Flash memory is all the rage nowadays, and it shows in SanDisk's (Nasdaq: SNDK) latest earnings results.

Third-quarter revenue rose 15% to a record $1.4 billion while non-GAAP net income fell to $292 million, or $1.20 per share. Revenue was on track with expectations, but the bottom line bested the estimates of $1.07. Gross margin contracted to 43.2% from last year's 51.8%, and operating margin similarly shrank to 27.3%. Going forward, the company expects fourth-quarter revenue in the ballpark of $1.5 billion to $1.6 billion, mostly in line with the consensus of $1.6 billion.

The company generated cash flow from operations of $176 million and free cash flow of $189 million. The balance sheet remains solid with cash and investments of $5.3 billion.

Demand was driven by strength in the mobile market, as all smartphones and tablets utilize flash memory. While its wares are found in the likes of Research In Motion's (Nasdaq: RIMM) underwhelming PlayBook, the company also enjoys spots in more popular tablets like Samsung's Galaxy Tab. Unfortunately, it hasn't been blessed by tablet king Apple (Nasdaq: AAPL) with a spot in the iPad.

SanDisk CEO Sanjay Mehrotra said, "Our broad portfolio of innovative storage solutions positions us exceedingly well to capitalize on our numerous growth opportunities in smart mobile devices and consumer and enterprise computing platforms."

I have some concerns about the company's long-term prospects, since flash memory is inherently a commoditized offering and SanDisk may have difficulty differentiating itself from competitors such as Micron (NYSE: MU), which has more diversified operations.

In the meantime, the stock is enjoying some nice gains today after the report, up 8% as of this writing. After all, there are a lot of bulls out there in our CAPS community who have granted SanDisk an overall four-star rating.

What do you think? Will SanDisk outperform or underperform the market? Head on over to CAPS to make your pick. While you're at it, add SanDisk to your Foolish watchlist.