Western Digital Corp.

FY26 performance was very strong (and validates the strategy) - Revenue $12.9B (+36% YoY); gross margin 49.1% (+970 bps); operating margin 37.3% (+1,290 bps). - EPS doubled to $10.22; free cash flow (FCF) $3.5B with ~27% FCF margin. - Shareholder returns: $3.1B returned via buybacks/dividends; ended quarter with net positive cash ~$500M (cash $1.6B, debt $1.1B).

Q4/FQ2? (Q4 of FY26) results outperformed guidance and showed demand breadth - Q4 revenue $3.75B (+44% YoY); EPS $3.56 (+109% YoY); revenue/gross margin/EPS at or above high end of guidance. - 231 exabytes shipped (+22% YoY); growth driven by nearline plus solid non-nearline. - Mix & pricing: Cloud 89% of revenue ($3.3B, +43% YoY); blended price up “high teens” per terabyte YoY (improved from prior quarter’s “high single digits”). - Incremental profitability: Q4 gross margin 54.4% (+1,310 bps YoY) and operating margin 44.2% (+1,610 bps YoY). - Q4 cash & capex: Operating cash flow $1.4B, capex $108M, FCF $1.3B.

FY27 outlook: Q1 guided to strong growth and margin expansion; investors expect acceleration later in the year - Q1 FY27 forecast: Revenue $4.1B ± $100M (~+45% YoY at midpoint). - Gross margin 55–56% - Operating expenses $390–$400M - Tax rate 17% - Diluted EPS $4.00 ± $0.15 (non-GAAP share count 388M). - Management repeatedly emphasized confidence in continued exabyte growth and margin improvement, tied to higher-capacity drives and operational execution. - Key “acceleration” narrative: Q1 may not be the low point for momentum, but they expect growth to accelerate in the second half as 40TB ePMR ramps and then HAMR (44TB) arrives.