EX-99.1 2 a4ex991-pressreleaseq426.htm EX-99.1 Document Exhibit 99.1 WD Reports Fiscal Fourth Quarter and Fiscal Year 2026 Financial Results Q4FY26 Highlights: • Revenue of $3.75 billion, up 44% year-over-year • GAAP gross margin of 54.1%; non-GAAP gross margin of 54.4% • GAAP diluted EPS of $8.21; non-GAAP diluted EPS of $3.56 • Cash flow from operations of $1.39 billion; free cash flow of $1.28 billion • Q1FY27 revenue expected to be up 42% to 49% year-over-year SAN JOSE, Calif. — August 5, 2026 — Western Digital Corporation (Nasdaq: WDC) today reported fiscal fourth quarter and fiscal year 2026 financial results for the period ended July 3, 2026. “WD concluded fiscal year 2026 with strong performance. In our fiscal fourth quarter, revenue increased 44% year over year, gross and operating margins expanded, and earnings per share more than doubled. These results reflect our ability to scale innovation and operational excellence across our global organization, supporting our customers’ growing storage demand,” said Irving Tan, CEO of WD. “As global data creation continues to accelerate, we enter fiscal year 2027 with continued confidence in the durability of demand and with increasing visibility into our business. With our scale, technology leadership, and operational discipline, WD is well positioned to capitalize on the secular data growth opportunity and deliver long-term shareholder value.” 1 Western Digital Reports Fiscal Fourth Quarter and Fiscal Year 2026 Financial Results Q4FY26 Financial Highlights ($ in millions, except per share amounts) GAAP Q4FY26 Q3FY26 Q4FY25 Q/Q Y/Y Revenue $3,747 $3,337 $2,605 +12% +44% Gross Margin 54.1% 50.2% 41.0% +390 bps +1310 bps Operating Income $1,563 $1,190 $680 +31% +130% Operating Margin 41.7% 35.7% 26.1% +600 bps +1560 bps Diluted Net Income Attributable to Common Shareholders $3,195 $3,172 $243 +1% +1215% Diluted Net Income Per Common Share $8.21 $8.20 $0.67 +0% +1125% Non-GAAP Q4FY26 Q3FY26 Q4FY25 Q/Q Y/Y Revenue $3,747 $3,337 $2,605 +12% +44% Gross Margin 54.4% 50.5% 41.3% +390 bps +1310 bps Operating Income $1,655 $1,287 $732 +29% +126% Operating Margin 44.2% 38.6% 28.1% +560 bps +1610 bps Diluted Net Income Attributable to Common Shareholders $1,382 $1,048 $600 +32% +130% Diluted Net Income Per Common Share $3.56 $2.72 $1.70 +31% +109% Fiscal Year 2026 Financial Highlights ($ in millions, except per share amounts) GAAP Non-GAAP FY26 FY25 Y/Y FY26 FY25 Y/Y Revenue $12,919 $9,520 +36% $12,919 $9,520 +36% Gross Margin 48.9% 38.8% +1010 bps 49.1% 39.4% +970 bps Operating Income $4,453 $2,334 +91% $4,817 $2,326 +107% Operating Margin 34.5% 24.5% +1000 bps 37.3% 24.4% +1290 bps Diluted Net Income Attributable to Common Shareholders $9,298 $1,599 +481% $3,883 $1,768 +120% Diluted Net Income Per Common Share $24.28 $4.45 +446% $10.22 $5.02 +104% 2 Western Digital Reports Fiscal Fourth Quarter and Fiscal Year 2026 Financial Results Business Outlook for Fiscal First Quarter of 2027 “Fiscal 2026 was an outstanding year for WD, characterized by broadening demand, deeper customer engagement, and disciplined execution across all end markets. As the cloud and other data-intensive workloads continue to expand, we remain confident in the long-term growth trajectory of our business, further margin expansion, and strong free cash flow generation,” said Kris Sennesael, CFO of WD. “For our fiscal first quarter of 2027, at the midpoint of the ranges provided in the table below, we expect revenue of $4.1 billion, non-GAAP gross margin of 55.5%, and non-GAAP EPS of $4.00.” Non-GAAP (1) Revenue  $4.1B +/- $100M Gross margin 55% - 56% Operating expenses $390M - $400M Interest and other expense, net ~ $15M Tax rate ~ 17% Diluted net income per common share $4.00 +/- $0.15 Diluted weighted average shares  ~ 388M (1)     We provide earnings guidance only on a non-GAAP basis because certain information necessary to reconcile such guidance to GAAP is difficult to estimate or cannot be allocated or quantified with certainty and is dependent on future events outside of our control. Please refer to the section titled “Non-GAAP Guidance” under “Discussion Regarding the Use of Non-GAAP Financial Measures” in this press release for additional information regarding the non-GAAP measures, including quantification of known expected adjustment items. Dividend WD’s Board of Directors declared a cash dividend of $0.15 per share of the company’s common stock, which will be paid on September 17, 2026 to stockholders of record as of the close of business on September 8, 2026. WD’s Fiscal Fourth Quarter 2026 Conference Call WD will host a conference call to discuss its fiscal fourth quarter and fiscal year 2026 results and business outlook for the fiscal first quarter of 2027 today at 1:30 p.m. Pacific / 4:30 p.m. Eastern. The live and archived conference call and the earnings presentation can be accessed online at investor.wdc.com . About WD WD, also known as Western Digital, builds the storage infrastructure that powers certainty in the AI-driven data economy. At the forefront of innovation, WD partners with the world’s leading hyperscalers, cloud service providers, and enterprises to enable reliable storage solutions that are proven and trusted at scale. Driven by a culture of innovation and execution, WD helps customers store, protect, and use the world’s data with confidence. Follow WD on LinkedIn and learn more at www.wd.com. 3 Western Digital Reports Fiscal Fourth Quarter and Fiscal Year 2026 Financial Results Basis of Presentation On February 21, 2025 (the “Separation Date”), Western Digital Corporation (“WD”) completed the previously announced separation (the “Separation”) of its Flash business unit into a separate company, Sandisk Corporation (“Sandisk”). The financial and operating results of Sandisk subsequent to the Separation Date are no longer consolidated into WD’s financial and operating results. For all periods prior to the Separation Date, the historical results of WD are reflected on a continuing operations basis with the historical results of Sandisk for such periods reflected as discontinued operations in WD’s financial highlights and condensed consolidated statements of operations included in this release. Forward-Looking Statements This press release contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for: the company’s business outlook, operational and financial performance for the fiscal first quarter of 2027 and beyond, demand and market conditions for our products as well as growth opportunities. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Key risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: adverse global or regional conditions, including new or additional tariffs or trade restrictions; the company’s dependence on a limited number of qualified suppliers; the impact of long-term agreements; volatility in demand for the company’s products; the impact of business and market conditions, including inflation, increases in interest rates and an economic recession; the impact of competitive products and pricing; the company’s development and introduction of products based on new technologies and expansion into new data storage markets; risks associated with the company's use of artificial intelligence; risks associated with cost saving initiatives, restructurings, acquisitions, divestitures, mergers, joint ventures and the company’s strategic relationships; difficulties or delays in manufacturing or other supply chain disruptions; hiring and retention of key employees; the company’s debt and other financial obligations; changes to the company’s relationships with key customers; compromise, damage or interruption from cybersecurity incidents or other data system security risks; actions by competitors; any decisions to reduce or discontinue paying cash dividends or repurchasing shares of the company’s common stock; the company’s ability to achieve its greenhouse gas emissions reduction and other sustainability goals; the impact of international conflicts; risks associated with compliance with changing legal and regulatory requirements and the outcome of legal proceedings; and other risks and uncertainties listed in the company’s filings with the Securities and Exchange Commission (the “SEC”), including the company’s Annual Report on Form 10-K filed with the SEC on August 14, 2025 to which your attention is directed. Further information regarding these risks and uncertainties will also be included in the company’s Annual Report on Form 10-K for the year ended July 3, 2026, which the company expects to file with the SEC on or about August 14, 2026. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements to reflect new information or events, except as required by law. ### Western Digital, the Western Digital logo, and WD are registered trademarks or trademarks of Western Digital Corporation or its affiliates in the US and/or other countries. 4 WESTERN DIGITAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions; unaudited) Three Months Ended Years Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Revenue, net $ 3,747  $ 2,605  $ 12,919  $ 9,520  Cost of revenue 1,719  1,538  6,608  5,828  Gross profit 2,028  1,067  6,311  3,692  Operating expenses: Research and development 284  262  1,161  994  Selling, general and administrative 138  124  551  568  Litigation matter —  —  —  (198) Business realignment charges (credits) 43  1  146  (6) Total operating expenses 465  387  1,858  1,358  Operating income 1,563  680  4,453  2,334  Interest and other income (expense), net 1,684  (333) 5,452  (1,204) Income before taxes 3,247  347  9,905  1,130  Income tax expense (benefit) 52  95  481  (513) Net income from continuing operations 3,195  252  9,424  1,643  Net income from discontinued operations, net of taxes —  30  —  246  Net income $ 3,195  $ 282  $ 9,424  $ 1,889  5 WESTERN DIGITAL CORPORATION EARNINGS PER COMMON SHARE (in millions, except per share amounts; unaudited) Three Months Ended Years Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Net income from continuing operations $ 3,195  $ 252  $ 9,424  $ 1,643  Dividends and income attributable to participating securities (1) —  (9) (138) (45) Basic net income from continuing operations attributable to common shareholders 3,195  243  9,286  1,598  Re-allocation of participating securities considered potentially dilutive —  —  12  1  Diluted net income from continuing operations attributable to common shareholders $ 3,195  $ 243  $ 9,298  $ 1,599  Weighted average shares: Basic 350  348  345  347  Diluted 389  362  383  359  Net income from continuing operations per common share: Basic $ 9.13  $ 0.70  $ 26.92  $ 4.61  Diluted $ 8.21  $ 0.67  $ 24.28  $ 4.45  (1)     Participating securities consisted of preferred stock prior to its conversion in February 2026, because it participated on a pro rata basis in any dividends declared on shares of common stock. 6 WESTERN DIGITAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in millions; unaudited) July 3, 2026 June 27, 2025 ASSETS Current assets: Cash and cash equivalents $ 1,579  $ 2,114  Accounts receivable, net 2,026  1,486  Inventories 1,511  1,291  Retained interest in Sandisk —  354  Other current assets 518  611  Total current assets 5,634  5,856  Property, plant and equipment, net 2,476  2,343  Goodwill 4,321  4,319  Other non-current assets 1,430  1,484  Total assets $ 13,861  $ 14,002  LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,774  $ 1,266  Accrued expenses 690  719  Accrued compensation 551  407  Income taxes payable 173  800  Current portion of long-term debt 1,052  2,226  Total current liabilities 4,240  5,418  Long-term debt —  2,485  Other liabilities 757  559  Total liabilities 4,997  8,462  Convertible preferred stock —  229  Total shareholders’ equity 8,864  5,311  Total liabilities, convertible preferred stock and shareholders’ equity $ 13,861  $ 14,002  7 WESTERN DIGITAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions; unaudited) Three Months Ended Years Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Cash flows from operating activities Net income $ 3,195  $ 282  $ 9,424  $ 1,889  Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 99  86  375  451  Stock-based compensation 45  45  204  265  Deferred income taxes (2) (63) 129  (745) Non-cash asset impairment 35  2  35  2  Gain on business divestiture —  —  —  (113) (Gain) loss on retained interest in Sandisk (2,050) 166  (6,498) 772  Costs in connection with debt and equity transactions 362  100  907  100  Other non-cash operating activities, net (5) 8  11  101  Changes in: Accounts receivable, net (133) (17) (541) 79  Inventories (154) 20  (218) (409) Accounts payable 96  (34) 385  307  Other assets and liabilities, net (99) 151  (284) (1,008) Net cash provided by operating activities 1,389  746  3,929  1,691  Cash flows from investing activities Purchases of property, plant and equipment, net (108) (71) (418) (407) Net proceeds from business divestiture —  —  —  401  Activity related to Flash Ventures, net —  —  —  148  Strategic investments and other, net (3) 1  (11) 8  Net cash provided by (used in) investing activities (111) (70) (429) 150  Cash flows from financing activities Employee stock plans, net (147) (13) (312) (36) Repurchases of common stock (672) (149) (2,592) (149) Dividends paid to shareholders (54) (44) (184) (44) Settlement of convertible notes transactions (1,220) —  (1,220) —  Debt issuance and equity transaction costs (6) 1  (6) (73) Proceeds from (repayments of) debt, net 350  (1,837) 282  56  Cash transferred to Sandisk related to Separation —  —  —  (1,366) Net cash used in financing activities (1,749) (2,042) (4,032) (1,612) Effect of exchange rate changes on cash —  3  (3) 6  Net increase (decrease) in cash and cash equivalents (471) (1,363) (535) 235  Cash and cash equivalents, beginning of period 2,050  3,477  2,114  1,879  Cash and cash equivalents, end of period $ 1,579  $ 2,114  $ 1,579  $ 2,114  8 WESTERN DIGITAL CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in millions, except percentages; unaudited) Three Months Ended Years Ended July 3, 2026 April 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 GAAP gross profit $ 2,028  $ 1,676  $ 1,067  $ 6,311  $ 3,692  Stock-based compensation expense 7  9  8  33  34  Litigation matter —  —  —  —  19  Other 2  (1) 2  5  4  Non-GAAP gross profit $ 2,037  $ 1,684  $ 1,077  $ 6,349  $ 3,749  GAAP gross margin (1) 54.1  % 50.2  % 41.0  % 48.9  % 38.8  % Non-GAAP gross margin (1) 54.4  % 50.5  % 41.3  % 49.1  % 39.4  % GAAP operating expenses $ 465  $ 486  $ 387  $ 1,858  $ 1,358  Stock-based compensation expense (38) (44) (37) (171) (133) Litigation matter —  —  —  —  198  Business realignment (charges) credits (42) (40) (1) (137) 6  Other (3) (5) (4) (18) (6) Non-GAAP operating expenses $ 382  $ 397  $ 345  $ 1,532  $ 1,423  GAAP operating income $ 1,563  $ 1,190  $ 680  $ 4,453  $ 2,334  Gross profit adjustments 9  8  10  38  57  Operating expense adjustments 83  89  42  326  (65) Non-GAAP operating income $ 1,655  $ 1,287  $ 732  $ 4,817  $ 2,326  GAAP operating margin (1) 41.7  % 35.7  % 26.1  % 34.5  % 24.5  % Non-GAAP operating margin (1) 44.2  % 38.6  % 28.1  % 37.3  % 24.4  % GAAP interest and other income (expense), net $ 1,684  $ 2,169  $ (333) $ 5,452  $ (1,204) (Gain) loss on retained interest in Sandisk (2,050) (2,734) 166  (6,498) 772  Costs in connection with debt and equity transactions 362  545  100  907  100  Other (6) (4) 15  16  18  Non-GAAP interest and other expense, net $ (10) $ (24) $ (52) $ (123) $ (314) GAAP income tax expense (benefit) $ 52  $ 154  $ 95  $ 481  $ (513) Income tax adjustments 211  48  (32) 270  709  Non-GAAP income tax expense $ 263  $ 202  $ 63  $ 751  $ 196  9 WESTERN DIGITAL CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in millions, except per share amounts; unaudited) Three Months Ended Years Ended July 3, 2026 April 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 GAAP net income from continuing operations $ 3,195  $ 3,205  $ 252  $ 9,424  $ 1,643  Amount allocated to preferred shareholders —  (33) (9) (126) (44) GAAP diluted net income from continuing operations attributable to common shareholders $ 3,195  $ 3,172  $ 243  $ 9,298  $ 1,599  GAAP net income from continuing operations $ 3,195  $ 3,205  $ 252  $ 9,424  $ 1,643  Gross profit adjustments 9  8  10  38  57  Operating expense adjustments 83  89  42  326  (65) Interest and other expense (income) adjustments (1,694) (2,193) 281  (5,575) 890  Income tax adjustments (211) (48) 32  (270) (709) Non-GAAP net income from continuing operations 1,382  1,061  617  3,943  1,816  Amount allocated to preferred shareholders —  (13) (17) (60) (48) Non-GAAP diluted net income from continuing operations attributable to common shareholders $ 1,382  $ 1,048  $ 600  $ 3,883  $ 1,768  Diluted weighted average shares: GAAP 389  387  362  383  359  Benefit of shares related to capped call transactions (2) (1) (2) (9) (3) (7) Non-GAAP 388  385  353  380  352  Diluted net income from continuing operations per common share: GAAP $ 8.21  $ 8.20  $ 0.67  $ 24.28  $ 4.45  Non-GAAP $ 3.56  $ 2.72  $ 1.70  $ 10.22  $ 5.02  Cash flows (3) Cash flows provided by operating activities $ 1,389  $ 1,123  $ 746  $ 3,929  $ 1,691  Purchases of property, plant and equipment, net (108) (145) (71) (418) (407) Activity related to Flash Ventures, net —  —  —  —  148  Free cash flow $ 1,281  $ 978  $ 675  $ 3,511  $ 1,432  (1) GAAP and non-GAAP gross margin, as well as GAAP and non-GAAP operating margin, are calculated by dividing GAAP and non-GAAP gross profit, as well as GAAP and non-GAAP operating income, respectively, by Revenue, net. (2) Beginning with the three months ended October 3, 2025, the company calculates non-GAAP diluted net income from continuing operations per common share based on non-GAAP diluted weighted average shares, which include the benefit of shares related to capped call transactions. Calculations of amounts presented for prior periods have been revised to conform to the new presentation. (3) Cash flows are presented on a consolidated basis and include the results of Sandisk through the Separation Date. 10 Discussion Regarding the Use of Non-GAAP Financial Measures To supplement the condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release sets forth certain financial measures that are not calculated in accordance with GAAP (“non-GAAP measures”). These non-GAAP measures, which are detailed in the reconciliation tables above, are not alternatives for measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. The company believes the presentation of these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors for measuring the company’s earnings performance and comparing it against prior periods. Specifically, the company believes these non-GAAP measures provide useful information to both management and investors as they exclude certain expenses, gains and losses that the company believes are not i