v3.26.1
Shareholders' Equity
 12 Months Ended
Jul. 03, 2026
Share-Based Payment Arrangement [Abstract]  
Shareholders' Equity Shareholders’ Equity
Prior to the separation, certain of the Company’s employees participated in WDC’s stock incentive plans (the “WDC Plans”), whereby all awards granted under the plans consisted of WDC common stock. The stock-based compensation expense recognized in the Company’s Consolidated Financial Statements was determined based upon employees who participated in the WDC Plans and exclusively supported the Company’s operations, as well as an allocation of WDC’s corporate and shared employee stock-based compensation expenses.
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 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 awards’ remaining service periods.
Additionally, the Company adopted the following incentive plans for Sandisk employees: (i) Sandisk Corporation 2025 Long-Term Incentive Plan (the “2025 Long-Term Incentive Plan”), and (ii) Sandisk Corporation 2025 Employee Stock Purchase Plan. 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
The types of awards that may be granted include stock options, stock appreciation rights, RSUs, PSUs, cash awards, and other stock-based awards. Persons eligible to receive awards include officers and employees of the Company or any of its subsidiaries, members of the Board and certain consultants and advisors. The vesting of awards is determined at the grant date. Each award expires on a date determined at the grant date. RSUs typically vest over periods ranging from two to four years from the grant date. PSUs are granted to certain employees and vest only after the achievement of a predetermined performance or market conditions and completion of requisite service periods. Once the performance or market conditions are met, the employee’s vesting of PSUs is generally subject to continued service.
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 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 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 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
The following tables present the Company’s stock-based compensation expense for equity-settled awards by type, financial statement line, and the related tax benefit included in the Company’s Consolidated Statements of Operations:
202620252024
(in millions)
RSUs and PSUs$201 $171 $133 
ESPP31 1116
Total$232 $182 $149 
202620252024
(in millions)
Cost of revenue$19 $16 $20 
Research and development105 8171 
Selling, general, and administrative108 8558 
Subtotal$232 $182 $149 
Tax benefit(25)(22)(21)
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, are excluded from the tax benefit above.
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 CostsWeighted average service period
(in millions)(years)
RSUs and PSUs$327 2.33
ESPP71 0.99
Total unamortized compensation cost$398 
RSUs and PSUs
The following table summarizes RSU and PSU award activity under the Company’s incentive plans during the year ended July 3, 2026:
Number of SharesWeighted Average Grant Date Fair Value
(in millions)
RSUs and PSUs outstanding at June 27, 20256.6 $38.98 
Granted3.3 66.93 
Vested(3.0)36.91 
Canceled/forfeited(0.3)41.24 
RSUs and PSUs outstanding at July 3, 20266.6 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.
Fair Value Assumptions
RSU and PSU Grants
The fair value of the Company’s RSU and PSU awards with a performance condition is determined based upon the closing price of the Company’s stock price on the grant date. The fair value of PSU awards with a market condition is estimated using a Monte Carlo simulation model on the grant date.
ESPP - Black-Scholes-Merton Model
The fair value of ESPP purchase rights issued is estimated at the grant date of the purchase rights using the Black-Scholes-Merton option pricing model. The Black-Scholes-Merton option pricing model requires the input of assumptions such as the expected stock price volatility and the expected period until options are exercised. Purchase rights under the ESPP are generally granted on either June 1st or December 1st of each year.
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:
202620252024
Weighted-average expected term (in years)
1.250.93— 
Risk-free interest rate3.58 %4.02 %— %
Stock price volatility
0.53 0.56 — 
Dividend yield
— %— %— %
Fair value
$89.60 $11.85 $— 
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.