Western Digital Corporation Q1 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue was $5.1 billion, up 3% sequentially and 29% year-over-year.
  • Non-GAAP EPS was $2.49, including $56 million in COVID-related costs (highest in over a year).
  • Non-GAAP gross margin was 33.9%, up 1 percentage point sequentially.
  • Sixth consecutive quarter meeting or exceeding guidance.
  • Record exabyte shipments in both HDD and flash segments.
  • Cloud represented a record 44% of revenue due to strong demand for capacity enterprise HDDs and enterprise SSDs.

Business Segment Performance

Cloud (44% of revenue)

  • Revenue: $2.2 billion, up 12% sequentially and 72% year-over-year.
  • Second straight quarter of record cloud revenue.
  • Strong sequential growth across all cloud product categories (capacity enterprise HDD, enterprise SSD, smart video, platforms).
  • Cloud HDD exabyte shipments up 9% sequentially, over 70% YoY.

Client (37% of revenue)

  • Revenue: $1.9 billion, down 2% sequentially but up 6% year-over-year.
  • Strength in mobile, gaming, automotive, IoT and industrial applications.
  • Weakness in PC HDDs due to customer supply chain constraints and internal component shortages.

Consumer (19% of revenue)

  • Revenue: $973 million, down 6% sequentially but up 10% year-over-year.

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Operator: Thank you for standing by, and welcome to the Western Digital's First Quarter Fiscal Year 2022 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your first speaker, Mr. Peter Andrew. Thank you. Please go ahead. T. Peter Andrew: Thank you, and good afternoon, everyone. Joining me today are David Goeckeler, Chief Executive Officer; and Bob Eulau, Chief Financial Officer. Before we begin, let me remind everyone that today's discussion contains forward-looking statements, including product portfolio expectations, business plans and performance, trends and financial outlook based on management's current assumptions and expectations, and as such, does include risks and uncertainties. We assume no obligation to update these statements. Please refer to our most recent financial report on Form 10-K filed with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially. We will also make references to non-GAAP financial measures today. Reconciliations between the non-GAAP and comparable GAAP financial measures are included in the press release and other materials that are being posted in the Investor Relations section of our website. With that, I will now turn the call over to David for his introductory remarks. David Goeckeler: Thank you, Peter. Good afternoon, everyone, and thanks for joining t

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