Western Digital first-quarter revenue rises 55% to $4.38 billion as margins expand

Western Digital Corporation (WDC) reported fiscal first-quarter 2027 revenue of $4.38 billion, up 55% from a year earlier, for the period ended Oct. 2, 2026.

It said in a press release furnished with its 8-K filing that it also raised its quarterly cash dividend.

Here's how the company did:

• Revenue: $4.38 billion vs. $2.82 billion a year earlier
• GAAP diluted net income per share: $4.63 vs. $3.07 a year earlier
• Non-GAAP diluted net income per share: $4.64 vs. $1.78 a year earlier
• GAAP gross margin: 57.8% vs. 43.5% a year earlier
• Non-GAAP operating margin: 49.1% vs. 30.4% a year earlier
• Free cash flow: $1.38 billion vs. $599 million a year earlier

Non-GAAP figures exclude items the company does not consider part of its core operating results, such as stock-based compensation and business realignment charges, the release said.

Revenue also rose 17% from the prior quarter, when the company reported $3.75 billion. That quarter's GAAP results included a $2.05 billion gain on the company's retained interest in Sandisk, according to the reconciliation tables.

GAAP net income attributable to common shareholders was $1.78 billion, or $4.63 per diluted share, against $1.15 billion a year earlier. The year-earlier quarter included a $611 million gain on the same retained interest.

GAAP operating income was $2.05 billion, up from $792 million a year earlier. GAAP operating margin was 46.7%, compared with 28.1%.

GAAP total operating expenses were $488 million, up from $435 million. Research and development fell to $283 million from $294 million, while selling, general and administrative expense rose to $162 million from $138 million.

Business realignment charges were $43 million, compared with $3 million a year earlier. Stock-based compensation was $79 million, up from $53 million.

GAAP income tax expense was $259 million, compared with $155 million a year earlier.

Operating cash flow was $1.60 billion, against $672 million a year earlier. Purchases of property, plant and equipment were $227 million, up from $73 million.

The company repurchased $1.00 billion of its common stock in the quarter, compared with $553 million a year earlier, and paid $56 million in dividends. It also recorded a $570 million outflow for the settlement of convertible notes transactions.

Cash and cash equivalents were $1.31 billion at Oct. 2, down from $1.58 billion at July 3. Current debt was $789 million, compared with $1.05 billion at July 3.

“Reflecting our confidence in the business and our commitment to return capital to shareholders, we are raising our quarterly cash dividend by 17% to $0.175 per share,” CEO Irving Tan said.

The board declared the $0.175 per share dividend, payable Dec. 17, 2026, to stockholders of record at the close of business on Dec. 4, 2026.

For the fiscal second quarter of 2027, the company expects revenue of $5.1 billion, plus or minus $100 million. The release says revenue is expected to be up 66% to 72% year over year.

On a non-GAAP basis, the company expects gross margin of 60% to 61%, operating expenses of $400 million to $410 million, and diluted net income per share of $5.80, plus or minus $0.20.

The guidance also includes interest and other expense, net, of about $15 million, a tax rate of about 17%, and about 380 million diluted weighted average shares.

“Our first quarter results demonstrate the continued momentum in our business, with robust exabyte growth and improved pricing driving another quarter of strong financial performance,” CFO Kris Sennesael said.

At the midpoint of the ranges, the company expects non-GAAP gross margin of 60.5% and non-GAAP earnings of $5.80 per share.

The company said its non-GAAP guidance excludes items totaling about $95 million, and that reconciliations to GAAP guidance are not available without unreasonable effort.

The company will host a conference call on Oct. 22 at 1:30 p.m. Pacific, or 4:30 p.m. Eastern, to discuss the results and outlook.

The release does not give a breakdown of results by business segment.