Slide 1: Fiscal Fourth Quarter & Fiscal Year 2024 Financial Results
Fiscal Fourth Quarter & Fiscal Year 2024 Financial Results Western Digital July 31, 2024
Slide 2: Disclaimers
2 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for: the company
Slide 3: Fiscal Fourth Quarter Executive Summary
3 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Fiscal Fourth Quarter Executive Summary Financial Results1 • Revenue of $ 3.8B • Operating cash flow of $ 366M • Non-GAAP EPS of $ 1.44 • Free cash flow of $ 282M • Non-GAAP gross margin of 36.3% • Ca
Slide 4: Revenue Trends by End Market
4 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Revenue Trends by End Market Cloud Client Consumer In billions In billions In billions $ 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 $- $- $- Q4F23 Q1F24 Q2
Slide 5: Flash and Hard Drive Metrics
5 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Flash and Hard Drive Metrics Flash Revenue and Gross Margin Hard Drive Revenue and Gross Margin In billions In billions $ 2.4 40% $ 2.4 40% $ 2.0 $ 2.0 30% $ 1.6 20% $ 1.6 $ 1.2 $ 1.2 20% $ 0.8 0% $ 0
Slide 6: Non-GAAP Financial Results
6 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Non-GAAP Financial Results ($ in millions, except for EPS) Q4 2023 Q3 2024 Q4 2024 QoQ YoY Revenue $ 2,672 $ 3,457 $ 3,764 up 9% up 41% Gross Margin % 3.9% 29.3% 36.3% up 7.0 ppt up 32.4 ppt Operating
Slide 7: Cash Flow Walk
7 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Cash Flow Walk In millions $ 366 $ (84) $ 40 $ 1,894 $ 1,879 $ (337) (1) (2) Q3F24 Operating Cash Cash CapEx Net Debt Other Q4F24 Cash & Cash Flow Cash & Cash Equivalents Equivalents § Total liquidity
Slide 8: Fiscal First Quarter Guidance
8 © 2024 Western Digital Corporation or its affiliates All rights reserved Fiscal First Quarter Guidance(1) GAAP Non-GAAP(2) Revenue ($ B) $ 4.00 - $ 4.20 $ 4.00 - $ 4.20 Gross Margin % 36.5% - 38.5% 37.0% - 39.0% Operating Expenses ($ M) $ 845 - $ 885 $ 695 - $ 715 Interest and Other Expense, net (
Slide 9: Joint Venture Operational Framework
9 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Joint Venture Operational Framework For more information on Flash Ventures, please visit investor.wdc.com for a published Flash Ventures presentation. Flash Ventures 49.9% Owned by Western Digital 50.
Slide 10: Capital Expenditure Framework
10 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D 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 Ventures Flash Ventures Flash Venture
Slide 11: Gross Capital Expenditure Trends
11 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D 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 ~ $ 0.8 $ - $ (0.3) $ (0.5) FY18 FY19 FY20 F
Slide 12: Appendix
12 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Appendix
Slide 13: Quarterly Fact Sheet
13 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Quarterly Fact Sheet In millions, except Average Selling Price (ASP), percentages, and working capital related metrics Q4F23 Q1F24 Q2F24 Q3F24 Q4F24 Revenue by End Market(1) Cloud $ 994 $ 872 $ 1,071
Slide 14: Quarterly Fact Sheet (continued)
14 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Quarterly Fact Sheet (continued) FOOTNOTES FORMULAS Days Sales Outstanding (DSO) = Accounts Receivable / (Revenue / # of days in quarter) Days Inventory Outstanding (DIO) = Inventories / (Cost of Rev
Slide 15: Potential Changes to Income Statement Layout & EPS
15 © 2024 Western Digital Corporation or its affiliates All rights reserved Potential Changes to Income Statement Layout & EPS Convertible Preferred Stock (as of Q4F24) Convertible preferred stock liquidation preference:𝟏 $ 257M𝟐 with a conversion price Income Statement Example ($ in millions…
Slide 16: Potential Changes to Income Statement Layout & EPS (cont.)
16 © 2024 Western Digital Corporation or its affiliates All rights reserved Potential Changes to Income Statement Layout & EPS (cont.) Convertible Senior Notes + Capped Calls • Principal balance: $ 1,600M with a conversion price of $ 52.20 Financial reporting (diluted shares for EPS) • Conversion pr
Slide 17: Debt Capital Structure
17 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Debt Capital Structure Current Cap Table Maturity Profile (in billions) All-in As of June Rate Maturity 28, 2024 Rate1 (in millions) Sr. Unsecured Notes Due 20262 4.750% 4.750% 2/15/2026 $ 2,300 $ 2.
Slide 18: Credit Agreement Defined Leverage Ratio
18 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Credit Agreement Defined Leverage Ratio In millions; unaudited; trailing 12 months Q4F23 Q1F24 Q2F24 Q3F24 Q4F24 Net Loss $ (1,684) $ (2,416) $ (2,252) $ (1,546) $ (507) Income tax expense 134 91 49
Slide 19: Credit Agreement Defined Adjusted EBITDA (Q4F24)
19 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Credit Agreement Defined Adjusted EBITDA (Q4F24) In millions; unaudited Q3F24 Q4F24 Net Income $ 135 $ 330 Income tax expense 43 63 Interest and other expense, net 95 114 Depreciation and amortizatio
Slide 20: GAAP to Non-GAAP Reconciliations
20 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D GAAP to Non-GAAP Reconciliations In millions; unaudited Q4F23 Q3F24 Q4F24 GAAP Gross Profit $ 92 $ 1,001 $ 1,353 Stock-based compensation expense 11 11 12 Amortization of acquired intangible assets (
Slide 21: GAAP to Non-GAAP Reconciliations (cont'd)
21 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D GAAP to Non-GAAP Reconciliations (cont'd) In millions, except per share amounts; unaudited Q4F23 Q3F24 Q4F24 GAAP Net Income (Loss) $ (709) $ 135 $ 330 Stock-based compensation expense 72 77 69 Busin
Slide 22: Supplemental Operating Segment Results
22 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Supplemental Operating Segment Results In millions, except percentages; unaudited Q4F23 Q1F24 Q2F24 Q3F24 Q4F24 Net Revenue Flash $ 1,377 $ 1,556 $ 1,665 $ 1,705 $ 1,761 HDD 1,295 1,194 1,367 1,752 2
Slide 23: GAAP to Non-GAAP Reconciliations
23 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D 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
Slide 24: Revisions to Previously Reported Financial Information
24 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Revisions to Previously Reported Financial Information As previously reported, in connection with the preparation of its condensed consolidated financial statements as of and for the three and six mo
Slide 25: Revisions to Previously Reported Financial Information (Cont'd)
25 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Revisions to Previously Reported Financial Information (Cont'd) In millions, unaudited Q1F22 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Q3F23 Q4F23 Q1F24 Q2F24 GAAP Net Income (Loss) as previously reported $ 610
Slide 26: Revisions to Previously Reported Financial Information (Cont'd)
26 © 2024 W E S TE R N D IGITA L C OR P OR A TION OR ITS A FFILIA TE S A LL R IGH TS R E S E R V E D Revisions to Previously Reported Financial Information (Cont'd) In millions, except per share amounts; unaudited Q1F22 Q2F22 Q3F22 Q4F22 Q1F23 Q2F23 Q3F23 Q4F23(1) Q1F24 Q2F24 Diluted Income (Loss) P
Slide 27: Western Digital. Create What's Next
SN. Western Digital. Create What’s Next