Western Digital Corporation Q4 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter and Full-Year Performance

  • Q4 FY2020 revenue was $4.3B, up 3% sequentially and up 18% year-over-year, driven by cloud strength and record client SSD shipments.
  • Q4 non-GAAP EPS was $1.23.
  • FY2020 revenue was $16.7B, up 1% from FY2019; non-GAAP EPS was $3.04.
  • COVID-19-related costs of $96M negatively impacted gross margin, primarily in hard drives.
  • Free cash flow for FY2020 was $1.1B; Western Digital ended Q4 with $3B in cash and $9.7B in debt.

Operational and Market Highlights

  • COVID-19 disruptions were managed effectively, though uncertainty remains.
  • Cloud demand continued strong due to work-from-home trends.
  • OEM business reached record revenue driven by flash notebook solutions.
  • Retail was heavily impacted by global lockdowns but improved toward quarter-end as online and curbside sales rose.
  • Data center devices and solutions revenue hit a record $1.7B, up 11% sequentially and 32% year-over-year.

Flash Business

  • Flash revenue reached $2.2B (up 9% sequentially and 49% year-over-year).
  • Flash ASPs increased slightly (1% sequentially; 3% like-for-like).
  • BiCS5 (112-layer NAND) ramp progressing well with impressive yields; BiCS4 remains the primary node at over 60% of bits shipped.

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Operator: Ladies and gentlemen, thank you for standing by, and welcome to Western Digital's Fourth Quarter Fiscal 2020 Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker, Mr. Peter Andrew, Vice President of Investor Relations. Please go ahead, sir. T. 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 financial report on Form 10-Q 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: Thanks, Peter, and thanks, everyone, for joining us this afternoon to discuss our fourth quarter and fiscal year 2020 results. I hope that you and your fa

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