Sandisk Corporation

Good afternoon and welcome to SanDisk's first quarter fiscal year 2027 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please send to a conference specialist by pressing the star and then zero on your telephone keypads. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ivan Donaldson, Vice President of Investor Relations. Please go ahead.

Before we begin, please note that today's discussion will contain forward-looking statements based on management's current assumptions and expectations, which are subject to various risks and uncertainties. These forward-looking statements include expectations for our technology We will also make references to non-GAAP financial measures today. Reconciliations between the non-GAAP and comparable GAAP financial measures are included in the written materials posted in the investor relations section of our website. With that, I'll turn the call over to David.

Thanks, Ivan. Good afternoon and thank you for joining SanDisk's fiscal first quarter 2027 earnings call. We began fiscal year 2027 with another strong quarter, creating value for customers and shareholders and delivering results above guidance. Our strategy is working and our execution is delivering strong results. Revenue for the quarter was $11 billion, non-GAAP gross margin was 85.1% and non-GAAP earnings per share was $49.51. We generated $5.7 billion of adjusted free cash flow and returned $5 billion to shareholders through share repurchases. Our confidence in the long-term trajectory of the business is grounded in three enduring strengths, technology leadership, deep customer partnerships, and disciplined financial management. These strengths are reinforced by a structural increase in NAND demand, driven particularly by AI, and by customer signals now extending beyond fiscal year 2030 through our new business model, our NBM partnerships. Together, they position us to invest with confidence in our technology roadmap, strengthen and expand our customer relationships, and deliver growing and durable free cash flow while returning capital to shareholders. It starts with our technology leadership. Bix8 is the backbone of our current production portfolio in the industry benchmark for performance and density across TLC and QLC. BICS8 introduce our CMOS directly bonded to array, our CBA architecture, enabling the performance required by AI data center customers in establishing the framework for future generations. BICS9 pairs the proven BICS8 cell array with next generation CMOS, significantly increasing interface performance while retaining a mature memory architecture. BICS-10 advances the full node architecture across both TLC and QLC with a one terabit TLC die designed for performance intensive workloads and a two terabit QLC die delivering industry leading density and twice the read and write bandwidth of BICS-8. Together these technologies will extend the BICS-8 foundation to meet the evolving performance and capacity requirements of next generation infrastructure. Beyond the core roadmap, high bandwidth flash, or HBF, reached an important milestone in the fiscal first quarter with the tape out of our first HBF memory die, with fabrication now underway. As we outlined at Investor Day, HBF is a new memory architecture for inference that targets HBM class read bandwidth with substantially greater capacity to support larger models, longer context lengths, and growing KB caches. It is designed to complement HBM by bringing NAND class capacity closer to the processor, and we remain on track to deliver samples of our first HBF-based products next calendar year. HBF remains a future innovation and is not included in the long-term financial model we introduced at Investor Day. As customer adoption product requirements and manufacturing readiness become more clearly defined, we expect to provide further perspective on the market opportunity. Customers recognize the strength of our innovation and increasingly view SanDisk as an important partner in achieving their growth objectives. Through our NBMs, we continue to evolve customer relationships into long-term partnerships grounded in innovation, collaboration, and shared commitment. Our most recent customers' engagements with the world's leading AI companies indicate further upside in demand for our technology. Our market-leading technology product portfolio and customer partnerships are the backbone of our strong financial position, which allows us to reinvest to maintain our technology leadership and expand supply through R&D-focused CapEx. Each of these strengths is reinforced by tailwinds from AI. The need for scalable memory and storage is expanding as inference workloads grow, making NAN increasingly integral to AI infrastructure. During inference, each generated token must reference the context that precedes it, creating a growing KV cache that serves as the model's working memory. Longer prompts, more complex reasoning, multimodal inputs, and persistent user context materially increase these storage requirements. HBM and DRAM support the highest performance tier, while Flash provides the capacity required to retain broader context efficiently and avoid costly recomputation. We believe this is a secular dynamic that is expanding NAND's role across the AI stack. The memory hierarchy defines the role of each NAND architecture. TLC provides the lower latency, higher rate performance and greater endurance required for active data sets, checkpointing and latency sensitive KV cache workloads. In our AI lab comparison, we presented an investor day Systems utilizing SSD delivered approximately three times the token throughput, while using approximately 75% less energy than comparable systems relying on volatile memory alone. QLC further increases storage density for capacity-intensive applications, such as data lakes, vector databases that power AI search, and retrieval repositories. Between these layers, a growing persistent context tier establishes data to be retained and recalled rather than regenerated. As inference costs decline, we expect the adoption and usage to expand, supporting our view that KVCash will represent approximately one-third of the AI data center flash market by the end of the decade, and that the AI data center opportunity will approach the size of the NAND industry today. Turning to our end markets. In Data Center, our portfolio addresses the full range of AI infrastructure requirements from performance-intensive enterprise SSDs to high-capacity platforms. Demand remains strong and continues to grow, and we estimate that Data Center has expanded from approximately 20% of industry bits early in the decade to roughly half of the industry bits today. This structural shift in customer mix is reshaping industry economics and is central to the transformation underway at SanDisk. This quarter, data center again delivered strong growth and continued to outpace the broader market as we allocated more supply to address the growing demand from this end market. Edge is a large and strategically important market for SanDisk. expanding smartphones, PCs, automotive, tablets, and an expanding range of physical AI applications. Automotive is becoming an increasingly important growth vector in our edge business and a meaningful long-term growth opportunity. We have deepening engagements with leading customers, reinforcing our confidence that automotive can become one of the largest markets within edge over time. Our consumer business remains a differentiated strategic asset, combining direct brand engagement with hundreds of millions of end users and broad shelf presence across the world's leading channel partners. The consumer end market provides a durable foundation for our business, while its direct connection to the market informs product development and provides early insight into shifts in end user demand. Taken together, These results reinforce the durability of the model we outlined at our Investor Day. We have established a strong level of profitability in cash generation, and our focus from here is consistent execution across the portfolio. With that, I'll turn the call over to Luis for a detailed update on our business and outlook.