Western Digital unveils Q1 2024 financial report, showcasing robust performance

Western Digital Corp. reported a 3% sequential revenue increase in the first quarter of 2024, driven by higher content per unit and unit shipments in flash products, while Cloud revenue decreased by 12% sequentially due to lower shipments of nearline hard drives.

Western Digital reported a revenue of $2.75 billion, representing a 3% sequential increase.
The company is well-positioned to take advantage of the improving market conditions and increase its earnings power.
Western Digital's solid performance in the first quarter demonstrates its ability to adapt to market demands and deliver innovative solutions across multiple sectors.

Western Digital Corp., a leading data storage company, has released its fiscal first quarter 2024 financial results, surpassing expectations. The company’s focus on enhancing business agility and developing innovative products across various markets has led to sequential margin improvement in both flash and HDD businesses.

David Goeckeler, CEO of Western Digital, expressed his satisfaction with the company’s performance, stating that the Consumer and Client end markets continue to thrive, while the Cloud end market is expected to grow in the future. With an improved cost structure, Western Digital is well-positioned to take advantage of the improving market conditions and increase its earnings power.

In the first quarter, Western Digital reported a revenue of $2.75 billion, representing a 3% sequential increase. While Cloud revenue decreased by 12% sequentially, Client revenue saw an 11% increase and Consumer revenue experienced a significant 14% increase.

The first quarter GAAP earnings per share (EPS) stood at $(2.17), while the Non-GAAP EPS was $(1.76), which includes underutilization-related charges of $225 million in Flash and HDD. Looking ahead, Western Digital expects its revenue for the second quarter of 2024 to be between $2.85 billion and $3.05 billion. The projected Non-GAAP EPS for the same period is estimated to be between $(1.35) and $(1.05), including underutilization-related charges of $110 to $130 million in Flash and HDD.

During the first quarter, Western Digital faced an operating cash outflow of $626 million but ended the period with $2.03 billion in total cash and cash equivalents.

In terms of market breakdown, Cloud accounted for 32% of total revenue in the first quarter. The decline in Cloud revenue was primarily due to lower shipments of nearline hard drives to data center customers. On a year-over-year basis, the decrease was driven by declines in both hard drive and flash product shipments.

Client revenue represented 42% of total revenue, with the sequential increase attributed to growth in flash bit shipments. However, there was a year-over-year decrease mainly due to declines in flash pricing.

Consumer revenue accounted for 26% of total revenue, and both on a sequential and year-over-year basis, the increase was driven by higher content per unit and unit shipments in flash products.

Western Digital’s solid performance in the first quarter demonstrates its ability to adapt to market demands and deliver innovative solutions across multiple sectors. With a positive outlook for the Cloud market and a focus on cost optimization, the company is poised for continued success in the coming quarters.

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Background Information

About Western Digital: Western Digital, established in 1970, is a important data storage solutions provider known for its wide range of hard drives and solid-state drives. Catering to various applications, from personal computers to enterprise storage systems, Western Digital emphasizes data management and security. With a reputation for reliability and innovative solutions, the company has been pivotal in shaping the storage industry. Their products are trusted by individuals, businesses, and data centers worldwide

Technology Explained

HDD: A Hard Disk Drive (HDD) is a classic data storage device that utilizes spinning disks, or platters, coated with a magnetic material to store and retrieve data. An actuator arm with read/write heads accesses data by moving over the spinning platters. HDDs offer large storage capacities at a comparatively lower cost per gigabyte, making them suitable for applications where massive data storage is required, such as servers and desktop computers. However, HDDs are slower in terms of read and write speeds compared to SSDs due to the mechanical nature of their operation. They are more susceptible to physical shocks and are less energy-efficient due to the need to constantly spin the platters.