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Western Digital — 2026Q3 earnings

reported 2026-08-05

EPS $3.56 vs $3.30 est — beat

next session -13.0% (close 2026-08-05 → 2026-08-06)

Source

Press release ↗

Summary

The quarter ended July 3, 2026 was a clean beat-and-raise for the post-separation, HDD-only WD: revenue of $3.75 billion grew 44% year over year, gross margin reached 54.1% GAAP / 54.4% non-GAAP, and the company generated $1.39 billion of operating cash flow. The headline GAAP diluted EPS of $8.21 is not the operating number — it carries mark-to-market gains on the ownership interest WD retained in Sandisk after the Flash separation, which management excludes; non-GAAP diluted EPS of $3.56 is the comparable figure. Guidance for fiscal Q1 2027 calls for roughly $4.1 billion of revenue and $4.00 of non-GAAP EPS, implying both further growth and further margin expansion.

Review

From the report

WD closed fiscal 2026 with revenue up 44% year over year to $3.75 billion and sharply wider margins, and guided the next quarter higher again — though headline GAAP EPS is inflated by a non-operating gain on its retained Sandisk stake.

  • Revenue reached $3.75 billion in the quarter, up 44% year over year, as WD's post-separation HDD-only business scaled with cloud storage demand. show quote
    “Revenue of $3.75 billion, up 44% year-over-year”
    source ↗
  • Profitability expanded on both lines: GAAP gross margin of 54.1% and non-GAAP gross margin of 54.4%, well above the year-ago quarter. show quote
    “GAAP gross margin of 54.1%; non-GAAP gross margin of 54.4%”
    source ↗
  • GAAP diluted EPS of $8.21 sits far above non-GAAP diluted EPS of $3.56, so the operating result is the non-GAAP figure. show quote
    “GAAP diluted EPS of $8.21; non-GAAP diluted EPS of $3.56”
    source ↗
  • The GAAP-to-non-GAAP gap is driven by mark-to-market gains on the ownership stake WD retained in Sandisk after the Flash separation, which management excludes as non-operating. show quote
    “The company retained an ownership interest in Sandisk at the time of the Separation and has recognized gains on the mark-to-market adjustment of such interest.”
    source ↗
  • Guidance for the next quarter points to continued growth and further margin expansion, with revenue of about $4.1 billion and non-GAAP EPS of about $4.00. show quote
    “For our fiscal first quarter of 2027, at the midpoint of the ranges provided in the table below, we expect revenue of $4.1 billion, non-GAAP gross margin of 55.5%, and non-GAAP EPS of $4.00.”
    source ↗

as of 2026-08-05