Western Digital Corporation Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Western Digital delivered strong fiscal Q3 2021 results, exceeding prior guidance.
  • Revenue was $4.1B (up 5% sequentially, down 1% year-over-year).
  • Non-GAAP gross margin reached 27.7% (up 1.3 points sequentially).
  • Non-GAAP EPS was $1.02, boosted by a 0.17 tax benefit.
  • Sequential growth was driven by high-capacity HDD demand, improved NAND pricing, and strong data center SSD traction.

Business Segment Performance

Flash
  • Flash revenue: $2.2B (up 7% sequentially, up 6% YoY).
  • Bit shipments up 8% sequentially; ASPs down 2% sequentially (flat like‑for‑like).
  • Flash gross margin rose 2.9 points sequentially to 30% driven by cost reductions and improved pricing.
  • Strong growth in:
    • Enterprise SSDs—major traction with second-generation NVMe SSD qualified at a cloud titan.
    • PC client SSD demand, new game console ramps.
    • Retail (notably WD Black gaming products).
    • Consumer electronics (VR, game consoles, at-home entertainment): over 10× bit growth last year, expected to double again this year.
  • BiCS5 ramp progressing; bit crossover expected later in 2021.
  • BiCS6 (162-layer, CuA) announced—major JV milestone with Kioxia.
HDD

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Operator: Good afternoon, and thank you for standing by. Welcome to Western Digital's Fiscal Third Quarter 2021 Conference Call. [Operator Instructions]. Now I will turn the call over to Mr. Peter Andrew. You may begin. 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, 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 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. David Goeckeler: Thank you, Peter. Good afternoon, everyone, and thanks for joining the call today. We reported solid third quarter results above the guidance range provided in January, with revenue of $4.1 billion, non-GAAP gross margin of 27.7% and non-GAAP earnings per s

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