Western Digital Corporation Q4 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Western Digital Q4 & FY2026 Earnings Summary

Financial Highlights (FY2026 Full Year vs FY2025)

  • Revenue: $12.9 billion, +36% YoY
  • Gross margin: 49.1%, +970 bps YoY
  • Operating margin: 37.3%, +1,290 bps YoY
  • EPS: $10.22, more than doubled YoY
  • Free cash flow: $3.5 billion (27% FCF margin)
  • Capital returned to shareholders: $3.1 billion
  • Ended year with net positive cash position

Q4 FY2026 Results (vs Q4 FY2025)

  • Revenue: $3.75 billion, +44% YoY (at or above high end of guidance)
  • EPS: $3.56, +109% YoY
  • Gross margin: 54.4%, +1,310 bps YoY
  • Operating income: $1.66 billion, +126% YoY; operating margin 44.2% (+1,610 bps YoY)
  • Exabytes shipped: 231, +22% YoY
  • Free cash flow: $1.3 billion (34% FCF margin)
  • Balance sheet: $1.6B cash, $1.1B debt, net cash position $500M

Segment Revenue (Q4 FY2026 vs Q4 FY2025)

  • Cloud: $3.3 billion (89% of total), +43% YoY
  • Client: $225 million (6% of total), +61% YoY
  • Consumer: $187 million (5% of total), +38% YoY

Strategic & Operational Updates

  • Strong demand driven by AI (inference, Agentic AI, physical AI) and core cloud services; ~80% of hyperscale data center storage on HDDs

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Operator : Good afternoon, and welcome to the Western Digital's Fourth Quarter Fiscal 2026 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Ambrish Srivastava, Vice President of Investor Relations. Please go ahead. 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, our business plans and performance, ongoing market trends and our future financial results. We assume no obligation to update these statements. Please refer to our most recent annual report on Form 10-K and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations. In our prepared remarks, our comments will be related to non-GAAP results on a continuing operations basis, unless stated otherwise. Reconciliations between the non-GAAP and comparable GAAP financial measures are included in the press release and other materials that are being posted in the Investor Relations section of our website at investor.wdc.com. Lastly, I want to

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