In This Article:
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Revenue: $2.3 billion, down 5% sequentially, up 31% year over year.
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Non-GAAP Gross Margin: 40.1%.
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Non-GAAP Earnings Per Share: $1.36.
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Free Cash Flow: $436 million.
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Cloud Revenue: $2.0 billion, representing 87% of total revenue, down 4% sequentially, up 38% year over year.
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Client Revenue: $137 million, representing 6% of total revenue, down 2% sequentially and year over year.
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Consumer Revenue: $150 million, representing 7% of total revenue, down 13% sequentially, down 4% year over year.
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Operating Expenses: $324 million, down sequentially.
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Operating Income: $596 million, up 85 basis points sequentially.
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Operating Margin: 26.0%, up 1.5 percentage points sequentially.
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Cash and Cash Equivalents: $3.5 billion.
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Gross Debt Outstanding: $7.4 billion.
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Inventory: $1.3 billion, representing 86 days of inventory.
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Net Leverage Ratio: 1.7 times.
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Operating Cash Flow: $508 million.
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Cash Capital Expenditures: $72 million.
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Quarterly Dividend: Initiating $0.10 per share.
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Fiscal Q4 Revenue Guidance: $2.45 billion, plus or minus $150 million.
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Fiscal Q4 Gross Margin Guidance: 40% to 41%.
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Fiscal Q4 Operating Expenses Guidance: $330 million to $340 million.
Release Date: April 30, 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 strong financial results for the third fiscal quarter with revenue of $2.3 billion, a non-GAAP gross margin of 40.1%, and non-GAAP earnings per share of $1.36.
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The company successfully completed the planned separation of its Flash business, focusing on its core HDD operations.
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Western Digital Corp (NASDAQ:WDC) initiated a quarterly dividend of $0.10 per share, reflecting confidence in its long-term cash-generating ability.
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The company has long-term agreements with two of its largest hyperscale customers, providing visibility into demand through the first half of calendar year 2026.
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Western Digital Corp (NASDAQ:WDC) is on track with its HAMR technology milestones, working closely with two hyperscale customers and receiving positive feedback.
Negative Points
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Total revenue for the quarter was down 5% sequentially, despite being up 31% year over year.
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The current environment remains highly uncertain and volatile, driven by tariffs and global trade tensions, which could impact demand in certain segments.
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There is potential demand uncertainty in the enterprise, distribution, and retail segments due to the unpredictability of tariffs.
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Western Digital Corp (NASDAQ:WDC) faces challenges in managing supply chain shifts and ensuring agility and resilience in the face of geopolitical uncertainties.
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The company anticipates an increase in operating expenses in the fiscal fourth quarter due to variable compensation, hiring, and increased investments in research and development.