Western Digital Reports Fiscal First Quarter 2024 Financial Results
News Summary
-- First quarter revenue was $2.75 billion, up 3% sequentially (QoQ).
Cloud revenue decreased 12% (QoQ), Client revenue increased 11% (QoQ) and
Consumer revenue increased 14% (QoQ).
-- First quarter GAAP earnings per share (EPS) was $(2.17) and Non-GAAP
EPS was $(1.76), which includes $225 million of underutilization-related
charges in Flash and HDD.
-- Expect fiscal second quarter 2024 revenue to be in the range of $2.85
billion to $3.05 billion.
-- Expect Non-GAAP EPS in the range of $(1.35) to $(1.05), which includes
$110 to $130 million of underutilization-related charges in Flash and
HDD.
SAN JOSE, Calif.--(BUSINESS WIRE)--October 30, 2023--
Western Digital Corp. (Nasdaq: WDC) today reported fiscal first quarter 2024 financial results.
“Western Digital’s fiscal first quarter results exceeded our expectations as the team’s efforts to bolster business agility and develop differentiated and innovative products across a broad range of end-markets have resulted in sequential margin improvement across flash and HDD businesses,” said David Goeckeler, Western Digital CEO. “Our Consumer and Client end markets continue to perform well and we now expect our Cloud end market to grow going forward. Our improved cost structure positions Western Digital to capitalize on enhanced earnings power as market conditions continue to improve.”
Q1 2024 Financial Highlights
GAAP Non-GAAP
------------------------ --------------------------
Q1 2024 Q4 2023 Q/Q Q1 2024 Q4 2023 Q/Q
----------- ------- ------- ------ ------- ------- --------
Revenue ($M) $2,750 $2,672 up 3% $2,750 $2,672 up 3%
up 0.2 up 0.2
Gross Margin 3.6% 3.4% ppt 4.1% 3.9% ppt
Operating
Expenses down
($M) $695 $742 6% $555 $582 down 5%
Operating
Loss ($M) $(596) $(650) * $(443) $(478) *
Net Loss
($M) $(685) $(715) * $(554) $(621) *
Loss Per
Share $(2.17) $(2.27) * $(1.76) $(1.98) *
* not a
meaningful
figure
GAAP Non-GAAP
------------------------ --------------------------
Q1 2024 Q1 2023 Y/Y Q1 2024 Q1 2023 Y/Y
----------- ------- ------- ------ ------- ------- --------
down
Revenue ($M) $2,750 $3,736 26% $2,750 $3,736 down 26%
down down
22.7 22.6
Gross Margin 3.6% 26.3% ppt 4.1% 26.7% ppt
Operating
Expenses down
($M) $695 $823 16% $555 $689 down 19%
Operating
Income
(Loss)
($M) $(596) $158 * $(443) $307 *
Net Income
(Loss)
($M) $(685) $27 * $(554) $64 *
Earnings
(Loss) Per
Share $(2.17) $0.08 * $(1.76) $0.20 *
* not a
meaningful
figure
The company had an operating cash outflow of $626 million and ended the quarter with $2.03 billion of total cash and cash equivalents.
Additional details can be found within the company’s earnings presentation, which is accessible online at investor.wdc.com.
End Market Summary
Revenue ($M) Q1 2024 Q4 2023 Q/Q Q1 2023 Y/Y
------------------ ------- ------- -------- ------- --------
Cloud $872 $994 down 12% $1,829 down 52%
Client 1,147 1,035 up 11% 1,229 down 7%
Consumer 731 643 up 14% 678 up 8%
------- ------- -------
Total Revenue $2,750 $2,672 up 3% $3,736 down 26%
======= ======= =======
In the fiscal first quarter:
-- Cloud represented 32% of total revenue. Sequentially, the decline was
primarily due to lower nearline hard drive shipments to data center
customers. The year-over-year decrease was primarily due to declines in
shipments for both hard drive and flash products.
-- Client represented 42% of total revenue. Sequentially, the increase was
due to growth in flash bit shipments. The year-over-year decrease was
primarily due to declines in flash pricing.
-- Consumer represented 26% of total revenue. On both a sequential and
year-over-year basis, the increase was driven by both higher content per
unit and unit shipments in flash.
Business Outlook for Fiscal Second Quarter of 2024
Three Months Ending
December 29, 2023
GAAP(1) Non-GAAP(1)
------------- -----------------
Revenue ($B) $2.85 - $3.05 $2.85 - $3.05
Gross margin 9.5% - 11.5% 10.0% - 12.0%
Operating expenses ($M) $650 - $670 $560 - $580
Interest and other expense, net ($M) $105 $105
Income tax expense ($M)(2) N/A $20 - $30
Preferred dividend ($M) $15 $15
Diluted earnings per share N/A $(1.35) - $(1.05)
Diluted shares outstanding (in millions) 325 325
____________________
(1) Non-GAAP gross margin guidance excludes 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 strategic review, totaling approximately $85 million to $95 million. In the aggregate, Non-GAAP diluted earnings per share guidance excludes these items totaling approximately $95 million to $110 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) The 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 second quarter of 2024 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 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(R), SanDisk(R) and WD(R) brands at .