▾ G11 Media Network: | ChannelCity | ImpresaCity | SecurityOpenLab | GreenCity | Italian Channel Awards | Italian Project Awards | ...
InnovationOpenLab

Western Digital Reports Fiscal Second Quarter 2024 Financial Results

Western Digital Corp. (Nasdaq: WDC) today reported fiscal second quarter 2024 financial results. “Western Digital’s second quarter results demonstrate that the structural changes we have put in pl...

Business Wire

News Summary

  • Second quarter revenue was $3.03 billion, up 10% sequentially (QoQ). Cloud revenue increased 23% (QoQ), Client revenue decreased 2% (QoQ) and Consumer revenue increased 15% (QoQ).
  • Second quarter GAAP earnings per share (EPS) was $(0.87) and Non-GAAP EPS was $(0.69), which includes $156 million of underutilization-related charges in Flash and HDD.
  • Expect fiscal third quarter 2024 revenue to be in the range of $3.20 billion to $3.40 billion.
  • Expect Non-GAAP EPS in the range of $(0.10) to $0.20, which includes $30 to $40 million of underutilization-related charges in HDD.

SAN JOSE, Calif.: Western Digital Corp. (Nasdaq: WDC) today reported fiscal second quarter 2024 financial results.

“Western Digital’s second quarter results demonstrate that the structural changes we have put in place over the last few years and the strategy we have been executing are producing significant outperformance across our flash and HDD businesses,” said David Goeckeler, Western Digital CEO. “We are seeing our efforts come to fruition as our financial performance met, or exceeded, the non-GAAP guidance ranges we provided in October, and I am confident that our strategy of managing inventory proactively, offering a broad range of products, closely controlling our product cost through focused R&D and manufacturing, and bolstering the agility of our business will allow us to improve through-cycle profitability and dampen business cycles into the future.”

Q2 2024 Financial Highlights

 

 

GAAP

 

Non-GAAP

 

 

Q2 2024

Q1 2024

Q/Q

 

Q2 2024

Q1 2024

Q/Q

Revenue ($M)

 

$3,032

$2,750

up 10%

 

$3,032

$2,750

up 10%

Gross Margin

 

16.2%

3.6%

up 12.6 ppt

 

15.5%

4.1%

up 11.4 ppt

Operating Expenses ($M)

 

$702

$695

up 1%

 

$561

$555

up 1%

Operating Loss ($M)

 

$(210)

$(596)

*

 

$(91)

$(443)

*

Net Loss ($M)

 

$(268)

$(685)

*

 

$(210)

$(554)

*

Loss Per Share

 

$(0.87)

$(2.17)

*

 

$(0.69)

$(1.76)

*

* not a meaningful figure

 

 

GAAP

 

Non-GAAP

 

 

Q2 2024

Q2 2023

Y/Y

 

Q2 2024

Q2 2023

Y/Y

Revenue ($M)

 

$3,032

$3,107

down 2%

 

$3,032

$3,107

down 2%

Gross Margin

 

16.2%

17.0%

down 0.8 ppt

 

15.5%

17.4%

down 1.9 ppt

Operating Expenses ($M)

 

$702

$849

down 17%

 

$561

$659

down 15%

Operating Loss ($M)

 

$(210)

$(321)

*

 

$(91)

$(119)

*

Net Loss ($M)

 

$(268)

$(446)

*

 

$(210)

($135)

*

Loss Per Share

 

$(0.87)

$(1.40)

*

 

$(0.69)

$(0.42)

*

* not a meaningful figure

The company had an operating cash outflow of $92 million and ended the quarter with $2.48 billion of total cash and cash equivalents.

Additional details can be found within the company’s earnings presentation, which is accessible online at investor.wdc.com.

End Market Summary

Revenue ($M)

Q2 2024

Q1 2024

Q/Q

Q2 2023

Y/Y

Cloud

$1,071

$872

up 23%

$1,224

down 13%

Client

1,122

1,147

down 2%

1,089

up 3%

Consumer

839

731

up 15%

794

up 6%

Total Revenue

$3,032

$2,750

up 10%

$3,107

down 2%

In the fiscal second quarter:

  • Cloud represented 35% of total revenue. Sequentially, the growth was attributed to higher nearline shipments to data center customers and better nearline pricing. The year-over-year decrease was due to lower eSSD bit shipments.
  • Client represented 37% of total revenue. Sequentially, an increase in flash ASPs was more than offset by a decline in flash bit shipments. The year-over-year increase was due to higher flash shipments, primarily driven by client SSD shipments into PC applications, more than offsetting a decline in flash ASPs.
  • Consumer represented 28% of total revenue. Sequentially, the growth was primarily due to seasonal strength in flash bit shipments. On a year-over-year basis, the increase in flash bit shipments was partially offset by a decline in flash ASPs as well as lower HDD shipments.

Business Outlook for Fiscal Third Quarter of 2024

 

Three Months Ending

 

March 29, 2024

 

GAAP(1)

 

Non-GAAP(1)

Revenue ($B)

$3.20 - $3.40

 

$3.20 - $3.40

Gross margin

21.5% - 23.5%

 

22.0% - 24.0%

Operating expenses ($M)

$710 - $730

 

$600 - $620

Interest and other expense, net ($M)

~$95

 

~$95

Income tax expense ($M)(2)

N/A

 

$20 - $30

Preferred dividend ($M)

$15

 

$15

Diluted earnings per share

N/A

 

$(0.10) - $0.20

Diluted shares outstanding (in millions)

~330

 

~330

__________

(1) Non-GAAP gross margin guidance excludes amortization of acquired intangible assets and stock-based compensation expense of approximately $10 million to $15 million. The company’s Non-GAAP operating expenses guidance excludes stock-based compensation expense, and expenses related to business separation costs, totaling approximately $105 million to $115 million. In the aggregate, Non-GAAP diluted earnings per share guidance excludes these items totaling approximately $115 million to $130 million. The timing and amount of additional charges the company excludes from its Non-GAAP income tax expense and Non-GAAP diluted earnings per share are dependent on the timing and determination of certain actions and cannot be reasonably predicted. The timing and amount of these charges excluded from Non-GAAP gross margin, Non-GAAP operating expenses, and Non-GAAP diluted earnings per share cannot be further allocated or quantified with certainty. Accordingly, full reconciliations of Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP income tax expense and Non-GAAP diluted earnings per share to the most directly comparable GAAP financial measures (GAAP gross profit, GAAP operating expenses, income tax expense and diluted earnings per share, respectively) are not available without unreasonable effort.

(2) Non-GAAP income tax expense is determined based on a percentage of Non-GAAP pre-tax income or loss. Our estimated Non-GAAP tax dollars may differ from our GAAP tax dollars (i) due to differences in the tax treatment of items excluded from our Non-GAAP net income or loss; (ii) the fact that our GAAP income tax expense or benefit recorded in any interim period is based on an estimated forecasted GAAP tax rate for the full year, excluding loss jurisdictions; and (iii) because our GAAP taxes recorded in any interim period are dependent on the timing and determination of certain GAAP operating expenses.

Investor Communications

The investment community conference call to discuss these results and the company’s business outlook for the fiscal third quarter of 2024 will be broadcast live online today at 1:30 p.m. Pacific/4:30 p.m. Eastern. The live and archived conference call/webcast and the earnings presentation can be accessed online at investor.wdc.com.

About Western Digital

Western Digital is on a mission to unlock the potential of data by harnessing the possibility to use it. With Flash and HDD franchises, underpinned by advancements in storage technologies, we create breakthrough innovations and powerful data storage solutions that enable the world to actualize its aspirations. Core to our values, we recognize the urgency to combat climate change and have committed to ambitious carbon reduction goals approved by the Science Based Targets initiative. Learn more about Western Digital and the Western Digital®, SanDisk® and WD® brands at www.westerndigital.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for the company’s business outlook and financial performance for the fiscal third quarter of 2024 and beyond; the impact of structural changes in the company’s business and corporate strategy on operating and financial performance; and the impact of the company’s inventory management, range of products, cost controls and business agility on cyclicality and through-cycle profitability. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. The preliminary financial results for the company’s fiscal second quarter ended December 29, 2023 included in this press release represent the most current information available to management. Actual results when disclosed in the company's Form 10-Q may differ from these preliminary results as a result of the completion of the company’s financial closing procedures, final adjustments, completion of the review by the company’s independent registered accounting firm; and other developments that may arise between now and the filing of the company's Form 10-Q. Other key risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: volatility in global economic conditions; future responses to and effects of global health crises; the impact of business and market conditions; the outcome and impact of the company's planned separation of its HDD and Flash business units, including with respect to customer and supplier relationships, contractual restrictions, stock price volatility and the diversion of management’s attention from ongoing business operations and opportunities; the impact of competitive products and pricing; the company's development and introduction of products based on new technologies and expansion into new data storage markets; risks associated with cost saving initiatives, restructurings, acquisitions, divestitures, mergers, joint ventures and the company's strategic relationships; difficulties or delays in manufacturing or other supply chain disruptions; hiring and retention of key employees; the company's level of debt and other financial obligations; changes to the company's relationships with key customers; compromise, damage or interruption from cybersecurity incidents or other data system security risks; actions by competitors; the company's ability to achieve its GHG emissions reduction and other ESG goals; risks associated with compliance with changing legal and regulatory requirements and the outcome of legal proceedings; and other risks and uncertainties listed in the company’s filings with the Securities and Exchange Commission (the “SEC”), including the company’s Annual Report on Form 10-K filed with the SEC on August 22, 2023 and Quarterly Report on Form 10-Q filed with the SEC on November 7, 2023 to which your attention is directed. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements to reflect new information or events, except as required by law.

Western Digital, the Western Digital logo, SanDisk and WD are registered trademarks or trademarks of Western Digital Corporation or its affiliates in the US and/or other countries.

 

WESTERN DIGITAL CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions; unaudited; on a US GAAP basis)

 

 

December 29,
2023

 

June 30,
2023

 

 

 

 

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

2,481

 

$

2,023

Accounts receivable, net

 

1,523

 

 

1,598

Inventories

 

3,216

 

 

3,698

Other current assets

 

618

 

 

567

Total current assets

 

7,838

 

 

7,886

Property, plant and equipment, net

 

3,315

 

 

3,620

Notes receivable and investments in Flash Ventures

 

1,248

 

 

1,297

Goodwill

 

10,037

 

 

10,037

Other intangible assets, net

 

79

 

 

80

Other non-current assets

 

1,768

 

 

1,509

Total assets

$

24,285

 

$

24,429

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY

Current liabilities:

 

 

 

Accounts payable

$

1,504

 

$

1,293

Accounts payable to related parties

 

251

 

 

292

Accrued expenses

 

1,037

 

 

1,288

Income taxes payable

 

506

 

 

999

Accrued compensation

 

353

 

 

349

Current portion of long-term debt

 

1,042

 

 

1,213

Total current liabilities

 

4,693

 

 

5,434

Long-term debt

 

7,351

 

 

5,857

Other liabilities

 

1,397

 

 

1,415

Total liabilities

 

13,441

 

 

12,706

Convertible preferred stock, aggregate liquidation preference of $953 and $924, respectively

 

876

 

 

876

Total shareholders’ equity

 

9,968

 

 

10,847

Total liabilities, convertible preferred stock and shareholders’ equity

$

24,285

 

$

24,429

 

WESTERN DIGITAL CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts; unaudited; on a US GAAP basis)

 

 

Three Months Ended

 

Six Months Ended

 

December 29,
2023

 

December 30,
2022

 

December 29,
2023

 

December 30,
2022

Revenue, net

$

3,032

 

 

$

3,107

 

 

$

If you liked this article and want to stay up to date with news from InnovationOpenLab.com subscribe to ours Free newsletter.

Related news

Last News

A capital increase for the Italian venture builder FoolFarm

FoolFarm launches €9 million capital increase targeting IPO and unveils new investment committee.

ShopFully goes shopping in Spain (again)

ShopFully, the Italian company leader in Europe in drive-to-store solutions, acquired the Spanish Ofertia.

Sicily is more and more digitally connected

Thanks to EXA Infrastructure investments, more routes provide rapid access to mainland Italy and beyond

Italian startup Audio Innova combines AI and metaverse for art preservation

Audio Innova won the first prize in the "Creative AI" category at WAICF in Cannes

Most read

A capital increase for the Italian venture builder FoolFarm

FoolFarm launches €9 million capital increase targeting IPO and unveils new investment committee.

ShopFully goes shopping in Spain (again)

ShopFully, the Italian company leader in Europe in drive-to-store solutions, acquired the Spanish Ofertia.

CIBC Innovation Banking Provides Growth Capital to InsightRX

CIBC Innovation Banking announced today that it has provided growth financing to InsightRX, a San Francisco-based software company leveraging quantitative…

Ault Alliance’s Sentinum Planning Major Expansion at Its Michigan and…

$AGREE #AGREE--Ault Alliance, Inc. (NYSE American: AULT), a diversified holding company (“Ault Alliance,” or the “Company”), today announced strategic…