# WESTERN DIGITAL CORP (WDC)

Informational only - not investment advice.

CIK: 0000106040
SIC: 3572 Computer Storage Devices
SIC breadcrumb: [Manufacturing](/division/D/) > [Industrial And Commercial Machinery And Computer Equipment](/major-group/35/) > [SIC 3572 Computer Storage Devices](/industry/3572/)
Latest 10-K filed: 2026-08-14
SEC page: https://www.sec.gov/edgar/browse/?CIK=106040
Filing source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm

## At a glance

FY2026 · period end 2026-07-03 · filed 2026-08-14 · accession 0001628280-26-057139 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000106040.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 12,919,000,000 USD | 2026 | verified |
| Net income | 9,424,000,000 USD | 2026 | verified |
| Assets | 13,861,000,000 USD | 2026 | verified |
| Free cash flow | 3,511,000,000 USD | 2026 | computed |
| Net margin | 72.95% | 2026 | computed |
| Operating margin | 34.47% | 2026 | computed |
| Revenue YoY | +35.70% | 2026 | computed |
| ROE | 106.32% | 2026 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2026 revenue ÷ FY2025 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | WDC | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 72.9% | 7.7% | 100 | 110 |
| Operating margin | 34.5% | 13.1% | 98 | 104 |
| Revenue growth | 35.7% | 5.8% | 90 | 111 |
| FCF margin | 27.2% | 9.6% | 93 | 103 |
| ROE | 106.3% | 11.7% | 97 | 108 |
| ROA | 68.0% | 5.6% | 100 | 111 |
| Liabilities / equity | 0.56 | 1.10 | 18 | 108 |
| Current ratio | 1.33 | 2.02 | 23 | 110 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 35 Industrial And Commercial Machinery And Computer Equipment, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 12919000000 | USD | 2026 | 2026-08-14 |
| Net income | 9424000000 | USD | 2026 | 2026-08-14 |
| Assets | 13861000000 | USD | 2026 | 2026-08-14 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000106040.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 19,093,000,000 | 20,647,000,000 | 16,569,000,000 | 16,736,000,000 | 16,922,000,000 | 18,793,000,000 | 6,255,000,000 | 6,317,000,000 | 9,520,000,000 | 12,919,000,000 |
| Net income |  | 397,000,000 | 675,000,000 | -754,000,000 | -250,000,000 | 821,000,000 | 1,546,000,000 | -1,684,000,000 | -798,000,000 | 1,889,000,000 | 9,424,000,000 |
| Operating income |  | 1,954,000,000 | 3,617,000,000 | 87,000,000 | 335,000,000 | 1,220,000,000 | 2,391,000,000 | -548,000,000 | -403,000,000 | 2,334,000,000 | 4,453,000,000 |
| Gross profit |  | 6,072,000,000 | 7,705,000,000 | 3,752,000,000 | 3,781,000,000 | 4,521,000,000 | 5,874,000,000 | 1,391,000,000 | 1,773,000,000 | 3,692,000,000 | 6,311,000,000 |
| Diluted EPS |  | 1.34 | 2.20 | -2.58 | -0.84 | 2.66 | 4.89 | -5.37 | -2.61 | 5.12 | 24.28 |
| Operating cash flow |  | 3,437,000,000 | 4,205,000,000 | 1,547,000,000 | 824,000,000 | 1,898,000,000 | 1,880,000,000 | -408,000,000 | -294,000,000 | 1,691,000,000 | 3,929,000,000 |
| Capital expenditures |  | 578,000,000 | 835,000,000 | 876,000,000 | 647,000,000 | 1,146,000,000 | 1,122,000,000 | 821,000,000 | 487,000,000 | 412,000,000 | 418,000,000 |
| Dividends paid |  |  |  | 147,000,000 |  |  |  |  | 0.00 | 44,000,000 | 174,000,000 |
| Share buybacks | 60,000,000 | 0.00 | 591,000,000 | 563,000,000 | 0.00 | 0.00 |  | 0.00 | 0.00 | 149,000,000 | 2,592,000,000 |
| Assets |  | 29,860,000,000 | 29,235,000,000 | 26,370,000,000 | 25,662,000,000 | 26,132,000,000 | 26,259,000,000 | 24,546,000,000 | 24,188,000,000 | 14,002,000,000 | 13,861,000,000 |
| Liabilities |  | 18,442,000,000 | 17,704,000,000 | 16,403,000,000 | 16,111,000,000 | 15,411,000,000 | 14,038,000,000 | 12,706,000,000 | 13,141,000,000 | 8,462,000,000 | 4,997,000,000 |
| Stockholders' equity |  | 11,418,000,000 | 11,531,000,000 | 9,967,000,000 | 9,551,000,000 | 10,800,000,000 | 12,323,000,000 | 10,964,000,000 | 10,818,000,000 | 5,311,000,000 | 8,864,000,000 |
| Cash and cash equivalents |  | 6,354,000,000 | 5,005,000,000 | 3,455,000,000 | 3,048,000,000 | 3,370,000,000 | 2,327,000,000 | 2,023,000,000 | 1,551,000,000 | 2,114,000,000 | 1,579,000,000 |
| Free cash flow |  | 2,859,000,000 | 3,370,000,000 | 671,000,000 | 177,000,000 | 752,000,000 | 758,000,000 | -1,229,000,000 | -781,000,000 | 1,279,000,000 | 3,511,000,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  | 2.08% | 3.27% | -4.55% | -1.49% | 4.85% | 8.23% | -26.92% | -12.63% | 19.84% | 72.95% |
| Operating margin |  | 10.23% | 17.52% | 0.53% | 2.00% | 7.21% | 12.72% | -8.76% | -6.38% | 24.52% | 34.47% |
| Return on equity |  | 3.48% | 5.85% | -7.56% | -2.62% | 7.60% | 12.55% | -15.36% | -7.38% | 35.57% | 106.32% |
| Return on assets |  | 1.33% | 2.31% | -2.86% | -0.97% | 3.14% | 5.89% | -6.86% | -3.30% | 13.49% | 67.99% |
| Liabilities / equity |  | 1.62 | 1.54 | 1.65 | 1.69 | 1.43 | 1.14 | 1.16 | 1.21 | 1.59 | 0.56 |
| Current ratio |  | 2.55 | 2.39 | 2.22 | 2.05 | 2.00 | 1.81 | 1.45 | 1.32 | 1.08 | 1.33 |

## As-reported value updates

9 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/WDC/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000106040.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-04-01 |  |  | 0.08 | reported discrete quarter |
| 2023-Q1 | 2022-09-30 |  |  | 0.08 | reported discrete quarter |
| 2023-Q2 | 2022-12-30 |  |  | -1.40 | reported discrete quarter |
| 2023-Q3 | 2023-03-31 |  |  | -1.82 | reported discrete quarter |
| 2023-Q4 | 2023-06-30 | 2,672,000,000 | -715,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2023-09-29 | 2,750,000,000 | -685,000,000 | -2.17 | reported discrete quarter |
| 2024-Q2 | 2023-09-29 |  | -685,000,000 |  | reported discrete quarter |
| 2024-Q2 | 2023-12-29 | 3,032,000,000 |  | -0.93 | reported discrete quarter |
| 2024-Q3 | 2023-12-29 |  | -287,000,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-03-29 | 3,457,000,000 |  | 0.34 | reported discrete quarter |
| 2024-Q4 | 2024-06-28 | 3,764,000,000 | 39,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2024-09-27 | 4,095,000,000 | 493,000,000 | 1.35 | reported discrete quarter |
| 2025-Q2 | 2024-09-27 |  | 493,000,000 |  | reported discrete quarter |
| 2025-Q2 | 2024-12-27 | 4,285,000,000 |  | 1.63 | reported discrete quarter |
| 2025-Q3 | 2024-12-27 |  | 594,000,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-03-28 | 2,294,000,000 |  | 1.42 | reported discrete quarter |
| 2025-Q4 | 2025-06-27 | 2,605,000,000 | 282,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q2 | 2026-01-02 | 3,017,000,000 | 1,842,000,000 | 4.73 | reported discrete quarter |
| 2026-Q3 | 2026-01-02 |  | 1,842,000,000 |  | reported discrete quarter |
| 2026-Q3 | 2026-04-03 | 3,337,000,000 |  | 8.20 | reported discrete quarter |
| 2026-Q4 | 2026-07-03 | 3,747,000,000 | 3,195,000,000 |  | derived Q4 = FY annual - nine-month YTD |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from WDC's latest 10-K: [/company/WDC/business/](/company/WDC/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from WDC's latest 10-K: [/company/WDC/risk-factors/](/company/WDC/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/106040/000162828026029054/wdc-20260403.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-01
Report date: 2026-04-03

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results. You should read this information in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited Consolidated Financial Statements and notes thereto included in Part II, Item 8 of our 2025 Annual Report on Form 10-K. See also “Forward-Looking Statements” immediately prior to Part I, Item 1 in this Quarterly Report on Form 10‑Q.

Unless otherwise indicated, references herein to specific years and quarters are to our fiscal years and fiscal quarters. As used herein, the terms “we,” “us,” “our,” and the “Company” refer to Western Digital Corporation and its subsidiaries.

Our Company

We are a leading developer, manufacturer, and provider of data storage devices and solutions based on HDD technology. We leverage our capability in the HDD industry primarily for the cloud and hyperscale data center markets. HDDs are critical components in the worldwide data infrastructure market, powering the digital economy. HDDs provide reliable, cost-effective, high-capacity storage needs for a wide range of applications, ranging from cloud data centers, enterprise storage systems, edge computing, smart video, to client and consumer.

Our broad portfolio of technology and products addresses our customers’ storage needs through multiple end markets: Cloud, Client and Consumer. Cloud is comprised primarily of products for public or private cloud environments and enterprise customers. Through the Client end market, we provide our OEM and channel customers a broad array of high-performance HDD solutions across desktop and notebooks. The Consumer end market provides a broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

Our fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year 2026, which will end on July 3, 2026, will be comprised of 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks each. Fiscal year 2025, which ended on June 27, 2025, was comprised of 52 weeks, with all quarters presented consisting of 13 weeks.

Key Developments

Separation of Business Units and Monetization of Sandisk Shares

On February 21, 2025, we completed the Separation to create two independent public companies, with Western Digital continuing our existing HDD business and Sandisk, formerly a wholly-owned subsidiary of the Company, holding the Flash business. We believe the Separation has better positioned us as a pure-play HDD company that can execute innovative technology and product development, capitalize on unique growth opportunities, extend our leadership position, operate more efficiently, and pursue capital allocation strategies to maximize long-term shareholder value. As part of the Separation, we initially retained 28.8 million shares of Sandisk common stock. In June 2025, we used 21.3 million shares of Sandisk in a tax-free exchange to reduce approximately $800 million principal amount of our term loan A-3. In February 2026, we executed a series of transactions to monetize additional Sandisk shares and further reduce our outstanding debt. Initially, we entered into a $1.50 billion Bridge Loan, which was utilized to fully redeem all of our Senior Notes and consolidate the broad creditor base to two holders to facilitate a debt-for-equity exchange. Following the redemptions of the Senior Notes, we retired the Bridge Loan and our existing Term Loan A-3 through a tax-free exchange for 5.8 million shares of Sandisk common stock. As of April 3, 2026, we still held 1.7 million shares of Sandisk common stock, which we expect to monetize by the end of 2026 in one or more subsequent exchanges for our outstanding common stock.

Prior period information provided herein is presented on a continuing operations basis to reflect the impact of the Separation. See Part I, Item 1, Note 4, Discontinued Operations, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Separation.

37

Table of Contents

Conversion of Preferred Shares

On February 17, 2026, we converted all remaining outstanding Preferred Shares into 7 million shares of our common stock in accordance with the Certificate of Designations, Preferences and Rights of the Preferred Shares.

Macroeconomic Conditions and Outlook

The increasing long-term demand for data storage in the cloud is benefiting our HDD business. The adoption of artificial intelligence (“AI”) and workloads driven by hybrid data is driving additional growth in data storage as well. This creates an accelerated demand for high-capacity drives, resulting in greater manufacturing complexity and longer production lead times. In response, customers are partnering with us earlier to support their future growth requirements and are extending the duration of their commercial arrangements.

Recent changes to U.S. trade policy, in particular with regard to tariffs, have caused substantial market uncertainty and, in certain cases, retaliatory measures by trading partners. Our business and results of operations have not been materially impacted through the third quarter of 2026 as a result of these actions, but we are actively monitoring developments and assessing options to mitigate potential future actions. For additional information, please see Part I, Item 1A, Risk Factors, included in our 2025 Annual Report on Form 10-K.

38

Table of Contents

Results of Operations

Third Quarter and Nine Month Overview

The following table sets forth, for the periods presented, selected summary information from our Condensed Consolidated Statements of Operations by dollars and percentage of net revenue(1):

[[GREPCENT_TABLE]]
[["","Three Months Ended"],["","April 3, 2026","","March 28, 2025","","$ Change","","% Change"],["","($ in millions)"],["Revenue, net","$","3,337","","","100.0","%","","$","2,294","","","100.0","%","","$","1,043","","","45","%"],["Cost of revenue","1,661","","","49.8","","","1,382","","","60.2","","","279","","","20"],["Gross profit","1,676","","","50.2","","","912","","","39.8","","","764","","","84"],["Operating expenses:"],["Research and development","294","","","8.8","","","245","","","10.7","","","49","","","20"],["Selling, general and administrative","147","","","4.4","","","108","","","4.7","","","39","","","36"],["Litigation matter","\u2014","","","\u2014","","","(201)","","","(8.8)","","","201","","","(100)"],["Business realignment charges","45","","","1.3","","","\u2014","","","\u2014","","","45","","","n/a"],["Total operating expenses","486","","","14.6","","","152","","","6.6","","","334","","","220"],["Operating income","1,190","","","35.7","","","760","","","33.1","","","430","","","57"],["Interest and other income (expense):"],["Interest income","12","","","0.4","","","10","","","0.4","","","2","","","20"],["Interest expense","(38)","","","(1.1)","","","(91)","","","(4.0)","","","53","","","(58)"],["Gain (loss) on retained interest in Sandisk","2,734","","","81.9","","","(606)","","","(26.4)","","","3,340","","","(551)"],["Costs in connection with debt-for-equity exchange","(545)","","","(16.3)","","","\u2014","","","\u2014","","","(545)","","","n/a"],["Other income, net","6","","","0.2","","","1","","","\u2014","","","5","","","500"],["Total interest and other income (expense), net","2,169","","","65.0","","","(686)","","","(29.9)","","","2,855","","","(416)"],["Income before taxes","3,359","","","100.7","","","74","","","3.2","","","3,285","","","4,439"],["Income tax expense (benefit)","154","","","4.6","","","(698)","","","(30.4)","","","852","","","122"],["Net income from continuing operations","$","3,205","","","96.0","%","","$","772","","","33.7","%","","$","2,433","","","315","%"]]
[[/GREPCENT_TABLE]]

(1)    Percentages may not total due to rounding.

39

Table of Contents

[[GREPCENT_TABLE]]
[["","Nine Months Ended"],["","April 3, 2026","","March 28, 2025","","$ Change","","% Change"],["","($ in millions)"],["Revenue, net","$","9,172","","","100.0","%","","$","6,915","","","100.0","%","","$","2,257","","","33","%"],["Cost of revenue","4,889","","","53.3","","","4,290","","","62.0","","","599","","","14"],["Gross profit","4,283","","","46.7","","","2,625","","","38.0","","","1,658","","","63"],["Operating expenses:"],["Research and development","877","","","9.6","","","732","","","10.6","","","145","","","20"],["Selling, general and administrative","413","","","4.5","","","444","","","6.4","","","(31)","","","(7)"],["Litigation matter","\u2014","","","\u2014","","","(198)","","","(2.9)","","","198","","","(100)"],["Business realignment charges","103","","","1.1","","","(7)","","","(0.1)","","","110","","","(1,571)"],["Total operating expenses","1,393","","","15.2","","","971","","","14.0","","","422","","","43"],["Operating income","2,890","","","31.5","","","1,654","","","23.9","","","1,236","","","75"],["Interest and other income (expense):"],["Interest income","41","","","0.4","","","25","","","0.4","","","16","","","64"],["Interest expense","(151)","","","(1.6)","","","(283)","","","(4.1)","","","132","","","(47)"],["Gain (loss) on retained interest in Sandisk","4,448","","","48.5","","","(606)","","","(8.8)","","","5,054","","","(834)"],["Costs in connection with debt-for-equity exchange","(545)","","","(5.9)","","","\u2014","","","\u2014","","","(545)","","","n/a"],["Other expense, net","(25)","","","(0.3)","","","(7)","","","(0.1)","","","(18)","","","257"],["Total interest and other income (expense), net","3,768","","","41.1","","","(871)","","","(12.6)","","","4,639","","","(533)"],["Income before taxes","6,658","","","72.6","","","783","","","11.3","","","5,875","","","750"],["Income tax expense (benefit)","429","","","4.7","","","(608)","","","(8.8)","","","1,037","","","(171)"],["Net income from continuing operations","$","6,229","","","67.9","%","","$","1,391","","","20.1","%","","$","4,838","","","348","%"]]
[[/GREPCENT_TABLE]]

(1)    Percentages may not total due to rounding.

The following table sets forth for the periods presented, summary information regarding our disaggregated revenue:

[[GREPCENT_TABLE]]
[["","Three Months Ended","","Nine Months Ended"],["","April 3, 2026","","March 28, 2025","","April 3, 2026","","March 28, 2025"],["","(in millions)"],["Revenue by end market"],["Cloud","$","2,972","","","$","2,007","","","$","8,155","","","$","6,012"],["Client","179","","","137","","","501","","","416"],["Consumer","186","","","150","","","516","","","487"],["Total revenue","$","3,337","","","$","2,294","","","$","9,172","","","$","6,915"],["Revenue by geography(1)"],["Americas","$","1,499","","","$","1,182","","","$","3,890","","","$","3,468"],["Asia","1,320","","","753","","","3,612","","","2,349"],["Europe, Middle East and Africa","518","","","359","","","1,670","","","1,098"],["Total revenue","$","3,337","","","$","2,294","","","$","9,172","","","$","6,915"]]
[[/GREPCENT_TABLE]]

(1)    Net revenue is attributed to geographic regions based on the ship-to location of the customer.

40

Table of Contents

Comparison of Three and Nine Months Ended April 3, 2026 to Three and Nine Months Ended March 28, 2025

Net Revenue

Net revenue increased by 45% for the three months ended April 3, 2026 from the comparable period in the prior year, driven by a 34% increase in exab

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm
Complete FY 2026 MD&A: /company/WDC/mda/fy2026/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-08-14
Report date: 2026-07-03

Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results. You should read this information in conjunction with the Consolidated Financial Statements and the notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. See also “Forward-Looking Statements” immediately prior to Part I, Item 1, Business, of this Annual Report on Form 10-K.

Our Company

We are a leading developer, manufacturer, and provider of data storage devices and solutions based on HDD technology. HDDs are critical components of the global data infrastructure market and play an essential role in enabling the AI-driven data economy. They provide reliable, cost-effective, high-capacity storage for a broad range of applications, including cloud data centers, enterprise storage systems, edge computing, smart video, client and consumer devices.

Our broad portfolio of technology and products, sold under the Western Digital® and WD® brands, addresses our customers’ storage needs through multiple end markets: “Cloud,” “Client” and “Consumer”. Cloud is our largest and fastest growing end market comprised primarily of products for public or private cloud environments and enterprise customers. Through the Client end market, we provide our OEM and channel customers a broad array of high-performance HDD solutions across desktop and notebooks. The Consumer end market offers a comprehensive portfolio of HDD external storage products that we offer globally through our retail and channel partners.

Our fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year 2026, which ended on July 3, 2026, comprised 53 weeks, with the first quarter consisting of 14 weeks and the remaining quarters consisting of 13 weeks. Fiscal years 2025 and 2024, which ended on June 27, 2025 and June 28, 2024, respectively, each comprised 52 weeks, with all quarters presented consisting of 13 weeks.

32

Table of Contents

Key Developments

Market Conditions and Outlook

The increasing long-term demand for data storage in the cloud is benefiting our HDD business. The adoption of AI and workloads driven by hybrid data are propelling growth in data storage as well. This creates an accelerated demand for higher-capacity drives, which have greater manufacturing complexity and longer production lead times. In response, customers are partnering with us earlier to support their future growth requirements and are extending the duration of their commercial arrangements, which improves our long-term visibility of demand.

Separation of Business Units and Monetization of Sandisk Shares

In the previous fiscal year, on February 21, 2025, we completed the Separation to create two independent public companies, with WD continuing our existing HDD business and Sandisk, formerly a wholly-owned subsidiary of the Company, operating the Flash business. We believe the Separation has better positioned us as a pure-play HDD company that can execute innovative technology and product development, capitalize on unique growth opportunities, extend our leadership position, operate more efficiently, and pursue capital allocation strategies to maximize long-term shareholder value. As part of the Separation, we initially retained 28.8 million shares of Sandisk common stock. In June 2025, we used 21.3 million shares of Sandisk common stock in a tax-free exchange to reduce approximately $800 million in principal amount of our term loan A-3 (the “Term Loan A-3”). In February 2026, we executed a series of transactions pursuant to which we used 5.8 million shares of Sandisk common stock to further reduce our debt and fully redeem our previously outstanding 4.75% senior unsecured notes due 2026, 2.85% senior notes due 2029, 3.10% senior notes due 2032 and Term Loan A-3 through a tax-free exchange. In the fourth quarter of 2026, we completed two separate equity-for-equity exchanges, which used our remaining 1.7 million shares of Sandisk common stock to acquire 4.8 million shares of our common stock, thereby reducing our share count. As of July 3, 2026, we no longer held shares of Sandisk common stock.

Capital Allocation Actions

In addition to the actions taken to monetize our initial retained interest in shares of Sandisk, as noted above, we have continued to take significant actions to deleverage our business, reduce dilution and return capital to our investors.

In February 2026, we converted all remaining outstanding shares of our Preferred Shares, in accordance with their terms, into 7 million shares of our common stock.

In June 2026, we fully settled the conversion obligation on $32 million in aggregate principal amount of our 2028 Convertible Notes that were tendered in March 2026 (the “Tendered Notes”). We used $32 million of cash to settle the principal amount of the Tendered Notes, as required by the indenture, and elected to use an additional $328 million of cash to settle the conversion premium instead of settling the premium with 0.8 million shares of our common stock.

Also in June 2026, we entered into separate, privately negotiated exchange agreements with certain holders of $858 million in aggregate principal of our 2028 Convertible Notes. Pursuant to these agreements, we fully settled the obligation for $860 million in cash (which reflected principal amount and a small inducement cost) and 21.3 million shares of our common stock.

During our previous fiscal year, our Board of Directors authorized the adoption of a quarterly cash dividend program. Under the cash dividend program, holders of our common stock will receive dividends when and as declared by our Board of Directors. During the year ended July 3, 2026, we paid aggregate cash dividends of $0.50 per share of our outstanding common stock, totaling $174 million, plus $2 million paid to holders of our then-outstanding Preferred Shares in accordance with their participation rights.

Subsequent to year-end, on August 4, 2026, our Board of Directors declared a cash dividend of $0.15 per share of our common stock, which will be paid on September 17, 2026 to our shareholders of record as of the close of business on September 8, 2026.

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During our previous fiscal year, our Board of Directors authorized a Share Repurchase Program for the repurchase of up to $2.0 billion of our common stock, and in February 2026, our Board of Directors authorized the repurchase of up to an additional $4.0 billion of our common stock. During the year ended July 3, 2026, we repurchased 14.7 million shares for a total cost of $2.59 billion. As of July 3, 2026, we had $3.26 billion available for repurchases under the Share Repurchase Program. Repurchases under the Share Repurchase Program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. We expect shares repurchased under the Share Repurchase Program to be funded primarily by operating cash flows.

During the year ended July 3, 2026, our repurchases under our Share Repurchase Program and our election to settle the conversion premium on the Tendered Notes in cash, instead of shares of common stock, aggregated $2.92 billion, which resulted in an effective impact to our outstanding shares of common stock of approximately 15.5 million shares.

Information regarding our indebtedness, including the principal repayment terms, interest rates, covenants and other key terms of our outstanding indebtedness, and additional information on the terms of our Preferred Shares is included in Part II, Item 8, Note 7, Debt, and Note 13, Shareholders’ Equity and Convertible Preferred Stock, of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

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Results of Operations

Information provided herein is presented on a continuing operations basis to reflect the impact of the Separation. See Part II, Item 8, Note 4, Discontinued Operations, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding the Separation.

Summary Comparison of 2026, 2025 and 2024

The following table sets forth, for the periods presented, selected summary information from our Consolidated Statements of Operations by dollars and percentage of net revenue(1):

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2026 MD&A: /company/WDC/mda/fy2026/
All MD&A years: /company/WDC/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2025 MD&A](/company/WDC/mda/fy2025/): filed 2025-08-14; accession 0000106040-25-000038 (https://www.sec.gov/Archives/edgar/data/106040/000010604025000038/wdc-20250627.htm)
- [FY 2024 MD&A](/company/WDC/mda/fy2024/): filed 2024-08-20; accession 0000106040-24-000031 (https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-20240628.htm)
- [FY 2023 MD&A](/company/WDC/mda/fy2023/): filed 2023-08-22; accession 0000106040-23-000024 (https://www.sec.gov/Archives/edgar/data/106040/000010604023000024/wdc-20230630.htm)
- [FY 2022 MD&A](/company/WDC/mda/fy2022/): filed 2022-08-25; accession 0000106040-22-000055 (https://www.sec.gov/Archives/edgar/data/106040/000010604022000055/wdc-20220701.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3572 Computer Storage Devices) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/WDC.md · JSON record: /company/WDC.json · verified financials: /company/WDC/financials.json / /company/WDC/financials.csv · machine TOC for the whole site: /llms.txt