Core Insights - Western Digital Corporation (WDC) reported strong financial performance in Q4 fiscal 2025, with non-GAAP earnings of $1.66 per share, exceeding estimates by 12.2% and up from $1.44 in the prior year [1] - The company’s quarterly revenues reached $2.61 billion, a 30% increase year over year, driven by demand for high-capacity storage solutions [2] - For fiscal 2025, revenues surged 51% year over year to $9.5 billion, with significant growth in shipments of high-capacity drives [3] Financial Performance - WDC's Q4 revenues from the Cloud end market, which constitutes 90% of total revenues, increased by 36% year over year to $2.6 billion [5] - Non-GAAP gross margin improved to 41.3%, up 610 basis points year over year, attributed to a shift towards higher-capacity drives and effective cost control [6] - Non-GAAP operating income rose 147% year over year to $732 million, while operating expenses decreased by 16% to $345 million [9] Market Dynamics - The demand for high-capacity storage is being driven by cloud computing and generative AI, which require extensive and cost-effective storage solutions [2] - WDC shipped 190 exabytes of storage in Q4, marking a 32% increase year over year, with nearline drives and 26TB CMR and 32TB UltraSMR products seeing significant demand [3][8] Strategic Developments - On February 21, 2025, WDC split its HDD and Flash businesses into two separate public companies, with the new SanDisk focusing on Flash and AI growth [4] - The company repurchased $149 million in stock during the quarter and authorized up to $2 billion in buybacks, reflecting strong cash flow [11] Future Outlook - For Q1 fiscal 2026, WDC anticipates non-GAAP revenues of $2.7 billion, a 22% year-over-year increase, and non-GAAP earnings of $1.54 per share [12][13]

Core Viewpoint - Western Digital has refocused on mechanical hard drives after the spin-off of its flash memory business, SanDisk, and reported strong financial performance for FY2025, indicating significant growth and confidence in its long-term cash generation capabilities [1][3]. Financial Performance - For FY2025, Western Digital achieved revenue of $9.52 billion (approximately ¥68.515 billion), a 51% increase compared to FY2024's revenue of $6.317 billion (excluding flash memory) [1]. - In Q4 FY2025, the company reported revenue of $2.605 billion (approximately ¥18.748 billion), representing a 30% year-over-year growth and a 14% quarter-over-quarter increase [3]. - The GAAP gross margin for FY2025 was 38.8%, with operating income of $2.334 billion, while the Non-GAAP gross margin was 39.4% with operating income of $2.336 billion [1]. - For Q4 FY2025, the GAAP gross margin was 41.0% with operating income of $680 million, and the Non-GAAP gross margin was 41.3% with operating income of $732 million [3]. Future Outlook - Western Digital expects revenue for Q1 FY2026 to be approximately $2.7 billion (around ¥19.432 billion), which would represent a year-over-year growth of about 22%, with a projected Non-GAAP gross margin of approximately 41.5% [3]. - The CEO expressed confidence in the company's long-term cash generation ability, highlighting the importance of mechanical hard drives in the global data infrastructure, especially in an AI-driven future [3].

Group 1: Financial Performance - Company reported Q2 sales of $2.61 billion, a 30% year-over-year increase, exceeding Wall Street expectations by approximately 5% [1] - Non-GAAP earnings per share for Q2 were $1.66, surpassing analyst expectations of $1.48 by 12.1% [1] - Adjusted operating profit for Q2 was $732 million, higher than the expected $667.5 million, with a profit margin of 28.1%, exceeding expectations by 9.7% [1] - Free cash flow margin was 25.9%, up from 12.5% in the same period last year [1] Group 2: Historical Performance and Trends - Over the past five years, the company has experienced an average annual revenue decline of 10.7%, indicating relatively low business quality [2] - The semiconductor industry is cyclical, and long-term investors should prepare for alternating periods of high growth and revenue contraction [2] - The company has seen an average annual revenue decline of 12.1% over the past two years, reflecting ongoing demand suppression [4] Group 3: Future Outlook - The recent performance indicates that the company is in an upward industry cycle, having achieved four consecutive quarters of growth, which typically lasts 8-10 quarters [7] - Analysts project a 10.3% revenue growth over the next 12 months, suggesting improvements driven by new products and services [7] - The company's inventory turnover days data is missing, which is a critical indicator for semiconductor manufacturers [7] Group 4: Market Reaction - The significant improvement in inventory levels and the quarterly performance exceeding analyst expectations left a positive impression on the market [9] - Following the earnings report, the company's stock price rose over 10%, reaching $79 [9]

Core Insights - Western Digital (WDC) reported quarterly earnings of $1.66 per share, exceeding the Zacks Consensus Estimate of $1.48 per share, and up from $1.44 per share a year ago [1] - The earnings surprise was +12.16%, following a previous surprise of +11.48% with earnings of $1.36 per share against an expectation of $1.22 per share [2] - The company generated revenues of $2.61 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.13%, but down from $3.76 billion year-over-year [3] Earnings Performance - Over the last four quarters, Western Digital has consistently surpassed consensus EPS estimates four times [2] - The company has also topped consensus revenue estimates three times in the last four quarters [3] Stock Performance - Western Digital shares have increased approximately 18.4% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [4] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for continued outperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.40 on revenues of $2.55 billion, and for the current fiscal year, it is $5.92 on revenues of $10.36 billion [8] - The Computer-Storage Devices industry is ranked in the top 18% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [9]

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, the company reported revenue of $2.6 billion, a 30% year-over-year increase, and non-GAAP earnings per share of $1.66, which was above the high end of the guidance range [11][15] - Non-GAAP gross margin was 41.3%, improving by 60 basis points year-over-year, reflecting a shift towards higher capacity drives and effective cost control [16][17] - Free cash flow for the quarter was $675 million, with operating cash flow at $746 million and capital expenditures of $71 million [19] Business Line Data and Key Metrics Changes - The cloud segment represented 90% of total revenue at $2.3 billion, up 36% year-over-year, driven by strong demand for higher capacity nearline products [16] - Client revenue accounted for 5% of total revenue at $140 million, up 2% year-over-year, while consumer revenue also represented 5% at $136 million, down 12% year-over-year [16] Market Data and Key Metrics Changes - Shipments of the latest generation ePMR drives with capacities up to 26 terabytes CMR and 32 terabytes Ultra SMR more than doubled quarter-over-quarter, exceeding 1.7 million units [8][11] - The company has firm purchase orders or long-term agreements with all top five hyperscale customers for the entire fiscal year 2026, indicating strong demand [11][12] Company Strategy and Development Direction - The company is focusing on operational execution, capital return programs, and leveraging AI-driven data growth to enhance storage solutions [6][10] - The transition to higher capacity drives and the development of HAMR technology are central to the company's strategy, with expectations for continued revenue growth driven by data center demand [9][20] Management's Comments on Operating Environment and Future Outlook - Management noted that while the broader environment remains uncertain due to tariffs, strong demand driven by AI is expected to continue [11][12] - For fiscal year 2026, the company anticipates revenue growth of approximately 22% year-over-year, with gross margin expected between 41% and 42% [20][21] Other Important Information - The company initiated a quarterly cash dividend program and authorized a $2 billion share repurchase program, repurchasing nearly $150 million worth of shares in the fourth quarter [11][19] - The balance sheet was strengthened with a reduction of $2.6 billion in debt, achieving a net leverage target of 1 to 1.5 times [11][18] Q&A Session Summary Question: Can you help us understand the gross margin guidance for September? - Management indicated that gross margin expansion is expected to slow due to various factors, including pricing stability and a favorable mix shift towards higher capacity drives [26][30] Question: How should investors think about share repurchase activity going forward? - Management expressed confidence in continuing to return cash to shareholders through dividends and share repurchases, with room for growth in the dividend program [34][37] Question: What is the ASP per terabyte for the last quarter? - Management noted that ASP per terabyte was down in low single digits, primarily due to mix, while ASPs per drive continue to rise with higher capacity drives [39][70] Question: How does the extra week in the quarter affect revenue and OpEx? - Management clarified that the extra week would add approximately $15 million in OpEx, but revenue impact would be minimal as customers operate on quarterly forecasts [75][76] Question: What is the outlook for AI's impact on growth? - Management highlighted that AI is expected to provide a significant uplift in exabyte growth, potentially increasing revenue growth from mid to high single digits to mid-teens [78][80]

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, the company reported revenue of $2.6 billion, a 30% increase year-over-year, and non-GAAP earnings per share of $1.66, which was above the high end of the guidance range [11][15] - Non-GAAP gross margin was 41.3%, improving by 60 basis points year-over-year, reflecting a shift towards higher capacity drives and effective cost control [17][18] - Free cash flow for the quarter was $675 million, with operating cash flow at $746 million and capital expenditures of $71 million [20] Business Line Data and Key Metrics Changes - Cloud business represented 90% of total revenue at $2.3 billion, up 36% year-over-year, driven by strong demand for higher capacity nearline products [16] - Client business accounted for 5% of total revenue at $140 million, up 2% year-over-year, while consumer revenue also represented 5% at $136 million, down 12% year-over-year [17] Market Data and Key Metrics Changes - Shipments of the latest generation ePMR drives with capacities up to 26 terabytes CMR and 32 terabytes Ultra SMR more than doubled quarter-over-quarter, exceeding 1.7 million units [7][10] - The company has secured firm purchase orders or long-term agreements with all top five hyperscale customers for the entire fiscal year 2026, indicating strong demand [12][45] Company Strategy and Development Direction - The company is focusing on operational execution, capital return programs, and leveraging AI-driven data growth to enhance storage solutions [5][15] - The transition to next-generation HAMR technology is on track, with expectations for ramp-up in 2027, while the next generation of ePMR drives will complete qualification in 2026 [9][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth driven by data center demand and improved profitability from high-capacity drives [12][21] - The company anticipates revenue for fiscal year 2026 to be approximately $2.7 billion, reflecting a year-over-year growth of about 22% [21] Other Important Information - The company initiated a quarterly cash dividend program and authorized a $2 billion share repurchase program, repurchasing nearly $150 million worth of shares in the fourth quarter [12][20] - The effective tax rate for the quarter was 9.3%, and diluted share count was approximately 362 million shares [18] Q&A Session Summary Question: Gross margin guidance for September - Management indicated that gross margin expansion is expected to slow due to various factors, including pricing stability and a favorable mix shift towards higher capacity drives [28][31] Question: Share repurchase activity and cash management - The company plans to continue returning cash to shareholders through dividends and share repurchases, with strong free cash flow generation supporting these initiatives [34][36] Question: ASP and non-HDD revenue - ASP per terabyte was down in low single digits, primarily due to mix, while the overall pricing environment remains stable [38][72] Question: Seasonality in the business - Management noted that traditional seasonality may not apply anymore due to the structural changes in the business, with strong demand from hyperscale customers driving revenue [42][46] Question: Adoption of Ultra SMR technology - The company has completed qualifications for Ultra SMR with multiple hyperscale customers, indicating a positive adoption curve [57] Question: Impact of tariffs and enterprise demand - Management has not seen material impacts from tariffs and noted that any potential softness in enterprise demand would be offset by cloud demand [66][68] Question: Hard drive ASPs and market capacity - The company emphasized that their ability to produce higher capacity drives at scale differentiates them in the market, and they do not foresee needing incremental investments into capacity [75]

Financial Performance - Q4FY25 revenue reached $2.6 billion[5], a 30% increase year-over-year[13] and a 14% increase quarter-over-quarter[13] - Non-GAAP EPS for Q4FY25 was $1.66[5], a 22% increase quarter-over-quarter[13] - Non-GAAP gross margin for Q4FY25 was 41.3%[5], a 610 bps increase year-over-year[13] - Cash flow from operations was $746 million[5], a 104% increase year-over-year[13] - Free cash flow was $675 million[5], a 139% increase year-over-year[13] Capital Allocation - Total debt was reduced by $2.6 billion[5] - A new $2.0 billion share repurchase program was authorized, with $149 million of shares repurchased[5] - A cash dividend of $0.10 per share was initiated[5] Business Segments - Cloud revenue accounted for 90% of total revenue in Q4FY25[7] Q1FY26 Guidance (Non-GAAP) - Revenue is expected to be $2.70 billion, with a variance of +/- $100 million[14] - Gross margin is projected to be between 41% and 42%[14] - EPS is expected to be $1.54, with a variance of +/- $0.15[14]

Exhibit 99.1 Western Digital Reports Fiscal Fourth Quarter and Fiscal Year 2025 Financial Results Q4FY25 Highlights: SAN JOSE, Calif. — July 30, 2025 — Western Digital Corp. (Nasdaq: WDC) today reported fiscal fourth quarter and fiscal year 2025 financial results for the period ended June 27, 2025. "Western Digital executed well in its fiscal fourth quarter, achieving revenue and gross margin above the high end of our guidance range while delivering strong free cash flow. In addition, during the quarter, we ...

Core Insights - Western Digital (WDC) is positioned to potentially continue its earnings-beat streak in upcoming reports, particularly within the Zacks Computer-Storage Devices industry [1] - The company has a history of beating earnings estimates, with an average surprise of 6.31% over the last two quarters [1] Earnings Performance - For the most recent quarter, Western Digital reported earnings of $1.22 per share, missing the expected $1.36 per share by 11.48% [2] - In the previous quarter, the company reported $1.77 per share against an expectation of $1.75 per share, resulting in a surprise of 1.14% [2] Earnings Estimates and Predictions - Recent estimates for Western Digital have been trending upward, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong potential for an earnings beat [5] - The current Earnings ESP for Western Digital is +3.70%, suggesting that analysts are optimistic about the company's earnings prospects [8] - The combination of a positive Earnings ESP and a Zacks Rank 1 (Strong Buy) indicates a high likelihood of another earnings beat [8] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]

Core Insights - New dividends are often indicative of a company's commitment to returning value to shareholders, suggesting potential for future increases in payouts [2][3] Group 1: New Dividends Overview - Millrose Properties (MRP) launched with an 8% yield, focusing on residential land development and selling homesites back to homebuilders like Lennar [4][5] - Bristow Group (VTOL) is a global helicopter transportation provider, primarily serving the offshore energy sector, and plans to initiate a dividend of 12.5 cents quarterly starting in February 2026 [10][11][14] - WillScot Holdings (WSC) announced a 7-cent quarterly dividend, despite potential revenue contraction in 2025, indicating room for future dividend growth [15][16][17] - Western Digital (WDC) initiated a 10-cent quarterly dividend after spinning off its NAND flash memory business, despite a history of cyclical losses [18][21][23] - Regeneron Pharmaceuticals (REGN) announced an 88-cent quarterly dividend amid concerns over declining sales of its key drug Eylea, with expectations for stabilization in revenues and profits by 2026 [24][30]