Western Digital (WDC) Q2 2026 Financial Results Summary
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Western Digital Corporation (WDC) Q2 2026 Financial Results Summary
Release Date: January 29, 2026
Western Digital Corporation (Nasdaq: WDC) reported its fiscal second quarter 2026 financial results for the period ending January 2, 2026. The company’s financial highlights showcase significant year-over-year growth across several key metrics.
Q2 FY26 Financial Highlights:
- Revenue:
- $3.02 billion
-
Growth: Up 25% Year-over-Year (Y/Y)
-
Gross Margin:
- GAAP: 45.7%
- Non-GAAP: 46.1%
-
Improvement: GAAP up 800 basis points Y/Y; Non-GAAP up 770 basis points Y/Y
-
Operating Income:
- GAAP: $908 million
- Non-GAAP: $1.02 billion
-
Growth: GAAP up 62% Y/Y; Non-GAAP up 72% Y/Y
-
Net Income Attributable to Common Shareholders:
- GAAP: $1.80 billion
- Non-GAAP: $807 million
-
Growth: GAAP up 296% Y/Y; Non-GAAP up 92% Y/Y
-
Diluted Earnings Per Share (EPS):
- GAAP: $4.73
- Non-GAAP: $2.13
-
Growth: GAAP up 272% Y/Y; Non-GAAP up 78% Y/Y
-
Cash Flow:
- Cash Flow from Operations: $745 million
- Free Cash Flow: $653 million
Q3 FY26 Outlook:
- Expected Revenue: Approximately $3.2 billion, representing a 40% increase Y/Y (at midpoint).
- Non-GAAP Gross Margin: Expected between 47% and 48%.
- Non-GAAP Diluted EPS: Expected to be approximately $2.30 (± $0.15).
Shareholder Returns:
- Dividend:
-
Western Digital’s Board of Directors declared a cash dividend of $0.125 per share, payable on March 18, 2026, to stockholders of record as of the close of business on March 5, 2026.
-
Share Repurchase Program:
- Over 100% of free cash flow was returned to shareholders through share repurchases and dividends.
Summary of Key Business Performances:
- The increase in revenue reflects Western Digital’s strategic execution to meet growing demand in the AI-driven data economy, particularly for high-capacity HDDs.
- Profitability improved thanks to a notable rise in both gross and operating margins.
Financial Overview (Comparison Table):
| Metric & Period | Q2 FY26 (GAAP) | Q2 FY25 (GAAP) | Y/Y Change |
|---|---|---|---|
| Revenue | $3,017 million | $2,409 million | +25% |
| Gross Margin | 45.7% | 37.7% | +800 bps |
| Operating Income | $908 million | $560 million | +62% |
| Net Income | $1,802 million | $455 million | +296% |
| Diluted EPS | $4.73 | $1.27 | +272% |
Conclusion
Western Digital has demonstrated a strong performance in Q2 FY26, with significant growth across all major financial metrics compared to the same quarter a year ago. The announced dividend and commitment to return cash to shareholders highlight management’s confidence in the company’s ongoing strength and stability in a rapidly evolving data storage market.
Here are the extracted tables from the press release:
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions; unaudited)
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| January 2, 2026 | December 27, 2024 | January 2, 2026 | December 27, 2024 | |
| Revenue, net | $3,017 | $2,409 | $5,835 | $4,621 |
| Cost of revenue | 1,637 | 1,502 | 3,228 | 2,908 |
| Gross profit | 1,380 | 907 | 2,607 | 1,713 |
| Operating expenses: | ||||
| Research and development | 289 | 225 | 583 | 487 |
| Selling, general and administrative | 128 | 132 | 266 | 336 |
| Litigation matter | — | — | — | 3 |
| Business realignment charges | 55 | -10 | 58 | -7 |
| Total operating expenses | 472 | 347 | 907 | 819 |
| Operating income | 908 | 560 | 1,700 | 894 |
| Interest and other income (expense), net | 1,054 | -94 | 1,599 | -185 |
| Income before taxes | 1,962 | 466 | 3,299 | 709 |
| Income tax expense | 120 | — | 275 | 90 |
| Net income from continuing operations | 1,842 | 466 | 3,024 | 619 |
| Net income from discontinued operations, net of taxes | — | 128 | — | 468 |
| Net income | $1,842 | $594 | $3,024 | $1,087 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited)
| January 2, 2026 | June 27, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $1,975 | $2,114 |
| Accounts receivable, net | 1,685 | 1,486 |
| Inventories | 1,349 | 1,291 |
| Retained interest in Sandisk | 2,068 | 354 |
| Other current assets | 454 | 611 |
| Total current assets | 7,531 | 5,856 |
| Property, plant and equipment, net | 2,352 | 2,343 |
| Goodwill | 4,319 | 4,319 |
| Other non-current assets | 1,409 | 1,484 |
| Total assets | $15,611 | $14,002 |
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $1,497 | $1,266 |
| Accrued expenses | 771 | 719 |
| Accrued compensation | 459 | 407 |
| Income taxes payable | 223 | 800 |
| Current portion of long-term debt | 2,226 | 2,226 |
| Total current liabilities | 5,176 | 5,418 |
| Long-term debt | 2,429 | 2,485 |
| Other liabilities | 666 | 559 |
| Total liabilities | 8,271 | 8,462 |
| Convertible preferred stock | 229 | 229 |
| Total shareholders’ equity | 7,111 | 5,311 |
| Total liabilities, convertible preferred stock and shareholders’ equity | $15,611 | $14,002 |