Western Digital Reports Fiscal Third Quarter 2023 Financial Results

News Summary

  • Third quarter revenue was $2.8 billion, at the high end of the guidance range.

  • Third quarter GAAP earnings per share (EPS) was $(1.82) and Non-GAAP EPS was $(1.37), which includes $200 million of underutilization related charges in Flash and HDD.

  • Third quarter GAAP operating loss was $472 million and Non-GAAP operating loss was $304 million.

  • Expect fiscal fourth quarter 2023 revenue to be in the range of $2.40 billion to $2.60 billion.

  • Expect Non-GAAP EPS in the range of $(2.20) to $(1.90) which includes $220 to $240 million of underutilization charges in Flash and HDD.

 

SAN JOSE, Calif. - May 08, 2023

Western Digital Corp. (Nasdaq: WDC) today reported fiscal third quarter 2023 financial results.

"Over the last several years, our team has focused on enhancing business agility and delivering a range of innovative, industry-leading products that address the increasing data storage demands of our customers,” said David Goeckeler, Western Digital CEO. “The groundwork we laid, combined with the actions we have taken since the beginning of this fiscal year to right-size and refocus our businesses, have enabled us to navigate a dynamic environment. I am pleased that we delivered non-GAAP gross margin at the higher end of our guidance range due to strong execution across both our HDD and Flash businesses."

Q3 2023 Financial Highlights

 

GAAP

Non-GAAP

 

Q3 2023

Q2 2023

Q/Q

Q3 2023

Q2 2023

Q/Q

Revenue ($M)

$2,803

$3,107

down 10%

$2,803

$3,107

down 10%

Gross Margin

10.2%

17.0%

down 6.8 ppt

10.6%

17.4%

down 6.8 ppt

Operating Expenses ($M)

$758

$849

down 11%

$602

$659

down 9%

Operating Loss ($M)

$(472)

$(321)

up 47%

$(304)

$(119)

*

Net Loss ($M)

$(572)

$(446)

up 28%

$(427)

$(135)

*

Earnings Per Share

$(1.82)

$(1.40)

up 30%

$(1.37)

$(0.42)

*

 

 

GAAP

Non-GAAP

 

Q3 2023

Q3 2022

Y/Y

Q3 2023

Q3 2022

Y/Y

Revenue ($M)

$2,803

$4,381

down 36%

$2,803

$4,381

down 36%

Gross Margin

10.2%

27.0%

down 16.8 ppt

10.6%

31.7%

down 21.1 ppt

Operating Expenses ($M)

$758

$857

down 12%

$602

$740

down 19%

Operating Income (Loss) ($M)

$(472)

$324

*

$(304)

$650

*

Net Income (Loss) ($M)

$(572)

$25

*

$(427)

$521

*

Earnings Per Share

$(1.82)

$0.08

*

$(1.37)

$1.65

*

* not a meaningful figure

The company had an operating cash outflow of $381 million and ended the quarter with $2.22 billion of total cash and cash equivalents.

Additional details can be found within the company's earnings presentation, which is accessible online at investor.wdc.com.

End Market Summary


Revenue ($M)

Q3 2023

Q2 2023

Q/Q

Q3 2022

Y/Y

Cloud

$1,205

$1,224

down 2%

$1,774

down 32%

Client

975

1,089

down 10%

1,732

down 44%

Consumer

623

794

down 22%

875

down 29%

Total Revenue

$2,803

$3,107

down 10%

$4,381

down 36%

In the fiscal second quarter:

  • Cloud represented 43% of total revenue. Sequentially, an increase in capacity enterprise drive shipments was offset by a decrease in flash shipments. The year-over-year decline was primarily due to a decline in shipments of both hard drive and flash products, as well as price decreases in Flash.

  • Client represented 35% of total revenue. On both a sequential and year-over-year basis, the decrease was driven by price declines across our flash products and a lower client SSD and hard drive shipments for PC applications.

  • Consumer represented 22% of total revenue. Sequentially, the decrease was due to a seasonal decline in shipments of both retail hard drive and flash products, as well as price declines in retail Flash. The year-over-year decrease was driven by lower retail hard drive shipments and price declines in Flash.

Business Outlook for Fiscal Fourth Quarter of 2023

Three Months Ending
June 30, 2023