Western Digital Corporation (WDC) Earnings

metirFinance

Sep 2026upcoming

Next quarter

Reports Oct 29, 2026.

Consensus is $3.97 EPS for Sep 2026 across 4 estimates, ranging $3.88 to $4.01.

WDC Jun 2026

Reported Aug 5, 2026 · after the close

: 7.10%
: -13.03%

: $3.24
: $3.47
: —
: —

Highlights

Revenue growth: Q4 FY26 revenue was $3.747 billion, up 12% sequentially and 44% year over year from $2.605 billion.
Adjusted earnings beat: The supplied consensus comparison shows EPS of $3.47 versus $3.24 expected, a 7.1% beat; WD’s release reports non-GAAP diluted EPS of $3.56, up 31% sequentially and 109% year over year.
Margin expansion: GAAP gross margin reached 54.1%, up 390 basis points sequentially and 1,310 basis points year over year, while GAAP operating margin rose to 41.7% from 35.7% and 26.1%.
Operating leverage: GAAP operating income was $1.563 billion, up 31% from Q3 FY26 and 130% from Q4 FY25; non-GAAP operating income was $1.655 billion, or a 44.2% margin.
GAAP earnings distortion: GAAP diluted EPS was $8.21 versus $0.67 a year ago, helped by $1.684 billion of net interest and other income, including a $2.050 billion gain on WD’s retained Sandisk interest.
Cash generation: Operating cash flow was $1.389 billion and free cash flow was $1.281 billion, versus $746 million and $675 million, respectively, in the year-ago quarter.
Q1 outlook: WD expects Q1 FY27 revenue of $4.1 billion plus or minus $100 million, non-GAAP gross margin of 55%-56% and non-GAAP EPS of $4.00 plus or minus $0.15.
Capital returns and deleveraging: WD repurchased $672 million of stock in the quarter, paid $54 million of dividends and ended the period with $1.579 billion of cash; current and long-term debt totaled $1.052 billion.

Analysis

WD’s Q4 FY26 was a strong operating quarter, with revenue of $3.747 billion beating the prior quarter’s $3.337 billion by 12% and rising 44% from $2.605 billion a year earlier. Against the supplied consensus comparison, EPS was $3.47 versus $3.24 expected, a 7.1% beat; the release’s non-GAAP reconciliation reports diluted EPS of $3.56. On that adjusted measure, earnings rose 31% sequentially from $2.72 and 109% year over year from $1.70. GAAP EPS was $8.21, but the comparison is heavily affected by gains tied to WD’s retained Sandisk interest.

The defining feature of the print was continued operating leverage. GAAP gross margin expanded to 54.1% from 50.2% in Q3 and 41.0% a year ago, while operating margin reached 41.7%. Cash conversion was also substantial, with $1.389 billion of operating cash flow and $1.281 billion of free cash flow. Management entered FY27 with a strong demand outlook, guiding Q1 revenue to approximately $4.1 billion and non-GAAP EPS to $4.00, implying another sequential increase in adjusted earnings and further gross-margin expansion to 55%-56%.

Revenue and operating leverage

Top-line acceleration: Revenue increased to $3.747 billion from $3.337 billion in Q3 FY26 and $2.605 billion in Q4 FY25. Fiscal-year revenue reached $12.919 billion, up 36% from $9.520 billion.
Profit growth: GAAP operating income rose to $1.563 billion from $1.190 billion sequentially and $680 million a year ago. Non-GAAP operating income was $1.655 billion, up 29% sequentially and 126% year over year.
Expense discipline: GAAP operating expenses were $465 million, versus $486 million in Q3 and $387 million a year earlier. Non-GAAP operating expenses were $382 million, down from $397 million sequentially despite the higher revenue base.

Margin expansion

Gross margin: GAAP gross margin improved to 54.1% from 50.2% in Q3 and 41.0% in the year-ago quarter. Non-GAAP gross margin was 54.4%, also up 390 basis points sequentially.
Operating margin: GAAP operating margin increased 600 basis points sequentially to 41.7% and 1,560 basis points year over year. Non-GAAP operating margin reached 44.2%, compared with 38.6% in Q3 and 28.1% a year ago.
Annual progress: FY26 GAAP operating margin was 34.5%, up from 24.5% in FY25; non-GAAP operating margin was 37.3%, versus 24.4%.

GAAP versus adjusted earnings

The quarter’s $3.195 billion of GAAP net income and $8.21 of diluted EPS were not representative of core operating earnings. Interest and other income was $1.684 billion, including a $2.050 billion gain on the mark-to-market value of WD’s retained Sandisk interest. WD excludes that gain, along with transaction costs, stock compensation and other items, from its non-GAAP presentation. On that basis, diluted net income was $1.382 billion and diluted EPS was $3.56, compared with $1.048 billion and $2.72 in Q3 FY26. The separation of the Flash business into Sandisk in February 2025 also means historical comparisons are presented on a continuing-operations basis.

Q1 FY27 outlook

Revenue: Management guided Q1 FY27 revenue to $4.1 billion plus or minus $100 million, representing year-over-year growth of approximately 42%-49% based on the company’s stated range.
Margins and earnings: Non-GAAP gross margin is expected at 55%-56%, above the Q4 level of 54.4%, while non-GAAP EPS is guided to $4.00 plus or minus $0.15 versus $3.56 in Q4.
Underlying assumptions: The outlook includes non-GAAP operating expenses of $390 million-$400 million, roughly $15 million of net interest and other expense, a tax rate near 17% and approximately 388 million diluted shares.

Cash flow and capital allocation

Cash generation: Operating cash flow was $1.389 billion, up from $1.123 billion in Q3 and $746 million a year ago. After $108 million of capital expenditures, free cash flow was $1.281 billion, compared with $978 million and $675 million in the prior and year-ago quarters.
Shareholder returns: WD repurchased $672 million of common stock in Q4 and paid $54 million of dividends. The board declared another $0.15-per-share quarterly dividend, payable September 17, 2026.
Balance sheet: Cash ended at $1.579 billion, down from $2.050 billion at the end of Q3, after $1.749 billion of financing cash outflows that included $672 million of repurchases and a $1.220 billion settlement of convertible-note transactions. Current and long-term debt totaled $1.052 billion.

Western Digital Corporation

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