzed based on business criticality and impact and must be cleared through a formal cybersecurity risk assessment process before being allowed to integrate with Sandisk’s information systems, access confidential data, or provide electronic services to members of our workforce. The Company has in the past experienced cybersecurity incidents of varying degrees involving our technology infrastructure and information systems. While these incidents have at times resulted in some disruptions to our business operations, as of the date of this Annual Report on Form 10-K, we do not believe that known risks from cybersecurity threats, including as a result of any previous cybersecurity incident, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. However, we can give no assurance that we have detected or protected against all such cybersecurity incidents or threats or that we will not experience such an incident in the future. Further details about the cybersecurity risks we face are described under “The compromise, damage or interruption of our technology infrastructure, systems or products by cybersecurity incidents, data security breaches, other security problems, design defects or system failures could have a material negative impact on our business” in Part I, Item 1A., *Risk Factors* of this Annual Report on Form 10-K. ### Governance The Company has implemented a governance framework related to cybersecurity that includes operational risk-mitigation practices and Board-level cybersecurity risk oversight. Our management team is charged with managing cybersecurity risk and identifying material cybersecurity risk exposures to our company and carries out this function primarily through our Information Security organization, which is led by our Chief Information Security Officer (“CISO”) who has over 25 years of experience managing global information technology and cybersecurity operations, having served in executive roles up to Chief Information Officer, and holding multiple industry-recognized certifications such as Certified Information Systems Security Professional and Certificate of Cloud Security Knowledge, as well as a certificate from the Stanford Advanced Cybersecurity Program. Our CISO reports to our Chief Information Officer, who has more than 25 years of experience in information technology. Additionally, our Cybersecurity Incident Response Plan discussed above calls for the establishment of an Impact Assessment Committee, which consists of members of executive leadership and is convened on an ad hoc basis to assess the detailed business impact of a cybersecurity incident. The Impact Assessment Committee is led by our Chief Information Security Officer and includes members of the executive leadership team. During a cybersecurity incident, the Impact Assessment Committee receives incident updates to support strategic decision-making regarding the Company’s response, with a focus on prioritizing safe, secure, and efficient business continuity or restoration of services, as appropriate. The Impact Assessment Committee works with the Company’s internal and external legal counsel to determine and facilitate appropriate communications with the Board of Directors. Our Board of Directors is responsible for overseeing the cybersecurity risk management process and exercises this risk oversight through both our full Board of Directors and its Audit Committee. Our Board of Directors has delegated to the Audit Committee the responsibility to oversee risks related to cybersecurity threats, and our Audit Committee Charter requires the Audit Committee to review and discuss with management the Company’s policies with respect to risk assessment and enterprise risk management and to review the risk exposure of the Company related to the Committee’s areas of responsibility, including with respect to cybersecurity. In carrying out this role, the Audit Committee meets with our Chief Information Security Officer regularly and receives at least quarterly reports on cybersecurity matters. Additionally, at least annually, our Chief Audit Executive, who manages the day-to-day activities of our ERM program, reports to our Board of Directors on enterprise risk assessment under our ERM program, providing updates on key risks, status of mitigation efforts and residual risk trends, including an analysis of cybersecurity risks. Also at least annually, our Chief Information Security Officer reports to the full Board of Directors on cybersecurity matters related to or impacting our company and our business. ## Properties As filed, 2,319 characters. Our principal executive offices are currently located at 951 Sandisk Drive, Milpitas, California 95035. Our principal manufacturing, research and development (“R&D”), marketing and administrative facilities as of the date of this Annual Report on Form 10-K were as follows: | Location United States California | Buildings Owned or Leased | Approximate Square Footage | Description | | --- | --- | ---: | --- | | Irvine | Leased | 105,000 | Flash R&D, marketing and sales, and administrative | | Milpitas | Leased | 578,000 | Flash R&D, marketing and sales, and administrative | | Colorado | | | | | Longmont | Leased | 31,000 | Flash R&D | | Minnesota | | | | | Rochester | Leased | 45,000 | Flash product development | | **Asia** | | | | | **Korea** | | | | | Seoul | Leased | 4,000 | Flash R&D | | **China** | | | | | Beijing | Leased | 5,000 | Flash R&D, marketing and sales, and administrative | | Shanghai | Leased | 5,000 | Flash assembly and testing | | Shenzhen | Leased | 6,000 | Flash R&D, marketing and sales, and administrative | | **Taiwan** | | | | | Hsinchu | Leased | 27,000 | Flash R&D | | Taichung | Leased | 6,000 | Flash R&D | | Taipei | Leased | 7,000 | Flash R&D, marketing and sales | | **Japan** | | | | | Fujisawa | Owned | 23,000 | Flash R&D, Sales | | **Malaysia** | | | | | Penang | Owned | 1,177,000 | Flash R&D, manufacturing of media | | **India** | | | | | Bangalore | Owned and Leased | 108,000 | Flash R&D and administrative | | **Middle East** | | | | | **Israel** | | | | | Kfar Saba | Owned | 204,000 | Flash R&D | | Tefen | Owned | 58,000 | Flash R&D | | Omer | Leased | 39,000 | Flash R&D | | **Europe** | | | | | Prague | Leased | 5,000 | Flash R&D, marketing and sales, and administrative | We also lease office space in various other locations throughout the world primarily for R&D, sales, operations, manufacturing, administration and technical support. We believe our present facilities are adequate for our current needs, although we update our facilities from time to time to meet anticipated future technological and market requirements. All of our flash-based memory wafers are manufactured by the Flash Ventures in purpose-built wafer fabrication facilities that the Flash Ventures lease, located in Yokkaichi and Kitakami, Japan. ## Legal proceedings As filed, 221 characters. There are no material legal proceedings, other than ordinary routine litigation incidental to the Company, to which we or any of our subsidiaries is a party or of which any of our or our subsidiaries’ property is subject. ## Management's discussion and analysis As filed, 47,365 characters. The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results. You should read this information in conjunction with the Consolidated Financial Statements and the notes thereto included in Part II, Item 8., of this Annual Report on Form 10-K. See also “Forward-Looking Statements” immediately prior to Part I, Item 1., of this Annual Report on Form 10-K. For management’s discussion of our consolidated results for the year ended June 27, 2025 in comparison with the combined results for the year ended June 28, 2024, and other financial information related to fiscal year 2025, refer to Part II, Item 7., “*Management’s Discussion and Analysis of Financial Condition and Results of Operations,”* included in our 2025 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on August 21, 2025. Unless otherwise indicated or the context requires, references herein to specific years and quarters are to our fiscal years and fiscal quarters. As used herein, the terms “we,” “us,” “our,” and the “Company” refer to Sandisk Corporation and its subsidiaries. ### Overview ### Our Business Sandisk is a leading global semiconductor memory company with more than 30 years of innovation in NAND flash technology. We are a vertically integrated solutions provider with ownership of chip-level design and IP, front and back-end manufacturing, as well as systems engineering and design. With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful flash storage solutions for artificial intelligence (“AI”) workloads in datacenters, edge devices, and consumer applications. Our technologies enable everyone from students, gamers, and home offices to the largest enterprises and public clouds to produce, analyze, and store data. Our solutions include a broad range of solid-state drives (“SSDs”), embedded products, removable cards, universal serial bus drives and wafers and components. Our broad portfolio of technology and products addresses multiple end markets of “Datacenter” (formerly referred to as “Cloud”), “Edge” (formerly referred to as “Client”), and “Consumer.” The Datacenter end market is comprised primarily of products for datacenters, cloud service providers, and private cloud customers. Through the Edge end market, we provide our original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, physical AI, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast presence around the world. The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal years 2025 and 2024, which ended on June 27, 2025 and June 28, 2024, respectively, were each comprised of 52 weeks, with each fiscal quarter consisting of 13 weeks. Fiscal year 2026 was comprised of 53 weeks and ended on July 3, 2026, with the first fiscal quarter consisting of 14 weeks. Unless otherwise indicated or the context requires, references herein to specific years and quarters are to fiscal years and fiscal quarters, and references to financial information are on a consolidated basis. ### The Separation On October 30, 2023, Western Digital Corporation (“WDC”) announced that its board of directors (the “WDC Board of Directors”) authorized WDC management to pursue a plan to separate the Company into an independent public company (the “separation” or “the spin-off”). The separation received final approval by the WDC Board of Directors and was completed on February 21, 2025. Prior to February 21, 2025, we were wholly owned by WDC. On February 21, 2025, WDC executed the spin-off of the Company through WDC’s pro rata distribution of 116,035,464, or 80.1%, of the Company’s outstanding shares of common stock to holders of WDC’s common stock. Each WDC stockholder received one-third (1/3) of one share of the Company’s common stock for each share of WDC’s common stock held by such WDC stockholder as of February 12, 2025, the record date of the distribution. Upon completion of the separation, WDC owned 28,827,787, or 19.9%, of the outstanding shares of the Company’s common stock. Following the distribution, the Company became an independent publicly listed company, and on February 24, 2025, the Company began trading as an independent publicly traded company under the stock symbol “SNDK” on Nasdaq. On June 9, 2025, WDC disposed of 21,314,768, or 14.6%, of our common stock through an exchange of our common stock for WDC debt held by WDC creditors, which shares were sold by affiliates of the WDC creditors in a registered public offering by the Company. On February 18, 2026, WDC disposed of an additional 5,821,135 outstanding shares of the Company through an exchange of Sandisk’s common stock for WDC debt held by WDC creditors, which shares were sold by affiliates of the WDC creditors in a registered public offering by us. All expenses for these offerings were paid for by us. Following this transaction, WDC continued to retain 1,691,884 of the outstanding shares of the Company’s common stock and, as of March 19, 2026, the sale of such shares was no longer subject to restriction, and we were no longer required to pay any expenses associated with WDC’s eventual exchange or distribution of our shares. Subsequent to this date, WDC has disposed of additional outstanding shares of our common stock in exchange for shares of its outstanding common stock and has announced that it expects to monetize all remaining shares of Sandisk common stock held by it by the end of 2026 in one or more subsequent exchanges for its outstanding common stock. ### Goodwill Impairment As discussed in Part II, Item 8., Note 5, *Supplemental Financial Statement Data* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, subsequent to the separation, we conducted a quantitative analysis of potential goodwill and long-lived assets impairments, in accordance with Accounting Standards Codification (“ASC”) No. 350, Intangibles - Goodwill and Other. This analysis indicated that the estimated carrying value of our reporting unit exceeded its fair value. Consequently, we recorded a goodwill impairment charge of $1.8 billion during the fiscal year ended June 27, 2025. For the year ended July 3, 2026, there were no goodwill impairment charges recorded. ### Financing Activities Prior to the separation, we received financing from certain of WDC’s subsidiaries in the form of borrowings under revolving credit agreements and promissory notes to fund activities primarily related to Flash Ventures. Additional information regarding our outstanding notes due to (from) Western Digital Corporation is included in Part II, Item 8., Note 10, *Related Parties and Related Commitments and Contingencies* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. As discussed in Part II, Item 8., Note 8, *Debt* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, on February 21, 2025, we entered into a loan agreement (the “Loan Agreement”) comprised of a seven-year Term Loan B facility in an aggregate principal amount of $2.0 billion (the “Term Loan Facility”) and a five-year revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of $1.5 billion, including up to $150 million for letters of credit. On February 21, 2025, we borrowed $2.0 billion under the Term Loan Facility. We used a portion of the proceeds of the borrowing to make a net distribution payment of $1.5 billion to WDC, with the remainder used for general corporate purposes of the Company. The proceeds of the Revolving Credit Facility may be used by us for working capital and general corporate purposes. On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment of $46 million resulting from the write-off of the remaining unamortized issuance costs. As of July 3, 2026, we have drawn no amounts under the Revolving Credit Facility. ### Operational Update In 2026, we continued to observe that the rapid growth of AI infrastructure is driving demand for high-performance storage products, and AI adoption is driving the need for NAND storage to support these workloads, leading to increased revenues when compared to prior periods. The current demand environment has led to pricing shifts that have positively impacted our business, and we expect these favorable pricing trends to have a positive impact on our revenue and cash flows from operations. We expect AI-driven demand to persist through calendar year 2027 and beyond. Accordingly, we expect to invest in, and allocate resources to, high-value opportunities for both the short-term and long-term benefit of our customers and us. There are pending and ongoing investigations initiated by the United States under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 that may impact tariff rates for our products. Currently, the majority of our products sold in the U.S. are exempt from tariffs, but additional tariff increases, or the loss of applicable exemptions, would increase the cost of goods sold for our products sold in the U.S., which could negatively impact our margins and financial performance. Increases in the price of our products in response to increased costs may adversely impact demand for those products in the U.S., which could also negatively impact our performance and financial results. Future trade policies and regulations in the U.S. and other countries, the terms of any trade arrangements that may be negotiated between the U.S. and other countries, the scope, amount, or duration of tariffs that may be imposed by any country, and the impact of these factors on our business are uncertain and may contribute to increased costs and reduced demand for our products, each of which could harm our financial performance. Commencing in fiscal 2026, we entered into long-term agreements, which we also refer to as New Business Models, or “NBMs,” with several Datacenter and Edge customers. These agreements generally commit us to deliver, and our customers to purchase, a stated volume of products, mostly over multi-year periods. The agreements include pricing mechanisms consisting of fixed and variable components and are supported by financial guarantees that are intended to provide additional protection in the event a customer does not satisfy their contractual purchase obligations. As NBMs are expected to become our predominant way of doing business, we believe that this business model will contribute to greater predictability of revenue, support production planning, and enhance supply assurance for our customers. While these agreements do not eliminate the risks associated with customer demand, market conditions, or operational execution, we believe they reduce certain elements of industry cyclicality and support our long-term strategic and financial objectives. We will continue to actively monitor developments impacting our business and may take additional responsive actions that we determine to be in the best interest of our business and stakeholders. ### Basis of Presentation On February 21, 2025, the Company became a standalone publicly traded company, and its financial statements are now presented on a consolidated basis. Prior to the separation, the Company’s historical consolidated financial information was derived from WDC’s consolidated financial statements and accounting records and prepared as if the Company existed on a standalone basis. The financial statements for all periods presented, including the historical results of the Company prior to February 21, 2025, are now referred to as “Consolidated Financial Statements” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the policies and practices that are generally accepted in the industry in which it operates, consistent with prior statements. The following discussion reflects our financial condition and results of operations as set forth in the Consolidated Financial Statements included in this Annual Report on Form 10-K. The Consolidated Statements of Operations include all revenues and costs directly attributable to us, including costs for facilities, functions, and services used by us. Prior to the separation, our business had historically functioned together with the other businesses controlled by WDC. Accordingly, we relied on WDC’s corporate overhead and other support functions. Therefore, certain corporate overhead and shared costs were allocated to us including (i) certain general and administrative expenses related to WDC’s support functions that are provided on a centralized basis within WDC (e.g., expenses for corporate facilities, executive oversight, treasury, finance, legal, human resources, compliance, information technology, employee benefit plans, stock compensation plans and other corporate functions), and (ii) certain operations support costs incurred by WDC, including product sourcing, maintenance and support services, and other supply chain functions. These expenses were specifically identified, when possible, or allocated based on revenues, headcount, usage or other allocation methods that are considered to be a reasonable reflection of the utilization of services provided or benefit received. While management considers that such allocations were made on a reasonable basis consistent with benefits received, the Consolidated Financial Statements included in this Annual Report on Form 10-K may not be indicative of our future performance, do not necessarily include the actual expenses that would have been incurred by us and may not reflect our results of operations, financial position, and cash flows had we been a separate, standalone company during the periods presented. For additional information, see Part II, Item 8., Note 1, *Organization, Basis of Presentation and Summary of Significant Accounting Policies* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Results of Operations ### Overview The following table sets forth, for the periods presented, selected summary information from our Consolidated Statements of Operations by U.S. dollars and percentage of net revenue(1): *(in millions, except percentages)* | | Year Ended 2026 | | 2025 | | 2024 | | | --- | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue, net | $20,248 | 100.0% | $7,355 | 100.0% | $6,663 | 100.0% | | Cost of revenue | 5,776 | 28.5 | 5,143 | 69.9 | 5,591 | 83.9 | | Gross profit | 14,472 | 71.5 | 2,212 | 30.1 | 1,072 | 16.1 | | Operating expenses: | | | | | | | | Research and development | 1,328 | 6.6 | 1,132 | 15.4 | 1,061 | 15.9 | | Selling, general and administrative | 676 | 3.3 | 573 | 7.8 | 455 | 6.8 | | Goodwill impairment | — | — | 1,830 | 24.9 | — | — | | Loss on debt extinguishment | 46 | 0.2 | — | — | — | — | | Business separation costs | 25 | 0.1 | 67 | 0.9 | 64 | 1.0 | | Employee termination and other | (2) | — | 21 | 0.3 | (40) | (0.6) | | (Gain) loss on business divestiture | 10 | — | (34) | (0.5) | — | — | | Total operating expenses | 2,083 | 10.2 | 3,589 | 48.8 | 1,540 | 23.1 | | Operating income (loss) | 12,389 | 61.3 | (1,377) | (18.7) | (468) | (7.0) | | Interest and other income (expense), net: | | | | | | | | Gain (loss) on equity securities, net | 808 | 4.0 | (2) | — | 1 | — | | Interest income | 70 | 0.3 | 22 | 0.3 | 12 | 0.2 | | Interest expense | (73) | (0.4) | (63) | (0.9) | (40) | (0.6) | | Other income (expense), net | (177) | (0.9) | (59) | (0.8) | (8) | (0.1) | | Total interest and other income (expense), net | 628 | 3.0 | (102) | (1.4) | (35) | (0.5) | | Income (loss) before taxes | 13,017 | 64.3 | (1,479) | (20.1) | (503) | (7.5) | | Income tax expense | 1,584 | 7.8 | 162 | 2.2 | 169 | 2.5 | | Net income (loss) | $11,433 | 56.5% | $(1,641) | (22.3)% | $(672) | (10.0)% | (1) Percentage may not total due to rounding. The following table sets forth, for the periods presented, summary information regarding our disaggregated revenue: *(in millions)* | Revenue by end market: | 2026 | 2025 | 2024 | | --- | ---: | ---: | ---: | | Datacenter | $5,153 | $960 | $325 | | Edge | 12,160 | 4,127 | 4,069 | | Consumer | 2,935 | 2,268 | 2,269 | | **Total revenue** | $20,248 | $7,355 | $6,663 | | Revenue by geography: | | | | | Asia | $14,241 | $4,457 | $4,510 | | Americas | 4,275 | 1,618 | 1,095 | | Europe, Middle East and Africa | 1,732 | 1,280 | 1,058 | | **Total revenue** | $20,248 | $7,355 | $6,663 | 46 Our broad portfolio of technology and products addresses multiple end markets. Datacenter represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers. Through the Edge end market, we provide our OEM and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, physical AI, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast presence around the world. ### Net Revenue Net revenue increased 175%, or $12,893 million, in 2026 compared to 2025, due to a 437% increase in Datacenter revenue, a 195% increase in Edge revenue, and a 29% increase in Consumer revenue. Total products sold increased by mid-teens percent on an exabyte basis. Datacenter revenue increased 437%, or $4,193 million, in 2026 compared to 2025, primarily due to higher sales and higher pricing. Total products sold increased by almost 120% on an exabyte basis. Revenue per gigabyte increased by almost 150%. Edge revenue increased 195%, or $8,033 million, in 2026 compared to 2025, primarily due to higher sales and higher pricing. Total products sold increased by high single-digits percent on an exabyte basis. Revenue per gigabyte increased by almost 180%. Consumer revenue increased 29%, or $667 million in 2026 compared to 2025, primarily due to higher pricing partially offset by lower sales. Total products sold decreased by mid-teens percent on an exabyte basis. Revenue per gigabyte increased by low-fifties percent. The changes in net revenue by geography in 2026 compared to 2025 primarily reflected higher revenue in the Asia and Americas regions from Edge and Datacenter customers, respectively. Consistent with standard industry practice, we offer sales incentives and marketing programs that provide customers with price protection and other incentives or reimbursements that are recorded as reductions of gross revenue. For 2026, 2025 and 2024, these programs represented 11%, 19%, and 19%, respectively, of gross revenues. The amounts attributed to our sales incentive and marketing programs generally vary according to several factors, including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix, and overall availability of products. Changes in future customer demand and market conditions may require us to adjust our incentive programs as a percentage of gross revenue. ### Gross Profit and Gross Margin Gross profit increased $12,260 million in 2026 compared to 2025, primarily due to higher sales and higher pricing in 2026 compared to 2025 as described above. Gross profit margin increased 4,100 basis points in 2026 compared to 2025 primarily due to higher sales and higher pricing. ### Operating Expenses ### Research and development Research and development (“R&D”) expenses increased $196 million in 2026 compared to 2025, primarily due to a $136 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount, a $28 million increase in spending for R&D projects as we continue to invest in innovation, and a $24 million increase in stock based compensation. ### Selling, general and administrative Selling, general and administrative expenses increased $103 million in 2026 compared to 2025, primarily due to a $68 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount, partially offset by a $51 million decrease in materials due to a change in business practice for the launch of new products whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The costs of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period, partially offset by a $32 million increase in sales and marketing expenses, and a $15 million increase in outside services. ### Goodwill impairment Goodwill impairment decreased $1.8 billion in 2026 compared to 2025 due to an impairment charge resulting from the difference between the carrying value of our reporting unit and its fair value that was recognized in the previous fiscal year. No such impairment charge was incurred during the current fiscal year. ### Loss on debt extinguishment Loss on debt extinguishment increased $46 million in 2026 compared to 2025 due to the write-off of the remaining unamortized issuance costs in connection with the early settlement of the Company’s Term Loan Facility. ### Business separation costs Business separation costs decreased $42 million in 2026 compared to 2025, primarily due to the completion of the separation from WDC. ### Employee termination and other Employee termination and other charges decreased $23 million in 2026 compared to 2025 as there were no restructuring actions taken in the current period. ### Gain on business divestiture Gain on business divestiture decreased $44 million in 2026 compared to 2025 primarily due to the pre-tax gain on the sale of 80% of the Company’s interest in SanDisk Semiconductor (Shanghai) Co. Ltd. (“SDSS”) recognized in the prior fiscal year and no comparable transaction in the current fiscal year. ### Interest and Other Income (Expense), net Interest and other income (expense), net increased $730 million in 2026 compared to 2025, primarily due to a gain on equity securities, due to the Company’s investment in Nanya Technology Corporation (“Nanya”), for which there was no activity in the comparable year. This $807 million gain was offset by a $118 million increase in other expenses which was primarily due to the settlement of certain non-operating legal matters, partially offset by a $48 million increase in interest income related to cash and investment accounts. ### Income Tax Expense H.R. 1, more widely known as the One Big Beautiful Bill Act (“OBBBA”), was signed into law on July 4, 2025. It reversed the requirement for capitalization of U.S. research and development expenditures that came into law under the Tax Cuts and Jobs Act of 2017, but the mandatory requirement of capitalization of foreign research and development expenditures remains. The tax rates for income earned by our foreign subsidiaries will also be changed under H.R. 1, which applies to our fiscal years 2027 and onward. Depending on our operating results, these changes can materially impact our effective tax rate and reduce our operating cash flows. During the fiscal year ended July 3, 2026, we recorded a $10 million tax benefit in relation to the OBBBA’s impact on the Company’s 2025 tax provision. On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which contained significant changes to laws related to tax, climate, energy, and health care. The tax measures include, among other things, a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income (“AFSI”) exceeding $1.0 billion. We do not expect to be subject to the CAMT of 15% for fiscal year 2026 as our average annual AFSI did not exceed $1.0 billion for the preceding three-year period. We expect to be subject to CAMT in fiscal year 2027. On December 20, 2021, the Organisation for Economic Co-operation and Development G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two (“Pillar Two”). Pillar Two is currently effective in most of the jurisdictions in which we operate. Accordingly, these taxes are included in the Company’s Income tax expense for the year ended July 3, 2026. The following table presents our Income tax expense and the effective tax rate: *(in millions)* | | 2026 | 2025 | 2024 | | --- | ---: | ---: | ---: | | Income (loss) before taxes | $13,017 | $(1,479) | $(503) | | Income tax expense | 1,584 | 162 | 169 | | Effective tax rate | 12% | (11)% | (34)% | 48 The relative mix of earnings and losses by jurisdiction, foreign-derived deduction-eligible income, credits, and tax holidays in Malaysia that will expire at various dates during years 2028 through 2031 resulted in decreases to the effective tax rate below the U.S. statutory rate for the year ended July 3, 2026. The primary drivers of the difference between the effective tax rate for the year ended June 27, 2025 and the U.S. federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the goodwill impairment, the foreign income inclusion, credits, and tax holidays in Malaysia. For additional information regarding income tax expense, see Part II, Item 8., Note 14, *Income Tax Expense* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Financial condition, liquidity and capital resources The following table summarizes our Consolidated Statements of Cash Flows: *(in millions)* | Net cash provided by (used in): | 2026 | 2025 | 2024 | | --- | ---: | ---: | ---: | | Operating activities | $11,671 | $84 | $(309) | | Investing activities | (1,386) | 556 | 210 | | Financing activities | (7,001) | 518 | 136 | | Effect of exchange rate changes on cash | (3) | (5) | (1) | | Net increase in cash and cash equivalents | $3,281 | $1,153 | $36 | In alignment with market conditions, we maintained what we believe to be a conservative capital expenditure strategy for fiscal years 2026 and 2025. For fiscal year 2027, we anticipate increased capital investments as we transition to newer nodes to meet the demand and technology needs of our product portfolio. We believe our cash and cash equivalents will be sufficient to meet our working capital and capital expenditure needs, as well as to fund any repurchases of our shares under the Repurchase Program (as defined under *Share Repurchase Authorization* below). We believe we can also access the various capital markets to further supplement our liquidity position if necessary. Our ability to sustain our working capital position is subject to a number of risks that we discuss in Part I, Item 1A., *Risk Factors* included in this Annual Report on Form 10-K. A total of $2,879 million and $692 million of our cash and cash equivalents were held outside of the U.S. as of July 3, 2026 and June 27, 2025, respectively. There are no material tax consequences that were not previously accrued for the repatriation of this cash. Our cash equivalents are primarily invested in money market funds that invest in U.S. Treasury securities and U.S. Government agency securities. ### Operating Activities Net cash provided by operating activities primarily consists of net income or loss, adjusted for non-cash charges, plus or minus changes in operating assets and liabilities. Net cash used as a result of changes in operating assets and liabilities was $212 million for 2026, compared to $380 million net cash provided for 2025 and to $86 million net cash provided for 2024, reflecting an increase in the volume of our business, as discussed above. Changes in our operating assets and liabilities are largely affected by our working capital requirements, which are dependent on the volume of our business and the effective management of our cash conversion cycle as well as timing of payments for taxes. Our cash conversion cycle measures how quickly we can convert our products into cash through sales. The cash conversion cycles were as follows (in days): | | 2026 | 2025 | 2024 | | --- | ---: | ---: | ---: | | Days sales outstanding | 48 | 51 | 48 | | Days in inventory | 178 | 135 | 158 | | Days payable outstanding | (64) | (50) | (54) | | Cash conversion cycle | 162 | 136 | 152 | 49 Changes in days sales outstanding, or DSO, are generally due to the timing of shipments. Changes in days in inventory, or DIO, are generally related to the timing of inventory builds. Changes in days payable outstanding, or DPO, are generally related to production volume and the timing of purchases during the period. From time to time, we modify the timing of payments to our vendors. We make modifications primarily to manage our vendor relationships and to manage our cash flows, including our cash balances. Generally, we make payment term modifications through negotiations with our vendors or by granting to, or receiving from, our vendors’ payment term accommodations. In 2026, DSO decreased 3 days when compared to the prior year, primarily due to the timing of shipments and continued strong receivables collections. DIO increased 43 days over the prior year, primarily due to inventory builds to meet demand. DPO increased 14 days over the prior year, primarily due to routine variations in the timing of purchases and payments. ### Investing Activities Net cash used in investing activities in 2026 primarily consisted of $970 million in purchases of marketable equity securities, $275 million in net issuances from activity related to Flash Ventures and $177 million in capital expenditures, partially offset by $25 million in net proceeds from our sale of a majority interest in one of our subsidiaries. Net cash provided by investing activities in 2025 primarily consisted of $401 million in net proceeds from our sale of a majority interest in one of our subsidiaries and $358 million in net proceeds from activity related to Flash Ventures, partially offset by $204 million in capital expenditures. ### Financing Activities Net cash used in financing activities in 2026 primarily consisted of $4.5 billion in repurchases of the Company’s common stock pursuant to the Initial Repurchase Program (as defined under *Share Repurchase Authorization* below), $1.9 billion for repayments and eventual settlement of the Term Loan Facility, and $630 million in payments of taxes on vested stock awards. Net cash provided by financing activities in 2025 primarily consisted of $2.0 billion in proceeds from borrowings from the Term Loan Facility, $550 million in proceeds from borrowings on notes due to WDC, and $101 million in proceeds from principal repayments on notes due from WDC, partially offset by $1.9 billion transferred to WDC, $100 million in repayment on the Term Loan Facility, and $76 million in net repayments on notes due to WDC. A discussion of our cash flows for 2024, including a comparison of such cash flows to 2023, is included in Part II, Item 7., “*Management’s Discussion and Analysis of Financial Condition and Results of Operations,”* included in our 2025 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on August 21, 2025. ### Off-Balance Sheet Arrangements Other than the Flash Ventures, SDSS and Nanya-related commitments incurred in the normal course of business and certain indemnification provisions (see “*Short-and-Long-term Liquidity—Purchase Obligations and Other Commitments”* below), we do not have any other material off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or any other obligations arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned subsidiaries that are not included in the Consolidated Financial Statements. Additionally, with the exception of Flash Ventures, the SDSS Venture and the Unis Venture, we do not have an interest in, or relationships with, any variable interest entities. For additional information regarding our off-balance sheet arrangements, see Part II, Item 8., Note 10, *Related Parties and Related Commitments and Contingencies* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Short-and-Long-term Liquidity ### Material Cash Requirements The following is a summary of our known material cash requirements, including those for capital expenditures, as of July 3, 2026. In addition, see the discussions further below related to unrecognized tax benefits, foreign exchange contracts, indemnifications, long term agreements and share repurchase authorization. *(in millions)* | | Total | 1 year (2027) | 2-3 Years (2028 - 2029) | 4-5 Years (2030 - 2031) | More than 5 Years (Beyond 2031) | | --- | ---: | ---: | ---: | ---: | ---: | | Flash Ventures related commitments (1) | $6,559 | $2,627 | $2,577 | $1,318 | $37 | | Purchase obligations and other commitments | 4,902 | 726 | 2,993 | 1,111 | 72 | | Operating leases | 299 | 38 | 55 | 44 | 162 | | Total | $11,760 | $3,391 | $5,625 | $2,473 | $271 | (1) Includes Flash Ventures depreciation reimbursement and lease payments on owned and committed equipment, funding commitments for loans and equity investments and payments for other committed expenses, including research and development and building depreciation and payments made directly to Kioxia in consideration for the manufacturing services and continued availability of supply. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments. ### Debt In connection with the separation, on February 21, 2025, we entered into the Loan Agreement, comprised of the $1.5 billion Revolving Credit Facility, on which no amounts have been drawn, and the $2.0 billion Term Loan Facility which was due in 2032. The Company used a portion of the proceeds received from the Term Loan Facility, as well as cash on hand, to make a net distribution payment of $1.5 billion to WDC in exchange for assets, liabilities and certain legal entities of WDC associated with the Company. On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment of $46 million resulting from the write-off of the remaining unamortized issuance costs. As of July 3, 2026, we were in compliance with the Loan Agreement financial covenant that prohibits us from exceeding a maximum Leverage Ratio. Additional information regarding our indebtedness, including information about availability under our revolving credit facility and the principal repayment terms, interest rates, covenants, collateral and other key terms of our outstanding indebtedness, is included in Part II, Item 8., Note 8, *Debt* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Flash Ventures Flash Ventures sells to, and leases back from, a consortium of financial institutions a portion of its tools and has entered into equipment lease agreements, of which we guarantee half of all of the outstanding obligations under each lease agreement. The leases are subject to customary covenants and cancellation events that relate to Flash Ventures and each of the guarantors. The occurrence of a cancellation event could result in an acceleration of the lease obligations and a call on our guarantees. As of July 3, 2026, and as of June 27, 2025, we were in compliance with all covenants under these Japanese lease facilities. See Part II, Item 8., Note 10, *Related Parties and Related Commitments and Contingencies* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding Flash Ventures. ### Purchase Obligations and Other Commitments In the normal course of business, we enter into purchase orders with suppliers for the purchase of components used to manufacture our products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. We also enter into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. These arrangements are included under “*Purchase obligations and other commitments”* in the table above. ### Unrecognized Tax Benefits As of July 3, 2026, our liability for unrecognized tax benefits (excluding accrued interest and penalties) was approximately $323 million. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of July 3, 2026 and June 27, 2025 was $16 million and $11 million, respectively. Of these amounts, approximately $259 million could result in potential cash payments. ### Foreign Exchange Contracts We purchase foreign exchange contracts to hedge the impact of foreign currency fluctuations on certain underlying assets, liabilities and commitments for operating expenses and product costs denominated in foreign currencies. See Part II, Item 7A., *Quantitative and Qualitative Disclosures About Market Risk* included in this Annual Report on Form 10-K for additional disclosures. ### Indemnifications Concurrent with the separation, we and WDC entered into a Tax Matters Agreement under which we and WDC agreed to indemnify each other for certain tax positions. As a result of this agreement, we recorded a tax indemnification liability of $112 million on February 21, 2025, which was recognized as an adjustment to the Net investment from Western Digital Corporation. The remaining tax indemnification liability of $128 million is classified as Other liabilities in the Consolidated Balance Sheets as of July 3, 2026. In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of agreements, products or services to be provided by us, environmental compliance, or intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain of our officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers in certain circumstances. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses. Historically, we have not incurred material costs as a result of obligations under these agreements. ### Long-Term Agreements In connection with entering into long-term agreements with certain customers, we received customer advances that increased our available cash and cash equivalents. We record these customer payments as contract liabilities in advance of performance under such contract. As of July 3, 2026, our contract liabilities were $1,242 million, which primarily relate to the remaining performance obligations under these long-term agreements. Our long-term agreements may also require customers to maintain refundable security deposits with the Company or establish and maintain collateral with third-party financial institutions during the contract term. Security deposits are recorded as refund liabilities within the Consolidated Balance Sheets. As of July 3, 2026, our refund liabilities were $1,500 million. See Part II, Item 8., Note 4, *Revenue* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding our contract liabilities. ### Share Repurchase Authorization On April 30, 2026, we announced that our Board of Directors had approved a $6.0 billion (exclusive of fees and commissions) share repurchase program (the “Initial Repurchase Program”). On August 5, 2026, we announced that our Board of Directors had approved an additional $14.0 billion share repurchase program (exclusive of fees and commissions) (each of the share repurchase programs, collectively and separately, the “Repurchase Program”). The acquisition of shares under the Repurchase Program may be effected from time to time through open market purchases (including under a plan adopted pursuant to Rule 10b5-1 promulgated under the Securities Exchange Act of 1934) or other methods of acquiring shares, in each case on such terms and at such times as shall be permitted by applicable securities laws and determined by our management. We expect shares repurchased under the Repurchase Program to be funded by operating cash flows. The amount and timing of share repurchases will depend on market conditions and other relevant factors. We may suspend or discontinue the Repurchase Program at any time. The approval of the Repurchase Program does not obligate us to repurchase any common shares. During the year ended July 3, 2026, we repurchased 3 million shares of our common stock for an aggregate purchase price of $4.5 billion, and $1.5 billion remained available for future repurchases under the Repurchase Program as of July 3, 2026. ### Recent Accounting Pronouncements For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see Part II, Item 8., Note 2, *Recent Accounting Pronouncements* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Critical Accounting Estimates We have prepared the accompanying Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States. The preparation of the financial statements requires the use of judgments and estimates that affect the reported amounts of revenues, expenses, assets, and liabilities. We have adopted accounting policies and practices that are generally accepted in the industry in which we operate. If these estimates differ significantly from actual results, the impact to the Consolidated Financial Statements may be material. Our accounting policies are fully described in Part II, Item 8., Note 1, *Organization, Basis of Presentation and Summary of Significant Accounting Policies* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. ### Revenue We provide distributors and retailers (collectively referred to as “resellers”) with limited price protection for inventories held by resellers at the time of published list price reductions. We also provide resellers and OEMs with other sales incentive programs. We record estimates of variable consideration related to these items as a reduction of revenue at the time of revenue recognition. We use judgment in our assessment of variable consideration in contracts to be included in the transaction price. We use the expected value method to arrive at the amount of variable consideration. We constrain variable consideration until the likelihood of a significant revenue reversal is not probable and believe that the expected value method is the appropriate estimate of the amount of variable consideration based on the fact that we have a large number of contracts with similar characteristics. For sales to OEMs, the methodology for estimating variable consideration is based on the amount of consideration expected to be earned based on the OEMs’ volume of purchases under agreed-upon sales incentive programs. For sales to resellers, the methodology for estimating variable consideration is based on the amount of consideration expected to be earned from sell-through activity under agreed-upon sales incentive programs. The amount of consideration expected to be earned by the reseller is based on historical pricing information, current pricing trends and channel inventory levels. Estimating the impact of these factors requires judgment and differences between estimated and actual amounts of variable consideration can occur. ### Inventories We value inventories at the lower of cost or net realizable value, or “NRV,” with cost determined on a first-in, first-out basis. We record inventory write-downs of our inventory to the lower of cost or net realizable value or for obsolete or excess inventory based on assumptions, which requires significant judgment. The determination of NRV involves estimating the average selling prices less any selling expenses of inventory based on market conditions and customer demand. To estimate the average selling prices and selling expenses of inventory, we review historical sales, future demand, economic conditions, contract prices and other information. We periodically perform an excess and obsolete analysis of our inventory based on assumptions, which includes changes in business and economic conditions, changes in technology and projected demand of our products. If in any period we anticipate a change in those assumptions to be less favorable than our previous estimates, additional inventory write-downs may be required and could materially and negatively impact our gross margin. If in any period, we can sell inventories that had been written down to a level below the realized selling price in the previous period, higher gross profit would be recognized in that period. Adjustments to the reserve in 2026 were immaterial. ## Market risk As filed, 3,053 characters. ### Equity Prices We are exposed to equity market risk through our investment in marketable equity securities in a foreign entity, which we typically do not attempt to reduce or eliminate through hedging activities. As of July 3, 2026, the fair value of our marketable equity securities was $1,777 million. This represents an investment in Nanya, for which the securities are traded on the Taiwan Stock Exchange. To determine a reasonable possible decrease in the market value of our marketable equity securities, we have analyzed the historical market price sensitivity of our investment. Assuming a decline of 10% in market prices, the aggregate value of our marketable equity securities could decrease by $178 million, based on the fair value as of July 3, 2026. ### Foreign Currency Risk Although the majority of our transactions are in U.S. dollars, some transactions are based in various foreign currencies. We have historically purchased short-term foreign exchange contracts to hedge the impact of foreign currency exchange fluctuations on certain underlying assets, liabilities and commitments for product costs and operating expenses denominated in foreign currencies. The purpose of entering into these hedge transactions is to reduce the impact of foreign currency fluctuations on our results of operations. Substantially all of the contract maturity dates do not exceed twelve months. We do not purchase foreign exchange contracts for speculative or trading purposes. We have performed sensitivity analyses as of July 3, 2026, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant. The analyses cover all of our foreign currency derivative contracts used to offset the underlying exposures. The foreign currency exchange rates used in performing the sensitivity analyses were based on market rates in effect at July 3, 2026. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar would result in a foreign exchange fair value loss of $22 million at July 3, 2026. During 2026, 2025 and 2024, total net realized and unrealized transaction and foreign exchange contract currency losses were $17 million, $29 million, and $4 million, respectively, to our Consolidated Financial Statements. Notwithstanding our efforts to mitigate some foreign exchange risks, we do not hedge all of our foreign currency exposures, and there can be no assurance that our mitigating activities related to the exposures that we do hedge will adequately protect us against risks associated with foreign currency fluctuations. Additionally, the overall effectiveness of our historical hedging strategy is dependent on business, market and global economic conditions. We have revised, and may continue to alter, our hedging program and may choose to discontinue our hedging activities at any time. ## Controls and procedures As filed, 3,091 characters. #### Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) promulgated by the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures were effective. #### Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) of the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Our management evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the period covered by this Annual Report on Form 10‑K. KPMG LLP, our independent registered public accounting firm, which audited the Consolidated Financial Statements included in this Annual Report on Form 10-K, has issued an audit report on our internal control over financial reporting. See Report of Independent Registered Public Accounting Firm herein. #### Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Filed Aug 17, 2026. Source: SEC EDGAR, the filing index for accession 0001628280-26-057406. Last ingested by Listed: Nov 6, 2026, 17:44 ET. No prices; not investment advice.