Western Digital Corporation Q4 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarterly Performance (Fiscal Q4 2023)

  • Revenue: $2.7B, down 5% sequentially and down 41% year-over-year, but above internal expectations.
  • Non-GAAP Gross Margin: 3.9%, down 6.7 percentage points sequentially and down 28.4 percentage points year-over-year.
  • Non-GAAP Loss per Share: $1.98.
  • Underutilization and Inventory Charges: $272M total across HDD and Flash.
  • Operating Cash Flow: Outflow of $68M; Free Cash Flow: Outflow of $219M.
  • Liquidity: $4.9B total, with $2B in cash and $2.25B in undrawn revolver capacity.

Full Fiscal Year 2023 Performance

  • Total Revenue: $12.3B, down 34% from FY2022.
  • Non-GAAP Gross Margin: 15.7%, down 17.2 percentage points year-over-year.
  • Non-GAAP Operating Margin: negative 4.8%, down 21.8 percentage points year-over-year.
  • Non-GAAP Loss per Share: $3.59.
  • Cloud Revenue: Down 34% year-over-year due to lower capacity enterprise HDD and SSD shipments.
  • Client Revenue: Down 39% year-over-year due to lower flash pricing and reduced PC-related SSD/HDD shipments.
  • Consumer Revenue: Down 26% year-over-year despite SSD bit growth; overall declines driven by lower flash pricing and HDD shipments.

Business Segment Highlights

HDD Business

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Operator: Good afternoon, and thank you for standing by. Welcome to the Western Digital's Fiscal Fourth Quarter and Fiscal 2023 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 call is being recorded. Now, I would like to turn the call over to Mr. Peter Andrew, Vice President, Financial Planning and Analyst 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 expectations for our product portfolio, spending and cost reductions, business plans and performance, market trends and financial results 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 and/or our other filings 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 o

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