Western Digital(WDC) - 2025 Q4 - Annual Results

Financial Performance - Q4FY25 revenue reached $2.61 billion, representing a 30% year-over-year increase[4] - GAAP diluted EPS for Q4FY25 was $0.67, while non-GAAP diluted EPS was $1.66[4] - Fiscal year 2025 revenue totaled $9.52 billion, up 51% year-over-year[6] - Operating income for Q4FY25 was $680 million, compared to a loss of $91 million in Q4FY24[5] - GAAP gross profit for the three months ended June 27, 2025, was $1,067 million, up from $912 million in the previous quarter, and $697 million in the same quarter last year, representing a 17% increase quarter-over-quarter and a 53% increase year-over-year[20] - Non-GAAP net income from continuing operations for the three months ended June 27, 2025, was $617 million, compared to $500 million in the previous quarter, reflecting a 23% increase[21] - The diluted income per common share for the three months ended June 27, 2025, was $0.67 on a GAAP basis and $1.66 on a non-GAAP basis, compared to $2.11 and $1.36 respectively in the previous quarter[21] Cash Flow and Liquidity - Free cash flow for Q4FY25 was $675 million, with cash flow from operations at $746 million[4] - Cash flows provided by operating activities for the three months ended June 27, 2025, were $746 million, significantly higher than $366 million in the same quarter last year[24] - Free cash flow for the three months ended June 27, 2025, was $675 million, up from $436 million in the previous quarter, indicating strong cash generation capabilities[21] - Cash and cash equivalents at the end of the period were $2,114 million, an increase from $1,879 million at the end of the previous quarter[24] Margins and Guidance - Gross margin for Q4FY25 improved to 41.0%, up 620 basis points year-over-year[5] - Non-GAAP gross margin guidance for Q1FY26 is projected to be between 41% and 42%[8] - The company reported non-GAAP gross margin guidance excluding stock-based compensation expense, totaling approximately $10 million to $15 million[37] Debt and Liabilities - The company reduced its debt by $2.6 billion during the quarter[3] - Total liabilities decreased to $8,462 million as of June 27, 2025, down from $13,141 million a year earlier, indicating improved financial health[23] Strategic Initiatives and Adjustments - The company incurred expenses related to a strategic review that resulted in the separation of its HDD and Flash business units[29] - The company recognized losses on the mark-to-market adjustment of its retained 19.9% interest in Sandisk, which are excluded from operating results[30] - The company believes that certain litigation-related charges do not reflect its operating results and are not indicative of underlying business performance[27] - Business realignment charges may include employee terminations and restructuring costs, which are inconsistent in amount and frequency[28] - The company anticipates that reconciliations of non-GAAP measures to GAAP measures may include additional unanticipated adjustments not reflective of ongoing operations[36] Future Outlook - For Q1FY26, revenue is expected to be approximately $2.7 billion, a 22% year-over-year increase at the mid-point[7] - A cash dividend of $0.10 per share was declared, payable on September 18, 2025[9]