Western Digital Corporation · NASDAQ:WDC

Western Digital — Q1 2025 Earnings Presentation

24 slides from Western Digital's earnings presentation, Oct 24, 2024

  1. Slide 1: Fiscal First Quarter 2025 Financial Results

    Fiscal First Quarter 2025 Financial Results Western Digital October 24, 2024

  2. Slide 2: Disclaimers

    2 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for: the company's business ou

  3. Slide 3: Fiscal First Quarter Executive Summary

    3 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Fiscal First Quarter Executive Summary Financial Results1 • Revenue of $ 4.1B • Operating cash flow of $ 34M • Non-GAAP EPS of $ 1.78 • Free cash flow of $ (14)M • Non-GAAP gross margin of 38.5% • Cash and cash equ

  4. Slide 4: Revenue Trends by End Market

    4 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Revenue Trends by End Market Cloud Client Consumer In billions In billions In billions $ 2.4 $ 1.6 $ 1.2 $ 1.8 $ 1.2 $ 0.9 $ 1.2 $ 0.8 $ 0.6 $ 0.6 $ 0.4 $ 0.3 $- $- $- Q1F24 Q2F24 Q3F24 Q4F24 Q1F25 Q1F24 Q2F24 Q3F2

  5. Slide 5: Flash and Hard Drive Metrics

    5 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Flash and Hard Drive Metrics Flash Revenue and Gross Margin Hard Drive Revenue and Gross Margin In billions In billions $ 2.4 40% 40% $ 2.4 $ 2.0 25% $ 2.0 30% $ 1.6 $ 1.6 $ 1.2 10% 20% $ 1.2 $ 0.8 $ 0.8 -5% 10% $

  6. Slide 6: Non-GAAP Financial Results

    6 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Non-GAAP Financial Results(1) ($ in millions, except for EPS) Q1 2024 Q4 2024 Q1 2025 QoQ YoY Revenue $ 2,750 $ 3,764 $ 4,095 up 9% up 49% Gross Margin % 4.1% 36.3% 38.5% up 2.2 ppt up 34.4 ppt Operating Expenses $

  7. Slide 7: Cash Flow Walk

    7 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Cash Flow Walk In millions $ 1,879 $ 34 $ (48) $ 1,705 $ (38) $ (71) $ (51) (1) Q4F24 Operating Cash Cash CapEx Net Debt Cash and Cash (2) Other (3) Q1F25 Cash & Cash Flow Equivalents Cash & Cash Equivalents Held-f

  8. Slide 8: Fiscal Second Quarter Guidance

    8 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Fiscal Second Quarter Guidance(1) GAAP Non-GAAP(2) Revenue ($ B) $ 4.20 - $ 4.40 $ 4.20 - $ 4.40 Gross Margin % 36.5% - 38.5% 37.0% - 39.0% Operating Expenses ($ M) $ 835 - $ 855 $ 695 - $ 715 Interest and Other Ex

  9. Slide 9: Joint Venture Operational Framework

    9 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED 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 50.1% Owned by Ki

  10. Slide 10: Capital Expenditure Framework

    10 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Capital Expenditure Framework 1 2 3 Flash Cash Capital HDD CapEx Related Non-Fab Related Flash Ventures (1) image image Parent Loans(2) Expenditures CapEx 3 4 5 Flash Ventures Capital Flash Ventures Flash Ventures

  11. Slide 11: Gross Capital Expenditure Trends

    11 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED 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 ~ $ 0.5 $ 1.2 $ 0.8 $ 0.8 ~ $ 0.8 $ - $ (0.3) $ (0.5) FY18 FY19 FY20 FY21 FY22 FY23

  12. Slide 12: Appendix

    12 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Appendix

  13. Slide 13: Quarterly Fact Sheet

    13 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Quarterly Fact Sheet In millions, except Average Selling Price (ASP), Q1F24 Q2F24 Q3F24 Q4F24 Q1F25 percentages, and working capital related metrics Revenue by End Market (1) Cloud $ 872 $ 1,071 $ 1,553 $ 1,882 $

  14. Slide 14: Quarterly Fact Sheet (continued)

    14 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED 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 da

  15. 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 Q1F25) Convertible preferred stock liquidation preference: 1 $ 261M with a conversion price Income Statement Example ($ in millions except

  16. 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: $ 1.6B with a conversion price of $ 52.20 Financial reporting (diluted shares for EPS) • Conversion prem

  17. Slide 17: Debt Capital Structure

    17 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Debt Capital Structure Current Cap Table Maturity Profile (in billions) As of All-in Maturity September Rate 27, 2024 Rate1 (in millions) Sr. Unsecured Notes Due 20262 4.750% 4.750% 2/15/2026 $ 2,300 $ 2.25B Revol

  18. Slide 18: Credit Agreement Defined Leverage Ratio

    18 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Credit Agreement Defined Leverage Ratio In millions; unaudited; trailing 12 months Q1F24 Q2F24 Q3F24 Q4F24 Q1F25 Net Loss $ (2,416) $ (2,252) $ (1,546) $ (798) $ 380 Income tax expense 91 49 49 137 269 Interest an

  19. Slide 19: Credit Agreement Defined Adjusted EBITDA (Q1F25)

    19 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Credit Agreement Defined Adjusted EBITDA (Q1F25) In millions; unaudited Q3F24 Q4F24 Q1F25 Net Income $ 135 $ 39 $ 493 Income tax expense 43 63 135 Interest and other expense, net 95 114 114 Depreciation and amorti

  20. Slide 20: GAAP to Non-GAAP Reconciliations

    20 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED GAAP to Non-GAAP Reconciliations In millions; unaudited Q1F24 Q4F24 Q1F25 GAAP Gross Profit $ 99 $ 1,353 $ 1,551 Stock-based compensation expense 13 12 14 Amortization of acquired intangible assets — 1 1 Litigatio

  21. Slide 21: GAAP to Non-GAAP Reconciliations (cont'd)

    21 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED GAAP to Non-GAAP Reconciliations (cont'd) In millions, except per share amounts; unaudited Q1F24 Q4F24 Q1F25 GAAP Net Income (Loss) $ (685) $ 39 $ 493 Stock-based compensation expense 77 69 84 Business separation

  22. Slide 22: Supplemental Operating Segment Results

    22 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED Supplemental Operating Segment Results In millions, except percentages; unaudited Q1F24 Q2F24 Q3F24 Q4F24 Q1F25 Net Revenue HDD $ 1,194 $ 1,367 $ 1,752 $ 2,003 $ 2,211 Flash 1,556 1,665 1,705 1,761 1,884 Total Net

  23. Slide 23: GAAP to Non-GAAP Reconciliations

    23 © 20 24 WESTER N DI GI TAL C ORPOR ATION OR ITS AFFILIA TE S ALL R IGHTS R ESER VED 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;

  24. Slide 24: Western Digital. Create What's Next

    WS. Western Digital. Create What’s Next

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