Western Digital (WDC) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 revenue grew 36% to $12.92 billion, with Q4FY26 revenue at $3.75 billion, up 44% year-over-year, driven by strong demand in cloud, AI, and data-intensive workloads.

• Gross and operating margins expanded significantly, with non-GAAP gross margin at 54.4% and operating margin at 44.2% in Q4FY26.

• Non-GAAP EPS for Q4FY26 was $3.56, up 109% year-over-year; fiscal year non-GAAP EPS more than doubled to $10.22.

• Generated $3.51 billion in free cash flow for fiscal 2026 and ended the year with a net positive cash position.

• Began shipping next-generation 40TB ePMR drives and ramped UltraSMR technology with major customers.

Financial highlights

• Q4FY26 revenue was $3.75 billion, up 44% year-over-year and 12% sequentially; fiscal 2026 revenue totaled $12.92 billion, up 36% year-over-year.

• Q4FY26 non-GAAP gross margin was 54.4% (up 1,310 bps YoY); operating margin was 44.2% (up 1,610 bps YoY); fiscal year non-GAAP gross margin was 49.1%.

• Q4FY26 non-GAAP operating income was $1.66 billion (+126% YoY); fiscal year non-GAAP net income was $3.88 billion (+120% YoY).

• Q4FY26 free cash flow was $1.28 billion (34% margin); fiscal year free cash flow was $3.51 billion.

• Q4FY26 GAAP diluted EPS was $8.21 (+1125% YoY); non-GAAP diluted EPS was $3.56 (+109% YoY).

Outlook and guidance

• Q1FY27 revenue expected at $4.1 billion ±$100 million, reflecting 42–49% year-over-year growth.

• Q1FY27 non-GAAP gross margin guidance is 55–56%; operating expenses expected at $390–$400 million.

• Q1FY27 diluted EPS expected at $4.00 ±$0.15; tax rate at 17%.

• Board declared a $0.15 per share dividend, payable September 17, 2026.

• High conviction in sustained demand from AI, cloud, and data-intensive workloads, with no need for major CapEx to add unit capacity.