Slide 1: Fiscal Third Quarter 2022 Financial Results
Fiscal Third Quarter 2022 Financial Results Western Digital April 28, 2022
Slide 2: Forward Looking Statements
2 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Forward Looking Statements SAFE HARBOR This presentation contains forward-looking statements within the meaning of federal securities laws, including statements re
Slide 3: Executive Summary
3 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Executive Summary Financial Results • Revenue of $4.4B • Operating cash flow of $398M • Non-GAAP diluted net earnings per share of $1.65 • Free cash flow of $148M
Slide 4: Revenue Trends by End Market
4 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Revenue Trends by End Market Cloud Client Consumer In billions In billions In billions $ 2.4 $ 2.4 $ 2.4 $ 2.0 $ 2.0 $ 2.0 $ 1.6 $ 1.6 $ 1.6 $ 1.2 $ 1.2 $ 1.2 $ 0.
Slide 5: Flash and Hard Drive Metrics
5 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Flash and Hard Drive Metrics Flash Revenue and Gross Margin Hard Drive Revenue and Gross Margin In billions In billions $ 2.8 40% $ 2.8 40% $ 2.4 35% $ 2.4 35% 30%
Slide 6: Non-GAAP Financial Results
6 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Non-GAAP Financial Results ($ in millions, except for EPS) Q3F21 Q2F22 Q3F22 QoQ YoY Revenue $ 4,137 $ 4,833 $ 4,381 ($ 452) $ 244 Gross Margin % 27.7% 33.6% 31.7%
Slide 7: Cash Flow Walk
7 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Cash Flow Walk In millions $398 $2,531 $2,505 ($250) ($150) ($24) (1) (2) Q2F22 Operating Cash Cash CapEx Debt Repayment Other Q3F22 Cash & Cash Flow (Net) Cash &
Slide 8: Fiscal Fourth Quarter Guidance
8 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Fiscal Fourth Quarter Guidance (1) GAAP Non-GAAP(2) Revenue ($B) $4.50 - $4.70 $4.50 - $4.70 Gross Margin % 30.0% - 32.0% 31.0% - 33.0% Operating Expenses ($M) $88
Slide 9: Joint Venture Operational Framework
9 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Joint Venture Operational Framework For more information on Flash Ventures, please visit investor.wdc.com for a recently published Flash Ventures presentation. Fla
Slide 10: Capital Expenditure Framework
10 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Capital Expenditure Framework 1 2 3 Flash Cash Capital HDD CapEx Non-Fab Flash Ventures (1) Parent Loans(2) Expenditures CapEx 3 4 5 Flash Ventures Capital Flash
Slide 11: Gross Capital Expenditure Trends
11 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Gross Capital Expenditure Trends In billions $ 3.5 $ 3.0 $ 2.5 $ 1.6 $1.6 $ 2.0 $ 1.0 $ 1.9 $ 1.5 $ 1.1 $ 1.0 $ 2.0 $ 1.6 $ 1.4 $ 1.3 $ 0.5 $ 0.8 $ 0.8 $ 0.0 -$ 0
Slide 12: Capital Allocation Priorities
12 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Capital Allocation Priorities Highest Priority Reinvestment in the Strategically reinvest to continue driving Company technological innovation Reduce Debt Target
Slide 13: Appendix
13 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Appendix
Slide 14: Quarterly Fact Sheet
14 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Quarterly Fact Sheet In millions, except Average Selling Price (ASP), Q3F21 Q4F21 Q1F22 Q2F22 Q3F22 percentages, and working capital related metrics Revenue by En
Slide 15: Quarterly Fact Sheet (continued)
15 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Quarterly Fact Sheet (continued) FOOTNOTES FORMULAS Days Sales Outstanding (DSO) = Accounts Receivable / (Revenue / # of days in quarter) Days Inventory Outstandi
Slide 16: Debt Capital Structure
16 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Debt Capital Structure Current Cap Table Debt Maturity Profile (in billions) $ 4.0 As of April Over 85% of debt to mature All-in Rate1 Maturity 1, 2022 $ 3.5 in 2
Slide 17: Credit Agreement Defined Leverage Ratio
17 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Credit Agreement Defined Leverage Ratio In millions; unaudited; trailing 12 months Q3F21 Q4F21 Q1F22 Q2F22 Q3F22 Net Income $ 347 $ 821 $ 1,491 $ 1,993 $ 1,821 In
Slide 18: Net Income to Adjusted EBITDA Reconciliation
18 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Net Income to Adjusted EBITDA Reconciliation In millions; unaudited Q3F21 Q4F21 Q1F22 Q2F22 Q3F22 Net Income $ 197 $ 622 $ 610 $ 564 $ 25 Income Tax Expense 52 (2
Slide 19: GAAP to Non-GAAP Reconciliations
19 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED GAAP to Non-GAAP Reconciliations In millions; unaudited Q3F21 Q2F22 Q3F22 GAAP Gross Profit $ 1,091 $ 1,583 $1,181 Contamination related charges - - 203 Stock-bas
Slide 20: GAAP to Non-GAAP Reconciliations (continued)
20 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED GAAP to Non-GAAP Reconciliations (continued) In millions, except per share amounts; unaudited Q3F21 Q2F22 Q3F22 GAAP Net Income $ 197 $ 564 $ 25 Contamination rel
Slide 21: Supplemental Operating Segment Results
21 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Supplemental Operating Segment Results In millions, except percentages; unaudited Q3F21 Q4F21 Q1F22 Q2F22 Q3F22 Net Revenue Flash $ 2,175 $ 2,419 $ 2,490 $ 2,620
Slide 22: GAAP to Non-GAAP Reconciliations
22 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED GAAP to Non-GAAP Reconciliations FOOTNOTES This presentation contains the following financial measures that are not in accordance with U.S. generally accepted acc
Slide 23: Western Digital. Create What's Next
SN. Western Digital. Create What’s Next