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Oct 03, 2025
Western Digital Q1 2026 Earnings Report
Western Digital reported strong fiscal first quarter 2026 financial results, exceeding revenue and gross margin guidance, driven by robust demand in data storage.
Key Takeaways
Western Digital delivered a strong fiscal first quarter 2026, with revenue up 27% year-over-year to $2.82 billion and significant increases in GAAP and non-GAAP diluted EPS. The company achieved strong free cash flow and exceeded its own guidance for revenue and gross margin, primarily due to a strong demand environment in data storage, particularly in the cloud.
Revenue reached $2.82 billion, marking a 27% increase compared to the same period last year.
GAAP diluted EPS was $3.07, while non-GAAP diluted EPS stood at $1.78, both showing substantial year-over-year growth.
The company generated $672 million in cash flow from operations and $599 million in free cash flow.
Gross margin and non-GAAP gross margin both exceeded the high end of guidance, reflecting improved profitability.
Forward Guidance
For the fiscal second quarter of 2026, Western Digital anticipates continued revenue growth, driven by data center demand, and improved profitability, led by the adoption of high-capacity drives.
Positive Outlook
- Revenue is expected to be approximately $2.9 billion, representing a 20% year-over-year increase at the mid-point.
- Non-GAAP gross margin is projected to improve to 44.5%.
- Non-GAAP EPS is expected to be $1.88.
- Continued revenue growth is anticipated, driven by strong data center demand.
- Improved profitability is expected due to the adoption of high-capacity drives.
Challenges Ahead
- Non-GAAP operating expenses are projected to be between $365 million and $375 million.
- Interest and other expense, net, is estimated to be around $50 million.
- The tax rate is expected to be approximately 17%.
Historical Earnings Impact
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