Summary
Western Digital Corporation (WDC) reported a strong fiscal first quarter ending October 3, 2025, with a significant surge in revenue and net income, largely driven by robust performance in the Cloud segment and favorable pricing dynamics for their Hard Disk Drive (HDD) products. Revenue increased by 27% year-over-year, fueled by higher average selling prices due to a favorable product mix towards higher-capacity drives and increased demand for data storage systems. The company's strategic separation of its Flash business (Sandisk) is continuing to shape its financial profile, with the current results presented on a continuing operations basis focusing solely on the HDD business. A notable item impacting profitability was a substantial gain from the mark-to-market valuation of its retained interest in Sandisk. Despite ongoing investments in research and development, the company managed to reduce selling, general, and administrative expenses, contributing to a significant improvement in operating income and a substantial increase in net income from continuing operations. The company also initiated a new share repurchase program, demonstrating confidence and a commitment to returning capital to shareholders.
Financial Highlights
54 data points| Revenue | $3.02B |
| Cost of Revenue | $1.64B |
| Gross Profit | $1.38B |
| SG&A Expenses | $128.00M |
| Operating Expenses | $472.00M |
| Operating Income | $908.00M |
| Net Income | $1.84B |
| EPS (Basic) | $5.27 |
| EPS (Diluted) | $4.73 |
| Shares Outstanding (Basic) | 341.00M |
| Shares Outstanding (Diluted) | 381.00M |
Key Highlights
- 1Revenue surged by 27% year-over-year to $2.818 billion, primarily driven by a 19% increase in average selling price (ASP) due to a favorable product mix towards higher-capacity HDDs and growth in data storage systems.
- 2Net income from continuing operations dramatically increased to $1.182 billion, up from $153 million in the prior year period, reflecting strong operational performance and a significant gain on the retained interest in Sandisk.
- 3Gross margin expanded by 7 percentage points to 43.5%, attributed to higher volumes, product cost reductions, and improved pricing.
- 4Operating income more than doubled year-over-year to $792 million, benefiting from increased gross profit and a reduction in SG&A expenses.
- 5The company recorded a significant gain of $611 million from the mark-to-market valuation of its retained interest in Sandisk, significantly boosting the 'Interest and other income (expense)' line item.
- 6SG&A expenses decreased by $66 million, largely due to the post-Separation realignment of corporate overhead roles and reduced marketing/legal costs.
- 7Western Digital initiated a substantial share repurchase program, buying back $553 million of its common stock during the quarter, with $1.30 billion remaining under the $2.0 billion authorization.