Western Digital (WDC) Fiscal Q1 2027 Earnings Call: Margins Rise, HAMR Ramp Advances

Key Takeaways

• Western Digital reported fiscal Q1 2027 revenue of $4.4 billion, up 55% year over year, as shipments reached 248 exabytes, up 22% year over year and 8% sequentially.
• Non-GAAP gross margin rose 1,420 basis points to 58.1%, while operating margin reached 49.1%. Diluted EPS increased 161% to $4.64.
• Cloud revenue was $3.9 billion, or 88% of total revenue, supported by demand for high-capacity nearline HDDs and favorable pricing. Average price per terabyte increased 28% year over year.
• Management guided fiscal Q2 2027 revenue to $5.1 billion, plus or minus $100 million, with gross margin of 60% to 61% and diluted EPS of $5.80, plus or minus $0.20.
• Western Digital expects to complete first-generation HAMR qualifications with two hyperscale customers in calendar Q1 2027 and begin volume shipments in the first half of calendar 2027.
• The company generated $1.4 billion in free cash flow and returned $1.1 billion through repurchases and dividends. Its quarterly dividend was increased 17% to $0.175 per share.

Core Financial Data