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Jan 02
Western Digital Q2 2026 Earnings Report
Western Digital posted strong results in Q2 2026 with significant revenue growth, expanded margins, and a sharp rise in profitability.
Key Takeaways
Western Digital delivered solid financial performance in Q2 2026, driven by demand in the AI data economy. Revenue rose to $3.02B with gross and operating margins expanding significantly. The company returned over 100% of free cash flow to shareholders.
Revenue increased to $3.02 billion, up from $2.41 billion a year ago.
GAAP net income rose to $1.80 billion from $455 million the prior year.
GAAP EPS surged to $4.73; Non-GAAP EPS reached $2.13.
Free cash flow of $653 million was fully returned to shareholders through dividends and buybacks.
Forward Guidance
Western Digital expects strong growth in Q3 FY26, driven by sustained data center demand and adoption of high-capacity HDDs.
Positive Outlook
- Revenue expected to reach $3.2 billion +/- $100 million
- Non-GAAP gross margin projected between 47% and 48%
- Non-GAAP EPS expected at $2.30 +/- $0.15
- Continued strength in data center demand
- High-capacity drive adoption accelerating
Challenges Ahead
- Potential volatility in macroeconomic conditions
- Dependency on demand from hyperscalers and cloud providers
- Uncertainty around long-term interest and inflation trends
- Risk of supply chain disruptions or component shortages
- Exposure to competitive pricing and market pressure
Historical Earnings Impact
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Avg. Return Before/After Earnings
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