Slide 1: Fourth Quarter & Fiscal Year 2021 Results
Fourth Quarter & Fiscal Year 2021 Results Western Digital August 4, 2021
Slide 2: Forward Looking Statements
Forward Looking Statements SAFE HARBOR This presentation contains forward-looking statements that involve risks and uncertainties, including, but not limited to, the company’s preliminary financial results for its fiscal fourth quarter ended July 2, 2021; the company’s business outlook for the fisca
Slide 3: Executive Summary
Executive Summary Financial Results • Revenue of $4.9B • Operating cash flow of $994M • Non-GAAP diluted net earnings per share of $2.16 • Free cash flow of $792M • Non-GAAP gross margin is 33% • Cash and cash equivalents of $3.4B Corporate • Western Digital’s unique ability to deliver innovative so
Slide 4: Revenue Trends
Revenue Trends Client Devices Data Center Devices & Solutions Client Solutions 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 $- $- $- Q4F20 Q1F21 Q2F21 Q3F21 Q4F21 Q4F20 Q1F21 Q2F21 Q3F21 Q4F21 Q4F20 Q1F21 Q2F21 Q3F21 Q4
Slide 5: Flash and Hard Drive Metrics
Flash and Hard Drive Metrics Flash Revenue and Non-GAAP Gross Margin Hard Drive Revenue and Non-GAAP Gross Margin In billions In billions 40% 35% $ 2.4 $ 2.4 35% 30% $ 2.0 30% $ 2.0 25% $ 1.6 25% $ 1.6 20% 20% $ 1.2 $ 1.2 15% 15% $ 0.8 $ 0.8 10% 10% $ 0.4 $ 0.4 5% 5% $- 0% $- 0% Q4F20 Q1F21 Q2F21 Q3
Slide 6: Non-GAAP Financial Results
Non-GAAP Financial Results Q4F20 Q3F21 Q4F21 QoQ YoY Revenue ($M) $ 4,287 $ 4,137 $ 4,920 $ 783 $ 633 Gross Margin % 28.9% 27.7% 32.9% 5.2 ppt 4.0 ppt Operating Expenses ($M) $ 713 $ 732 $ 790 $ 58 $ 77 Operating Income ($M) $ 527 $ 412 $ 828 $ 416 $ 301 Interest and Other Expense, net $ 73 $ 67 $ 7
Slide 7: Cash Flow Walk
Cash Flow Walk In millions $994 ($202) ($213) $57 $3,370 $2,734 (1) (2) Q3F21 Operating Cash Cash CapEx Debt Other Q4F21 Cash & Cash Flow Repayment Cash & Cash Equivalents Equivalents Quarterly debt repayment of $213 million, including optional payment of $150 million Strong liquidity position o
Slide 8: Fiscal First Quarter Guidance
Fiscal First Quarter Guidance (1) GAAP(2) NON-GAAP(2) Revenue ($B) $ 4.90 - $ 5.10 $ 4.90 - $ 5.10 Gross Margin % 32.0% - 34.0% 33.0% - 35.0% Operating Expenses ($M) $ 865 - $ 895 $ 755 - $ 785 Interest and Other Expense, net ($M) ~ $ 80 ~ $ 70 Tax Rate % N/A 11-12%(3) EPS – Diluted N/A $ 2.25 - $ 2
Slide 9: Joint Venture Operational Framework
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 Kioxia Co-develops flash (including process Owns and leases equipment for flash
Slide 10: Capital Expenditure Framework
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 Ventures Lease Net Operating Expenditures Parent Loans(2) Financing(2) Cash Flow(2)(3) 1 2 3 4 5 Gross Capit
Slide 11: Gross Capital Expenditure Trends
Gross Capital Expenditure Trends In billions $ 3.5 $ 3.0 $ 1.1 $ 2.5 $ 1.6 $ 2.0 $ 1.0 $ 1.9 $ 1.5 $ 1.1 $ 1.0 $ 2.0 $ 2.0 $ 1.6 $ 1.4 $ 0.5 $ 0.8 $ 0.8 $ 0.0 -$ 0.3 -$ 0.5 (1) FY17 FY18 FY19 FY20 FY21 FY22F (2) (3) Cash CapEx WD portion of: Flash Ventures Cash Flow + Flash Ventures Lease Financing
Slide 12: Capital Allocation Priorities
Capital Allocation Priorities Highest Priority Strategically reinvest to continue driving Reinvestment in the Company technological innovation Reduce Debt Target 1.0x – 3.5x Debt-to-EBITDA Shareholder Return Dividend Share Shareholder return opportunities will be reevaluated Program Repurchases
Slide 13: Upcoming Events
Upcoming Events 9 9 14 30 7 AUGUST SEPTEMBER SEPTEMBER NOVEMBER DECEMBER Deutsche Wells Fargo Nasdaq Asia Citi Global Barclays TMT Bank Global TMT Investor Technology Conference Technology Conference Conference Conference Conference Events and participation are subject to change. Please visit our we
Slide 14: Appendix
Western Digital. Appendix 8/4/2021 © 2021 Westem Digital Corporation or is afflfates. All ights reserved. | WESTERN DIGITAL CONFIDENTIAL 4
Slide 15: Quarterly Fact Sheet
Quarterly Fact Sheet In millions, except Average Selling Price (ASP), Q4F20 Q1F21 Q2F21 Q3F21 Q4F21 percentages, and working capital related metrics Revenue Client Devices(1) $ 1,916 $ 1,946 $ 2,131 $ 2,012 $ 2,166 Data Center Devices & Solutions(1) 1,684 1,129 807 1,237 1,777 Client Solutions(1) 68
Slide 16: Quarterly Fact Sheet
Quarterly Fact Sheet FOOTNOTES FORMULAS Days Sales Outstanding (DSO) = Accounts Receivable / (Revenue / # of days in quarter) Days Inventory Outstanding (DIO) = Inventories / (Cost of Revenue / # of days in quarter) Days Payables Outstanding (DPO) = Accounts Payable (including Accounts Payable to Re
Slide 17: Debt Tranches and Interest Rates
Debt Tranches and Interest Rates Principal Balance Debt Base Rate Maturity Outstanding as of Applicable Rates(1) Q4F21 (in millions) Revolver drawn(2)(3) L+150 February 27, 2023 $ 0 1.601% Term Loan A-1(3) L+150 February 27, 2023 4,332 2.753%(4) Term Loan B-4(3) L+175 April 29, 2023 1,093 1.851% Con
Slide 18: Credit Agreement Defined Leverage Ratio
Credit Agreement Defined Leverage Ratio In millions; unaudited; trailing 12 months Q4F20 Q1F20 Q2F21 Q3F21 Q4F21 Net Income (Loss) ($ 250) ($ 34) $ 167 $ 347 $ 821 Income tax expense 204 222 146 169 106 Interest and other expense, net 381 346 329 290 293 Depreciation and amortization 1,566 1,534 1,4
Slide 19: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation In millions; unaudited Q4F20 Q1F21 Q2F21 Q3F21 Q4F21 Net Income (Loss) $ 148 ($ 60) $ 62 $ 197 $ 622 Income Tax Expense 37 57 23 52 (26) Interest And Other Expense, Net 76 73 73 68 79 Depreciation And Amortization 377 374 336 251 251 EBITDA(1) $ 638 $ 444
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation In millions; unaudited Q4F20 Q3F21 Q4F21 GAAP Gross Profit $ 1,083 $ 1,091 $ 1,566 Amortization of acquired intangible assets 144 39 38 Stock-based compensation expense 13 14 14 Non-GAAP Gross Profit $ 1,240 $ 1,144 $ 1,618 GAAP Operating Expenses $ 822 $ 774 $ 891 Am
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation In millions, except per share amounts; unaudited Q4F20 Q3F21 Q4F21 GAAP Net Income $ 148 $ 197 $ 622 Amortization of acquired intangible assets 183 78 76 Stock-based compensation expense 76 83 79 Employee termination, asset impairment and other charges 7 (68) (4) Char
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation In millions, except percentages; unaudited Q4F20 Q1F21 Q2F21 Q3F21 Q4F21 Gross Profit $ 1,083 $ 904 $ 960 $ 1,091 $ 1,566 Amortization of acquired intangible assets 144 145 109 39 38 Stock-based compensation expense 13 12 15 14 14 Charges related to a power outage inc
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 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-GAAP gross margin; non-GAAP operating expenses; non-GAAP operating income; non-GAAP
Slide 24: Western Digital
Western Digital.