Western Digital Corporation Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Revenue of 4.4 billion dollars, at the high end of revised guidance; down 9 percent sequentially but up 6 percent year-over-year.
  • Non-GAAP gross margin of 31.7 percent, also at the high end of guidance; down 190 basis points sequentially but up 400 basis points year-over-year.
  • Non-GAAP EPS of 1 dollar and 65 cents, above the revised guidance range of 1 dollar 30 cents to 1 dollar 60 cents; up from 1 dollar and 2 cents a year ago.
  • The company navigated macroeconomic pressures, supply chain disruptions, and a previously disclosed flash fab contamination event, which is now fully resolved.

Business Segment Performance

Cloud (40 percent of revenue; 1.8 billion dollars)
  • Down 8 percent sequentially, up 25 percent year-over-year.
  • Nearline HDD revenue grew nearly 40 percent year-over-year due to strong demand for 18 and 20 terabyte drives.
  • Some offset from lower enterprise SSD and smart video HDD shipments.
Client (40 percent of revenue; 1.7 billion dollars)
  • Down 7 percent sequentially, down 2 percent year-over-year.
  • Sequential weakness driven by typical seasonality in flash for mobile and client HDD.
  • Year-over-year, flash growth was offset by HDD declines.
Consumer (20 percent of revenue; 0.9 billion dollars)

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Operator: Good afternoon, and thank you for standing by. Welcome to Western Digital's Fiscal Third Quarter 2022 Conference Call. Presently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. . 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. 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, including product portfolio expectations, business plans and performance, demand and market 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 introductory remarks

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