10-KPeriod: FY2026

WESTERN DIGITAL CORP Annual Report, Year Ended Jul 3, 2026

Filed August 14, 2026For Securities:WDC

Summary

Western Digital Corporation (WDC) reported a significant year-over-year increase in net revenue for fiscal year 2026, reaching $12.919 billion, a 36% rise from $9.520 billion in 2025. This growth was primarily driven by a 25% increase in exabytes sold and an 8% increase in average selling price (ASP) per exabyte, reflecting strong demand across its Cloud, Client, and Consumer end markets. The Cloud segment, which constitutes 89% of total revenue, saw a substantial 38% increase, indicating robust demand for high-capacity enterprise HDDs, fueled by AI and hybrid data workloads. The company also reported a significant improvement in profitability, with operating income rising to $4.453 billion from $2.334 billion in the prior year, and a strong gross margin of 48.9%. The company has actively managed its capital structure, completing the separation of its Flash business in February 2025 and utilizing cash flow to reduce debt and repurchase shares. Financially, WDC demonstrated strong operational performance, with net cash provided by operating activities increasing significantly to $3.929 billion from $1.691 billion in the previous year, largely due to improved profitability. The company continues to invest in research and development to support its technology roadmap, with R&D expenses increasing by 17% to $1.161 billion. WDC also initiated a quarterly cash dividend program in April 2025 and repurchased $2.59 billion of its common stock during fiscal year 2026, demonstrating a commitment to returning capital to shareholders. The company ended the fiscal year with a solid liquidity position and expects its current cash and credit facilities to be sufficient to meet its obligations and fund future operations.

Key Highlights

  • 1Net revenue increased by 36% to $12.919 billion in fiscal year 2026, driven by higher volumes and improved ASPs.
  • 2Operating income more than doubled year-over-year, reaching $4.453 billion, indicating improved profitability.
  • 3The Cloud segment, representing 89% of revenue, experienced a 38% increase in revenue, highlighting strong demand for high-capacity HDDs.
  • 4Net cash provided by operating activities improved significantly to $3.929 billion, reflecting strong operational performance.
  • 5Western Digital completed the separation of its Flash business in February 2025, positioning itself as a pure-play HDD company.
  • 6The company initiated a quarterly cash dividend and repurchased $2.59 billion in stock, demonstrating capital return to shareholders.
  • 7R&D expenses increased by 17% to $1.161 billion, reflecting continued investment in technology and product development.

Frequently Asked Questions

The primary revenue driver for Western Digital in fiscal year 2026 was the Cloud segment, which accounted for 89% of the company's total net revenue. This segment saw a significant 38% increase in revenue, driven by strong demand for high-capacity enterprise HDDs, which are crucial for AI and hybrid data workloads.

Western Digital actively managed its capital structure in fiscal year 2026. Key actions included using operating cash flows to reduce debt, repurchasing $2.59 billion of its common stock under its share repurchase program, and settling a significant portion of its convertible notes. The company also completed the separation of its Flash business in February 2025, which has refined its focus as a pure-play HDD company.

Western Digital is committed to investing in its future growth through increased R&D spending, which rose by 17% to $1.161 billion in fiscal year 2026. This investment is directed towards executing its innovative technology and product roadmap, supporting the growing demand in the data storage market, particularly driven by AI.

Western Digital is returning capital to its shareholders through multiple avenues. The company initiated a quarterly cash dividend program in April 2025 and repurchased approximately $2.59 billion of its common stock during fiscal year 2026. These actions reflect a commitment to enhancing shareholder value.