Western Digital Revenue Jumps 55% as Second-Quarter Guidance Tops Consensus
Key Facts
Western Digital reported first-quarter fiscal 2027 results on October 22, 2026, for the quarter ended October 2, with revenue of $4.381 billion. Revenue rose 55% year over year and 17% sequentially, according to the company. The results coincided with the company issuing guidance for its second fiscal quarter of 2027. Its revenue and earnings-per-share forecasts for that quarter are above the analyst consensus cited by Investing.com. Chief Executive Irving Tan said the fiscal year had started strongly and results exceeded expectations, citing customer demand and disciplined execution as drivers of performance.
First-quarter revenue rose from $2.818 billion in the same period a year earlier and from $3.747 billion in the fourth fiscal quarter of 2026. The non-GAAP gross margin increased year over year to 58.1% from 43.9%, and rose from 54.4% in the previous quarter. Non-GAAP diluted earnings per share were $4.64, compared with $1.78 a year earlier and $3.56 in the previous quarter. Tan said non-GAAP earnings per share increased 161% year over year. The comparison shows improvement in revenue, margins and earnings per share against the two preceding periods cited by the company.
The cloud segment was the largest revenue contributor, accounting for 88% of first-quarter revenue, with its revenue up 54% year over year. The company attributed the growth to an increase of more than 20% in exabytes shipped, alongside an approximately 25% rise in average selling price per exabyte. Chief Financial Officer Chris Snaith said growth in exabyte shipments and improved pricing contributed to strong financial performance. He added that the company expected momentum to continue in the second quarter. These indicators link higher shipment volumes with a higher average price, without the statement specifying the separate contribution of either to the company’s overall revenue growth.
The company attributed growing demand for its high-capacity drives to the expansion of cloud environments and increased storage needs associated with artificial intelligence. It said the adoption of AI applications increases the volume of data created, collected and retained, driving greater demand for storage. It also said customers were engaging with it earlier and extending the duration of their commercial arrangements. Commenting on the period’s results, Snaith said, "Exabyte shipment growth and improved pricing are driving another quarter of strong financial performance." This demand provides an operational backdrop to the company’s results, while the reported shipment and pricing growth figures relate to the cloud segment in the first quarter.
Western Digital forecast second-quarter fiscal revenue of between $5.0 billion and $5.2 billion, according to figures reported by Investing.com. The analyst consensus for revenue is $4.57 billion, while the report puts the midpoint of the company’s range at $5.1 billion, 12% above consensus. The company also forecast earnings per share of between $5.60 and $6.00, compared with consensus of $4.82. The midpoint of the forecast range is $5.80, about 20% above consensus, according to the report. These figures reflect the second-quarter guidance the company announced on October 22, and do not establish that it raised earlier guidance for the same period.
The stock moved after the results and guidance were announced, rising about 4% in after-hours trading, according to Investing.com. It then erased its gains as selling in AI stocks continued, the report said. The initial move followed results the report described as stronger than expected, alongside second-quarter guidance that topped analyst consensus for revenue and earnings per share. But the gains did not hold in subsequent after-hours trading. The company’s announced second-quarter operating outlook is based on the revenue and earnings-per-share ranges cited in the report, while the disclosure provided no other date in the facts presented here.