Financial Data and Key Metrics Changes - The company reported revenue of $2.3 billion for the first quarter, representing a sequential increase of 21% and a year-over-year increase of 23% [4][12] - Non-GAAP earnings per share (EPS) were $1.22, up from $0.29 in the prior quarter, exceeding guidance of $0.70-$0.90 [4][15] - Adjusted free cash flow generated was $448 million, with a free cash flow margin of 19.4% [4][17] - Non-GAAP gross margin for the first quarter was 29.9%, up 350 basis points sequentially, compared to guidance of 28.5%-29.5% [12][15] Business Line Data and Key Metrics Changes - Data center revenue increased by 26% sequentially to $269 million, driven by strong demand from hyperscale and OEM customers [12][14] - Edge revenue reached $1.387 billion, up 26% sequentially, supported by a PC refresh cycle and smartphone launches [12][14] - Consumer revenue was $652 million, up 11% quarter-over-quarter, with strong sales from partnerships in the gaming sector [12][14] Market Data and Key Metrics Changes - The data center market is expected to become the largest segment in NAND by 2026, with demand growth projected at mid-40% [38][46] - The company anticipates ongoing supply constraints, with demand expected to exceed supply through the end of 2026 and beyond [17][54] - The average smartphone capacity per device is expected to grow in the high single digits in 2025 and 2026, while PC unit shipments are projected to grow in low single digits [8][95] Company Strategy and Development Direction - The company is focused on growing revenue, expanding margins, and generating sustainable free cash flow to create shareholder value [4][19] - Strategic allocation decisions are being made to maximize long-term value creation, particularly in data centers and AI infrastructure [5][6] - The company is transitioning from a mobile-centric approach to a more diversified strategy that includes significant growth in the data center business [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to create significant and sustainable value for customers and shareholders, driven by strong execution and robust demand [10][22] - The company is optimistic about the long-term demand for NAND products, particularly in data centers, as customers seek higher performance solutions [9][45] - Management noted that the current market dynamics are favorable, with customers proactively seeking long-term commitments for supply [25][26] Other Important Information - The company achieved a net cash position of $91 million, six months ahead of target, driven by strong cash generation [4][16] - Capital expenditures for the quarter totaled $387 million, representing 16.8% of revenue, with plans to continue investing in the business [17][19] - The company is aligning its end market nomenclature to better match industry standards, referring to data center, edge, and consumer segments [12][13] Q&A Session Summary Question: Are you seeing similar trends in NAND as in the HD world regarding customer engagement and allocation? - Management noted that customers are seeking multi-quarter deals for certainty of supply, indicating a shift from short-term to longer-term agreements [25][26] Question: What is the outlook for bit shipment growth in 2025 and 2026? - Management expressed optimism about maintaining market share and growing the data center business through innovation and product qualifications [29][30] Question: How do you view the supply situation over the next couple of years? - Management indicated that the market is expected to remain undersupplied through 2026, with a focus on increasing productivity without adding wafer capacity [35][36] Question: What is the update on enterprise SSD qualifications and market share ambitions? - Management reported strong progress in enterprise SSD qualifications and expects sequential growth throughout FY2026, with increasing sales in this segment [37][38] Question: How does the enterprise SSD market opportunity compare to hard disk drives? - Management believes both technologies will grow, with enterprise SSDs expected to grow faster due to rising data demands driven by AI [44][46] Question: Can you clarify the guidance for the next quarter regarding pricing and bit growth? - Management expects revenue growth to be primarily driven by pricing, with low single-digit bid growth anticipated [92][93] Question: What is the status of the Ultra QLC 256 Terabyte product? - Management confirmed that the 128T product is under qualification and expected to ramp in mid-2026, with multiple customers involved [77][78]