Western Digital Corporation Q1 2027 Earnings Recap

Western Digital shares fell 3.0% after earnings, signaling a muted market response despite substantial year-over-year growth. The transcript points to dependence on cloud, which accounted for 88% of revenue, while broader adoption of newer products such as HAMR remains ahead.

Key Takeaways

• Q1 revenue was $4.4 billion, up 55% year over year; the company shipped 248 exabytes, up 22% year over year and 8% sequentially.
• Cloud revenue rose 54% to $3.9 billion and represented 88% of total revenue. Client revenue was $320 million, up 119%; consumer revenue was $193 million, up 19%.
• Gross margin was 58.1%, up 34 basis points year over year. Management attributed the expansion to higher-capacity product mix, operational execution, and favorable pricing.
• The latest ePMR drives, with capacity up to 40 TB, are ramping; management expects them to reach close to 30% of nearline shipments by Q2 and 50% by Q3 of fiscal 2027.
• HAMR volume shipments are expected in the first half of calendar 2027, following customer qualifications.