Western Digital Corporation Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Western Digital Q3 FY2024 Earnings Summary

  • Revenue: $3.5B (up 40% sequentially; up 23% YoY). Exceeded expectations.
  • Non-GAAP EPS: $0.63 (returned to profitability).
  • Non-GAAP Gross Margin: 29.3%, up 13.8 points sequentially and 18.7 points YoY.
  • Strong performance across all three end markets (Cloud, Client, Consumer), each returning to YoY growth.
  • Company progressing toward separating Flash and HDD businesses in 2H calendar 2024.

End Market Performance

  • Cloud (45% of revenue; $1.6B): Up 45% sequentially and 29% YoY. - Driven by strong nearline HDD shipments and improved Flash demand.
  • Client (34%; $1.2B): Up 5% sequentially and 20% YoY. - Higher Flash ASPs offset lower Flash bits; HDD down sequentially.
  • Consumer (21%; $0.7B): Down 13% sequentially; up 7% YoY. - Seasonality drove sequential decline; better flash pricing improved YoY growth.

Flash Business Highlights

  • Revenue: $1.7B (+2% sequentially; +30% YoY). - ASPs up 18% sequentially; bit shipments down 15% as WDC prioritized high-margin markets.
  • Gross Margin: 27.4%, up 19.5 points sequentially; no underutilization charges.

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Operator: Good afternoon, everyone, and thank you for standing by. Welcome to Western Digital's Third Quarter Fiscal 2024 Conference Call. Presently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]. As a reminder, this event 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 based upon 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 plan 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 and 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 rele

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