Western Digital Corporation (WDC) Q1 2027 Financial Results Summary
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Western Digital Corporation (WDC) Q1 2027: Revenue Surge, EPS Growth — Strongly Positive
Western Digital Corporation (Nasdaq: WDC) reported impressive financial results for its fiscal first quarter of 2027, showcasing significant growth across key metrics. The company achieved a revenue of $4.38 billion, reflecting a robust increase of $1.56 billion or +55% year-over-year compared to $2.82 billion in Q1FY26. This performance not only exceeded expectations but also highlights the company's strong market position and operational execution.
Key Financial Metrics:
- Revenue: $4.38 billion, up $1.56 billion or +55% YoY
- GAAP Gross Margin: 57.8%
- Non-GAAP Gross Margin: 58.1%
- GAAP Diluted EPS: $4.63, up $1.56 or +51% YoY
- Non-GAAP Diluted EPS: $4.64, up $2.86 or +161% YoY
- Cash Flow from Operations: $1.60 billion
- Free Cash Flow: $1.38 billion
Analyst Opinion:
This quarter is undoubtedly a strong one for shareholders. The substantial revenue growth of 55% year-over-year, coupled with a remarkable 161% increase in non-GAAP EPS, indicates that Western Digital is effectively capitalizing on robust customer demand and executing its strategies well. The increase in gross margins also suggests improved operational efficiency and pricing power, which are critical for sustaining profitability in a competitive market.
Moreover, the company announced a 17% increase in its quarterly cash dividend to $0.175 per share, demonstrating its commitment to returning capital to shareholders. This move is likely to be well-received by investors, as it reflects confidence in the company's ongoing performance and future prospects.
Additional Highlights:
- Operating Income: Increased to $2.05 billion, up $1.26 billion or +158% YoY
- Operating Margin: 46.7%, up 1,860 bps YoY
- Q2FY27 Revenue Guidance: Expected to grow 66% to 72% YoY, with a midpoint estimate of $5.1 billion.
Forward-Looking Catalysts:
Investors should closely monitor the upcoming fiscal second quarter of 2027, where Western Digital anticipates continued momentum with revenue guidance of $5.1 billion and non-GAAP gross margin expectations of 60.5%. The company’s ability to maintain this growth trajectory will be crucial, especially as it navigates through technology transitions and expands its customer base in new market areas.
In summary, Western Digital's Q1FY27 results reflect a strong operational performance and a positive outlook, making it an attractive proposition for investors looking for growth in the technology sector.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts; unaudited)
Note: All amounts are in thousands.
| October 2, 2026 | October 3, 2025 | |
|---|---|---|
| Revenue, net | $4,381 | $2,818 |
| Cost of revenue | $1,847 | $1,591 |
| Gross profit | $2,534 | $1,227 |
| Operating expenses: | ||
| Research and development | $283 | $294 |
| Selling, general and administrative | $162 | $138 |
| Business realignment charges | $43 | $3 |
| Total operating expenses | $488 | $435 |
| Operating income | $2,046 | $792 |
| Interest and other income (expense), net | $-8 | $545 |
| Income before taxes | $2,038 | $1,337 |
| Income tax expense | $259 | $155 |
| Net income | $1,779 | $1,182 |
| Dividends and income attributable to participating securities(1) | $— | $-30 |
| Basic net income attributable to common shareholders | $1,779 | $1,152 |
| Re-allocation of participating securities considered potentially dilutive | $— | $2 |
| Diluted net income attributable to common shareholders | $1,779 | $1,154 |
| Weighted average shares: Basic | $366 | $345 |
| Diluted | $384 | $376 |
| Net income per common share: Basic | $4.86 | $3.34 |
| Diluted | $4.63 | $3.07 |
(1) Participating securities in the prior year period consisted of preferred stock prior to its conversion in February 2026, because it participated on a pro rata basis in any dividends declared on shares of common stock.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
Note: All amounts are in thousands.
| October 2, 2026 | July 3, 2026 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $1,314 | $1,579 |
| Accounts receivable, net | $2,232 | $2,026 |
| Inventories | $1,781 | $1,511 |
| Other current assets | $541 | $518 |
| Total current assets | $5,868 | $5,634 |
| Property, plant and equipment, net | $2,586 | $2,476 |
| Goodwill | $4,321 | $4,321 |
| Other non-current assets | $1,464 | $1,430 |
| Total assets | $14,239 | $13,861 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $1,855 | $1,774 |
| Accrued expenses | $675 | $690 |
| Accrued compensation | $469 | $551 |
| Income taxes payable | $304 | $173 |
| Debt, current | $789 | $1,052 |
| Total current liabilities | $4,092 | $4,240 |
| Other liabilities | $799 | $757 |
| Total liabilities | $4,891 | $4,997 |
| Total shareholders’ equity | $9,348 | $8,864 |
| Total liabilities and shareholders’ equity | $14,239 | $13,861 |
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