In This Article:
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Revenue: $4.3 billion, up 5% sequentially and 41% year-over-year.
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Non-GAAP Gross Margin: 35.9%, down 2.6 percentage points sequentially.
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Non-GAAP Earnings Per Share: $1.77.
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Cloud Revenue: $2.3 billion, representing 55% of total revenue, up 6% sequentially.
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Client Revenue: $1.2 billion, representing 27% of total revenue, down 3% sequentially.
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Consumer Revenue: $0.8 billion, representing 18% of total revenue, up 14% sequentially.
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Flash Revenue: $1.9 billion, flat sequentially, up 13% year-over-year.
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HDD Revenue: $2.4 billion, up 9% sequentially and 76% year-over-year.
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Operating Income: $864 million, down 2% sequentially.
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Operating Cash Flow: $403 million.
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Free Cash Flow: $335 million.
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Gross Debt Outstanding: $7.4 billion.
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Cash and Cash Equivalents: $2.3 billion.
Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Western Digital Corp (NASDAQ:WDC) reported a revenue of $4.3 billion for the second fiscal quarter, marking a 5% sequential increase and a 41% year-over-year growth.
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The HDD business achieved record gross margins and data center revenue hit an all-time high, driven by strong demand for nearline storage solutions.
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The company is in the final stages of separating its flash and HDD businesses, with key milestones like Form 10 filing and financing activities completed.
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Western Digital Corp (NASDAQ:WDC) is strategically positioned to capitalize on long-term storage demand driven by the AI data cycle.
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The company has seen a 50% sequential growth in external SSD drive shipments, indicating strong consumer demand and successful product launches.
Negative Points
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The flash segment is facing temporary headwinds due to pricing pressure and oversupply, leading to a sequential decline in profitability.
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Gross margin for the fiscal second quarter was below guidance, impacted by pricing pressure in the flash segment.
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Western Digital Corp (NASDAQ:WDC) anticipates a sequential revenue decline in the fiscal third quarter due to lower volume in both flash and HDD segments.
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The company is experiencing underutilization charges in the flash segment as it manages supply in response to ongoing inventory adjustments.
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There is a mid-cycle pause in the flash market, with expectations of continued pricing headwinds and lower bit shipments in the near term.
Q & A Highlights
Q: Can you explain the sequential decline in HDD for the March quarter? Is it due to lower client and consumer units, or is there a pause in cloud demand? A: Irving Tan, Executive Vice President for Global Operations, explained that the decline is due to quarter-on-quarter variations as they support customers with deployment timing and manage supply-demand tightness. The overall business outlook remains healthy.