01—Abstract
Summary
Summary of the 8-K filed April 7, 2025. Cited figures are marked; the original filing is the authoritative source.
Western Digital's 8-K (Item 7.01 and Exhibit 99.1) provides recast, preliminary unaudited financial statements for the post-separation company, which now consists of the hard disk drive (HDD) business.
The Flash business was spun off as Sandisk (NASDAQ: SNDK) on February 21, 2025. Sandisk's results are reclassified to discontinued operations for all periods shown, so the continuing-operations figures below reflect WDC on a standalone basis. The filing does not restate previously reported results and is furnished, not filed, under Form 8-K.
On the recast basis, WDC's business looks markedly stronger. Fiscal Q2 2025 revenue was $2,409 milliona, up 76% from $1,367 million a year earlier, driven by Cloud revenue of $2,096 million (up from $1,031 million). Non-GAAP gross margin expanded to 38.4% from 23.6%, and GAAP operating income reached $560 million versus a $102 million loss.
Diluted EPS from continuing operations was $1.27b, compared with a $0.49 loss. Fiscal Q1 2025 showed the same trend, with revenue of $2,212 million and GAAP operating income of $333 million. The balance sheet shows total debt of about $7.4 billion at fiscal Q2 2025 (current portion $150 million plus long-term debt $7.2 billion), down from roughly $7.4 billion at year-end 2024.
Cash and equivalents were $1,487 millionc. Investors should note that the discontinued-operations figures include allocation methodologies that differ from Sandisk's own filings, the data are unaudited, and the transaction accounting adjustments reported in the February 26, 2025 Form 8-K/A are excluded. Because WDC's continuing results now exclude Flash, the company's forward earnings profile should be evaluated on the HDD business alone.
02—Key points
Key Highlights
- Separation completed February 21, 2025: Flash business spun off as Sandisk (SNDK); Sandisk results moved to discontinued operations for all periods presented.
- Fiscal Q2 2025 continuing revenue of $2,409M, up 76% year over year, led by Cloud revenue of $2,096M (vs. $1,031M in Q2 2024).
- Non-GAAP gross margin of 38.4% in Q2 2025, up from 23.6% a year earlier; GAAP gross margin of 37.7% vs. 22.9%.
- GAAP operating income of $560M in Q2 2025 (23.3% margin) vs. a $102M loss in Q2 2024; non-GAAP operating income of $591M vs. a $15M loss.
- Diluted EPS from continuing operations of $1.27 in Q2 2025 vs. a $(0.49) loss in Q2 2024; Q1 2025 was $0.42.
- Total debt of roughly $7.4B and cash of $1,487M at fiscal Q2 2025; working capital metrics improved, with cash conversion cycle down to 61 days from 133 days in Q1 2024.
- Data are preliminary and unaudited, are furnished rather than filed, do not restate prior results, and exclude 8-K/A transaction accounting adjustments.
03—Questions
Frequently Asked Questions
Does this filing restate WDC's previously reported financials?
No. The filing states that the preliminary unaudited information is provided for informational purposes only and does not revise or restate previously filed consolidated financial statements or non-GAAP measures. The recast reflects Flash as discontinued operations for presentation purposes.
Why do the discontinued-operations figures differ from Sandisk's own reported historical results?
Under ASC 205-20, WDC keeps certain general corporate overhead costs in continuing operations, since they do not qualify for discontinued-operations treatment. Those costs were previously allocated to Sandisk. Sandisk's standalone filings use a different basis of accounting, so the two sets of numbers are not directly comparable.
What drove the sharp improvement in WDC's margins and profitability?
The recast figures show revenue growth concentrated in Cloud, with fiscal Q2 2025 Cloud revenue more than doubling year over year. Gross margin expanded roughly 15 points on a non-GAAP basis, and operating expenses fell, with SG&A dropping to $132M in Q2 2025 from $204M in Q1 2025. The filing does not explain the drivers of these changes, so management commentary should be reviewed for the underlying causes.
How much debt does WDC carry after the separation, and how has it changed?
Total debt was about $7.4B at fiscal Q2 2025 ($150M current plus $7,216M long-term), broadly unchanged from year-end 2024 and well below the roughly $8.7B level implied in Q1 2024. Note that Q2 2024 long-term debt was $7.4B, so the balance has been relatively steady in the $7–8B range over the period.
Is this 8-K an official SEC-filed financial statement that investors can rely on?
The information is furnished under Item 7.01, so it is not deemed filed for Section 18 liability purposes and is not incorporated into registration statements. It is also preliminary and unaudited. Investors should rely on the audited financials in WDC's Form 10-K and quarterly reports for official results.
04—Continue