Slide 1: Fiscal Fourth Quarter & Year 2023 Financial Results
Fiscal Fourth Quarter & Year 2023 Financial Results Western Digital July 31, 2023
Slide 2: Forward Looking Statements
2 © 2023 Western Digital Corporation or its affiliates All rights reserved Forward Looking Statements SAFE HARBOR This presentation contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for the company’s business outlook and fi
Slide 3: Fiscal Fourth Quarter Executive Summary
3 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Fiscal Fourth Quarter Executive Summary Financial Results1 • Revenue of $ 2.7B • Operating cash flow of $ (68)M • Non-GAAP EPS of $ (1.98) • Free cash flow of $ (219)M • Non-GAAP gross margin of 3.9% • Cash and cash equiv
Slide 4: Revenue Trends by End Market
4 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS 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 $ 0.8 $ 0.8 $ 0.8 $ 0.4 $ 0.4 $ 0.4 $- $- $- Q4F22 Q1F23 Q2F23
Slide 5: Flash and Hard Drive Metrics
5 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS 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 30% $ 2.4 30% $ 2.0 $ 2.0 20% $ 1.6 $ 1.6 10% 20% $ 1.2 $ 1.2 0% $ 0.8 $ 0.
Slide 6: Non-GAAP Financial Results
6 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Non-GAAP Financial Results ($ in millions, except for EPS) Q4 2022 Q3 2023 Q4 2023 QoQ YoY Revenue $ 4,528 $ 2,803 $ 2,672 down 5% down 41% Gross Margin % 32.3% 10.6% 3.9% down 6.7 ppt down 28.4 ppt Operating Expenses $ 7
Slide 7: Cash Flow Walk
7 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Cash Flow Walk In millions $ 2,220 $ 22 $ 2,023 $ (68) $ (151) (1) (2) Q3F23 Operating Cash Flow Cash CapEx Other Q4F23 Cash & Cash Cash & Cash Equivalents Equivalents ▪ Total liquidity was $ 4.9 billion, including cash a
Slide 8: Fiscal First Quarter Guidance
8 © 2023 Western Digital Corporation or its affiliates All rights reserved Fiscal First Quarter Guidance(1) GAAP Non-GAAP(2) Revenue ($ B) $ 2.55 - $ 2.75 $ 2.55 - $ 2.75 Gross Margin % 1.9% - 4.0% 2.5% - 4.5% Operating Expenses ($ M) $ 665 - $ 685 $ 570 - $ 590 Interest and Other Expense, net ($ M)
Slide 9: Joint Venture Operational Framework
9 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Joint Venture Operational Framework For more information on Flash Ventures, please visit investor.wdc.com for a recently published Flash Ventures presentation. Flash Ventures 49.9% Owned by Western Digital 50.1% Owned by
Slide 10: Capital Expenditure Framework
10 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Capital Expenditure Framework 1 2 3 Flash Cash Capital HDD CapEx Non-Fab Flash Ventures Expenditures(1) CapEx Parent Loans(2) 3 4 5 Flash Ventures Capital Flash Ventures Flash Ventures Flash Ventures Lease Net Operating
Slide 11: Gross Capital Expenditure Trends
11 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Gross Capital Expenditure Trends In billions $ 3.5 $ 3.0 $ 2.5 $ 1.0 $ 1.6 $ 2.0 $ 1.5 $ 1.9 $ 1.5 $ 1.4 $ 1.0 $ 2.0 $ 1.6 ~ $ 1.4 $ 1.2 $ 0.5 $ 0.8 $ 0.8 ~ $ - $ (0.3) $ (0.5) FY18 FY19 FY20 FY21 FY22 FY23 (1) (2) Cash
Slide 12: Capital Allocation Framework
12 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Capital Allocation Framework Highest Priority Reinvestment in the Strategically reinvest to drive innovation Company Reduce Leverage Target 1.0x – 3.25x Debt-to-EBITDA Shareholder Return Dividend Share Committed to retur
Slide 13: Quarterly Fact Sheet
13 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Quarterly Fact Sheet In millions, except Average Selling Price (ASP), Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 percentages, and working capital related metrics Revenue by End Market(1) Cloud $ 2,098 $ 1,829 $ 1,224 $ 1,205 $ 994 Cl
Slide 14: Quarterly Fact Sheet (continued)
14 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Quarterly Fact Sheet (continued) FOOTNOTES FORMULAS Days Sales Outstanding (DSO) = Accounts Receivable / (Revenue / # of days in quarter) Days Inventory Outstanding (DIO) = Inventories / (Cost of Revenue / # of days in q
Slide 15: Credit Agreement Amendments Summary
15 © 2023 Western Digital Corporation or its affiliates All rights reserved Credit Agreement Amendments Summary1 • Modified the leverage ratio requirements applicable through Q4F25 (Figure 1). Figure 1: Credit Agreement Defined Leverage Ratio Quarter Ratio Quarter Ratio • Following the two-quarter c
Slide 16: Debt Capital Structure
16 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Debt Capital Structure Current Cap Table Debt Maturity Profile (in billions) As of June All-in Maturity 30, 2023 Rate Rate1 (in millions) Delayed Draw Term Loan2 S+2.00%6 7.08% 6/28/20242 $0 Convertible Debt Due 2024 3 1
Slide 17: Appendix
17 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Appendix
Slide 18: Credit Agreement Defined Leverage Ratio
18 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Credit Agreement Defined Leverage Ratio In millions; unaudited; trailing 12 months Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Net Income (Loss) $ 1,500 $ 917 $ (93) $ (690) $ (1,706) Income tax expense 623 586 565 371 146 Interest an
Slide 19: GAAP to Non-GAAP Reconciliations
19 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED GAAP to Non-GAAP Reconciliations In millions; unaudited Q4F22 Q3F23 Q4F23 GAAP Gross Profit $ 1,445 $ 286 $ 92 Stock-based compensation expense 12 12 11 Amortization of acquired intangible assets 1 — (1) Contamination re
Slide 20: GAAP to Non-GAAP Reconciliations (cont'd)
20 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED GAAP to Non-GAAP Reconciliations (cont'd) In millions, except per share amounts; unaudited Q4F22 Q3F23 Q4F23 GAAP Net Income (Loss) $ 301 $ (572) $ (715) Stock-based compensation expense 77 74 72 Amortization of acquired
Slide 21: Supplemental Operating Segment Results
21 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED Supplemental Operating Segment Results In millions, except percentages; unaudited Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Net Revenue Flash $ 2,400 $ 1,722 $ 1,657 $ 1,307 $ 1,377 HDD 2,128 2,014 1,450 1,496 1,295 Total Net Revenu
Slide 22: GAAP to Non-GAAP Reconciliations
22 © 2 0 2 3 W ESTERN DIGITAL CORPORATION OR ITS AFFILIATES ALL RIGHTS RESERVED GAAP to Non-GAAP Reconciliations FOOTNOTES This presentation contains the following financial measures that are not in accordance with U.S. generally accepted accounting principles (“GAAP”): Non-GAAP gross profit; Non-GA
Slide 23: Western Digital. Create What's Next
SS. Western Digital. Create What’s Next