Western Digital Corporation Q1 FY2027 Earnings Call

· Earnings call transcript and AI-powered summary

Western Digital Q1 Fiscal 2027 Earnings Summary

Financial Performance Highlights (Q1 FY2027 vs. Q1 FY2026)

  • Revenue: $4.4 billion, +55% year-over-year (YoY), driven by strong exabyte growth and favorable pricing.
  • Exabytes Shipped: 248 exabytes, +22% YoY and +8% sequentially, with nearline products leading growth.
  • Gross Margin: 58.1%, +1,420 basis points YoY; incremental gross margin above 80%.
  • Operating Margin: 49.1%, reflecting strong operating leverage (operating expenses ~9% of revenue).
  • Operating Income: $2.2 billion, +152% YoY.
  • EPS: $4.64, +161% YoY (diluted share count 383 million).
  • Free Cash Flow: $1.4 billion; returned $1.1 billion to shareholders via repurchases and dividends.
  • Balance Sheet: Ended with net cash position of $0.5 billion; quarterly dividend increased 17% to $0.175 per share.

Segment Revenue (Q1 FY2027)

  • Cloud: $3.9 billion (88% of total), +54% YoY.
  • Client: $320 million (7% of total), +119% YoY.
  • Consumer: $193 million (5% of total), +19% YoY.

Key Business & Technology Updates

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Operator: Good afternoon, and thank you for standing by. Welcome to Western Digital's First Quarter Fiscal 2027 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. Now I would like to turn the call over to Mr. Ambrish Srivastava, Vice President, Investor Relations. You may begin. Ambrish Srivastava: Thank you, and good afternoon, everyone. Joining me today are Irving Tan, WD's Chief Executive Officer, and Kris Sennesael, WD's Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements based on management's current assumptions and expectations, which are subject to various risks and uncertainties. These forward-looking statements include expectations for our product portfolio, business plans and performance, ongoing market trends and future financial results. We assume no obligation to update these statements. Please refer to our most recent annual report on Form 10-K and other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations. Unless stated otherwise, today's remarks reflect non-GAAP results. Reconciliations to GAAP results are available in our press release and at investor.wdc.com. With that, I will now turn the call over to Irving. Tiang Yew Tan: Thanks, Ambrish. Good afternoon, everyone, and thank you for joining us today. Q1 marked a strong start to fiscal 2027, reflecting solid execution a

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