Q4 2024 Western Digital Corp Earnings Call Transcript
Key Points
- Western Digital Corp (WDC) reported strong fiscal fourth-quarter revenue of $3.8 billion, up 9% sequentially and 41% year-over-year.
- Non-GAAP gross margin for the quarter was 36.3%, exceeding the high end of the guidance range.
- The company introduced industry-leading products, including a high-performance PCIe Gen 5 SSD and a 64 terabyte SSD, demonstrating continued innovation.
- WDC's HDD business surpassed its target gross margin range, driven by strength in nearline demand and improved pricing.
- The company is well-positioned to capitalize on the AI data cycle, which is expected to be a significant growth driver for both Flash and HDD.
- WDC anticipates incurring separation dis-synergy costs in the second half of the calendar year, impacting operating expenses.
- Consumer revenue decreased by 7% sequentially due to lower flash and HDD bit shipments.
- Inventory levels increased to $3.3 billion, with days of inventory rising from 119 to 126 days, indicating potential overstocking.
- The company faces ongoing challenges in the more transactional markets such as consumer and channel, affecting product mix and profitability.
- WDC's gross debt outstanding was $7.5 billion at the end of the fiscal fourth quarter, indicating a significant debt burden.
Good afternoon, and thank you for standing by. Welcome to Western Digital's fourth-quarter and fiscal 2024 conference call. (Operator Instructions) As a reminder, today's call is being recorded. I'd now like to turn the conference 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 upon 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.
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