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Shareholders' Equity
 12 Months Ended
Jun. 27, 2025
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 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 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.
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 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. The 2025 Long-Term Incentive Plan terminates on January 25, 2035, unless terminated earlier by the Company’s Board of Directors.
2025 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 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.
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.
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:
202520242023
(in millions)
RSUs and PSUs$171 $133 $148 
ESPP11 16 17 
Total$182 $149 $165 
202520242023
(in millions)
Cost of revenue$16 $20 $19 
Research and development81 71 88 
Selling general, and administrative85 58 58 
Subtotal$182 $149 $165 
Tax benefit(22)(21)(22)
Total$160 $128 $143 
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:
Unamortized Compensation CostsWeighted average service period
(in millions)(years)
RSUs and PSUs$315 2.27
ESPP16 1.81
Total unamortized compensation cost$331 
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 SharesWeighted Average Grant Date Fair ValueAggregate Intrinsic Value at Vest Date
(in millions)
RSUs and PSUs outstanding at June 28, 2024— $— $— 
Awards converted from Western Digital Corporation Plans (1)
6.4 35.32 — 
Granted1.5 50.47 — 
Vested(1.1)34.07 46.95 
Canceled/forfeited(0.2)36.14 — 
RSUs and PSUs outstanding at June 27, 20256.6 $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. 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:
2025
Weighted-average expected term (in years)0.93
Risk-free interest rate4.02 %
Stock price volatility0.56 
Dividend yield— %
Fair value$11.85