Western Digital (WDC.US) Q1 revenue surged 55% year-on-year, and both performance and guidance exceeded expectations

The Zhitong Finance App learned that Western Digital (WDC.US) announced financial results for the first quarter of the 2027 fiscal year on Thursday. Despite the company's strong performance and issuing guidelines for the next quarter that were higher than market expectations, the stock price experienced a sharp rise and fall in post-market trading. At one point, it went from rising more than 2% to falling by about 7%, drawing market attention.

Financial reports show that for the first fiscal quarter ending October 2, 2026, Western Digital's revenue reached US$4.381 billion, up 55% year on year, up 17% month on month; GAAP net profit was US$1,779 billion, up about 50% year on year; and GAAP diluted earnings per share were US$4.63, up 51% year on year.

Non-GAAP adjusted net profit was $1,779 million, up 172% year over year; adjusted earnings per share were $4.64, up 161% year over year, up from $1.78 in the same period last year. Analysts had expected Western Digital's revenue for the first fiscal quarter to be around US$4.15 billion, with adjusted earnings per share of approximately US$4.10. Both indicators announced by the company exceeded market expectations.

In terms of profitability, Western Digital's GAAP gross margin for the first fiscal quarter reached 57.8%, up 14.3 percentage points year on year and 3.7 percentage points month on month; non-GAAP adjusted gross margin was 58.1%, up 14.2 percentage points year on year.

The company's GAAP operating profit for the quarter reached US$2,046 billion, up 158% year on year, and the operating profit margin rose to 46.7% from 28.1% in the same period last year. Non-GAAP adjusted operating profit reached US$2.153 billion, up 152 percent year over year, and adjusted operating margin reached 49.1%, a significant improvement from 30.4% in the same period last year.

Western Digital said that strong customer demand, increased storage capacity shipments, and improved product prices have all contributed to this quarter's performance growth. As demand for data storage in artificial intelligence applications and cloud computing infrastructure continues to expand, the company is seizing market growth opportunities through technology upgrades and deepening customer cooperation.

In terms of cash flow, the company's cash flow from operating activities in the first fiscal quarter reached US$1,604 million, up from US$672 million in the same period last year; free cash flow was US$1,377 million, up from US$599 million in the same period last year. Additionally, the company spent about $1 billion to repurchase common stock during the quarter.

Looking ahead to the second quarter of fiscal year 2027, Western Digital expects revenue of $5 billion to 5.2 billion US dollars, which means a year-on-year increase of about 66% to 72%; non-GAAP gross margin is expected to be 60% to 61%, and adjusted earnings per share are expected to be 5.60 to 6.00 US dollars. The above guidelines were also higher than the market's previous expectations. Analysts pointed out that the market originally expected Western Digital's revenue for the second fiscal quarter to be about US$4.57 billion, with adjusted earnings per share of about US$4.82. Western Digital also announced a 17% increase in quarterly cash dividend to $0.175 per share.