Western Digital Lifts Second-Quarter Growth Outlook

The Tip Desk · October 23, 2026 · 2 min read

Revenue reached $4.38 billion, up 55% year over year, and the company now expects fiscal second-quarter sales of $5.1 billion at the midpoint.

Western Digital Corporation (WDC) reported fiscal first-quarter 2027 revenue of $4.38 billion, up 55% from a year earlier, as year-over-year growth accelerated from the 44% pace recorded in the prior quarter.

The storage-infrastructure maker said the period ended Oct. 2, 2026, produced results that exceeded its own first-quarter outlook, which had called for revenue up 42% to 49% year over year. Sequential sales rose 17% from $3.75 billion in the fiscal fourth quarter.

Chief Executive Irving Tan attributed the quarter to robust customer demand and disciplined execution, and said the company was raising its quarterly cash dividend 17% to $0.175 a share, payable Dec. 17, 2026. That followed a 20% increase to $0.15 a share announced with fiscal third-quarter results.

Profitability continued to expand. GAAP gross margin was 57.8%, and non-GAAP gross margin was 58.1%. GAAP operating margin was 46.7% and non-GAAP operating margin was 49.1%. GAAP operating income was $2.05 billion.

Non-GAAP diluted earnings were $4.64 a share, up 161% from a year earlier, after a 109% year-over-year increase in the prior quarter. GAAP diluted earnings were $4.63 a share. GAAP diluted net income attributable to common shareholders was $1.78 billion.

Cash generation stayed elevated. Cash flow from operations was $1.60 billion and free cash flow was $1.38 billion. Cash and cash equivalents ended the period at $1.31 billion. The company spent $1.00 billion on share repurchases in the quarter.

Chief Financial Officer Kris Sennesael said first-quarter results showed continued momentum, with robust exabyte growth and improved pricing driving another quarter of strong financial performance.

For the fiscal second quarter of 2027, Western Digital expects revenue to be up 66% to 72% year over year. At the midpoint of the ranges, the company expects revenue of $5.1 billion, non-GAAP gross margin of 60.5%, and non-GAAP diluted earnings of $5.80 a share. Non-GAAP operating expenses are guided at $400 million to $410 million, interest and other expense net at about $15 million, and the tax rate at about 17%. Diluted weighted average shares are expected at about 380 million.

That second-quarter growth range sits well above the 42% to 49% year-over-year band the company had issued for the first quarter. Tan said fiscal 2027 was off to a strong start and that the company was executing through technology transitions to meet growing demand for storage.

The board’s dividend increase to $0.175 a share, payable to holders of record as of Dec. 4, 2026, is the latest step in a run of capital-return increases that began with the 20% lift to $0.15 a share announced with fiscal third-quarter results.