Western Digital Corporation · NASDAQ:WDC
Western Digital — Q4 2022 Earnings Presentation
22 slides from Western Digital's earnings presentation, Aug 5, 2022
Slide 1: Fiscal Fourth Quarter & Year 2022 Financial Results
Fiscal Fourth Quarter & Year 2022 Financial Results Western Digital August 5, 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: Fiscal Fourth Quarter 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 Fiscal Fourth Quarter Executive Summary Financial Results • Revenue of $4.5B • Operating cash flow of $295M • Non-GAAP diluted net earnings per share of $1.78 • Fr
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 Revenue Revenue Revenue $2.1 billion $1.6 billion $0.8 billion Increased 18%
Slide 5: Flash and Hard Drive Metrics
5 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Flash and Hard Drive Metrics Flash Revenue and Gross Margin Hard Drive Revenue and Gross Margin In billions In billions Flash Hard Drive ▪ Bit shipments: increased
Slide 6: Non-GAAP Financial Results
6 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Non-GAAP Financial Results ($ in millions, except for EPS) Q4F21 Q3F22 Q4F22 QoQ YoY Revenue $ 4,920 $ 4,381 $ 4,528 Up 3% Down 8% Down 0.6 Gross Margin % 32.9% 31
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 $295 $2,505 $2,327 $(392) $(150) $69 (1) (2) Q3F22 Operating Cash Cash CapEx Debt Repayment Other Q4F22 Cash & Cash Flow Cash & Cash Equ
Slide 8: Fiscal First Quarter Guidance
8 WEST ERN DI G I T AL CO NF I DENT I AL © 2022 WEST ERN DI G I T AL CO RPO RAT I O N O R I T S AF F I L I AT ES AL L RI G HT S RESERVED Fiscal First Quarter Guidance (1) GAAP Non-GAAP(2) Revenue ($B) $3.60 - $3.80 $3.60 - $3.80 Gross Margin % 27.1% - 29.1% 27.5% - 29.5% Operating Expenses ($M) $870
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 $ 1.0 $ 1.6 $ 2.0 $ 1.5 $ 1.9 $ 1.5 $ 1.0 $ 2.0 $ 1.6 $ 1.4 $ 1.6 $ 0.5 $ 1.2 $ 0.8 $ 0.0 -$
Slide 12: Capital Allocation Framework
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 Framework Highest Priority Reinvestment in the Strategically reinvest to drive innovation Company Reduce Leverage Target 1.0x – 3.25x Debt-to-E
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), Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 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 July Over 80% of debt to mature All-in Rate1 Maturity 1, 2022 $ 3.5 in 20
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 Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Net Income $ 821 $ 1,491 $ 1,993 $ 1,821 $ 1,500
Slide 18: GAAP to Non-GAAP Reconciliations
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 GAAP to Non-GAAP Reconciliations In millions; unaudited Q4F21 Q3F22 Q4F22 GAAP Gross Profit $ 1,566 $ 1,181 $1,445 Contamination related charges - 203 4 Stock-bas
Slide 19: GAAP to Non-GAAP Reconciliations (continued)
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 (continued) In millions, except per share amounts; unaudited Q4F21 Q3F22 Q4F22 GAAP Net Income $ 622 $ 25 $ 301 Contamination rel
Slide 20: Supplemental Operating Segment Results
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 Supplemental Operating Segment Results In millions, except percentages; unaudited Q4F21 Q1F22 Q2F22 Q3F22 Q4F22 Net Revenue Flash $ 2,419 $ 2,490 $ 2,620 $ 2,243
Slide 21: GAAP to Non-GAAP Reconciliations
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 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 22: Western Digital. Create What's Next
SN. Western Digital. Create What’s Next