Western Digital Reports 25% Revenue Growth to $3.017 Billion in Latest Quarter

Western Digital Corporation reported significant financial growth in its latest quarterly results, with net revenue reaching $3.017 billion for the three months ended January 2, 2026, a 25% increase from $2.409 billion in the same period the previous year. For the first half of the fiscal year, revenue rose 26% to $5.835 billion compared to $4.621 billion in the prior year. The company attributed this growth to a 22% increase in exabytes sold, driven by strong demand for high-capacity enterprise products, and a 2% increase in average selling prices per exabyte.

The company's gross profit also saw a substantial increase, rising to $1.380 billion for the quarter, up from $907 million a year earlier, resulting in a gross margin improvement of 8 percentage points. Operating income for the quarter was $908 million, a 62% increase from $560 million in the prior year. The increase in profitability was supported by a lower cost structure on newer generation products and improved pricing strategies. Net income from continuing operations surged to $1.842 billion, compared to $466 million in the same quarter last year.

In terms of strategic developments, Western Digital completed the separation of its hard disk drive (HDD) and flash business units on February 21, 2025, creating two independent public companies. This strategic move is expected to enhance operational efficiency and focus on growth opportunities within the HDD market. The company retained a 19.9% stake in Sandisk, which it plans to monetize to further reduce debt. As of January 2, 2026, Western Digital's total assets increased to $15.611 billion, up from $14.002 billion at the end of the previous fiscal year.

Operationally, Western Digital's customer concentration increased, with its top ten customers accounting for 76% of net revenue in the latest quarter, compared to 67% in the same period last year. The company reported a notable increase in accounts receivable, which rose to $1.685 billion from $1.486 billion, indicating strong sales performance. The company also reported a cash and cash equivalents balance of $1.975 billion, down from $2.114 billion, reflecting significant cash outflows related to share repurchases and dividends.

Looking ahead, Western Digital anticipates continued demand for data storage solutions, particularly in the cloud and enterprise sectors, driven by the adoption of artificial intelligence and hybrid data workloads. The company is closely monitoring macroeconomic conditions, including trade policies and tariffs, which could impact its operations. Western Digital expects to maintain sufficient liquidity to meet its operational and capital needs, with capital expenditures projected to be approximately 4% to 6% of net revenue for the fiscal year.