01—Abstract
Summary
Summary of the 10-K filed August 14, 2026. Cited figures are marked; the original filing is the authoritative source.
Western Digital Corporation (WDC) reported a significant year-over-year increase in net revenue for fiscal year 2026, reaching $12.919 billiona, 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 billionb 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 billionc 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 billiond 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.
02—Key points
Key Highlights
- Net revenue increased by 36% to $12.919 billion in fiscal year 2026, driven by higher volumes and improved ASPs.
- Operating income more than doubled year-over-year, reaching $4.453 billion, indicating improved profitability.
- The Cloud segment, representing 89% of revenue, experienced a 38% increase in revenue, highlighting strong demand for high-capacity HDDs.
- Net cash provided by operating activities improved significantly to $3.929 billion, reflecting strong operational performance.
- Western Digital completed the separation of its Flash business in February 2025, positioning itself as a pure-play HDD company.
- The company initiated a quarterly cash dividend and repurchased $2.59 billion in stock, demonstrating capital return to shareholders.
- R&D expenses increased by 17% to $1.161 billion, reflecting continued investment in technology and product development.
03—Questions
Frequently Asked Questions
What was Western Digital's primary revenue driver in fiscal year 2026?
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.
How did the company manage its debt and capital structure during fiscal year 2026?
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.
What is the company's outlook on investing in future growth?
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.
How is Western Digital returning capital to its shareholders?
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.
04—Continue