Western Digital (WDC) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue was $4.381B, up 55% YoY; non-GAAP EPS rose 161% to $4.64, and results exceeded expectations.

• Robust Cloud and AI demand, exabyte growth, improved pricing and newer-generation products supported stronger margins and earnings.

Financial highlights

• Non-GAAP operating income was $2.153B, up 152% YoY; GAAP operating income was $2.046B, up 158% YoY.

• GAAP net income was $1.779B; GAAP diluted EPS was $4.63, compared with non-GAAP diluted EPS of $4.64.

• Cash from operations was $1.604B; free cash flow was $1.377B, up 130% YoY.

• Operating expenses were $391M, up 3% YoY; R&D was $283M, SG&A was $162M, and realignment charges were $43M.

Outlook and guidance

• Q2 FY27 revenue guidance is $5.1B ± $100M, implying 66%–72% YoY growth; non-GAAP gross margin is guided to 60%–61%.

• Q2 non-GAAP diluted EPS guidance is $5.80 ± $0.20; operating expenses are guided to $400M–$410M, with ~380M diluted shares, ~17% tax rate and ~$15M interest and other expense.

• Exabyte supply growth is expected to accelerate through FY27 and FY28; long-term nearline exabyte growth is expected to exceed 25%.

• ASP per terabyte growth has further room to expand over the next three to four quarters, though management expects it to moderate eventually.