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WESTERN DIGITAL CORP 8-K Report, Financial Results (Oct 30, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed October 30, 2025
Period End
October 30, 2025
Security
WDC
In the record · 2016–202610-K1110-Q328-K197

WDC filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 197 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Material agreement8-K · May ’19May ’19
  3. Leadership change8-K · Feb ’23Feb ’23
  4. Leadership change8-K · Jan ’25Jan ’25

01—Abstract

Summary

Summary of the 8-K filed October 30, 2025. Cited figures are marked; the original filing is the authoritative source.

Western Digital reported fiscal first quarter 2026 results (quarter ended October 3, 2025) with revenue of $2.82 billiona, up 27% year over year and 8% sequentially.

GAAP gross margin expanded to 43.5% and non-GAAP gross margin to 43.9%, while non-GAAP operating margin reached 30.4%, up roughly 1,200 basis points from a year ago. Operating cash flow was $672 millionb and free cash flow was $599 million. Management attributes the strength to data center and AI-driven storage demand and the adoption of high-capacity drives.

GAAP diluted EPS of $3.07c is inflated by a $611 million non-cash gain on the company's retained interest in Sandisk, which is excluded from the company's non-GAAP diluted EPS of $1.78 (up 137% year over year). Investors should weigh the non-GAAP figure as the better measure of core operating performance, while recognizing that the GAAP result reflects a one-time mark-to-market benefit. Shareholder returns were also a focus: the company repurchased $553 million of common stock and raised its quarterly dividend 25% to $0.125 per share.

For fiscal second quarter 2026, management guided to revenue of about $2.9 billiond (±$100 million, roughly 20% year-over-year growth at the midpoint), non-GAAP gross margin of 44% to 45%, and non-GAAP diluted EPS of $1.88 (±$0.15). The guidance implies continued sequential improvement, though the outlook is subject to demand, supply chain, and tariff risks noted in the filing.

02—Key points

Key Highlights

  1. Revenue of $2,818 million, up 27% year over year and 8% quarter over quarter, with a GAAP gross margin of 43.5% (up 710 bps year over year).
  2. Non-GAAP diluted EPS of $1.78, up 137% year over year and 5% sequentially; GAAP diluted EPS of $3.07 includes a $611 million gain on the retained Sandisk interest.
  3. Non-GAAP operating margin of 30.4%, up 1,200 bps year over year, with non-GAAP operating income of $856 million.
  4. Free cash flow of $599 million on operating cash flow of $672 million, versus $(14) million in free cash flow a year earlier.
  5. Capital returns: $553 million in share repurchases and a 25% dividend increase to $0.125 per quarter, payable December 18, 2025.
  6. Q2 FY26 guidance: revenue of $2.9 billion ±$100 million, non-GAAP gross margin of 44%–45%, and non-GAAP EPS of $1.88 ±$0.15.
  7. Balance sheet: total debt of roughly $4.7 billion (current and long-term), with cash of $2.05 billion, and a retained Sandisk interest valued at $965 million.

03—Questions

Frequently Asked Questions

  1. Why is GAAP EPS so much higher than non-GAAP EPS this quarter?

    GAAP net income includes a $611 million gain on the company's retained interest in Sandisk, a mark-to-market benefit the company excludes from non-GAAP results. Excluding this and other items such as stock-based compensation, non-GAAP diluted EPS was $1.78 versus GAAP diluted EPS of $3.07.

  2. How strong was the underlying operating performance?

    Strong. Revenue grew 27% year over year, and non-GAAP operating margin expanded to 30.4% from 18.4%, driven by higher gross margin (43.9% non-GAAP) and disciplined operating expenses. Non-GAAP operating income rose 110% to $856 million.

  3. What does the Q2 FY26 guidance imply for the business?

    The midpoint implies revenue of $2.9 billion, about 20% year-over-year growth, and non-GAAP EPS of $1.88, up from $1.78 in Q1. Management expects gross margin to improve to 44%–45%, driven by adoption of high-capacity drives and continued data center demand.

  4. Is the dividend increase and buyback program sustainable?

    Free cash flow of $599 million in the quarter covered the $39 million dividend and $553 million in repurchases, though the buybacks exceeded free cash flow. The 25% dividend increase signals management's confidence in cash generation, but sustainability will depend on continued strong cash flow, and the filing notes that the company may reduce or discontinue dividends or buybacks.

  5. What are the main risks investors should monitor?

    The filing cites tariffs and trade restrictions, dependence on a limited number of suppliers, volatility in demand, competitive pricing, supply chain disruptions, and the company's debt level of roughly $4.7 billion. Variability in the Sandisk retained-interest valuation can also swing GAAP results significantly from quarter to quarter.

04—Continue

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