Western Digital Corporation Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q4 revenue was $4.5B, up 3% sequentially but down 8% year-over-year.
  • Non-GAAP EPS was $1.78, compared to $1.65 last quarter and $2.16 in Q4 FY21.
  • Non-GAAP gross margin was 32.3%, up 0.6 percentage points sequentially and down 0.6 percentage points year-over-year.

Full-Year Fiscal 2022 Highlights

  • Revenue totaled $18.8B, up 11% from $16.9B in FY21.
  • EPS was $8.22, up 81% from $4.55 in FY21.
  • Cloud revenue grew 40% year-over-year; nearline HDD revenue grew 38%.
  • Enterprise SSD Flash revenue more than doubled year-over-year.
  • Debt was reduced by $1.7B, and Western Digital achieved investment-grade rating.

Key Business Segment Performance

Cloud (46% of revenue)

  • Revenue: $2.1B, up 18% sequentially and 5% year-over-year.
  • Nearline HDD exabyte shipments were 111 EB, up 9% sequentially.
  • Strong demand from U.S. hyperscalers; China cloud experiencing inventory digestion.
  • New products: 20TB, 22TB CMR drives and 26TB SMR drives (qualifications ongoing).

Client (36% of revenue)

  • Revenue: $1.6B, down 5% sequentially and down 14% year-over-year.
  • Client HDD saw significant year-over-year decline (down 30% for FY22).

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Operator: Good day and thank you for standing by. Welcome to Western Digital's Fiscal Fourth 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. I will now turn the call over to Mr. Peter Andrew, Vice President, FP&A and Investor Relations. You may begin. Peter Andrew: Thank you, and good morning, 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'll now turn the call over to David for introductory remarks. David Goeckeler: Thank you, Peter. Goo

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