Western Digital Reports 41% Revenue Increase to $4.285 Billion, Plans Business Separation

Western Digital Corporation reported significant financial improvements in its latest quarterly results, with net revenue reaching $4.285 billion for the three months ended December 27, 2024, a 41% increase from $3.032 billion in the same period last year. For the first half of fiscal 2025, revenue totaled $8.380 billion, up 45% from $5.782 billion in the prior year. The company achieved a net income of $594 million, compared to a net loss of $287 million in the previous year, marking a substantial turnaround in profitability.

The company's performance was bolstered by a 76% increase in hard disk drive (HDD) revenue, driven by a 93% rise in exabytes sold, primarily from higher shipments of high-capacity enterprise drives. Flash revenue also saw a 13% increase, reflecting improved pricing dynamics as supply-demand conditions stabilized. The Cloud segment was particularly strong, with revenue surging 119% year-over-year, attributed to increased shipments of enterprise HDD products for new data center builds.

In terms of strategic developments, Western Digital announced plans to separate its HDD and flash business units into two independent public companies, a move expected to enhance operational efficiency and capitalize on distinct growth opportunities. This separation is currently in the soft-spin phase, with a pro rata distribution of shares planned for February 2025. Additionally, the company completed the sale of an 80% equity interest in its SanDisk Semiconductor (Shanghai) Co. Ltd. subsidiary, resulting in a pre-tax gain of $113 million.

Operationally, Western Digital reported a total employee headcount of approximately 40,000, with ongoing efforts to manage costs amid macroeconomic challenges such as inflation and recession concerns. The company has implemented measures to reduce operating expenses and align production with demand, particularly in the Flash segment, which is experiencing a mid-cycle slowdown. Despite these challenges, Western Digital anticipates that digital transformation trends, including artificial intelligence, will drive long-term growth in both HDD and Flash markets.

Looking ahead, Western Digital remains cautiously optimistic about its financial outlook, expecting continued improvements in supply-demand dynamics and pricing in the HDD segment. However, the company acknowledges potential challenges in the Flash market and plans to monitor developments closely. The management's focus on capital efficiency and strategic investments is expected to support the company's growth trajectory in the coming quarters.