Western Digital

Western Digital (WD) designs and makes hard disk drives. Most of its sales go to cloud companies, which buy high-capacity drives for their data centers. In Q1 fiscal 2027, which ended on October 2, 2026, Cloud was 88% of revenue, Client was 7% and Consumer was 5%.

In February 2025, WD separated its flash business into a new company, Sandisk, and it later used its retained Sandisk shares to reduce its debt. Revenue was $12.92 billion in fiscal 2026, which ended on July 3, 2026. Its fiscal year ends near June 30.

The market doubts that Western Digital's record margins can last. Cloud companies need more storage for AI data, so WD shipped more exabytes at higher prices. Its non-GAAP gross margin rose to 58.1% in Q1 fiscal 2027 from 43.9% a year earlier, and non-GAAP EPS rose 161% to $4.64. But hard drive demand has moved in deep cycles before, and investors fear that customers stop buying when they have enough drives or that new supply pushes prices down.

The share price fell by more than half from its June 2026 high while earnings kept rising. For the gap to close, three things must be true. Q2 fiscal 2027 results must meet the guidance of $5.1 billion of revenue and $5.80 of non-GAAP EPS. The price per exabyte and the gross margin must hold through 2027, which shows that long-term agreements with cloud customers work.

Free cash flow must keep funding buybacks while debt stays low. The Q2 fiscal 2027 report, expected in late January 2027, gives the next test. If these checks pass, the gap can close within four to six quarters. The main reason it may not close is a downturn in cloud orders, which has ended past upturns.

1. Oct 22, 2026Passed

   Q1 fiscal 2027 resultsRevenue and non-GAAP EPS above the guidance of $4.1 billion and $4.00 pass; results below guidance or a lower gross margin fail.Outcome: Revenue of $4.38 billion and non-GAAP EPS of $4.64 beat the guidance, the non-GAAP gross margin rose to 58.1% and the Q2 guidance was higher again.
2. Jan 28, 2027 · est.Pending

   Q2 fiscal 2027 results: margins and guidanceRevenue near $5.1 billion, a non-GAAP gross margin near 60% and Q3 guidance for more growth pass; results below guidance or a lower price per exabyte fail.

Every passed and failed checkpoint across all picks

• October 22, 2026Western Digital reported Q1 fiscal 2027 results. Revenue rose 55% to $4.38 billion. The non-GAAP gross margin was 58.1%, and non-GAAP diluted EPS rose 161% to $4.64. Free cash flow was $1.38 billion, and the company bought back 2.0 million shares for $1.00 billion. It raised the quarterly dividend by 17% to $0.175 per share. For Q2 fiscal 2027, it expects revenue of $5.1 billion, plus or minus $100 million, and non-GAAP EPS of $5.80, plus or minus $0.20.
• September 14, 2026Western Digital gave notice that it will redeem all of its remaining 3.00% convertible notes due 2028 on November 16, 2026. In the quarter that ended October 2, 2026, it settled $569 million of these notes in cash for the principal and with about 14.0 million shares for the conversion premium.
• August 5, 2026Western Digital reported Q4 fiscal 2026 results. Revenue rose 44% to $3.75 billion, and non-GAAP diluted EPS was $3.56. For fiscal 2026, revenue rose 36% to $12.92 billion and non-GAAP diluted EPS rose 104% to $10.22. GAAP diluted EPS of $24.28 included gains on the retained Sandisk shares.

Last earnings

October 22, 2026 (8-K on sec.gov)

Next earnings

Expected about January 28, 2027. The company has not confirmed the date.

• 10-QQuarterly report for the period ended Oct 2, 2026Filed October 23, 2026 · wdc-20261002
• 8-KEarnings releaseFiled October 22, 2026 · wdc-20261022
• 8-KInvestor disclosure and Other company newsFiled September 14, 2026 · Read it on sec.gov
• 8-KOther company newsFiled August 26, 2026 · Read it on sec.gov
• 10-KAnnual report for the period ended Jul 3, 2026Filed August 14, 2026 · wdc-20260703
• 8-KEarnings releaseFiled August 5, 2026 · wdc-20260805
• 8-KOther company newsFiled June 11, 2026 · Read it on sec.gov
• 8-KOther company newsFiled June 3, 2026 · Read it on sec.gov
• 8-KChange of directors or officers and Investor disclosureFiled May 28, 2026 · wdc-20260526
• 10-QQuarterly report for the period ended Apr 3, 2026Filed May 1, 2026 · wdc-20260403

Every filing on SEC EDGAR (CIK 106040)

• Hard drive demand and prices move in cycles. In Q1 fiscal 2027, the price per exabyte in Cloud rose about 25% from a year earlier. If cloud customers slow their orders or rivals add supply, prices and margins can fall fast, as they did in past downturns.
• Cloud was 88% of revenue in Q1 fiscal 2027, and a small number of large customers buy most of these drives. A change in the plans of one large customer can change WD's results.
• WD must keep its lead in drive capacity. Seagate competes with its own high-capacity drives, and flash storage competes for part of the market. A delay in new drive technology can cost market share.
• The 10-Q lists changes in U.S. trade policy, new tariffs and trade restrictions as risks to costs and sales. New trade barriers can raise costs or limit sales to some customers.

Western Digital has little debt. At October 2, 2026, cash was $1.31 billion and debt principal was $791 million. Read more

Dividend yield

0.2% (last 12 months, at today’s price of $289.78)

Paid per share

$0.55 in the last 12 months (4 payments)

Current annual rate

$0.60 ($0.15 × 4 a year)

Payout ratio

2% of the last fiscal year’s earnings (the year that ended July 3, 2026)

Latest ex-dividend date

September 8, 2026, $0.15 per share

Dividends per share by year

Over the last 10 years, the dividend fell by about 9.6% a year.

Source: company filings and market data, read on November 9, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.