Western Digital Reports Fiscal Third Quarter 2025 Financial Results; Adopts Dividend Program and Declares Quarterly Cash Dividend on Common Stock
Western Digital Corp. (Nasdaq: WDC) today reported fiscal third quarter 2025 financial results. “Western Digital executed well in its fiscal third quarter achieving revenue at the high end of our g...
News Summary
- Third quarter revenue was $2.29 billion, down 5% sequentially (QoQ). Cloud revenue decreased 4% (QoQ), Client revenue decreased 2% (QoQ) and Consumer revenue decreased 13% (QoQ).
- Third quarter GAAP earnings per share (EPS) was $2.11 and Non-GAAP EPS was $1.36.
- Expect fiscal fourth quarter 2025 revenue to be in the range of $2.45 billion +/- $150 million.
- Expect Non-GAAP EPS in the range of $1.45 +/- $0.20.
- The company’s Board of Directors authorized the adoption of a quarterly cash dividend program and declared a cash dividend of $0.10 per share.
SAN JOSE, Calif.: Western Digital Corp. (Nasdaq: WDC) today reported fiscal third quarter 2025 financial results.
“Western Digital executed well in its fiscal third quarter achieving revenue at the high end of our guidance range and gross margin over 40%,” said Irving Tan, CEO of Western Digital. “Even in a world marked by geopolitical uncertainty and shifting tariff dynamics, one thing remains constant: the exponential growth of data. When it comes to storing that data, at scale, no technology rivals the cost-efficiency and reliability of HDDs. With our rich portfolio of storage products, WD is uniquely positioned to meet our customers’ mass storage needs.”
On April 29, 2025, the company’s Board of Directors authorized the adoption of a quarterly cash dividend program beginning with the quarter ending June 27, 2025 and declared a cash dividend of $0.10 per share of the company’s common stock, payable on June 18, 2025 to shareholders of record as of June 4, 2025.
Q3 2025 Financial Highlights | ||||||||||||
($ in millions, except per share amounts) | ||||||||||||
| GAAP |
| Non-GAAP | |||||||||
| Q3 2025 |
| Q2 2025 |
| Q/Q |
| Q3 2025 |
| Q2 2025 |
| Q/Q | |
Revenue | $2,294 |
| $2,409 |
| down 5% |
| $2,294 |
| $2,409 |
| down 5% | |
Gross Margin | 39.8% |
| 37.7% |
| up 2.1 ppt |
| 40.1% |
| 38.4% |
| up 1.7 ppt | |
Operating Expenses | $152 |
| $347 |
| down 56% |
| $324 |
| $335 |
| down 3% | |
Operating Income | $760 |
| $560 |
| up 36% |
| $596 |
| $591 |
| up 1% | |
Diluted Net Income Attributable to Common Shareholders | $755 |
| $455 |
| up 66% |
| $487 |
| $420 |
| up 16% | |
Net Income Per Share | $2.11 |
| $1.27 |
| up 66% |
| $1.36 |
| $1.18 |
| up 15% | |
| GAAP |
| Non-GAAP | |||||||||
| Q3 2025 |
| Q3 2024 |
| Y/Y |
| Q3 2025 |
| Q3 2024 |
| Y/Y | |
Revenue | $2,294 |
| $1,752 |
| up 31% |
| $2,294 |
| $1,752 |
| up 31% | |
Gross Margin | 39.8% |
| 29.6% |
| up 10.2 ppt |
| 40.1% |
| 30.1% |
| up 10.0 ppt | |
Operating Expenses | $152 |
| $425 |
| down 64% |
| $324 |
| $375 |
| down 14% | |
Operating Income | $760 |
| $94 |
| up 709% |
| $596 |
| $153 |
| up 290% | |
The company had an operating cash inflow of $508 million and ended the quarter with $3.48 billion of total cash and cash equivalents.
Additional details can be found within the company’s earnings presentation, which is accessible online at investor.wdc.com.
End Market Summary | ||||||||||
Revenue ($M) | Q3 2025 |
| Q2 2025 |
| Q/Q |
| Q3 2024 |
| Y/Y | |
Cloud | $2,007 |
| $2,096 |
| down 4% |
| $1,455 |
| up 38% | |
Client | 137 |
| 140 |
| down 2% |
| 140 |
| down 2% | |
Consumer | 150 |
| 173 |
| down 13% |
| 157 |
| down 4% | |
Total Revenue | $2,294 |
| $2,409 |
| down 5% |
| $1,752 |
| up 31% | |
In the fiscal third quarter:
- Cloud represented 87% of total revenue at $2.0 billion, down 4% sequentially and up 38% year-over-year. On a sequential basis, the decline was due to a 6% reduction in nearline bit shipments while pricing per unit in Cloud was up 5%. On a year-over-year basis, both revenue and bit shipments grew at 38% and 32%, respectively, driven by the strength of our product portfolio.
- Client represented 6% of total revenue at $137 million, down 2% on both a sequential and year-over-year basis. Compared to last quarter and last year, revenue was down due to lower unit shipments.
- Consumer represented 7% of total revenue at $150 million, down 13% sequentially and 4% year-over-year. The sequential decline in Consumer was primarily due to lower unit shipments; year over year, the decrease was largely due to pricing.
Business Outlook for Fiscal Fourth Quarter of 2025 | ||||
| Three Months Ending | |||
| June 27, 2025 | |||
| GAAP |
| Non-GAAP(1) | |
Revenue | $2.45B +/- $150M |
| $2.45B +/- $150M | |
Gross margin | 39.5% - 40.5% |
| 40.0% - 41.0% | |
Operating expenses ($M) | $385 - $395 |
| $330 - $340 | |
Interest and other expense, net ($M) | ~ $70 |
| ~ $70 | |
Tax rate(2) | N/A |
| 8.0% - 10.0% | |
Diluted earnings per share | N/A |
| $1.45 +/- $0.20 | |
Diluted shares outstanding (in millions) | ~ 360 |
| ~ 360 | |
| ____________________ | ||
(1) | Non-GAAP gross margin guidance excludes stock-based compensation expense, totaling approximately $10 million to $15 million. The company’s Non-GAAP operating expenses guidance excludes stock-based compensation expense and other expenses, totaling approximately $50 million to $60 million. In the aggregate, Non-GAAP diluted earnings per share guidance excludes these items totaling $60 million to $75 million. 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. Additionally, the timing and amount of additional charges the company excludes from its Non-GAAP tax rate and Non-GAAP diluted earnings per share are dependent on the timing and determination of certain actions and cannot be reasonably predicted. Accordingly, full reconciliations of Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP tax rate and Non-GAAP diluted earnings per share to the most directly comparable GAAP financial measures (gross margin, operating expenses, tax rate and diluted earnings per share, respectively) are not available without unreasonable effort. | |
| ||
(2) | Non-GAAP tax rate is determined based on a percentage of Non-GAAP pre-tax income or loss. Our estimated Non-GAAP tax rate may differ from our GAAP tax rate (i) due to differences in the tax treatment of items excluded from our Non-GAAP net income or loss; (ii) due to 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 income taxes recorded in any interim period are dependent on the timing and determination of certain GAAP operating expenses. | |
Basis of Presentation
On February 21, 2025 (the “Separation Date”), Western Digital Corporation (“WDC”) completed the previously announced separation of its Flash business unit into a separate company, Sandisk Corporation (“Sandisk”). Sandisk is now an independent public company.
The financial and operating results of Sandisk subsequent to the Separation Date are no longer consolidated into WDC’s financial and operating results, and the historical results and financial position of Sandisk for all periods prior to the Separation Date have been reflected as discontinued operations in WDC’s preliminary condensed consolidated balance sheets and preliminary condensed consolidated statements of operations included in this release.
Dividend Program
The amount and timing of future dividends under the company’s dividend program will depend on market conditions and other corporate considerations. The company may suspend or discontinue the dividend program at any time.
Investor Communications
The investment community conference call to discuss these results and the company’s business outlook for the fiscal fourth quarter of 2025 will be broadcast live online today at 5:30 a.m. Pacific/8:30 a.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 empowers the systems and people who rely on data. Consistently delivering massive capacity, high quality and low total cost of ownership, Western Digital is trusted by hyperscale cloud providers, enterprise data centers, content professionals and consumers around the world. Core to its values, the company recognizes the urgency to combat climate change and is on a mission to design storage technologies that not only meet today’s data demands but also contribute to a more climate-conscious future. Follow Western Digital on LinkedIn and learn more 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 operational and financial performance for the fiscal fourth quarter of 2025 and beyond; the growth of data; demand and market conditions for our products and growth opportunities; and the company’s dividend payment plans. 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 third quarter ended March 28, 2025 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: adverse global or regional conditions, including new or additional tariffs or trade restrictions; volatility in demand for the company’s products; inflation; increases in interest rates and an economic recession; future responses to and effects of global health crises; the impact of business and market conditions; the outcome and impact of the company’s completed separation of its HDD and Flash businesses, including with respect to 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; any decisions to reduce or discontinue paying cash dividends; the company’s ability to achieve its greenhouse gas emissions reduction and other sustainability goals; the impact of international conflicts; 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 20, 2024 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, 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) | ||||||||
|
|
|
|
| ||||
|
| March 28, |
| June 28, | ||||
|
|
|
| |||||
ASSETS | ||||||||
Current assets: |
|
|
| |||||
Cash and cash equivalents | $ | 3,477 |
| $ | 1,551 | |||
Accounts receivable, net |
| 1,469 |
|
|
| 1,231 |
| |
Inventories |
| 1,311 |
|
|
| 1,387 |
| |
Retained interest in Sandisk |
| 1,412 |
|
|
| — |
| |
Other current assets |
| 417 |
|
|
| 360 |
| |
Current assets of discontinued operations |
| — |
|
|
| 3,531 |
| |
Total current assets |
| 8,086 |
|
|
| 8,060 |
| |
Property, plant and equipment, net |
| 2,347 |
|
|
| 2,359 |
| |
Goodwill |
| 4,319 |
|
|
| 4,319 |
| |
Other intangible assets, net |
| 76 |
|
|
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