Western Digital Corp.

Strong FY26 performance + major shareholder returns (the “good”): - Full fiscal year 2026 revenue +$36% YoY to $12.9B. - Gross margin +970 bps to 49.1% and operating margin +1,290 bps to 37.3%. - EPS more than doubled to $10.22; generated $3.5B free cash flow (~27% FCF margin). - Shareholder returns: $3.1B returned via $1B+ share repurchases (plus cash dividends of $54M in the quarter) and completed SanDisk monetization (remaining 1.7M shares exchanged for 4.8M WD shares). - Balance sheet strengthened to net positive cash (~$500M) with $1.6B cash and $1.1B debt.

Q4 delivered upside vs already strong guidance + pricing/exabyte demand tailwind (the “good”): - Q4 revenue $3.75B (+44% YoY); EPS $3.56 (+109% YoY). - Exabyte shipments 231 exabytes (+22% YoY)—nearline led, plus non-nearline growth. - Gross margin 54.4% (+1,310 bps YoY); operating margin 44.2%. - Pricing: blended average price per terabyte improved to high-teens YoY (from high single digits last quarter), reflecting sustained commercial discipline. - Free cash flow: $1.3B in Q4; CapEx only $108M (FCF strength supported by operational leverage).

FY27 outlook: Q1 growth + margins expected to stay very strong (the “forecast”): - Q1 FY27 revenue $4.1B ± $100M (implies ~+45% YoY at midpoint). - Gross margin expected 55%–56%; operating expenses $390M–$400M. - EPS $4.00 ± $0.15 (non-GAAP, ~388M diluted shares). - Company emphasizes continued incremental gross margin strength year-over-year (CFO cited strong YoY incremental gross margin: 60% fiscal’25 → 75% fiscal’26, with ~80–81% implied for Q1).