What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-08-17 compared with 2025-08-21 · 599 added, 472 removed, 947 unchanged (53% of the section changed)

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Report of Independent Registered Public Accounting Firm (Auditor Firm ID:

Consolidated Balance Sheets — As of June 27, 2025 and June 28, 2024

Consolidated Statements of Operations — Three Years Ended June 27, 2025

Consolidated Statements of Comprehensive Loss — Three Years Ended June 27, 2025

Consolidated Statements of Cash Flows — Three Years Ended June 27, 2025

Consolidated Statements of Shareholders' Equity — Three Years Ended June 27, 2025

Consolidated Balance Sheets — As of July 3, 2026 and June 27, 2025

Consolidated Statements of Operations — Three Years Ended July 3, 2026, June 27, 2025, and June 28, 2024

Consolidated Statements of Comprehensive Loss — Three Years Ended July 3, 2026, June 27, 2025, and June 28, 2024

Consolidated Statements of Cash Flows — Three Years Ended July 3, 2026, June 27, 2025, and June 28, 2024

Consolidated Statements of Shareholders’ Equity — Three Years Ended July 3, 2026, June 27, 2025, and June 28, 2024

Notes to Consolidated Financial Statements 63

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders and the Board of Directors

Sandisk Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Sandisk Corporation and subsidiaries (the Company) as of June 27, 2025 and June 28, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the fiscal years in the three-year period ended June 27, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 27, 2025 and June 28, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended June 27, 2025, in conformity with U.S.

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Sandisk Corporation and subsidiaries (the Company) as of July 3, 2026 and June 27, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended July 3, 2026, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of July 3, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 3, 2026 and June 27, 2025, and the results of its operations and its cash flows for each of the years in the three-year period ended July 3, 2026, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 3, 2026 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of variable consideration for sales to resellers

As discussed in Note 1 to the consolidated financial statements, the Company provides resellers with price protection for inventories held by resellers at the time of published list price reductions and other sales incentive programs.

The Company records estimated variable consideration related to these items as a reduction to revenue at the time of revenue recognition.

The Company uses judgment in its assessment of variable consideration in contracts to be included in the transaction price.

For sales to resellers, the Company’s methodology for estimating variable consideration is based on several factors, including historical pricing information, current pricing trends, and channel inventory levels.

We identified the assessment of variable consideration for sales to resellers as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the Company’s assumptions for historical pricing information and the level of channel inventory used to estimate variable consideration for sales to resellers as minor changes in these assumptions could cause significant changes in the estimate.

Sufficiency of audit evidence over revenue, net

As discussed in Note 1 to the consolidated financial statements, substantially all of the Company’s revenue is derived from the sale of tangible products for which the performance obligations are satisfied at a point in time, generally upon delivery in accordance with the shipping terms of the arrangement.

The Company’s processing and recording revenue is reliant upon the Company’s information technology (IT) system.

The Company recorded revenue, net, of $20,248 million for the year ended July 3, 2026.

We identified the evaluation of the sufficiency of audit evidence over revenue, net, as a critical audit matter.

Evaluating the sufficiency of audit evidence required subjective auditor judgment due to the highly automated nature to capture and process revenue data throughout various IT applications.

Involvement of IT professionals with specialized skills and knowledge were required to evaluate the nature and extent of evidence obtained over revenue, net.

The following are the primary procedures we performed to address this critical audit matter.

To assess the reasonableness of the estimated variable consideration for sales to resellers, we developed an independent expectation of the variable consideration for sales to resellers based on historically recorded payments and issued credits and then compared our expectation to the estimated variable consideration recorded.

We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue, net.

For revenue, net, we involved IT professionals with specialized skills and knowledge, who assisted in evaluating the design and tested the operating effectiveness of certain general IT and application controls related to the Company’s automated revenue recognition process, including recording of revenue.

We performed a software-assisted data analysis to test relationships among certain revenue transactions.

In addition, for a sample of revenue transactions, we compared the amounts recognized for consistency with underlying documentation, such as contracts, shipping documents, or other third-party evidence.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We have served as the Company’s auditor since 2023.

Irvine, California

Santa Clara, California

August 17, 2026

SANDISK CORPORATION CONSOLIDATED BALANCE SHEETS

SANDISK CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except par value)

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Other current assets 590 392

Notes due from Western Digital Corporation — 102

Total current assets 12,780 5,086

Marketable equity securities 1,777 —

Property, plant and equipment, net 674 619

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Goodwill 4,994 4,999

Deferred tax assets 58 96

Income tax receivable, non-current 169 80

Deferred tax assets 66 58

Other non-current assets 1,369 1,489

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Accrued compensation 657 173

Income tax payables 43 20

Notes due to Western Digital Corporation — 814

Refund liabilities 1,500 126

Contract liabilities 849 25

Income tax payable, current 1,286 43

Current portion of long-term debt — 20

Total current liabilities 5,581 1,427

Non-current contract liabilities 393 —

Deferred tax liabilities 161 17

Income tax payable, non-current 258 131

Long-term debt — 1,829

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authorized — 450 shares;

issued and outstanding — 146 shares

issued — 149 shares and outstanding — 146 shares (issued and outstanding as of June 27, 2025 — 146 shares)

Treasury stock ( 4,537 ) —

Additional paid-in capital 10,879 11,248

Accumulated deficit ( 1,784 ) —

Accumulated other comprehensive loss ( 256 ) ( 249 )

Net investment from Western Digital Corporation — 11,534

Retained earnings (Accumulated deficit) 9,649 ( 1,784 )

Total shareholders’ equity 15,736 9,216

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The accompanying notes are an integral part of these Consolidated Financial Statements.

SANDISK CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

SANDISK CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

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Goodwill impairment — 1,830 —

Loss on debt extinguishment 46 — —

Business separation costs 25 67 64

Employee termination and other ( 2 ) 21 ( 40 )

Gain on business divestiture ( 34 ) — —

(Gain) loss on business divestiture 10 ( 34 ) —

Total operating expenses 2,083 3,589 1,540

Operating loss

( 1,377 ) ( 468 ) ( 2,035 )

Operating income (loss) 12,389 ( 1,377 ) ( 468 )

Interest and other income (expense), net:

Gain (loss) on equity securities, net 808 ( 2 ) 1

Interest income 70 22 12

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Total interest and other income (expense), net 628 ( 102 ) ( 35 )

Loss before taxes

( 1,479 ) ( 503 ) ( 2,002 )

Income (loss) before taxes 13,017 ( 1,479 ) ( 503 )

Income tax expense 1,584 162 169

$ ( 1,641 ) $ ( 672 ) $ ( 2,143 )

Net loss per common share:

Basic and diluted $ ( 11.32 ) $ ( 4.63 ) $ ( 14.78 )

Net income (loss) $ 11,433 $ ( 1,641 ) $ ( 672 )

Net income (loss) per common share:

Basic $ 77.78 $ ( 11.32 ) $ ( 4.63 )

Diluted $ 73.76 $ ( 11.32 ) $ ( 4.63 )

Weighted average shares outstanding:

Basic and diluted 145 145 145

Basic 147 145 145

Diluted 155 145 145

The accompanying notes are an integral part of these Consolidated Financial Statements.

SANDISK CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

SANDISK CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

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2025 June 28,

$ ( 1,641 ) $ ( 672 ) $ ( 2,143 )

Net income (loss) $ 11,433 $ ( 1,641 ) $ ( 672 )

Other comprehensive income (loss), before tax

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Total other comprehensive income (loss), before tax 7 232 ( 130 )

Income tax benefit (expense) related to items of other comprehensive income (loss), before tax ( 19 ) 21 ( 29 )

Income tax benefit (expense) related to items of other comprehensive income, before tax ( 14 ) ( 19 ) 21

Other comprehensive income (loss), net of tax ( 7 ) 213 ( 109 )

Total comprehensive loss $ ( 1,428 ) $ ( 781 ) $ ( 2,079 )

Total comprehensive income (loss) $ 11,426 $ ( 1,428 ) $ ( 781 )

The accompanying notes are an integral part of these Consolidated Financial Statements.

SANDISK CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS

SANDISK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

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Cash flows from operating activities

$ ( 1,641 ) $ ( 672 ) $ ( 2,143 )

Adjustments to reconcile net loss to net cash provided by (used in) operations:

Net income (loss) $ 11,433 $ ( 1,641 ) $ ( 672 )

Adjustments to reconcile net income (loss) to net cash provided by operations:

Depreciation and amortization 149 163 224

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Deferred income taxes 120 ( 12 ) ( 16 )

Asset Impairment — 4 1

Gain on disposal of assets ( 1 ) ( 60 ) —

Non-cash portion of impairment of cost method investments 1 — —

(Gain) loss on disposal of assets 5 ( 1 ) ( 60 )

(Gain) loss on equity securities, net ( 808 ) 2 ( 1 )

Unrealized foreign exchange (gain) loss 86 ( 25 ) 13

Gain on business divestiture ( 34 ) — —

(Gain) loss on business divestiture 10 ( 34 ) —

Loss on debt extinguishment 46 — —

Amortization of debt issuance costs and discounts 7 3 —

Equity loss in investees, net of dividends received 160 73 49

Gain on sale of investments — ( 1 ) ( 3 )

Other non-cash operating activities, net 23 87 114

Settlement of accrued interest on Notes due to Western Digital Corporation — ( 99 ) —

Other non-cash operating activities, net 19 23 91

Accounts receivable, net ( 3,640 ) ( 100 ) ( 395 )

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Accrued compensation 460 21 99

Refund liability 1,374 25 ( 38 )

Contract liabilities 1,217 ( 11 ) 17

Income taxes payable 1,370 — —

Other assets and liabilities, net ( 129 ) ( 224 ) ( 106 )

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Cash flows from investing activities

Purchase of marketable equity securities ( 970 ) — —

Purchases of property, plant and equipment ( 177 ) ( 204 ) ( 166 )

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Taxes paid on vested stock awards under employee stock plans ( 630 ) ( 13 ) —

Repurchases of common stock ( 4,524 ) — —

Proceeds from debt — 1,970 —

Repayments of debt ( 100 ) — —

Repayment of debt ( 1,900 ) ( 100 ) —

Debt issuance costs — ( 32 ) —

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Origination of Notes due from Western Digital Corporation — — ( 170 )

Net cash provided by financing activities

Net cash provided by (used in) financing activities ( 7,001 ) 518 136

Effect of exchange rate changes on cash ( 3 ) ( 5 ) ( 1 )

Net increase (decrease) in cash and cash equivalents 1,153 36 ( 43 )

Net increase in cash and cash equivalents 3,281 1,153 36

Cash and cash equivalents, beginning of year 1,481 328 292

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Cash paid for income taxes 146 50 —

Accrued purchases of long-lived assets 56 10 11

Unpaid taxes relating to vested stock awards and repurchases of common stock 37 — —

Non-cash transfers of:

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Tax balances from (to) Western Digital Corporation — 8 ( 17 )

8 ( 17 ) ( 2 )

Tax indemnification liability to Western Digital Corporation — ( 112 ) —

The accompanying notes are an integral part of these Consolidated Financial Statements.

SANDISK CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SANDISK CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in millions)

Shares Amount Additional Paid in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Net Investment from Western Digital Corporation Total

Balance at July 01, 2022 — $ — $ — $ — $ ( 407 ) $ 13,384 $ 12,977

— — — — — ( 2,143 ) ( 2,143 )

Foreign currency translation adjustment — — — — ( 35 ) — ( 35 )

Net unrealized gain on derivative contracts

— — — — 99 — 99

Stock-based compensation — — — — — 165 165

Net transfer from Western Digital Corporation — — — — — 376 376

Common Stock Treasury Stock

Shares Amount Shares Amount Additional Paid in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Net Investment from Western Digital Corporation Total

Balance at June 30, 2023 — $ — — $ — $ — $ — $ ( 343 ) $ 11,782 $ 11,439

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Net transfer from Western Digital Corporation — — — — — — — 275 275

— — — — — 275 275

Balance at June 28, 2024 — — — — — — ( 452 ) 11,534 11,082

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Net unrealized gain on derivative contracts — — — — — — 203 — 203

— — — — 203 — 203

Stock-based compensation — — — — 67 — — 115 182

Balance at June 27, 2025 146 1 — — 11,248 ( 1,784 ) ( 249 ) — 9,216

Net income — — — — — 11,433 — — 11,433

Employee stock plans 3 — — — ( 601 ) — — — ( 601 )

Repurchases of common stock — — ( 3 ) ( 4,537 ) — — — — ( 4,537 )

Foreign currency translation adjustment — — — — — — ( 54 ) — ( 54 )

Net unrealized gain on derivative contracts — — — — — — 47 — 47

Stock-based compensation — — — — 232 — — — 232

Balance at July 3, 2026 149 $ 1 ( 3 ) $ ( 4,537 ) $ 10,879 $ 9,649 $ ( 256 ) $ — $ 15,736

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Description of the Company

Sandisk Corporation (“Sandisk, or ” the “Company”) is a leading developer, manufacturer and provider of data storage devices and solutions based on NAND flash technology.

With a differentiated innovation engine driving advancements in storage and semiconductor technologies, Sandisk’s broad and ever-expanding portfolio delivers powerful flash storage solutions for AI workloads in datacenters, edge devices, and consumers.

Sandisk Corporation (“Sandisk”, or the “Company”) is a leading global semiconductor memory company with more than 30 years of innovation in NAND flash technology.

Sandisk is 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.

Sandisk’s broad and ever-expanding portfolio delivers powerful flash storage solutions for artificial intelligence (“AI”) workloads in datacenters, edge devices, and consumer applications.

Sandisk’s technologies enable everyone from students, gamers, and home offices to the largest enterprises and public clouds to produce, analyze, and store data.

The Company’s solutions include a broad range of solid-state drives, embedded products, removable cards, universal serial bus drives and wafers and components.

The Company’s broad portfolio of technology and products addresses multiple end markets of “Cloud,” “Client” and Consumer.” The Company operates primarily in the United States (“U.S.”), and also internationally, with a significant concentration in the Asia Pacific region.

The Company’s 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 Company operates primarily in the United States (“U.S.”), and also internationally, with a significant concentration in the Asia Pacific region.

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”).

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Prior to February 21, 2025, the Company was wholly owned by WDC.

On February 24, 2025, following the separation, the Company began trading as an independent, publicly traded company under the stock symbol “SNDK” on Nasdaq.

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 as of the close of business on February 21, 2025.

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 shares of the Company’s common stock.

On June 6, 2025, WDC disposed of 21,314,768 or 14.6 % of the Company’s common stock through an exchange of Sandisk’s common stock for WDC debt held by WDC creditors.

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.

In connection with the separation, on February 21, 2025, the Company entered into definitive agreements with WDC that set forth the terms and conditions of the spin-off and provided a framework for the relationship between WDC and the Company following the separation.

These agreements include the Separation and Distribution Agreement, which contains certain key provisions related to the spin-off, as well as a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement, an Intellectual Property Cross-License Agreement, a Transitional Trademark License Agreement, and a Stockholder and Registration Rights Agreement , as described in and filed as Exhibits to the Company’s Current Report on Form 8-K on February 24, 2025 and incorporated by reference to this Annual Report on Form 10-K.

These agreements include the Separation and Distribution Agreement, which contains certain key provisions related to the spin-off, as well as a Transition Services Agreement (the “TSA”), a Tax Matters Agreement, an Employee Matters Agreement, an Intellectual Property Cross-License Agreement, a Transitional Trademark License Agreement, and a Stockholder and Registration Rights Agreement , as described in and filed as Exhibits to the Company’s Current Report on Form 8-K on February 24, 2025, and incorporated by reference to this Annual Report on Form 10-K.

Additionally, the Company adopted certain compensation plans filed as Exhibits to the Company’s Registration Statement on Form 10, initially filed with the U.S.

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The Company also entered into various sublease agreements and established a stock compensation incentive plan in connection with the separation.

On February 21, 2025, in connection with the separation, the Company entered into a $ 1.5 billion revolving credit facility that remains undrawn to date, and a $ 2.0 billion term loan facility due in 2032.

Also on February 21, 2025, in connection with the separation, the Company entered into a $ 1.5 billion revolving credit facility that remains undrawn to date, and a $ 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 and 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.

The remaining outstanding balance of the Company’s term loan facility was repaid in full on March 4, 2026.

After the separation, outstanding restricted stock units (“RSU”) and performance stock units (“PSU”) previously granted by WDC to employees of the Company were adjusted per the terms of the Employee Matters Agreement, in an attempt to maintain the economic value of those awards before and after the separation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On June 9, 2025, WDC disposed of 21,314,768 , or 14.6 %, of the Company’s common stock 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 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 the Company.

All expenses for these offerings were paid for by the Company.

Following this transaction, WDC held 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.

Basis of Presentation

On February 21, 2025, the Company became a standalone publicly-traded company, and the Company’s financial statements are now presented on a consolidated basis.

Prior to the separation, the Company’s historical combined financial information was derived from WDC’s consolidated financial statements and accounting records and prepared as if the Company existed on a standalone 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 policies and practices that are generally accepted in the industry in which it operates.

The Company’s significant accounting policies are summarized below.

generally accepted accounting principles (“GAAP”) and the policies and practices that are generally accepted in the industry in which it operates.

Reclassifications

Certain prior period presentations in the Consolidated Financial Statements have been reclassified to conform to the current period presentation.

Contract liabilities (previously presented within Accrued expenses), Refund liability (previously presented within Accrued expenses), and Income tax payable, non-current (previously presented within Other liabilities) were reclassified and presented as separate line items in the Consolidated Financial Statements.

The prior period presentation in Part II, Item 8., Note 9, Segment Reporting , was also reclassified to conform with current period presentation.

These changes in presentation do not affect any previously reported results.

Basis of Consolidation

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dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate for each period for statement of operations items.

Translation adjustments are recorded in Accumulated other comprehensive income (loss), a component of shareholders’ equity.

Translation adjustments are recorded in Accumulated other comprehensive loss, a component of shareholders’ equity.

Unless otherwise noted, all figures within the Consolidated Financial Statements are stated in U.S.

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Prior to the separation on February 21, 2025, the Company was an operating segment of WDC.

Consequently, standalone financial statements were not historically prepared for the Company.

The accompanying Consolidated Financial Statements were prepared based upon WDC’s historical consolidated financial statements and accounting records.

Consequently, standalone financial statements were not historically prepared for the Company and instead were prepared based upon WDC’s historical consolidated financial statements and accounting records.

They were presented on a standalone basis as if the Company’s operations had been conducted independently from WD C.

The Company utilized allocations and carve-out methodologies to prepare these historical Consolidated Financial Statements.

The Consolidated Financial Statements included the historical results of operations, financial position, and cash flows of the Company and were prepared in accordance with GAAP, and the Company adopted accounting policies and practices generally accepted in the industry in which it operates.

Intercompany transactions were eliminated.

With the exception of balances associated with lending arrangements reflected within Notes due to (from) Western Digital Corporation in the Consolidated Balance Sheets, transactions between the Company and WDC were generally considered to be effectively settled in the Consolidated Financial Statements at the time the transactions were recorded.

The Consolidated Financial Statements included the historical results of operations, financial position, and cash flows of the Company and were prepared in accordance with GAAP, and the Company has adopted accounting policies and practices generally accepted in the industry in which it operates.

Intercompany transactions were eliminated, with the exception of balances associated with lending arrangements reflected within Notes due to (from) Western Digital Corporation in the Consolidated Balance Sheets, and transactions between the Company and WDC were generally considered to be effectively settled in the Consolidated Financial Statements at the time the transactions were recorded.

The total net effect of the settlement of these transactions was reflected in the Consolidated Statements of Cash Flows as a financing activity and in the Consolidated Balance Sheets as Net investment from Western Digital Corporation.

General financing activities included the net impact of any cash movements resulting from WDC’s centralized treasury cash management.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Balance Sheets included all assets and liabilities that were identifiable or otherwise attributable to the Company.

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If the Company was not the primary user of the asset, it was excluded entirely from the Consolidated Financial Statements.

WDC historically used a centralized approach to cash management and financing of its operations, as needed.

WDC historically used a centralized approach to cash management and the financing of its operations, as needed.

Certain of the Company’s cash was transferred to WDC according to centrally managed cash programs by treasury, and WDC funded the Company’s operating and investing activities, as needed.

Cash transfers to and from WDC’s cash management accounts were reflected as a component of the Net investment from Western Digital Corporation in the Consolidated Balance Sheets.

Cash and cash equivalents in the Company’s Consolidated Balance Sheets primarily represented cash held locally by entities included in the Company’s Consolidated Financial Statements.

Cash and cash equivalents in the Company’s Consolidated Balance Sheets and Consolidated Statements of Cash Flows primarily represented cash held locally by entities included in the Company’s Consolidated Financial Statements.

None of the debt obligations of WDC or corresponding interest expense were included in the Consolidated Financial Statements, as the Company was neither the legal obligor nor transferee for any portion of such debt.

WDC’s debt obligations were secured by a lien on substantially all assets and properties of WDC and certain key subsidiaries, which included assets and properties of the Company prior to the completion of the separation.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Statements of Operations and Comprehensive Income (Loss) included all revenues and costs directly attributable to the Company as well as an allocation of expenses related to facilities, functions, and services provided by WDC.

The Consolidated Statements of Operations and Comprehensive Income (Loss) for the fiscal year ended June 28, 2024 until the separation on February 21, 2025 , included all revenues and costs directly attributable to the Company as well as an allocation of expenses related to facilities, functions, and services provided by WDC.

Allocation of general corporate expenses from WDC included, but was not limited to, executive management, finance, tax, legal, information technology, employee benefits administration, treasury, risk management, procurement, and other shared services.

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P eriods Post Separation

After the separation on February 21, 2025 , the Company’s financial statements for the period from February 22, 2025, through June 27, 2025, are consolidated financial statements based on the Company’s reported results as a standalone company.

All significant transactions and accounts between controlled entities within the Company were eliminated.

Following the separation, certain functions continue to be provided by or for WDC under the Transition Services Agreement (“TSA”) for up to fifteen months or are being performed using the Company ’ s own resources or third-party service providers.

As of June 27, 2025 , charges under the TSA were not material.

After the separation on February 21, 2025 , the Company’s financial statements for the period from February 22, 2025, through July 3, 2026, are consolidated financial statements based on the Company’s reported results as a standalone company.

All transactions and accounts between controlled entities within the Company have been eliminated.

Following the separation, certain functions continued to be provided by or for WDC for up to fifteen months under the TSA or have been performed using the Company ’ s own resources or third-party service providers.

For the fiscal year ended July 3, 2026 , charges under the TSA were not material.

The term of the TSA ended on June 10, 2026 .

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2024, and 2023, which ended on June 27, 2025 , June 28, 2024 , and June 30, 2023, are each comprised of 52 weeks, with all quarters presented consisting of 13 weeks.

Fiscal year 2026 will be comprised of 52 weeks and end on July 3, 2026.

Unless otherwise indicated, references herein to specific years and quarters are to fiscal years and fiscal quarters, and references to financial information are on a consolidated basis.

Approximately every five to six years, the Company reports 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.

Segment Reporting

The Company develops, manufactures, markets, and sells data storage devices and solutions based on NAND flash technology in the United States (“U.S.”) and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries.

The Company develops, manufactures, markets, and sells data storage devices and solutions based on NAND flash technology in the U.S.

and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries.

The Company manages and reports its business operations under a single reportable operating segment.

Operating segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the Company’s Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance.

The Chief Executive Officer, who is the CODM, evaluates the performance of the Company and makes resource allocation decisions for its single reportable operating segment based upon the Company’s consolidated net income (loss).

The CODM considers variances of actual performance to forecasted amounts when making decisions.

The CODM considers variances of actual performance to forecasted amounts of these profit measures when making decisions.

Asset information is not used by the CODM to evaluate performance or allocate resources.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See Note 9, Segment Reporting, for additional disclosures.

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Management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with GAAP.

These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented, with consideration given to the potential impacts of current macroeconomic conditions, including the evolving impacts from tariffs.

However, actual results could differ materially from these estimates.

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The equity method of accounting is used if the Company’s ownership interest is greater than or equal to 20.0% but less than a majority or where the Company has the ability to exercise significant influence over operating and financial policies.

The Company’s equity in the earnings or losses in equity-method investments is recognized in Other income (expense), net, in the Consolidated Statements of Operations.

The Company’s equity in the earnings or losses in equity-method investments is recognized in Gain (loss) on equity securities, net, in the Consolidated Statements of Operations.

Equity earnings or losses in the Company’s equity method investments (as defined in Note 10, Related Parties and Related Commitments and Contingencies ) are reported on a three-month lag.

If the Company’s ownership interest is less than 20.0% and the Company does not have the ability to exercise significant influence over operating and financial policies of the investee, the Company accounts for these investments at fair value, or if these equity securities do not have a readily determinable fair value, these securities are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes.

These investments are recorded in Other non-current assets in the Consolidated Balance Sheets and are periodically analyzed to determine whether or not impairment indicators exist.

These investments are recorded in either Marketable equity securities or Other non-current assets in the Consolidated Balance Sheets and are periodically analyzed to determine whether or not impairment indicators exist.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Variable Interest Entities

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The carrying value of notes receivable from Flash Ventures (as defined in Note 10, Related Parties and Related Commitments and Contingencies ) also approximates fair value for all periods presented because they bear variable market rates of interest.

The fair value of investments that are not accounted for under the equity method is based on appropriate market information.

The fair value of investments that are not accounted for under the equity method is based on appropriate market information, one of which is marketable equity securities which are reported at fair value.

The carrying amounts of Notes due to (from) Western Digital Corporation approximate their fair value as the notes were due on demand.

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Inventory write-downs are recorded for the valuation of inventory at the lower of cost or net realizable value by analyzing market conditions and estimates of future sales prices as compared to inventory costs and inventory balances.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company evaluates inventory balances for excess quantities and obsolescence on a regular basis by analyzing estimated demand, inventory on hand, sales levels and other information, and reduces inventory balances to net realizable value for excess and obsolete inventory based on this analysis.

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Changes in these estimates could materially affect the Company’s assessment of the fair value and goodwill impairment.

The Company’s assessment resulted in no impairment of goodwill in 2024.

In 2025 and 2023, certain macroeconomic conditions caused the Company to perform a quantitative impairment analysis which resulted in a $ 1.8 billion and $ 671 million impairment of goodwill for the years ended June 27, 2025 and June 30, 2023, respectively.

The Company’s assessment resulted in no impairment of goodwill in 2026 and 2024.

In 2025, certain macroeconomic conditions caused the Company to perform a quantitative impairment analysis which resulted in a $ 1.8 billion impairment of goodwill for the year ended June 27, 2025.

See Note 5, Supplemental Financial Statement Data for additional disclosures.

Revenue and Accounts Receivable

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to the customer.

The transaction price to be recognized as revenue is adjusted for variable consideration, such as sales incentives, and excludes amounts collected on behalf of third parties, including taxes imposed by governmental authorities.

The transaction price to be recognized as revenue is adjusted for variable consideration, such as sales incentives and other amounts determined under the terms of customer contracts, and excludes amounts collected on behalf of third parties, including taxes imposed by governmental authorities.

Variable consideration is estimated and included in the transaction price only to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur.

The Company’s performance obligations are typically not constrained based on the Company’s history with similar transactions and the fact that uncertainties are resolved in a fairly short period of time.

Substantially all of the Company’s revenue is derived from the sale of tangible products for which the performance obligations are satisfied at a point in time, generally upon delivery.

Substantially all of the Company’s revenue is derived from the sale of tangible products for which the performance obligations are satisfied at a point in time, generally upon delivery in accordance with the shipping terms of the arrangement.

The Company’s services revenue mainly includes professional service arrangements and post-contract customer support, warranty as a service and maintenance contracts and was not material for the periods presented.

The performance obligations for the Company’s services are generally satisfied ratably over the service period based on the nature of the service provided and contract terms.

Similarly, revenue from patent licensing arrangements is recognized based on whether the arrangement provides the customer a right-to-use or right-to-access the IP.

Similarly, revenue from patent licensing arrangements, that were also not material for the periods presented, is recognized based on whether the arrangement provides the customer a right-to-use or right-to-access the IP.

Revenue for a right to use arrangement is recognized at the time the control of the license is transferred to the customer.

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The Company uses the practical expedient and does not recognize a significant financing component for payment considerations of less than one year.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company provides distributors and retailers, which we refer to collectively as resellers, with limited price protection for inventories held by resellers at the time of published list price reductions.

The Company also provides resellers and OEMs with other sales incentive programs.

The Company also provides resellers and original equipment manufacturers (“OEMs”) with other sales incentive programs.

The Company records estimated variable consideration related to these items as a reduction of revenue at the time of revenue recognition.

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For sales to OEMs, the Company’s methodology for estimating variable consideration is based on the amount of consideration expected to be earned based on the OEMs’ volume of purchases from the Company or other agreed-upon sales incentive programs.

For sales to resellers, the Company’s methodology for estimating variable consideration is based on several factors including historical pricing information, current pricing trends and channel inventory levels.

For sales to resellers, the Company’s methodology for estimating variable consideration is based on the amount of consideration expected to be earned from reseller sell-through activity under agreed upon sales incentives programs.

The amount of consideration to be earned by the reseller is based on historical pricing information, current pricing trends and channel inventory levels.

Differences between the estimated and actual amounts of variable consideration are recognized as adjustments to revenue.

Marketing development program costs are typically recorded as a reduction of the transaction price and, therefore, of revenue.

The Company nets sales rebates against open customer receivable balances if the criteria to offset are met, otherwise they are recorded in other accrued liabilities.

Marketing development program costs are typically recorded as a reduction of the transaction price and, therefore, as a reduction of revenue.

The Company nets sales rebates against open customer receivable balances if the criteria to offset are met, otherwise they are recorded in refund liabilities.

For contracts with multiple performance obligations, the Company evaluates whether each deliverable is a distinct promise and should be accounted for as a separate performance obligation.

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If applicable, the Company allocates the transaction price to the performance obligations of each distinct product or service, or distinct bundle, based on their relative standalone selling prices.

The Company’s contract liabilities reflect consideration received from customers in advance of the Company satisfying its performance obligations, and primarily include advances under long-term agreements, which we also refer to as New Business Models or “NBMs”.

Contract liabilities are recognized as revenue as the related goods or services are transferred to the customer.

The Company’s NBMs may 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.

The Company’s right to access collateral maintained with third-party

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

financial institutions is contingent upon the occurrence of specified events of default or breach by the customer, as defined in the respective NBMs.

The Company does not control the collateral or have an unconditional right to the collateral unless and until a specified customer default or breach event occurs.

Collateral amounts are not recognized in the Consolidated Financial Statements until a triggering event as defined in the underlying NBM has occurred.

The Company records an allowance for doubtful accounts by analyzing specific customer accounts and assessing the risk of loss based on insolvency or other collection issues.

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Such changes are generally a result of differences between forecasted and actual return rate experience and costs to repair and could differ significantly from the estimates.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Litigation and Other Contingencies

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Research and Development (“R&D”) expenditures are expensed as incurred.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is subject to income tax laws and regulations in the jurisdictions in which it operates.

These laws and regulations continue to evolve, and their interpretation and application may vary among taxing authorities.

The interpretation and application of tax laws and regulations to the Company's facts and circumstances involves significant judgment and may not be uniformly applied by all tax authorities.

Changes in tax laws, regulations, administrative practices, or interpretations could affect the Company's tax positions and related estimates.

Accordingly, the ultimate resolution of tax matters may differ from the Company's current estimates and assumptions.

Income taxes are calculated as if the Company filed U.S.

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Basic net income (loss) per common share is computed using the weighted average number of shares of common stock outstanding during the period.

Diluted net income (loss) per common share is computed using the weighted average shares of common stock outstanding during the period and potentially dilutive common shares, including the effect of RSUs, PSUs, and right to purchase shares of common stock under the Company’s Employee Stock Purchase Program (“ESPP”) using the treasury stock method.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Diluted net income (loss) per common share is computed using the weighted average shares of common stock outstanding during the period and potentially dilutive common shares, including the effect of RSUs, PSUs, and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Program (“ESPP”), using the treasury stock method.

Stock-based Compensation Expense

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The fair value of RSUs is determined on the grant date based on the Company’s stock price at that time.

The fair value of market-conditioned PSUs awards is determined on the grant date using a Monte Carlo simulation model, which estimates the probability of satisfying the market conditions of the award.

The fair value of market-conditioned PSU awards is determined on the grant date using a Monte Carlo simulation model, which estimates the probability of satisfying the market conditions of the award.

Forfeitures are recognized as they occur.

Stock-based compensation cost is recorded in Cost of Revenue and Operating Expenses in the Consolidated Statement of Income based on the employees’ respective functions.

Stock-based compensation cost is recorded in Cost of Revenue and Operating Expenses in the Consolidated Statements of Operations based on the employees’ respective functions.

Prior to the separation, the Consolidated Statements of Operations included all stock-based compensation expenses for WDC RSU and PSU awards directly attributable to Sandisk’s employees, as well as an allocation of WDC’s corporate and shared functional employees’ expenses.

See Note 12, Shareholders’ Equity for additional disclosures.

Treasury Stock

Treasury stock is carried at cost.

Upon retirement of treasury stock, any excess of the repurchase price paid over par value is allocated between additional paid-in capital and retained earnings.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other comprehensive income (loss), net of tax

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The Company does not purchase foreign exchange contracts for speculative or trading purposes.

The Company had foreign exchange contracts with commercial banks for European euro, Canadian dollar, Japanese yen, Malaysian ringgit, Korean won and Israeli shekel, which had an aggregate notional amount of $ 2.5 billion and $ 2.9 billion at June 27, 2025 and June 28, 2024, respectively.

The Company had foreign exchange contracts with commercial banks for European euro, Japanese yen, Malaysian ringgit, Philippine peso, Thai baht, Korean won and Israeli shekel, which had an aggregate notional amount of $ 4.2 billion and $ 2.5 billion at July 3, 2026 and June 27, 2025 , respectively.

If the derivative is designated as a cash flow hedge and is determined to be highly effective, the change in fair value of the derivative is initially deferred in Other comprehensive income (loss), net of tax.

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Accounting Pronouncements Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which expands segment reporting requirements, primarily through enhanced disclosures surrounding significant segment expenses.

This ASU expands on existing segment reporting requirements to require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to an entity’s CODM, a description of other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources.

These incremental disclosures are required beginning with the Company’s financial statements for the fiscal year ending 2025.

The Company adopted the guidance retrospectively in the fourth quarter of fiscal 2025.

See Note 9, Segment Reporting, for additional disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” This ASU calls for enhanced income tax disclosure requirements surrounding the tabular rate reconciliation and income taxes paid.

The Company is currently compiling the information required for these disclosures.

These incremental disclosures will be required beginning with the Company’s financial statements for the year ending July 3, 2026, with early adoption permitted.

The Company expects to provide any required disclosures at that time.

The Company adopted this ASU for the fiscal year ended July 3, 2026, and the resulting incremental disclosures have been applied prospectively.

The adoption of this ASU did not impact the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Cash Flows and Consolidated Statements of Shareholders’ Equity.

See Note 14, Income Tax Expense .

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company expects to provide any required disclosures for annual reporting periods included in the Company’s financial statements for the year ending June 30, 2028.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software,” which is intended to modernize the accounting for software costs.

The amendments eliminate references to software development project stages and introduce a new threshold for capitalization.

This ASU requires an entity to start capitalizing software costs when both of the following occur:

(i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”).

This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently assessing the impact of this ASU in the Company’s financial statements.

The ASU will be effective beginning with the Company’s financial statements for the year ending June 29, 2029.

In December 2025, the FASB issued ASU 2025-10, “Accounting for Government Grants Received by Business Entities,” which is intended to clarify the accounting treatment for government grants received by business entities.

This ASU establishes the accounting for a government grant received by a business entity, including guidance for a grant related to an asset and a grant related to income.

This ASU also provides guidance on recognition, measurement and presentation of government grants received by a business entity.

This ASU is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods.

The Company is currently assessing the impact of this ASU in the Company’s financial statements.

This ASU will be effective beginning with the Company’s financial statements for the year ending June 28, 2030.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270):

Narrow-scope Improvements.” This ASU makes targeted, narrow-scope improvements to the interim reporting guidance to clarify application and to improve consistency in practice.

The amendments do not change the underlying principles of interim reporting.

This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently assessing the impact of this ASU in the Company’s financial statements.

The ASU will be effective beginning with the Company’s financial statements for the year ending June 29, 2029.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information and Concentrations of Risk

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The Company’s broad portfolio of technology and products addresses multiple end markets.

Cloud represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers.

Through the Client end market, the Company provides its OEM and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces.

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, the Company provides its 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 the Company’s broad range of retail and other end-user products, which capitalize on the strength of the Company’s product brand recognition and vast points of presence around the world.

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Revenue by end market:

Cloud $ 960 $ 325 $ 500

Client 4,127 4,069 3,637

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

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s operations outside the United States include owned manufacturing facilities in Malaysia, manufacturing operations contracted via related parties in China and Japan, as well as sales offices throughout the Americas, Asia Pacific, Europe and the Middle East.

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United States $ 3,714 $ 1,447 $ 933

$ 1,447 $ 933 $ 1,133

2,040 2,549 2,302

China 4,503 2,040 2,549

Hong Kong 5,126 1,301 1,044

Europe, Middle East and Africa 1,280 1,058 930

Rest of Asia 4,612 1,116 917

Europe, Middle East and Africa 1,732 1,280 1,058

Other 561 171 162

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(1) Net revenue is attributed to geographic regions based on the ship-to location of the customer.

License and royalty revenue is attributed to countries based upon the location of the headquarters of the licensee.

License and royalty revenue, which is immaterial, is attributed to countries based upon the location of the headquarters of the licensee.

Disaggregated Long-lived Assets

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Total long-lived assets $ 674 $ 619

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Customer Concentration and Credit Risk

1 unchanged sentence

For 2026, 2025 and 2024, no single customer accounted for more than 10% of the Company’s net revenue.

For 2023 , one customer accounted for 15 % of the Company’s net revenue.

For 2026, 2025, and 2024, the Company’s top 10 customers accounted for 44 %, 40 % and 41 % of the Company’s net revenue, respectively.

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At any given point in time, the total amount outstanding from any one of a number of its customers may be individually significant to the Company’s financial results.

As of June 27, 2025, the Company had net accounts receivable of $ 1.1 billion, and one customer accounted for approximately 11 % of the Company’s outstanding accounts receivable.

As of June 28, 2024, the Company had net accounts receivable of $ 935 million, and one customer accounted for 10 % of the Company’s outstanding accounts receivable.

As of July 3, 2026 , the Company had net accounts receivable of $ 4.7 billion and three customers accou nted for approximately 19 % , 12 % and 10 %, respectively, of the Company’s outstanding accounts receivable.

As of June 27, 2025 , the Company had net accounts receivable of $ 1.1 billion, and one customer accounted for 11 % of the Company’s outstanding accounts receivable.

Reserves for potential credit losses were not material as of each period end.

The Company also has cash equivalent and investment policies that limit the amount of credit exposure to any one financial institution or investment instrument and requires that investments be made only with financial institutions or in investment instruments evaluated as highly credit-worthy.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplier Concentration

All of the Company’s flash products require silicon wafers for the memory and controller components.

Substantially all of the Company’s flash memory wafers are currently supplied from Flash Ventures, and the Company’s controller wafers are all manufactured by third-party sources.

All of the Company’s flash memory wafers are currently supplied from Flash Ventures, and the Company’s controller wafers are all manufactured by third-party sources.

The failure of any of these sources to deliver silicon wafers could have a material adverse effect on the Company’s business, financial condition and results of operations.

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This could lead to product shortages or quality assurance problems that could increase the manufacturing costs of the Company’s products and have material adverse effects on the Company’s operating results.

The Company applies the practical expedients and does not disclose the transaction price allocated to the remaining performance obligations for (i) arrangements with an original expected duration of one year or less, mainly consisting of professional service, support, and maintenance contracts, and (ii) variable consideration for sale-based or usage-based royalties for intellectual property license arrangements, which typically range longer than one year.

The remaining performance obligations are mainly attributed to right-to-access patent license arrangements, professional service arrangements, and customer support and service contracts, which will be recognized over their contract period.

The transaction price allocated to the remaining performance obligations as of 2025 , 2024, and 2023, was not material.

Contract assets represent the Company’s rights to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied.

The Company did not have any contract assets as of June 27, 2025 , June 28, 2024, and June 30, 2023.

Contract liabilities relate to customers’ payments in advance of performance under the contract and primarily relate to remaining performance obligations under professional service, support, and maintenance contracts.

Contract liabilities as of June 27, 2025 , June 28, 2024, and June 30, 2023 , and changes in contract liabilities during 2025 , 2024, and 2023 , were not material.

Contract assets represent the Company’s right to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied.

The Company had no contract assets as of July 3, 2026 and June 27, 2025.

The Company incurs sales commissions as direct incremental costs to obtain sales contracts.

The Company has applied the practical expedient to recognize sales commissions as an expense when incurred if the amortization period is expected to be one year or less or the amount is not material, with these costs charged to Selling, general and administrative expenses.

The Company had no other direct incremental costs to obtain contracts with an expected benefit of more than one year.

The Company has applied the practical expedient to recognize sales commissions as an expense when incurred if the amortization period is expected to be one year or less, with these costs charged to Selling, general and administrative expenses.

Direct incremental costs to obtain contracts with an expected benefit of more than one year were not material for the fiscal year ended July 3, 2026.

Contract liabilities relate to customer payments in advance of performance under the contract and primarily include remaining performance obligations under NBMs.

Total contract liabilities as of July 3, 2026, were $ 1,242 million.

The contract liabilities as of June 27, 2025 were $ 25 million, of which $ 23 million were recognized as revenue during the year ended July 3, 2026.

The increase in contract liabilities during the period was driven by customer advances associated with NBMs entered into during the period.

Refund liabilities relate to consideration received that is expected to be refunded to the customer, following their satisfaction of all performance conditions, and primarily include security deposits collected under NBMs that must be refunded at the end of the contract term.

Total refund liabilities as of July 3, 2026 were $ 1,500 million.

The refund liabilities as of June 27, 2025 were $ 126 million.

The increase in refund liabilities during the period was driven by security deposits associated with NBMs entered into during the period ended July 3, 2026.

NBMs may include terms requiring the customer to establish and maintain collateral with third-party financial institutions.

The Company’s right to access such collateral is contingent upon the occurrence of specified events of default or

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

breach by the customer, as defined in the underlying NBM.

As of July 3, 2026, no amounts have been recognized in the Company’s Consolidated Financial Statements related to these collateral balances, as the Company does not control the underlying funds or have an unconditional right to the funds unless and until a specified customer default or breach event occurs.

The aggregate amount of collateral issued or held by third-party financial institutions was $ 5.0 billion as of July 3, 2026, representing the maximum potential proceeds available to the Company in the event of customer default or breach.

As of July 3, 2026, the transaction price allocated to remaining performance obligations was $ 59.8 billion, of which $ 58.7 billion has not yet been billed and $ 1.1 billion has been recorded as contract liabilities.

Approximately 19 % of the remaining performance obligations from these contracts with customers are expected to be recognized as revenue over the next twelve months .

The remaining performance obligations are entirely related to NBMs.

The Company applies the practical expedient and does not disclose the transaction price allocated to the remaining performance obligations for (i) arrangements with an original expected duration of one year or less, and (ii) variable consideration for sale-based or usage-based royalties for intellectual property license arrangements, which typically range longer than one year.

Supplemental Financial Statement Data

The following table provides a summary of goodwill activity for the period presented:

(in millions)

The following table provides a summary of goodwill activity for the periods presented:

Balance at (in millions)

Balance at June 28, 2024 $ 7,207

3 unchanged sentences

Balance at June 27, 2025 4,999

Foreign currency translation adjustment ( 5 )

Balance at July 3, 2026 $ 4,994

(1) On September 28, 2024, the Company sold its majority interest in a subsidiary.

1 unchanged sentence

Goodwill attributed to the Company represents the historical goodwill balances in WDC’s business arising from acquisitions specific to the Company.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company determined that its single operating segment was also its single reporting unit.

1 unchanged sentence

Instead, it is tested for impairment annually as of the beginning of the Company’s fourth quarter or more frequently if events or changes in circumstances indicate that goodwill may be impaired.

The Company uses qualitative factors to determine whether goodwill is more-likely-than-not impaired and whether a quantitative test for impairment is considered necessary.

If the Company concludes from the qualitative assessment that goodwill is more-likely-than-not impaired, the Company is required to perform a quantitative assessment to determine the amount of impairment.

The Company is required to use judgment when assessing goodwill for impairment, including evaluating the impact of industry and macroeconomic conditions and the determination of the fair value of the reporting unit.

In addition, the estimates and assumptions used to determine the fair value as well as the actual carrying value may change based on future changes in the Company’s results of operations, macroeconomic conditions, or other factors.

Changes in these estimates and assumptions could materially affect the Company’s assessment of the fair value and goodwill impairment.

In addition, if negative macroeconomic conditions continue or worsen, goodwill could become impaired, which could result in an impairment charge and materially adversely affect the Company’s financial condition and results of operations.

Subsequent to the completion of the separation, the Company identified potential impairment indicators related to macroeconomic indicators, industry developments, the trading price of the Company’s common stock and resulting market capitalization that warranted a quantitative impairment analysis of long-lived assets and goodwill.

The Company performed a recoverability test at the asset group level, which was determined to be equivalent to its reporting unit, to assess potential impairment of long-lived assets.

For the year ended June 27, 2025 , subsequent to the completion of the separation, the Company identified potential impairment indicators related to macroeconomic indicators, industry developments, the trading price of the Company’s common stock and resulting market capitalization that warranted a quantitative impairment analysis of long-lived assets and goodwill.

In accordance with ASC No.

360, “Property, Plant, and Equipment,” the Company performed a recoverability test at the asset group level, which was determined to be equivalent to its reporting unit, to assess potential impairment of long-lived assets comprised of property, plant and equipment.

The results of the recoverability test showed that the estimated undiscounted net cash flows to be generated from the use and eventual disposition of the Company’s long-lived assets exceeded its net carrying value.

As a result, no write-down of long-lived assets was recognized as of June 27, 2025.

Next, the Company performed a quantitative test by measuring the fair value of its reporting unit based on a weighing of two valuation methodologies:

As a result, no write-down of depreciable long-lived assets was recognized as of June 27, 2025.

In accordance with ASC No.

350, “Intangibles - Goodwill and Other,” the Company performed a quantitative test by measuring the fair value of its reporting unit based on a weighting of two valuation methodologies:

an income approach and a market approach.

The income approach valued the projected discounted cash flows that are expected to be generated by the Company’s reporting unit and required judgments and estimates surrounding general economic conditions and company-specific performance inputs such as revenue growth rates, gross margins, operating costs, capital expenditures, assumed tax rates and other assumptions deemed reasonable by management.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The market approach valued the reporting unit based on financial performance and market multiples of comparable public companies, including consideration of a control premium representing the estimated amount a market participant would pay to obtain a controlling interest in the Company.

The results of the quantitative test indicated that the carrying value of the Company’s reporting unit exceeded its estimated fair value, resulting in the recognition of a $ 1.8 billion impairment charge during the third quarter of the year ended June 27, 2025 which was recorded in the accompanying Consolidated Statements of Operations.

The Company’s policy is to perform an annual impairment test on the first day of the fourth fiscal quarter.

The Company performed a qualitative analysis, which did not indicate that goodwill was more-likely-than-not impaired.

As a result, no additional quantitative analysis was required and no additional impairment charge was recorded during the fiscal year ended June 27, 2025.

For the year ended June 28, 2024, there were no impairment charges recorded.

For the year ended June 30, 2023, the Company recorded an impairment charge of $ 671 million.

The results of the quantitative test indicated that the carrying value of the Company’s reporting unit exceeded its estimated fair value, resulting in the recognition of a $ 1.8 billion goodwill impairment charge during the third quarter of the year ended June 27, 2025 which was recorded in the accompanying Consolidated Statements of Operations.

For the years ended July 3, 2026, and June 28, 2024, there were no impairment charges recorded.

Accounts receivable, net

Prior to the separation, from time to time and in connection with factoring agreements, WDC sold certain of the Company’s trade accounts receivable without recourse to third-party purchasers in exchange for cash.

During the year ended June 27, 2025, there were no trade accounts receivable sold by WDC or the Company.

In 2024 and 2023, WDC sold trade accounts receivable of the Company and received cash proceeds of $ 339 million and $ 370 million, respectively.

The discounts on the trade accounts receivable sold during the period were not material and were recorded in Other expense, net, in the Consolidated Statements of Operations.

There were no factored receivables outstanding as of June 27, 2025 and June 28, 2024.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 2024 , WDC sold trade accounts receivable of the Company and received cash proceeds of $ 339 million.

The discounts on the trade accounts receivable sold during the period were not material and were recorded in Other income (expense), net, in the Consolidated Statements of Operations.

During the year ended July 3, 2026, and June 27, 2025, there were no trade accounts receivable sold by the Company.

There were no factored receivables outstanding as of July 3, 2026 and June 27, 2025.

(in millions)

3 unchanged sentences

Total inventories $ 2,698 $ 2,079

The Company recorded inventory charges of $ 91 million and $ 45 million in fiscal years 2026 and 2025, respectively, as part of Cost of revenue.

The Company released a portion of its inventory provision amounting to $ 22 million in fiscal year 2024 as part of Cost of revenue.

The Company’s inventory provisions amounted to $ 125 million and $ 126 million for the years ended July 3, 2026 and June 27, 2025.

Property, plant and equipment, net

11 unchanged sentences

Depreciation expense for property, plant and equipment totaled $ 149 million, $ 163 million, and $ 224 million in 2026 , 2025, and 2024, respectively.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets

Intangibles are amortized over the estimated useful life based on the pattern in which the economic benefits are expected to be received.

As of June 27, 2025 and June 28, 2024, all finite-lived intangible assets were fully amortized.

During 2023, the Company recognized intangible amortization charges of $ 133 million .

As of July 3, 2026 the amount of finite-lived intangible assets is immaterial.

As of June 27, 2025, all finite-lived intangible assets were fully amortized.

Product warranty liability

Changes in the warranty accrual were as follows:

2025 2024 2023

(in millions)

4 unchanged sentences

Warranty accrual, end of period $ 48 $ 44

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The current portion of the warranty accrual was classified in Accrued expenses and the long-term portion was classified in Other liabilities as noted below:

8 unchanged sentences

Non-current lease liability $ 177 $ 193

Non-current net tax payable 131 56

Tax indemnification liability 128 110

1 unchanged sentence

Total other liabilities $ 378 $ 365

In connection with the separation, the Company recorded an initial $ 112 million liability to indemnify WDC as a result of the Tax Matters Agreement entered into between the parties.

In connection with, and at the time of, the separation, the Company recorded a $ 112 million liability to indemnify WDC as a result of the Tax Matters Agreement entered into between the parties in connection with the separation.

The indemnification pertains to certain WDC tax positions where the underlying issues are determined to be related to the Company’s business before the spin-off.

As WDC receives tax assessments, settles with tax authorities, or when the statute of limitation lapses, the indemnification liabilities will be reassessed and adjusted accordingly.

This liability was subsequently reduced by approximately $ 2 million reflecting the outstanding balance as of June 27, 2025.

As WDC receives tax assessments, settles with tax authorities, or when the statute of limitations lapses, the indemnification liabilities will be reassessed and adjusted accordingly.

The outstanding balance of the liability as of July 3, 2026 and June 27, 2025 was $ 128 million and $ 110 million, respectively.

Accumulated other comprehensive loss

1 unchanged sentence

The components of AOCL were as follows:

Foreign Currency Translation Adjustment Unrealized Income (Losses) on Derivative Contracts Total Accumulated Comprehensive Loss

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency Translation Adjustment Unrealized Losses on Derivative Contracts Total Accumulated Comprehensive Loss

(in millions)

Balance at June 28, 2024 $ ( 208 ) $ ( 244 ) $ ( 452 )

Other comprehensive loss

( 43 ) ( 87 ) ( 130 )

Income tax benefit related to items of other comprehensive loss

Net current-period other comprehensive loss ( 43 ) ( 66 ) ( 109 )

Balance at June 28, 2024 $ ( 208 ) $ ( 244 ) $ ( 452 )

Other comprehensive income 10 222 232

3 unchanged sentences

Balance at June 27, 2025 $ ( 202 ) $ ( 47 ) $ ( 249 )

During the years ended June 27, 2025 and June 28, 2024 the amounts reclassified out of AOCL included l osses of $ 189 million and $ 215 million related to foreign exchange contracts.

Other comprehensive income ( 54 ) 61 7

Income tax expense related to items of other comprehensive income — ( 14 ) ( 14 )

Net current-period other comprehensive income ( 54 ) 47 ( 7 )

Balance at July 3, 2026 $ ( 256 ) $ — $ ( 256 )

During the years ended July 3, 2026, June 27, 2025, and June 28, 2024, the amounts reclassified out of AOCL included l osses of $ 74 million, $ 189 million, and $ 215 million related to foreign exchange contracts.

The losses related to foreign contracts were substantially all charged to Cost of revenue in the Consolidated Statements of Operations.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of June 27, 2025, substantially all existing net losses related to cash flow hedges recorded in AOCL are expected to be reclassified to earnings within the next twelve months.

Fair Value Measurements and Investments

7 unchanged sentences

The following tables present information about the Company’s financial instruments that were measured at fair value on a recurring basis for the periods presented and indicate the fair value hierarchy of the valuation techniques utilized to determine such values:

June 27, 2025

Level 1 Level 2 Level 3 Total

1 unchanged sentence

Cash equivalents - Money market funds $ 2,863 $ — $ — $ 2,863

Marketable equity securities 1,777 — — 1,777

Foreign exchange contracts (included in Other current assets) — 6 — 6

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Total liabilities at fair value $ — $ 2 $ — $ 2

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 27, 2025

2 unchanged sentences

Cash equivalents - Money market funds $ 751 $ — $ — $ 751

Marketable equity securities — — — —

Foreign exchange contracts (included in Other current assets) — 17 — 17

7 unchanged sentences

Money market funds are valued based on quoted market prices.

Marketable equity securities.

The Company’s marketable equity securities represent an investment in Nanya Technology Corporation (“Nanya”), a publicly-traded entity that has a quoted price in an active market and has a readily determinable fair value.

See Note 11, Leases and Other Commitments for additional disclosures.

The marketable equity securities are measured at fair value with the unrealized gains (losses) amounting to $ 807 million for the year ended July 3, 2026, recognized through Consolidated Statements of Operations.

The marketable equity securities owned by the Company are subject to a statutory lock-up period of three years , during which the Company will be restricted from transferring or selling the shares, subject to limited exceptions under applicable Taiwanese law.

Foreign Exchange Contracts .

The Company’s foreign exchange contracts are short-term contracts to hedge the Company’s foreign currency risk.

Foreign exchange contracts are valued using an income approach that is based on the present value of a future cash flows model.

Foreign exchange contracts are valued using an income approach that is based on the present value of a future cash flow model.

The market-based observable inputs for the model include forward rates and credit default swap rates.

See Note 7, Derivative Instruments and Hedging Activities for additional disclosures.

During the periods presented, the Company had no transfers of financial instruments between levels, and there were no changes in valuation techniques or the inputs used in the fair value measurement.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the periods presented, the Company had no transfers of financial instruments between levels, and there were no changes in valuation techniques or the inputs used in the fair value measurement.

Financial Instruments Not Carried at Fair value

Financial instruments not recorded at fair value on a recurring basis (debt) had an estimated fair value of $ 1.9 billion as of June 27, 2025.

The fair value of the debt was determined based on observable market prices in less active markets.

See Note 8, Debt for additional disclosures .

Derivative Instruments and Hedging Activities

As of July 3, 2026, the Company had outstanding foreign exchange forward contracts that were designated as non-designated hedges.

As of June 27, 2025, the Company had outstanding foreign exchange forward contracts that were designated as either cash flow hedges or non-designated hedges.

Substantially all of the contract maturity dates of these foreign exchange forward contracts do not exceed twelve months.

As of June 27, 2025 , the Company did not have any derivative contracts with credit-risk-related contingent features.

As of July 3, 2026 and June 27, 2025 , the Company did not have any derivative contracts with credit-risk-related contingent features.

Changes in the fair values of the non-designated foreign exchange contracts are recognized in Other income (expense), net, and are largely offset by corresponding changes in the fair values of the foreign currency-denominated monetary assets and liabilities.

For 2026 , 2025, and 2024, total net realized and unrealized transactions and foreign exchange contract currency losses were $ 17 million, $ 29 million, and $ 4 million respectively.

Unrealized gains or losses on designated cash flow hedges are recognized in AOCL.

See Note 5, Supplemental Financial Statement Data—Accumulated other comprehensive loss for additional disclosures .

Unrealized gains or losses on any designated cash flow hedges are recognized in AOCL.

For more information regarding cash flow hedges, see Note 5, Supplemental Financial Statement Data—Accumulated other comprehensive loss for additional disclosures .

Loan Agreement

4 unchanged sentences

$ 1.5 B Revolving Credit Facility maturing 2030

Total debt — 1,900

Unamortized issuance costs — 51

2 unchanged sentences

On February 21, 2025, the Company entered into a Loan Agreement (the “Loan Agreement”) by and among the Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the other parties party thereto.

The Loan Agreement comprises a term loan B facility in the principal amount of $ 2.0 billion (the “Term Loan Facility”) and a revolving credit facility in the principal amount of $ 1.5 billion (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Facilities”).

The Loan Agreement comprised a term loan B facility in the principal amount of $ 2.0 billion (the “Term Loan Facility”) and a revolving credit facility in the principal amount of $ 1.5 billion (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Facilities”).

The obligations under the Loan Agreement are guaranteed by the Company’s wholly-owned subsidiary, Sandisk Technologies, Inc.

3 unchanged sentences

wholly-owned subsidiaries, subject, in each case, to certain exceptions outlined in the Loan Agreement.

The Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Loan Agreement) on the ability of the Company and its subsidiaries to undertake certain activities, including to incur indebtedness and liens, merge or consolidate with other entities, dispose or transfer their assets, pay dividends or make distributions, make investments, make payments on junior or subordinated debt, enter into burdensome agreements or transact with affiliates.

The Loan Agreement also includes a financial covenant, which is solely for the benefit of the lenders under the Revolving Credit Facility, that requires the Company to maintain a maximum Leverage Ratio (as defined in the Loan Agreement).

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Loan Agreement) on the ability of the Company and its subsidiaries to undertake certain activities, including to incur indebtedness and liens, merge or consolidate with other entities, dispose of or transfer their assets, pay dividends or make distributions, make investments, make payments on junior or subordinated debt, enter into burdensome agreements or transact with affiliates.

The Loan Agreement also includes a financial covenant, which is solely for the benefit of the lenders under the Revolving Credit Facility, that prohibits the Company from exceeding a maximum Leverage Ratio (as defined in the Loan Agreement).

On February 21, 2025, the Company borrowed $ 2.0 billion under its Term Loan Facility.

The Company used a portion of the proceeds of the borrowing to make a net distribution payment of $ 1.5 billion to WDC, with the remainder to be used for general corporate purposes of the Company.

The Company 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 Revolving Credit Facility may be borrowed by the Company from time to time for general corporate purposes.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Loan Agreement, the Company and SDT entered into a security agreement to secure the obligations under the Facilities on a first-priority basis (subject to permitted liens) by a lien on substantially all the assets and properties of the Company and SDT, subject to certain exceptions.

1 unchanged sentence

Term Loan Facility

The Term Loan Facility bears interest, at the Company’s option, at (x) the Adjusted Term SOFR Rate (as defined in the Loan Agreement) plus an interest rate margin of 3.00 % per annum or (y) a base rate plus an interest rate margin of 2.00 % per annum.

The selection of the interest rate index determines the interest payment frequency, which is either monthly or quarterly.

The Company may elect the applicable rate at the beginning of each interest period, subject to the terms of the agreement.

The outstanding principal balance of the Term Loan Facility is required to be repaid in quarterly installments beginning on June 27, 2025, in an aggregate amount equal to 0.25 % of the aggregate principal amount of the Term Loan Facility and a final payment comprised of all principal and interest due and payable at maturity on February 20, 2032.

The annualized interest rate for Term Loan Facility as of June 27, 2025 was 7 % .

During the year ending June 27, 2025, the Company made scheduled and voluntary payments totaling $ 100 million.

In connection with the issuance of the Term Loan Facility, the Company recognized issuance costs of $ 54 million, which will be amortized to Interest expense over the life of the facility.

For the year ended June 27, 2025, the total interest expense was $ 51 million and amortization of issuance cost was $ 3 million.

The Term Loan Facility bore interest, at the Company’s option, at (x) the Adjusted Term SOFR Rate (as defined in the Loan Agreement) plus an interest rate margin of 3.00 % per annum or (y) a base rate plus an interest rate margin of 2.00 % per annum.

The outstanding principal balance of the Term Loan Facility was required to be repaid in quarterly installments that began on June 27, 2025, in an aggregate amount equal to 0.25 % of the aggregate principal amount of the Term Loan Facility.

A final payment comprised of all principal and interest was due and payable at maturity on February 20, 2032.

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.

Revolving Credit Facility

1 unchanged sentence

dollar borrowings, will bear interest, at the Company’s option, at (x) the Adjusted Term SOFR Rate (as defined in the Loan Agreement), which rate includes a credit spread adjustment of 0.10 %, plus an interest rate margin of 2.00 % per annum (subject to step-ups based on the Company’s Leverage Ratio (as defined in the Loan Agreement)), or (y) a base rate plus an interest rate margin of 1.00 % per annum (subject to step-ups based on the Company’s Leverage Ratio (as defined in the Loan Agreement)).

The Company will pay a commitment fee of 0.30 % per annum (subject to step-ups based on the Company’s Leverage Ratio (as defined in the Loan Agreement)) in respect of undrawn revolving commitments under the Revolving Credit Facility.

The Revolving Credit Facility will also provide for borrowings in Euros, Yen, and additional currencies agreed to by the lenders under the Revolving Credit Facility.

The Company pays a commitment fee of 0.30 % per annum (subject to step-ups based on the Company’s Leverage Ratio (as defined in the Loan Agreement)) in respect of undrawn revolving commitments under the Revolving Credit Facility.

The Revolving Credit Facility will also provide for borrowings in Euros, Japanese yen, and additional currencies agreed to by the lenders under the Revolving Credit Facility.

The Revolving Credit Facility will mature on February 21, 2030, at which time the commitments thereunder shall be terminated and will not have any amortization.

In connection with the issuance of the Revolving Credit Facility, the Company recognized deferred costs, classified as Other non-current assets of $ 8 million , which will be amortized to Interest expense over the life of the facility.

As of June 27, 2025 , the Company was in compliance with the financial covenant.

As of June 27, 2025, the Company had no outstanding standby letters of credit, and the available capacity under the Revolving Credit Facility was $ 1.5 billion .

For the year ended June 27, 2025, the total commitment fee expense was $ 2 million and amortization of issuance costs was $ 1 million.

In connection with the establishment of the Revolving Credit Facility, the Company recognized deferred costs, classified as Other non-current assets of $ 8 million , which are amortized to Interest expense over the life of the facility.

As of July 3, 2026 , the Company was in compliance with the financial covenant.

As of July 3, 2026, the Company had no outstanding standby letters of credit, and the available capacity under the Revolving Credit Facility was $ 1.5 billion.

Interest expense and amortization of issuance costs

For the year ended July 3, 2026, the total interest expense, including commitment fee expense, was $ 65 million and amortization of issuance costs was $ 7 million.

For the year ended June 27, 2025, the total commitment fee expense, including interest expense, was $ 53 million and amortization of issuance costs was $ 4 million.

There was no interest expense or amortization of issuance costs for the year ended June 28, 2024.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Maturity of Debt

As of June 27, 2025, the Company is subject to required principal payment as follows:

Contractual Maturity

(in millions)

2031 and thereafter 1,800

Total debt maturities 1,900

Issuance costs ( 51 )

Net carrying value $ 1,849

Subsequent to the June 27, 2025 fiscal year end, on August 4, 2025, the Company made a voluntary $ 100 million payment on its Term Loan Facility.

Segment Reporting

The following table presents the revenue, costs of revenue, operating expenses, and operating income (loss) of the Company’s reportable operating segment under its internal management reporting system, along with a reconciliation to consolidated net income (loss) before taxes.

This presentation aligns with how the CODM evaluates performance and allocates resources.

2025 June 28,

2024 June 30,

The following table presents the revenue, segment cost of revenue, significant segment expenses, and other segment items that are reflected in operating income (loss) of the Company’s reportable operating segment under its internal management reporting system, along with a reconciliation to consolidated net income (loss).

This presentation aligns with how the CODM reviews financial information, using both operating income (loss) and net income (loss) to evaluate performance and allocate resources.

In the financial information presented below, Segment cost of revenue, Segment research and development and Segment selling, general and administrative consist of Cost of revenue, Research and development and Selling, general and administrative, respectively, as reported in the Company’s Consolidated Statement of Operations, less stock-based compensation costs allocated to those captions.

Additional significant segment expenses include Stock-based compensation and Goodwill impairment.

Other segment items include Loss on debt extinguishment, Business separation costs, Employee termination and other, Loss on business divestiture, and in past comparative periods, Business separation costs, Employee termination and other, and Gain on business divestiture.

July 3, 2026 June 27, 2025 June 28, 2024

(in millions)

Revenue 20,248 7,355 6,663

Costs of revenue (1)

( 5,127 ) ( 5,607 ) ( 5,637 )

Operating expenses (1)

( 1,539 ) ( 1,365 ) ( 1,425 )

Stock-based compensation expenses ( 182 ) ( 149 ) ( 165 )

Amortization of acquired intangible assets — — ( 133 )

Employee termination and other ( 21 ) 40 ( 69 )

Segment cost of revenue ( 5,757 ) ( 5,127 ) ( 5,571 )

Segment research and development ( 1,223 ) ( 1,051 ) ( 990 )

Segment selling, general and administrative ( 568 ) ( 488 ) ( 397 )

Stock-based compensation ( 232 ) ( 182 ) ( 149 )

Goodwill impairment — ( 1,830 ) —

Business separation costs ( 67 ) ( 64 ) —

Strategic review — ( 20 ) ( 20 )

Gain on business divestiture 34 — —

Recoveries of contamination related charges — 36 —

Other — ( 2 ) ( 1 )

Other segment items ( 79 ) ( 54 ) ( 24 )

Operating income (loss) 12,389 ( 1,377 ) ( 468 )

Total interest and other income (expense), net 628 ( 102 ) ( 35 )

Income tax expense ( 1,584 ) ( 162 ) ( 169 )

( 162 ) ( 169 ) ( 141 )

$ ( 1,641 ) $ ( 672 ) $ ( 2,143 )

(1) For the management view, Costs of revenue excludes stock-based compensation and Operating expenses excludes stock-based compensation, amortization of intangibles, employee termination, goodwill impairment, business separation/strategic review costs, gain on business divestiture and recoveries of contamination-related charges, that are presented separately in the table above.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net income (loss) $ 11,433 $ ( 1,641 ) $ ( 672 )

Related Parties and Related Commitments and Contingencies

Flash Ventures

The Company procures substantially all of its flash-based memory wafers from its business ventures with Kioxia Corporation (“Kioxia”), which consists of three separate legal entities:

The Company procures all of its flash-based memory wafers from its business ventures with Kioxia Corporation (“Kioxia”), which consists of three separate legal entities:

Flash Partners Ltd.

14 unchanged sentences

Production of flash-based wafers in New Y2 started in 2016.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also has a facility agreement with Kioxia related to the construction and operation of Kioxia’s “Y6” 300-millimeter wafer fabrication facility in Yokkaichi, Japan.

9 unchanged sentences

The primary purpose of K2 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer flash technology nodes.

Output from K2 is expected to begin in the first half of 2026.

In connection with the construction of these facilities, the Company makes prepayments toward future building depreciation.

In connection with the start-up of the K1, Y7 and K2 facilities, the Company has made prepayments over time, and as of June 27, 2025, $ 946 million, with $ 131 million recorded in Other current assets and $ 815 million recorded in Other non-current assets in the Consolidated Balance Sheets, remain to be credited against future building depreciation charges.

As of June 27, 2025, the Company is also committed to making additional building depreciation prepayments of $ 264 million, based on the Japanese yen to U.S.

dollars exchange rate of ¥ 144.73 as of such date, payable as follows:

$ 32 million in 2026, $ 121 million in 2027, $ 97 million in 2028 and $ 14 million in 2029.

As of June 27, 2025, in addition to the requirements to make building depreciation prepayments, the Company will also make payments for building depreciation of approximately $ 209 million at varying dates through fiscal 2035.

Output from K2 began in the fiscal year ended July 3, 2026.

In connection with the construction of these facilities, the Company makes prepayments toward the Company’s share of Flash Ventures’ future building depreciation, with such amounts subsequently credited against the cost of the Company’s future wafer purchases.

In connection with the start-up of the K1, Y7 and K2 facilities, the Company has made prepayments to Flash Ventures over time, and as of July 3, 2026, $ 840 million, with $ 133 million recorded in Other current assets and $ 707 million recorded in Other non-current assets in the Consolidated Balance Sheets, remain to be credited against future wafer purchases.

The prepayments as of June 27, 2025, amounted to $ 946 million, with $ 131 million recorded in Other current assets and $ 815 million recorded in Other non-current assets.

As of July 3, 2026, the Company is also committed to making future building depreciation prepayments relating to various facilities of $ 402 million, based on the Japanese yen to U.S.

dollars exchange rate of 161.26 as of such date, payable at varying dates through fiscal year 2035.

The amounts payable in the next five succeeding fiscal years are $ 118 million in 2027, $ 172 million in 2028, $ 62 million in 2029, and $ 50 million on varying dates through fiscal year 2031.

Similar to other prepayments made to Flash Ventures, these amounts will be credited against future wafer purchases by the Company.

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 January 29, 2026, 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.

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.

These payments are amortized on a straight-line basis and will be recognized as Cost of revenue in the Consolidated Statements of Operations upon sale of inventory.

SANDISK CORPORATION

3 unchanged sentences

Entities within Flash Ventures are VIEs.

The Company evaluated whether it is the primary beneficiary of any of the entities within Flash Ventures for all periods presented and determined that it is not the primary beneficiary of any of the entities within Flash Ventures because it does not have a controlling financial interest in any of those entities.

In determining whether the Company is the primary beneficiary, the Company analyzed the primary purpose and design of Flash Ventures, the activities that most significantly impact Flash Ventures’ economic performance, and whether the Company had the power to direct those activities.

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Total notes receivable and investments in Flash Ventures $ 679 $ 654

During 2025, the Company received distributions from Flash Ventures of $ 176 million.

During 2026 , 2025, and 2024, the Company made net payments to Flash Ventures of $ 3.6 billion , $ 3.4 billion , and $ 3.4 billion, respectively, for purchases of flash-based memory wafers and net loans.

During 2025 , 2024, and 2023 the Company received distributions from Flash Ventures of $ 176 million, $ 0 and $ 0 respectively.

In 2026 and 2025, the Company received distributions from Flash Venture s of $ 107 million and $ 176 million, r espectively.

During 2024, there were no distributions from Flash Ventures.

The distributions received for the year ended July 3, 2026 were classified as cash flow from operating activities while the distributions received for the year ended June 27, 2025 were classified as cash flow from investing activities in our Consolidated Statements of Cash Flows.

The Company makes, or will make, loans to Flash Ventures to fund equipment investments for new process technologies and additional wafer capacity.

The Company aggregates its Flash Ventures’ notes receivable into one class of financing receivables due to the similar ownership interest and common structure in each Flash Ventures entity.

For all reporting periods presented, no loans were past due, and no loan impairments were recorded.

For all reporting periods presented, no loans were past due, and no material loan impairments were recorded.

The Company’s notes receivable from each Flash Ventures entity, denominated in Japanese yen, are secured by equipment owned by that Flash Ventures entity.

As of June 27, 2025, and June 28, 2024, the Company had accounts payable balances due to Flash Ventures of $ 279 million and $ 313 million, respectively.

As of July 3, 2026, and June 27, 2025, the Company had accounts payable balances due to Flash Ventures of $ 318 million and $ 279 million, respectively.

The Company’s maximum reasonably estimable loss exposure (excluding lost profits) as a result of its involvement with Flash Ventures, based upon the Japanese yen to U.S.

dollar exchange rate at June 27, 2025, is presented below.

Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to revaluation from the Japanese yen to the U.S.

dollar exchange rate at July 3, 2026, is presented below.

Investments in Flash Ventures are denominated in Japanese yen, and the maximum estimable loss exposure excludes any cumulative translation adjustment due to translation from the Japanese yen to the U.S.

(in millions)

4 unchanged sentences

Maximum estimable loss exposure $ 2,897

As of June 27, 2025, the Company’s net equity included undistributed earnings of Flash Ven tures of $ 85 million.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is obligated to pay for variable costs incurred in producing its share of Flash Ventures’ flash-based memory wafer supply, based on its rolling three-month forecast, which generally equals 50 % of Flash Ventures’ output.

The Company is obligated to pay for variable costs incurred by Flash Ventures in producing the Company’s share of Flash Ventures’ flash-based memory wafer supply, based on its rolling three-month forecast.

The Company’s share generally equals 50 % of Flash Ventures’ output.

In addition, the Company is obligated to pay for half of Flash Ventures’ fixed costs regardless of the output the Company chooses to purchase.

The Company is not able to estimate its total wafer purchase commitment obligation beyond its rolling three-month purchase commitment because the price is determined by reference to the future cost of producing the semiconductor wafers.

The Company cannot estimate its total wafer purchase commitment obligation beyond its rolling three-month purchase commitment because the price is determined by reference to the future cost of producing the semiconductor wafers.

In addition, the Company is committed to fund 49.9 % to 50.0% of each Flash Ventures entity’s capital investments to the extent that the Flash Ventures entity’s operating cash flow is insufficient to fund these investments.

Flash Ventures has historically operated near 100 % of its manufacturing capacity.

During 2025 and 2024, as a result of flash market conditions, the Company temporarily reduced its utilization of its share of Flash Ventures’ manufacturing capacity to an abnormally low level to more closely align the Company’s flash-based wafer supply with projected demand.

In 2025 and 2024 the Company incurred costs of $ 75 million and $ 249 million, respectively, associated with the reduction in utilization related to Flash Ventures, which was recorded as a charge to Cost of revenue.

Flash Ventures has historically operated at approximately 100 % of its manufacturing capacity.

During 2026, 2025 and 2024, the Company temporarily reduced its utilization of its share of Flash Ventures’ manufacturing capacity.

During 2026, 2025 and 2024, the Company incurred costs of $ 11 million, $ 75 million, and $ 249 million, respectively, associated with the reduction in utilization related to Flash Ventures, which were recorded as charges to Cost of revenue.

Inventory Purchase Commitments with Flash Ventures.

9 unchanged sentences

dollar-equivalent, based upon the Japanese yen to U.S.

dollar exchange rate as of June 27, 2025:

dollar exchange rate as of July 3, 2026:

Lease Amounts

2 unchanged sentences

Total guarantee obligations ¥ 149.0 $ 923.0

The following table details the breakdown of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments, in U.S.

The following table details the components of the Company’s remaining guarantee obligations between the principal amortization and the purchase option exercise price at the end of the term of the Flash Ventures lease agreements, in annual installments, in U.S.

dollars, based upon the Japanese yen to U.S.

dollar exchange rate as of June 27, 2025:

dollar exchange rate as of July 3, 2026:

Annual Installments Payment of Principal Amortization Purchase Option Exercise Price at Final Lease Terms Guarantee Amount

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The Company has not made any indemnification payments nor recorded any indemnification receivables under any such agreements.

As of June 27, 2025, no amounts have been accrued in the Consolidated Financial Statements with respect to these indemnification agreements.

As of July 3, 2026 , no amounts have been accrued in the Consolidated Financial Statements with respect to these indemnification agreements.

SANDISK CORPORATION

6 unchanged sentences

The Transaction closed on September 28, 2024, and SanDisk China completed the sale of 80 % of its equity interest in SDSS to JCET.

The Transaction resulted in a pre-tax gain of $ 34 million, calculated as the difference between the total consideration for the sale, including the outstanding consideration receivable and the fair value of the Company’s 20 % retained interest, less the carrying value of the net assets divested, which included, among other items, $ 71 million of cash and cash equivalents and $ 382 million of goodwill that was allocated to SDSS.

Proceeds from the sale, including working capital adjustments, were $ 659 million (pre-tax).

On October 1, 2024, the Company received an initial pre-tax installment of $ 262 million.

On January 6, 2025, the Company received a second pre-tax installment of $ 210 million and expects to receive the remaining $ 187 million pre-tax proceeds in five equal installments of approximately $ 37 million on September 28 of each year through September 28, 2029.

As of June 27, 2025, the outstanding consideration receivable was recognized at its present value of $ 168 million, with $ 37 million classified as Other current assets and $ 131 million classified as Other non-current assets in the Consolidated Balance Sheets.

The remaining present value discount of $ 19 million as of June 27, 2025 will be recognized using the effective interest method over the next five years a s Interest income in the Consolidated Statements of Operations.

The Company’s 20 % retained interest in SDSS was determined to be valued at $ 158 million based on the fair value of the total pre-tax consideration received and receivable from JCET for its purchase of its 80 % interest in SDSS.

The Company accounts for its 20 % interest in SDSS as an equity method investment in Other non-current assets in the Consolidated Balance Sheets.

On January 6, 2025, the Company received a second pre-tax installment of $ 210 million.

The remaining $ 187 million pre-tax proceeds are payable in five equal installments of approximately $ 37 million on September 28 of each year through September 28, 2029.

On September 25, 2025, SanDisk China and JCET entered into an Amendment No.

1 to the Amended and Restated Equity Purchase Agreement that included a $ 10 million provision for working capital support, resulting in a reduction of the September 28, 2025 installment payment from JCET to $ 27 million.

The Company recognized the adjustment as a Loss on business divestiture for the year ended July 3, 2026.

As of July 3, 2026 and June 27, 2025, the outstanding consideration receivable was recog nized at its present value of $ 139 million and $ 168 million, with $ 37 million and $ 37 million classified as Other current assets and $ 102 million and $ 131 million classified as Other non-current assets in the Consolidated Balance Sheets, respectively.

The rema ining present value discount of $ 12 million as of July 3, 2026 will be recognized using the effective interest method over the next five years a s Interest income in the Consolidated Statements of Operations.

On September 28, 2024, the Company’s 20 % retained interest in SDSS was determined to be valued at $ 158 million based on the fair value of the total pre-tax consideration received and receivable from JCET for its purchase of its 80 % interest in SDSS.

Following the close of this Transaction, the Company accounts for its 20 % interest in SDSS as an equity method investment within Other non-current assets in the Consolidated Balance Sheets.

The Company’s 20 % interest in the earnings of SDSS is recognized one quarter in arrears and is reported in Other income (expense), net in the Consolidated Statements of Operations.

As of June 27, 2025, the 20 % retained interest in SDSS was valued at $ 161 million.

As of July 3, 2026, the carrying value of the 20 % retained interest in SDSS was $ 167 million.

Subsequent to and in connection with the Transaction, Western Digital Technologies, Inc.

(“WDT”) entered into a five-year supply agreement with SDSS (the “Supply Agreement”) to purchase certain flash-based products with a minimum annual commitment of $ 550 million (the “minimum annual commitment”).

(“WDT”, a WDC affiliate) entered into a five-year supply agreement with SDSS (the “Supply Agreement”) to purchase certain flash-based products with a minimum annual commitment of $ 550 million (the “minimum annual commitment”).

On January 10, 2025, the Company and WDT entered into an assignment agreement, pursuant to which WDT assigned all of its rights and obligations under the Supply Agreement to the Company.

The Supply Agreement contains specific penalties the Company must pay if SDSS fails to meet its minimum annual commitment.

The Supply Agreement also provides that if SDSS purchases exceed the minimum annual commitment in any of the two years immediately succeeding any annual period where a shortfall penalty has been paid, SDSS shall reimburse the Company an amount not exceeding the previously paid penalty amount.

The Supply Agreement also provides that if the Company’s purchases exceed the minimum annual commitment in any of the two years immediately succeeding any annual period where a shortfall penalty has been paid, SDSS shall reimburse the Company an amount not exceeding the previously paid penalty amount.

The Supply Agreement expires on September 28, 2029, and automatically renews for additional one-year terms unless earlier terminated by either of the parties.

The Company also entered into an agreement to grant SDSS certain intellectual property rights on a royalty-free basis for use in manufacturing products on the Company’s behalf for the term of and under the Supply Agreement.

For the year ended June 27, 2025, the Company made purchases of $ 341 million under the Supply Agreement and had a $ 121 million accounts payable balance due to SDSS as of June 27, 2025.

For the years ended July 3, 2026 and June 27, 2025, the Company made purchases of $ 519 million and $ 341 million , respectively, under the Supply Agreement and had a $ 143 million and $ 121 million accounts payable balance due to SDSS as of July 3, 2026 and June 27, 2025, respectively .

The Company also entered into an arrangement to provide certain transition services for a limited period following the closing of the Transaction.

Charges under this arrangement were not material.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On January 24, 2025, the Company and WDC entered into an equity transfer agreement (the “Equity Transfer Agreement”) to transfer WDC’s entire equity interest in its venture with Unisplendour Corporation Limited and Unissoft (Wuxi) Group Co.

1 unchanged sentence

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.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 the Company’s Consolidated Financial Statements.

The Unis Venture markets and sells the Company’s products in China and develops data storage systems for the Chinese market.

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 within the Company’s Consolidated Financial Statements.

After 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 and was not material for the year ended June 27, 2025.

The Company’s 48 % interest in the earnings of the Unis Venture is recognized one quarter in arrears from the date the Unis Venture was transferred to the Company and is reported in Other income (expense), net in the Consolidated Statements of Operations and was not material for the years ended July 3, 2026, June 27, 2025 and June 28, 2024.

Revenue from products distributed by the Unis Venture is recognized upon sell-through to third-party customers.

For the years ended June 27, 2025, June 28, 2024, and June 30, 2023, the Company recognized approximately 1 %, 1 %, and 2 % respectively, of its consolidated revenue on products distributed by the Unis Venture.

The outstanding accounts receivable due from the Unis Venture were 1 % and 4 % of Accounts receivable, net, as of June 27, 2025 and June 28, 2024, respectively.

Related Party Transactions

Separation and Distribution Agreement and Other Related Party Transactions with WDC

As described in 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, on February 21, 2025, in connection with the separation, the Company entered into several agreements that provide a framework for Sandisk’s relationship with WDC after the separation.

For the years ended July 3, 2026 , June 27, 2025 , and June 28, 2024, the Company recognized approximately 1 %, 1 %, and 1 % respectively, of its consolidated revenue on products distributed by the Unis Venture.

The outstanding accounts receivable due from the Unis Venture were 1 % and 1 % of Accounts receivable, net, as of July 3, 2026 and June 27, 2025 , respectively.

Transactions with Western Digital Corporation

Relationship with WDC

Following the separation and further disposition of WDC’s shares of the Company during fiscal year 2026, as described in Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies, WDC ceased to be a related party of the Company as of July 3, 2026.

For a portion of fiscal year 2026, WDC remained a related party of the Company.

The transactions outlined below represent full year transactions with WDC.

Separation and Distribution Agreement and Other Transactions with WDC

As described in Note 1, Organization, Basis of Presentation and Summary of Significant Accounting Policies , on February 21, 2025, in connection with the separation, the Company entered into several agreements that provide a framework for Sandisk’s relationship with WDC after the separation.

These include, but are not limited to, the following:

• Separation and Distribution Agreement – The separation and distribution agreement contains key provisions related to the separation of the Company from WDC, including the transfer of assets and assumptions of liabilities.

In connection with this agreement, certain assets and liabilities included in the Company’s Consolidated Balance Sheets were retained by WDC and certain assets and liabilities not included in the Company’s Consolidated Balance Sheets were transferred to the Company as of the date of the separation.

Separation-related adjustments resulted in a decrease to net assets and total equity of $ 0.6 billion and are reflected in the “Net transfers from (to) WDC, including spin-off related adjustments” line item of the Consolidated Statements of Shareholders’ Equity.

• Transition Services Agreement – The TSA governs the provision of transition services from WDC to Sandisk, and from Sandisk to WDC and its affiliates, on an interim, transitional basis following the separation.

For the year ended June 27, 2025, the Company recognized $ 5 million in expenses related to the TSA, and the Company expects to recognize an additional expense related to the TSA of approximately $ 4 million during the next twelve months.

Separation-related adjustments resulted in a decrease to net assets and total equity of $ 0.6 billion for the year ended June 27, 2025 and are reflected in the “Net transfers from (to) WDC, including spin-off related adjustments” line item of the Consolidated Statements of Shareholders’ Equity.

As of July 3, 2026 , the separation between the Company and WDC has been finalized, and no separation-related adjustments have been, or are expected to be, incurred going forward.

• Employee Matters Agreement – The Employee Matters Agreement allocates liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters.

Pursuant to this agreement, during the year ended July 3, 2026, the Company received reimbursement of short-term employee incentives totaling $ 22 million from WDC.

The Company did not receive any reimbursements from this agreement for the year ended June 27, 2025.

• Transition Services Agreement – The TSA governed the provision of transition services from WDC to Sandisk, and from Sandisk to WDC and its affiliates, on an interim, transitional basis following the separation.

For the years ended July 3, 2026 and June 27, 2025 the Company recognized $ 2 million and $ 5 million in expenses related to the TSA, respectively.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Tax Matters Agreement – The Tax Matters Agreement governs, among other things, WDC’s and the Company’s respective rights, responsibilities and obligations after the spin-off with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

1 unchanged sentence

As a result of this agreement, the Company recorded a tax indemnification liability of $ 112 million on February 21, 2025.

This liability was subsequently reduced by approximately $ 2 million reflecting the outstanding balance as of June 27, 2025.

The remaining tax indemnification liability of $ 110 million is classified as Other liabilities in the Consolidated Balance Sheets as of June 27, 2025.

The tax indemnification liability of $ 128 million and $ 110 million was classified as Other liabilities in the Consolidated Balance Sheets as of July 3, 2026 and June 27, 2025, respectively.

Notes Due to (from) Western Digital Corporation

4 unchanged sentences

As part of the separation, WDC contributed $ 550 million to the Company, and the Company repaid $ 6 million in cash, which included interest accrued until the date of the separation.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following presents Interest expense and Interest income on notes due to (from) Western Digital Corporation, which were recorded in Interest expense and Interest income in the Consolidated Statements of Operations for the periods presented:

The following presents Interest expense and Interest income on notes due to (from) Western Digital Corporation, which were recorded within Interest expense and Interest income in the Consolidated Statements of Operations for the periods presented:

2026 June 27,

1 unchanged sentence

(in millions)

Interest expense on notes due to Western Digital Corporation $ 7 $ 6 $ 16

Interest income on notes due from Western Digital Corporation — ( 1 ) ( 37 )

Interest expense on notes due to Western Digital Corporation — 7 6

Allocation of Corporate Expenses

1 unchanged sentence

These corporate expenses were allocated to the Company based on direct usage or benefit, where identifiable, with the remainder allocated based on headcount, revenue or other relevant measures.

Management believes the basis on which the expenses were allocated to be a reasonable reflection of the utilization of services provided to us or the benefit received by us.

Effective at the beginning of the second quarter of 2025, the Company was operationally separated from the operations that were ultimately retained by WDC following completion of the spin-off transaction.

Management believes the basis on which the expenses were allocated to be a reasonable reflection of the utilization of services provided to the Company or the benefit received by the Company.

Effective at the beginning of the second quarter of fiscal year 2025, the Company was operationally separated from the operations that were ultimately retained by WDC following completion of the spin-off.

In connection with this operational separation, personnel serving the Company in shared service functions were transferred into legal entities dedicated to the Company, and substantially all assets, liabilities, and contracts pertaining to operations of the Company were transferred to legal entities dedicated to the Company as well.

Accordingly, there was a substantial reduction in the pool of shared corporate overhead costs of WDC that were subject to allocation in the second and third quarters of 2025.

The table below summarizes the impact of expense allocations from WDC in the Consolidated Statements of Operations for the periods presented:

Accordingly, there was a substantial reduction in the pool of shared corporate overhead costs of WDC that were subject to allocation in the second and third quarters of fiscal year 2025 and those allocations ceased post-separation.

The table below summarizes the impact of expense allocations from WDC within the Consolidated Statements of Operations for the periods presented:

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2026 June 27,

6 unchanged sentences

Total allocation of Corporate Expenses $ — $ 402 $ 1,165

The Company’s historical financial statements do not purport to reflect what results of operations, financial position, equity or cash flows would have been if Sandisk had operated as a standalone company during the periods presented.

The Company’s historical financial statements for periods prior to the separation do not purport to reflect what results of operations, financial position, equity or cash flows would have been if the Company had operated as a standalone company during the periods presented prior to the separation.

Cash Management

1 unchanged sentence

WDC also directly collected certain of the Company’s receivables.

These activities were reflected as a component of the Net investment from Western Digital Corporation, and this arrangement is not reflective of the manner in which Sandisk would operate on a standalone company separate from WDC during the periods presented.

These activities were reflected as a component of the Net investment from Western Digital Corporation, and this arrangement is not reflective of the manner in which the Company would operate as a standalone company separate from WDC during the periods presented.

Western Digital Corporation Net Investment

Prior to the separation, the Net investment from Western Digital Corporation on the Consolidated Balance Sheets represented WDC’s historical investment in the Company, the net effect of transactions with and allocations from WDC, the Company’s retained earnings and the allocation to the Company of cumulative effect adjustments from the adoption of new accounting standards.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net Transfers from (to) Western Digital Corporation

A reconciliation of Net transfers from (to) Western Digital Corporation on the Consolidated Statements of Shareholders’ Equity to the corresponding amounts on the Consolidated Statements of Cash Flows is as follows:

2025 June 28,

2024 June 30,

July 3, 2026 June 27, 2025 June 28, 2024

(in millions)

Net transfers from Western Digital Corporation per Consolidated Statements of Shareholders’ Equity $ ( 585 ) $ 275 $ 376

Notes due (to) from Western Digital Corporation ( 1,223 ) 113 316

Net transfers from (to) Western Digital Corporation per Consolidated Statements of Shareholders’ Equity $ — $ ( 585 ) $ 275

Notes due to Western Digital Corporation — ( 1,223 ) 113

Other assets and liabilities, net transferred from Western Digital Corporation — ( 105 ) —

2 unchanged sentences

Tax balances transferred from Western Digital Corporation — ( 8 ) 17

Accumulated other comprehensive loss transferred to Western Digital Corporation 10 — —

Accumulated other comprehensive loss transferred from Western Digital Corporation — 10 —

Tax indemnification liability transferred to Western Digital Corporation — 112 —

Net transfers (to) from Western Digital Corporation per Consolidated Statements of Cash Flows $ ( 1,887 ) $ 394 $ 676

As of June 27, 2025, the outstanding accounts receivable from WDC were $ 65 million, related to the sale of NAND components, and the outstanding accounts payable and accrued expenses due to WDC, primarily related to the TSA were $11 million.

Net transfers to Western Digital Corporation per Consolidated Statements of Cash Flows $ — $ ( 1,887 ) $ 394

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leases and Other Commitments

The Company leases certain domestic and international facilities and data center space under long-term, non-cancelable operating leases that expire at various dates through 2039.

In connection with and subsequent to the separation, the Company entered into various sublease agreements with WDC under long-term, non-cancelable operating leases that expire at various dates through 2031.

The Company leases certain domestic and international facilities and datacenter space under long-term, non-cancelable operating leases that expire at various dates through fiscal year 2039.

These leases include no material variable or contingent lease payments.

11 unchanged sentences

Total operating lease liabilities $ 201 $ 219

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases:

10 unchanged sentences

Weighted average discount rate 7.4 % 7.3 %

As of June 27, 2025, minimum lease payments were as follows:

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of July 3, 2026, minimum lease payments were as follows:

Lease Amounts

7 unchanged sentences

In September 2023, WDC completed a sale and leaseback of its facility in Milpitas, California and received net proceeds of $ 191 million in cash.

A substantial majority of these assets are associated with the Company, and as a result, $ 134 million of the net proceeds from the sale-leaseback transaction were allocated to us on a relative square footage basis and reflected as a cash inflow from investing activities in the Consolidated Statements of Cash Flows for the year ended March 29, 2024.

In connection with the sale and leaseback, the Company recorded a gain of $ 60 million upon the closing of the transaction.

For more information, see Note 15, Employee Termination and Other Charges for additional disclosures .

A substantial majority of these assets are associated with the Company, and as a result, $ 134 million of the net proceeds from the sale-leaseback transaction were allocated to the Company on a relative square footage basis and reflected as a cash inflow from investing activities in the Consolidated Statements of Cash Flows for the year ended June 28, 2024.

In connection with the sale and leaseback, the Company recorded a gain of $ 60 million upon the closing of the transaction which was included within Employee termination and other in the Consolidated Statements of Operations.

The property is being leased back to the Company at a total annual rate of $ 16 million for the first year and increasing by 3 % per year thereafter through January 1, 2039.

The lease includes three five-year renewal options and one four-year renewal option for the ability to extend through December 2057.

The associated operating lease liability and right-of-use asset for this facility has been included in the Consolidated Balance Sheets as of June 27, 2025 and June 28, 2024.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The associated operating lease liability and right-of-use asset for this facility has been included in the Other liabilities and Other non-current assets in the Consolidated Balance Sheets as of July 3, 2026 and June 27, 2025.

Purchase Agreements and Other Commitments

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These purchase orders generally cover forecasted component supplies needed for production during the coming months, 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.

The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent upon certain conditions such as performance, quality and technology of the vendor’s components.

As of June 27, 2025, the Company had the following minimum long-term commitments:

The Company also enters into certain long-term agreements with suppliers that contain fixed future commitments, which are contingent upon certain conditions such as performance, quality and technology of the vendor’s components.

On March 25, 2026, the Company entered into a Private Placement Subscription Agreement (the “Equity Investment Agreement”) with Nanya, pursuant to which the Company agreed to make a strategic equity investment in Nanya through a private placement of Nanya common stock (the “Transaction”).

Under the Equity Investment Agreement, the Company agreed to purchase approximately 139 million shares of Nanya common stock for an aggregate purchase price of $ 970 million, representing approximately 3.9 % of Nanya’s outstanding common stock on a fully diluted basis following the Transaction.

The purchase price reflected a 15 % discount to Nanya’s 30-day average trading price, consistent with the Taiwan Securities and Exchange Act (“SEA”) and applicable regulations.

The private placement was conducted pursuant to Article 43-6 of the SEA and applicable regulations and was subject to post-closing filings with the Taiwan Stock Exchange and other Taiwanese regulatory authorities.

The shares issued to the Company in the private placement are subject to a statutory lock-up period of three years following delivery, during which the Company will be restricted from transferring or selling the shares, subject to limited exceptions under applicable Taiwanese law.

On April 8, 2026, the Company remitted the purchase price to fully subscribe for the shares of Nanya and recognized the investment as Marketable equity securities in the Consolidated Balance Sheet.

See Note 6, Fair Value Measurements and Investments for additional disclosures.

Concurrently with the Equity Investment Agreement, the Company and Nanya also entered into a multi-year strategic supply arrangement pursuant to which Nanya will supply the Company with DRAM products.

The supply arrangement is intended to support the Company’s long-term DRAM sourcing strategy.

The supply arrangement includes committed volumes

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

per year, subject to variable pricing that is determined on a quarterly basis.

Due to the variable pricing in this supply arrangement, actual amounts may differ from the amounts included within the table below.

As of July 3, 2026, the Company had the following minimum long-term commitments:

Long-term commitments

6 unchanged sentences

In connection with the separation, all outstanding RSU and PSU awards held by former employees of WDC and its affiliates, who became Sandisk employees after the separation, were adjusted pursuant to conversion ratios determined in accordance with the terms of the Employee Matters Agreement.

Outstanding RSU and PSU awards held by employees in the positions of Vice President and above as of the separation date were converted into RSU or PSU awards of Sandisk shares and RSU awards of WDC shares on a ratio of one-third (1/3) of one share of the Company’s common stock for each WDC award held by each such employee.

For all other employees, the value of the converted RSU awards was designed to preserve the aggregate intrinsic value of the award immediately after the separation when compared to the aggregate intrinsic value of those award immediately prior to separation.

Pursuant to the Employee Matters Agreement, the converted awards shall generally continue to be subject to the same terms and conditions as were applicable to the original WDC awards, including with respect to vesting, except as described in the Employee Matters Agreement.

As a result of the conversion, the Company will incur approximately $ 41 million of incremental stock-based compensation expense over the remaining service period for the awards.

Of this amount, $ 11 million was recognized during the year ended June 27, 2025, and approximately $ 30 million will be recognized over the awar ds’ remaining service periods.

Outstanding RSU and PSU awards held by employees in the positions of Vice President and above as of the separation date were converted into RSU or PSU awards of Sandisk shares and RSU awards of WDC shares at a ratio of one-third (1/3) of one share of the Company’s common stock for each WDC award held by each such employee.

For all other employees, the value of the converted RSU awards was designed to preserve the aggregate intrinsic value of the awards immediately after the separation when compared to the aggregate intrinsic value of those awards immediately prior to separation.

Pursuant to the Employee Matters Agreement, the converted awards generally continue to be subject to the same terms and conditions as were applicable to the original WDC awards, including with respect to vesting, except as described in the Employee Matters Agreement.

As a result of the conversion, the Company will incur approximately $ 41 million of incremental stock-based compensation expense over the period from the separation through the remaining service period for the awards.

Of this amount, $ 17 million was recognized during the year ended July 3, 2026, and approximately $ 12 million is expected to be recognized over the awar ds’ remaining service periods.

Additionally, the Company adopted the following incentive plans for Sandisk employees:

1 unchanged sentence

Grants of equity awards made after the separation to the Company’s executive officers and other employees will be made under the 2025 Long-Term Incentive Plan, which became effective on January 25, 2025.

After the separation, certain employees of the Company participate in stock incentive plans which allow for stock-based compensation in a number of forms, including RSU awards, PSU awards, and the ESPP.

2025 Long-Term Incentive Plan

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of June 27, 2025 , the maximum number of shares of the Company’s common stock that was authorized for award grants was 23.8 million shares.

As of July 3, 2026 , the maximum number of shares of the Company’s common stock that was authorized for award grants was 23.8 million shares.

The 2025 Long-Term Incentive Plan terminates on January 25, 2035, unless terminated earlier by the Company’s Board of Directors.

Employee Stock Purchase Plan

The Company has an ESPP under which WDC, as its then sole stockholder, has approved an aggregate of approximately 4.3 million shares of common stock for issuance to eligible employees.

The Company has an ESPP under which WDC, as its previous sole stockholder, approved an aggregate of approximately 4.3 million shares of common stock for issuance to eligible employees.

The fair value of the award at the grant date is based on the Black-Scholes valuation model.

The plan permits eligible employees to purchase common stock, through payroll deductions, at 95 % of the fair market value of a share of common stock on the first day of the 24-month offering period in which the employees are participating or 95% of the fair market value of a share of common stock on the applicable exercise date, whichever is lower.

Rights to purchase shares are granted during the second and fourth quarters of each year.

Rights to purchase shares are granted during the second and fourth quarters of each fiscal year.

After the separation, the Company had an offering period starting on April 1, 2025 and ending on May 31, 2025.

Following the end of this offering period, the Company will initiate regular offering periods of six months each generally beginning on June 1st and December 1st.

As of June 27, 2025 , the Company issued 0.1 million shares under the ESPP for aggregate purchase amounts of $ 5 million.

Following the end of this offering period, the Company initiated regular offering periods of six months each generally beginning on June 1st and December 1st.

As of July 3, 2026, the Company issued 0.7 million shares under the ESPP for aggregate purchase amounts of $ 58 million.

Stock-based Compensation Expense

13 unchanged sentences

Total $ 207 $ 160 $ 128

Any shortfalls or excess windfall tax benefits and tax deficiencies for shortfalls related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were not material for the periods presented.

Compensation cost related to unvested RSUs, PSUs, and rights to purchase shares of common stock under the ESPP are amortized on a straight-line basis over the remaining service period.

The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of June 27, 2025:

Compensation cost related to unvested RSUs, PSUs, and rights to purchase shares of common stock under the ESPP are amortized on a straight-line basis over the service period.

The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of July 3, 2026:

Unamortized Compensation Costs Weighted average service period

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RSUs and PSUs

The following table summarizes RSU and PSU award activity under the Company’s incentive plans during the year ended June 27, 2025:

Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value at Vest Date

The following table summarizes RSU and PSU award activity under the Company’s incentive plans during the year ended July 3, 2026:

Number of Shares Weighted Average Grant Date Fair Value

(in millions)

RSUs and PSUs outstanding at June 27, 2025 6.6 $ 38.98

Awards converted from Western Digital Corporation Plans (1)

Granted 3.3 66.93

1 unchanged sentence

Canceled/forfeited ( 0.3 ) 41.24

RSUs and PSUs outstanding at June 27, 2025 6.6 $ 38.98 $ —

(1) This amount excludes 3.1 million of WDC equity awards held by Sandisk employees, which upon vesting will be issued in WDC shares instead of the Company’s shares.

RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock upon vesting.

RSUs and PSUs outstanding at July 3, 2026 6.6 54.00

Total weighted average fair value, as of their respective vesting dates, for the years ended July 3, 2026, and June 27, 2025 were $ 1,808 million and $ 47 million, respectively, of common stock available for future grants under our equity incentive plans.

For the year ended June 28, 2024, the Company’s equity incentive plan was not yet active and there was no common stock available for future grants.

RSUs are generally settled in an equal number of shares of the Company’s common stock upon vesting.

PSUs contain performance conditions under which the recipient may earn from 0 % to 300 % of the target number of shares awarded.

The PSU awards consist of 1.4 million granted awards that could result in a maximum of 3.6 million shares available to vest if all PSU performance conditions are met.

Forfeitures are recognized as they occur.

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The fair values of ESPP purchase rights have been estimated at the grant date using a Black-Scholes-Merton option pricing model with the following weighted average assumptions:

2026 2025 2024

Weighted-average expected term (in years)

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Dividend yield

Fair value $ 11.85

$ 89.60 $ 11.85 $ —

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share Repurchase Program

On April 30, 2026, the Company announced that its Board of Directors had approved a $ 6.0 billion (exclusive of fees and commissions) share repurchase program (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 the Company’s management.

The Company expects 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.

The Company may suspend or discontinue the Repurchase Program at any time.

The approval of the Repurchase Program does not obligate the Company 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 July 3, 2026.

Net Income (Loss) per Common Share

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On the separation date, the Company issued 145 million shares of common stock, par value $ 0.01 per share.

This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the separation, and these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

For periods prior to the separation, it is assumed that there are no dilutive equity instruments as there were no equity awards of Sandisk outstanding prior to the separation.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

This share amount is utilized for the calculation of basic and diluted net income (loss) per share for all periods presented prior to the separation, and these shares are treated as issued and outstanding for purposes of calculating historical diluted net income (loss) per share.

For periods prior to the separation, it is assumed that there were no dilutive equity instruments as there were no equity awards of Sandisk outstanding prior to the separation.

The following table presents the computation of basic and diluted income (loss) per common share:

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Weighted average shares outstanding:

Basic and diluted 145 145 145

Net loss per common share:

Basic and diluted $ ( 11.32 ) $ ( 4.63 ) $ ( 14.78 )

Dilutive weighted-average shares (1)

(1) Dilutive stock-based awards were excluded from the calculation of diluted shares because their effect would have been anti-dilutive.

Basic 147 145 145

Net income (loss) per common share:

Basic $ 77.78 $ ( 11.32 ) $ ( 4.63 )

$ 73.76 $ ( 11.32 ) $ ( 4.63 )

(1) For the year ended July 3, 2026, an insignificant number of weighted average outstanding awards were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive.

For the year ended June 27, 2025, 2 million weighted average outstanding awards were excluded from the calculation of the diluted net income per share because their effect would have been anti-dilutive.

(2) For the years ended June 27, 2025 and June 28, 2024, the Company recorded a net loss.

Accordingly, the potential dilution from all equity awards would be anti-dilutive.

As a result, basic net loss per share is equal to diluted net loss per share for such periods.

For the year ended June 28, 2024, it was also assumed that there are no dilutive equity instruments as there were no equity awards of Sandisk outstanding prior to the separation.

Basic net income (loss) per share is computed using (i) net income (loss) divided by (ii) weighted average basic shares outstanding.

Diluted net income (loss) per share is computed as (i) net income divided by (ii) weighted average diluted shares outstanding.

Diluted net income (loss) per share is computed as (i) net income (loss) divided by (ii) weighted average diluted shares outstanding.

The treasury stock method is used to determine the dilutive impact of unvested equity awards.

Potentially dilutive shares include dilutive outstanding employee RSUs, PSUs, and rights to purchase shares of common stock under the ESPP.

For the year ended June 27, 2025, the Company recorded net losses, and as such, all potentially dilutive securities have been excluded from those periods as including them would be anti-dilutive.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income Tax Expense

13 unchanged sentences

- State 18 2 7

1,464 174 185

Foreign ( 29 ) ( 13 ) 7

3 unchanged sentences

Income tax expense $ 1,584 $ 162 $ 169

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

H.R.1, more widely known as the One Big Beautiful Bill Act, was recently signed into law on July 4, 2025.

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.

The tax rates for income earned by the Company’s foreign subsidiaries will also be changed under H.R.

Depending on the Company’s operating results, these changes can materially impact the Company’s effective tax rate and reduce its operating cash flows.

As H.R.1 was enacted after our fiscal year 2025, its impact on the tax provision will be reflected in fiscal year 2026 .

During the year ended July 3, 2026, the Company recorded a $ 10 million tax benefit in relation to the OBBBA’s impact on its 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.

The Company does not expect to be subject to the CAMT of 15% for 2025 as its average annual AFSI did not exceed $1.0 billion for the preceding three-year period.

On December 20, 2021, the Organization for Economic Co-operation and Development G20 (“OECD/G20”) Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two (“Pillar Two”).

Several non-U.S.

jurisdictions have either enacted legislation or announced their intention to enact future legislation to adopt certain or all components of Pillar Two, some of which are effective for the Company in 2025.

For 2025, the Company currently expects to be able to meet certain transitional safe harbors and does not expect any material Pillar Two taxes.

As more jurisdictions adopt this legislation in 2026, there may be material increases in the Company’s future tax obligations in certain jurisdictions.

The Company does not expect to be subject to the CAMT of 15% for fiscal year 2026 as its average annual AFSI did not exceed $1.0 billion for the preceding three-year period.

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 the Company operates.

Accordingly, these taxes are included in the Company’s Income tax expense for the year ended July 3, 2026.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s Income tax expense and the effective tax rate:

4 unchanged sentences

Effective tax rate 12 % ( 11 ) % ( 34 ) %

The relative mix of earnings and losses by jurisdiction, the goodwill impairment, the foreign income inclusion, 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 June 27, 2025.

The primary drivers of the difference between the effective tax rate for the years ended June 28, 2024 and the U.S.

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.

The primary drivers of the difference between the effective tax rate for the year ended June 28, 2024 and the U.S.

Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the foreign income inclusion, credits, and tax holidays in Malaysia.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Taxes

12 unchanged sentences

Long-lived assets ( 10 ) ( 7 )

Unremitted Earnings of Certain Non-US Entities ( 77 ) ( 86 )

Unremitted earnings of certain non-U.S.

entities ( 46 ) ( 77 )

Unrealized gain on Marketable equity securities ( 172 ) —

Other ( 15 ) ( 18 )

2 unchanged sentences

Deferred tax assets, net $ ( 95 ) $ 41

The decrease in the net deferred tax assets is attributable primarily to a decrease in hedging costs not currently deductible and is based on the Company’s position in its foreign exchange contracts.

The decrease in the net deferred tax assets is attributable primarily to unrealized gain on marketable securities, offset by a decrease in deferred tax liabilities on undistributed foreign earnings.

The Company continues to assess and adjust its valuation allowance based on operating results and market conditions.

After weighing both the positive and negative evidence available, including, but not limited to, earnings history, projected future outcomes, industry and market trends and the nature of each of the deferred tax assets, the Company determined that it is able to realize its deferred tax assets except for certain loss and credit carryforwards.

The Company is permanently reinvested with respect to certain foreign earnings.

There is no unrecognized deferred tax liability associated with the repatriation of these foreign undistributed earnings as it can be achieved without additional federal tax consequences.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is permanently reinvested with respect to certain foreign earnings.

There is no unrecognized deferred tax liability associated with the repatriation of these foreign undistributed earnings.

Adoption of Recently Issued Accounting Pronouncement

The incremental disclosures required by ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which includes disaggregation of information in the rate reconciliation and income taxes paid, were adopted by the Company on a prospective basis for the year ending July 3, 2026.

Effective Tax Rate

Reconciliation of the U.S.

federal statutory rate to the Company’s effective tax rate is as follows:

2025 2024 2023

(in millions)

federal statutory rate to the Company’s effective tax rate for fiscal year 2026 is as follows:

in USD (millions) In percent

federal statutory income tax rate $ 2,733 21 %

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects

Tax holiday exempt ( 492 ) ( 4 )

Other Foreign Jurisdictions 103 1

Tax rate and law change ( 7 ) —

Effect of cross-border tax law

Foreign-Derived Deduction-Eligible Income ( 725 ) ( 5 )

Net Foreign Tested Income (2)

Research and development tax credits ( 60 ) ( 1 )

Change in valuation allowance ( 2 ) —

Non-taxable or non-deductible items

Stock-based compensation ( 227 ) ( 2 )

Other permanent differences ( 1 ) —

Change in unrecognized tax benefits 70 1

Other adjustments ( 14 ) —

Income tax expense $ 1,584 12 %

(1) State taxes in Arizona, Florida, Illinois and Pennsylvania make up the majority of the tax effect in fiscal year 2026.

companies are subject to a lower tax rate on certain income earned by its foreign subsidiaries.

This regime is referred to as the Net Controlled Foreign Corporation Tested Income.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of the U.S.

federal statutory rate to the Company’s effective tax rate in 2025 and 2024 is as follows:

federal statutory rate 21 % 21 %

2 unchanged sentences

Change in valuation allowance — ( 2 )

Tax effect of U.S foreign income inclusion ( 7 ) ( 1 ) —

Tax effect of U.S.

foreign income inclusion ( 7 ) ( 1 )

Tax effect of U.S.

foreign derived intangible income 1 2

12 unchanged sentences

Effective income tax rate ( 11 ) % ( 34 ) %

Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended July 3, 2026 is as follows:

Tax Holidays and Carryforwards

A substantial portion of the Company’s manufacturing operations in Malaysia operate under various tax holidays and tax incentive programs, which will expire in whole or in part at various dates during 2028 through 2031.

Certain tax holidays and tax incentive programs may be extended if specific conditions are met.

The net impact of these tax holidays and tax incentives was an increase to the Company’s net earnings by $ 82 million, or $ 0.56 per share, in 2025.

The Company was at loss in Malaysia during 2024 and 2023.

The tax incentives had no impact on the Company’s net earnings.

As of June 27, 2025 , the Company had $ 38 million of state tax credit carryforwards that do not expire.

As of June 27, 2025, the Company had varying amounts of NOL carryforwards, totaling $ 2.1 billion, that do not expire or, if not used, expire in various years beginning in 2028, depending on the country.

The net impact of these tax holidays and tax incentives was an increase to the Company’s net earnings by $ 492 million, or 3.18 per share, in 2026 and $ 82 million, or 0.57 per share, in 2025.

The Company was at a loss in Malaysia during 2024.

The tax incentives had no impact on the Company’s net earnings in 2024.

As of July 3, 2026 and June 27, 2025, the Company had $ 95 million and $ 38 million, respectively, of state tax credit carryforwards that do not expire.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of July 3, 2026 and June 27, 2025, the Company had varying amounts of NOL carryforwards, totaling $ 0.3 billion, and $ 2.1 billion, respectively, that do not expire or, if not used, expire in various years beginning in 2028, depending on the country.

The majority of the NOL carryforwards reside in Malaysia.

1 unchanged sentence

With the exception of certain unrecognized tax benefits that are directly associated with the tax position taken, unrecognized tax benefits are presented gross in the Consolidated Balance Sheets.

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding accrued interest and penalties for the year ended June 27, 2025:

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding accrued interest and penalties for the year ended July 3, 2026:

2026 2025 2024

(in millions)

Unrecognized tax benefit, beginning balance $ 47 $ 25 $ 17

Unrecognized tax benefit, beginning $ 140 $ 47 $ 25

Gross increases related to prior year tax positions 31 6 10

1 unchanged sentence

Gross decrease related to prior year tax positions ( 12 ) ( 1 ) ( 3 )

Gross decrease related to lapse of statute of limitations ( 4 ) — —

Gross increase related to transfer from Western Digital Corporation — 78 —

Gross decrease related to settlement — ( 7 ) —

Unrecognized tax benefit, ending balance $ 140 $ 47 $ 25

As of June 27, 2025 and June 28, 2024, the liability for unrecognized tax benefits (excluding accrued interest and penalties) was $ 140 million and $ 47 million, respectively.

Unrecognized tax benefit, ending $ 323 $ 140 $ 47

As of July 3, 2026 and June 27, 2025, the liability for unrecognized tax benefits (excluding accrued interest and penalties) was $ 323 million and $ 140 million, respectively.

Interest and penalties related to unrecognized tax benefits are recognized in liabilities recorded for uncertain tax positions and are recorded in the provision for income taxes.

Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of June 27, 2025 and June 28, 2024 was $ 11 million and $ 9 million, respectively.

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.

The Company files U.S.

1 unchanged sentence

state, and foreign tax returns.

federal and state tax returns for fiscal year 2025 are initial filings.

The Company is currently subject to, or could become subject to, tax authority examinations in various jurisdictions for previously filed returns dating back as early as 2009.

The Company believes that an adequate provision has been made for any adjustments that may result from any other tax examinations.

The Company believes that adequate provision has been made for any adjustments that may result from any other tax examinations.

However, the outcome of such tax examinations cannot be predicted with certainty.

If any issues addressed in the Company’s tax examinations are resolved in a manner inconsistent with management’s expectations, the Company may be required to adjust its provision for income taxes in the period in which such resolution occurs.

As of June 27, 2025 , it was not possible to estimate the amount of change, if any, in the unrecognized tax benefits that is reasonably possible within the next twelve months.

Any significant change in the amount of the Company’s liability for unrecognized tax benefits would most likely result from additional information resulting from the examination of the Company’s tax returns.

Employee Termination and Other Charges

Business Realignment

The Company periodically incurs charges to realign its operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure and focus its resources.

The Company has taken actions to reduce the amount of capital invested in facilities, including the sale-leaseback of its facility in Milpitas, California, in September 2023, as discussed in Note 11, Leases and Other Commitments.

The Company recorded the following net charges related to these actions for the periods presented:

2025 2024 2023

(in millions)

Employee termination benefits $ 18 $ 15 $ 68

Other charges (gains):

Asset impairments and other charges (gains) — 5 1

Contract termination and other 3 — —

Gain on sale-leaseback of facility — ( 60 ) —

Total employee termination and other charges $ 21 $ ( 40 ) $ 69

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents an analysis of the components of the activity against the reserve during the years ended June 27, 2025, and June 28, 2024, which consisted entirely of employee termination benefits:

Employee Termination Benefits

(in millions)

Accrual balance at June 30, 2023 $ 3

Cash payments ( 18 )

Accrual balance at June 28, 2024 —

Cash payments ( 3 )

Accrual balance at June 27, 2025 $ 15

If any issues addressed in the Company’s tax examinations are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

Any significant change in the amount of the Company’s liability for unrecognized tax benefits would most likely result from additional information relating to the examination of the Company’s tax returns.

Legal Proceedings

In the normal course of business, the Company is subject to legal proceedings, lawsuits and other claims.

Although the ultimate aggregate amount of reasonably possible monetary liability or financial impact with respect to these other matters is subject to many uncertainties, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows.

Although the ultimate aggregate amount of reasonably possible monetary liability or financial impact with respect to these matters is subject to many uncertainties, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows.

However, any monetary liability and financial impact to the Company from these matters could differ materially from the Company’s expectations.

During the 2026 fiscal year, the Company recognized $ 93 million related to legal settlements in Other income/(expense), net.

Amounts recognized in relation to legal matters were immaterial for f iscal years 2025 and 2024.

Summarized Financial Information

1 unchanged sentence

The summarized financial information below includes the portions attributable to both the Company and the other investees in these entities.

The Company has been an investee in the Flash Ventures for all periods presented.

The Company has been an investor in the Flash Ventures for all periods presented.

The Company’s investment in SDSS was established upon the divestiture of the business on September 28, 2024, and its investment in the Unis Venture was transferred to the Company on January 24, 2025, See Note 10, Related Parties and Related Commitments and Contingencies for additional disclosures.

Accordingly, the summarized financial information of these ventures for the year ended June 30, 2025 includes the results of Flash Ventures, the Unis Venture and SDSS;

whereas the comparative periods for the years ended June 28, 2024 and June 30, 2023, include only the Flash Ventures.

The table below presents the combined summarized financial information for these periods:

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accordingly, the summarized financial information of these ventures for the years ended July 3, 2026 and June 27, 2025 includes the results of Flash Ventures, the Unis Venture, and SDSS;

whereas the comparative period for the year ended June 28, 2024, include only the Flash Ventures.

The table below presents the summarized financial information for these periods:

(in millions)

Current assets $ 1,583 $ 1,423

$ 1,423 $ 777

Non-current assets 5,737 6,185

Total assets 7,320 7,608

Current liabilities 3,025 2,797

3 unchanged sentences

2026 2025 2024

SANDISK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2025 2024 2023

(in millions)

$ 2,315 $ 2,252 $ 2,788

Gross profit (loss)

(101) ( 51 ) 138

Net income (loss)

$ (63) $ ( 9 ) $ 89

Net sales $ 2,775 $ 2,315 $ 2,252

Gross loss ( 93 ) ( 101 ) ( 51 )

Net loss $ ( 85 ) $ ( 63 ) $ ( 9 )

Subsequent Events

Share Repurchase Program

On August 5, 2026, the Company announced that its Board of Directors had approved a $ 14.0 billion (exclusive of fees and commissions) share repurchase program (the “Repurchase Program”).

The Company expects 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.

The Company may suspend or discontinue the Repurchase Program at any time.

The approval of the Repurchase Program does not obligate the Company to repurchase any common shares.

New Business Model Agreements

Subsequent to the balance sheet date, the Company entered into two additional NBMs with an aggregate transaction price of $ 31.3 billion.These agreements provide for customer purchase commitments for specified product volumes over multi-year periods.

Consistent with the Company's other NBMs, customer obligations are supported by financial guarantees, including cash deposits and other financial instruments, that are intended to protect the Company in the event a customer fails to satisfy its contractual purchase obligations.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data