Western Digital Corporation Q2 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $4.3B, up 5% sequentially and 41% year-over-year.
  • Non-GAAP EPS: $1.77, within guidance.
  • Non-GAAP Gross Margin: 35.9%, down 2.6 points sequentially but up 20.4 points year-over-year.
  • CEO David Goeckeler’s final call as CEO of Western Digital; will become CEO of SanDisk post-separation.
  • Company on track to complete separation of Flash and HDD businesses in fiscal Q3; SanDisk and Western Digital will trade independently shortly after February investor days.

Business Segment Performance

Flash Business

  • Revenue: $1.9B, flat sequentially; up 13% year-over-year.
  • Bit shipments: Up 9% sequentially; down 2% year-over-year.
  • ASP: Down 13% sequentially (like-for-like).
  • Gross Margin: 32.5%, down 6.4 points sequentially due to pricing pressure.
  • Challenges: NAND oversupply, customer inventory digestion, pricing erosion.
  • Strengths: Stronger cloud pricing; external SSD shipments rose 50% sequentially.
  • Outlook Q3: Revenue to decline mid-teens percentage; bits down mid-single digits; underutilization charges $20–30M; gross margin to decline further.
  • Recovery expected in 2H CY2025 as PC/mobile demand normalizes and AI-driven cycles kick in.

HDD Business

  • Revenue: $2.4B, up 9% sequentially and 76% year-over-year.

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Operator: Good afternoon, and thank you for standing by. Welcome to Western Digital's second quarter fiscal 2025 conference call. Presently, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator instructions] As a reminder, this call is being recorded. Now, I will turn the call over to Mr. Peter Andrew, Vice-President, Financial Planning and Analysis, and Investor Relations. You may begin sir. Peter Andrew: Thank you, and good afternoon, everyone. Joining me today are David Goeckeler, Chief Executive Officer; and Wissam Jabre, Chief Financial Officer. Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on management's current assumptions and expectations and, as such, does include risks and uncertainties. These forward-looking statements include expectations for our product portfolio, our business plans and performance, the separation of our Flash and HDD businesses, ongoing market trends, and our future financial results. We assume no obligation to update these statements. Please refer to our most recent financial report on Form 10-K and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations. 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 oth

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