Q1 2025 Western Digital Corp Earnings Call Transcript
Key Points
- Western Digital Corp (WDC) reported a revenue of $4.1 billion, marking a 9% sequential increase and a 49% year-over-year growth.
- The company achieved a non-GAAP gross margin of 38.5% and non-GAAP earnings per share of $1.78, both above the midpoint of the guidance range.
- Record HDD gross margin and highest revenue levels in 11 quarters were driven by the adoption of Ultra SMR technology.
- Enterprise SSD revenue grew 76% sequentially, reaching the highest levels since fiscal Q4 2022, indicating strong demand in the data center market.
- The separation of flash and HDD businesses is on track, with the soft spin phase completed, setting the stage for future growth and operational efficiency.
- Ongoing weakness in consumer and client markets, particularly with PC OEMs, as they work down inventory and delay refresh cycles.
- Flash gross margin is expected to face a slight sequential decline due to a temporary cost increase.
- The company anticipates potential seasonality headwinds in the March quarter for both flash and HDD segments.
- Despite strong enterprise SSD growth, the overall flash market faces challenges with mixed demand dynamics across different submarkets.
- Operating cash flow was only $34 million, with free cash flow showing an outflow of $14 million, impacted by significant tax and settlement payments.
Good afternoon, and thank you for standing by. Welcome to Western Digital's fiscal first quarter 2025 conference call. (Operator Instructions) As a reminder, this call is being recorded.
Now I will turn the call over to Mr. Peter Andrew, Vice President, Financial Planning and Analysis and Investor Relations. You may begin.
Thank you, and good afternoon, everyone. Joining me today are David Goeckeler, Chief Executive Officer, and Wissam Jabre, Chief Financial Officer.
Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on management's current assumptions and expectations and as such does include risks and uncertainties. These forward looking statements include expectations for our product portfolio, our business plans and performance, the separation of our flash and HDD businesses, ongoing market trends, and our future financial results.
We assume no obligation to update these statements. Please refer to our most recent financial report on
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