0000106040false00001060402024-01-252024-01-25

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 25, 2024
wdcolor logo.gif (1).gif
WESTERN DIGITAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware001-0870333-0956711
(State or Other Jurisdiction
of Incorporation)		(Commission
File Number)		(I.R.S. Employer
Identification No.)
5601 Great Oaks Parkway
95119
San Jose
California
(Address of Principal Executive Offices)(Zip Code)
(408) 717-6000
(Registrant’s Telephone Number, Including Area Code)

Not applicable
(Former Name or Former Address, if Changed Since Last Report) 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par Value Per ShareWDC
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition.

On January 25, 2024, Western Digital Corporation (the “Company”) announced financial results for the fiscal second quarter ended December 29, 2023. A copy of the press release making this announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits


104    Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Western Digital Corporation
(Registrant)
By:/s/ Cynthia Tregillis
Cynthia Tregillis
Senior Vice President, Chief Legal Officer
and Secretary
Date: January 25, 2024








Exhibit 99.1
wdcolorlogogif1.gif




Western Digital Reports Fiscal Second Quarter 2024 Financial Results

News Summary
•Second quarter revenue was $3.03 billion, up 10% sequentially (QoQ). Cloud revenue increased 23% (QoQ), Client revenue decreased 2% (QoQ) and Consumer revenue increased 15% (QoQ).
•Second quarter GAAP earnings per share (EPS) was $(0.87) and Non-GAAP EPS was $(0.69), which includes $156 million of underutilization-related charges in Flash and HDD.
•Expect fiscal third quarter 2024 revenue to be in the range of $3.20 billion to $3.40 billion.
•Expect Non-GAAP EPS in the range of $(0.10) to $0.20, which includes $30 to $40 million of underutilization-related charges in HDD.

SAN JOSE, Calif., — January 25, 2024 — Western Digital Corp. (Nasdaq: WDC) today reported fiscal second quarter 2024 financial results.

“Western Digital’s second quarter results demonstrate that the structural changes we have put in place over the last few years and the strategy we have been executing are producing significant outperformance across our flash and HDD businesses,” said David Goeckeler, Western Digital CEO. “We are seeing our efforts come to fruition as our financial performance met, or exceeded, the non-GAAP guidance ranges we provided in October, and I am confident that our strategy of managing inventory proactively, offering a broad range of products, closely controlling our product cost through focused R&D and manufacturing, and bolstering the agility of our business will allow us to improve through-cycle profitability and dampen business cycles into the future.”




Western Digital Reports Fiscal Second Quarter 2024 Financial Results
Page 2

Q2 2024 Financial Highlights
GAAPNon-GAAP
Q2 2024Q1 2024Q/QQ2 2024Q1 2024Q/Q
Revenue ($M)$3,032$2,750up 10%$3,032$2,750up 10%
Gross Margin16.2%3.6%up 12.6 ppt15.5%4.1%up 11.4 ppt
Operating Expenses ($M)$702$695up 1%$561$555up 1%
Operating Loss ($M)$(210)$(596)*$(91)$(443)*
Net Loss ($M)$(268)$(685)*$(210)$(554)*
Loss Per Share
$(0.87)$(2.17)*$(0.69)$(1.76)*
* not a meaningful figure
GAAPNon-GAAP
Q2 2024Q2 2023Y/YQ2 2024Q2 2023Y/Y
Revenue ($M)$3,032$3,107down 2%$3,032$3,107down 2%
Gross Margin16.2%17.0%down 0.8 ppt15.5%17.4%down 1.9 ppt
Operating Expenses ($M)$702$849down 17%$561$659down 15%
Operating Loss ($M)$(210)$(321)*$(91)$(119)*
Net Loss ($M)$(268)$(446)*$(210)($135)*
Loss Per Share$(0.87)$(1.40)*$(0.69)$(0.42)*
* not a meaningful figure

The company had an operating cash outflow of $92 million and ended the quarter with $2.48 billion of total cash and cash equivalents.

Additional details can be found within the company’s earnings presentation, which is accessible online at investor.wdc.com.


Western Digital Reports Fiscal Second Quarter 2024 Financial Results
Page 3

End Market Summary
Revenue ($M)Q2 2024Q1 2024Q/QQ2 2023Y/Y
Cloud$1,071$872up 23%$1,224down 13%
Client1,1221,147down 2%1,089up 3%
Consumer839731up 15%794up 6%
Total Revenue$3,032$2,750up 10%$3,107down 2%

In the fiscal second quarter:

•Cloud represented 35% of total revenue. Sequentially, the growth was attributed to higher nearline shipments to data center customers and better nearline pricing. The year-over-year decrease was due to lower eSSD bit shipments.

•Client represented 37% of total revenue. Sequentially, an increase in flash ASPs was more than offset by a decline in flash bit shipments. The year-over-year increase was due to higher flash shipments, primarily driven by client SSD shipments into PC applications, more than offsetting a decline in flash ASPs.

•Consumer represented 28% of total revenue. Sequentially, the growth was primarily due to seasonal strength in flash bit shipments. On a year-over-year basis, the increase in flash bit shipments was partially offset by a decline in flash ASPs as well as lower HDD shipments.



Western Digital Reports Fiscal Second Quarter 2024 Financial Results
Page 4

Business Outlook for Fiscal Third Quarter of 2024
Three Months Ending
March 29, 2024
GAAP(1)
Non-GAAP(1)
Revenue ($B)$3.20 - $3.40$3.20 - $3.40
Gross margin21.5% - 23.5%22.0% - 24.0%
Operating expenses ($M)$710 - $730$600 - $620
Interest and other expense, net ($M)~$95~$95
Income tax expense ($M)(2)
N/A$20 - $30
Preferred dividend ($M)
$15$15
Diluted earnings per shareN/A$(0.10) - $0.20
Diluted shares outstanding (in millions)~330~330
(1) Non-GAAP gross margin guidance excludes amortization of acquired intangible assets and stock-based compensation expense of approximately $10 million to $15 million. The company’s Non-GAAP operating expenses guidance excludes stock-based compensation expense, and expenses related to business separation costs, totaling approximately $105 million to $115 million. In the aggregate, Non-GAAP diluted earnings per share guidance excludes these items totaling approximately $115 million to $130 million. The timing and amount of additional charges the company excludes from its Non-GAAP income tax expense and Non-GAAP diluted earnings per share are dependent on the timing and determination of certain actions and cannot be reasonably predicted. The timing and amount of these charges excluded from Non-GAAP gross margin, Non-GAAP operating expenses, and Non-GAAP diluted earnings per share cannot be further allocated or quantified with certainty. Accordingly, full reconciliations of Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP income tax expense and Non-GAAP diluted earnings per share to the most directly comparable GAAP financial measures (GAAP gross profit, GAAP operating expenses, income tax expense and diluted earnings per share, respectively) are not available without unreasonable effort.

(2) Non-GAAP income tax expense is determined based on a percentage of Non-GAAP pre-tax income or loss. Our estimated Non-GAAP tax dollars may differ from our GAAP tax dollars (i) due to differences in the tax treatment of items excluded from our Non-GAAP net income or loss; (ii) the fact that our GAAP income tax expense or benefit recorded in any interim period is based on an estimated forecasted GAAP tax rate for the full year, excluding loss jurisdictions; and (iii) because our GAAP taxes recorded in any interim period are dependent on the timing and determination of certain GAAP operating expenses.



Western Digital Reports Fiscal Second Quarter 2024 Financial Results
Page 5

Investor Communications
The investment community conference call to discuss these results and the company’s business outlook for the fiscal third quarter of 2024 will be broadcast live online today at 1:30 p.m. Pacific/4:30 p.m. Eastern. The live and archived conference call/webcast and the earnings presentation can be accessed online at investor.wdc.com.

About Western Digital
Western Digital is on a mission to unlock the potential of data by harnessing the possibility to use it. With Flash and HDD franchises, underpinned by advancements in storage technologies, we create breakthrough innovations and powerful data storage solutions that enable the world to actualize its aspirations. Core to our values, we recognize the urgency to combat climate change and have committed to ambitious carbon reduction goals approved by the Science Based Targets initiative. Learn more about Western Digital and the Western Digital®, SanDisk® and WD® brands at www.westerndigital.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws, including statements regarding expectations for the company’s business outlook and financial performance for the fiscal third quarter of 2024 and beyond; the impact of structural changes in the company’s business and corporate strategy on operating and financial performance; and the impact of the company’s inventory management, range of products, cost controls and business agility on cyclicality and through-cycle profitability. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. The preliminary financial results for the company’s fiscal second quarter ended December 29, 2023 included in this press release represent the most current information available to management. Actual results when disclosed in the company's Form 10-Q may differ from these preliminary results as a result of the completion of the company’s financial closing procedures, final adjustments, completion of the review by the company’s independent registered accounting firm; and other developments that may arise between now and the filing of the company's Form 10-Q. Other key risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: volatility in global economic conditions; future responses to and effects of global health crises; the impact of business and market conditions; the outcome and impact of the company's planned separation of its HDD and Flash business units, including with respect to customer and supplier relationships, contractual restrictions, stock price volatility and the diversion of management’s attention from ongoing business operations and opportunities; the impact of competitive products and pricing; the company's development and introduction of products based on new technologies and expansion into new data storage markets; risks associated with cost saving


Western Digital Reports Fiscal Second Quarter 2024 Financial Results
Page 6

initiatives, restructurings, acquisitions, divestitures, mergers, joint ventures and the company's strategic relationships; difficulties or delays in manufacturing or other supply chain disruptions; hiring and retention of key employees; the company's level of debt and other financial obligations; changes to the company's relationships with key customers; compromise, damage or interruption from cybersecurity incidents or other data system security risks; actions by competitors; the company's ability to achieve its GHG emissions reduction and other ESG goals; risks associated with compliance with changing legal and regulatory requirements and the outcome of legal proceedings; and other risks and uncertainties listed in the company’s filings with the Securities and Exchange Commission (the “SEC”), including the company’s Annual Report on Form 10-K filed with the SEC on August 22, 2023 and Quarterly Report on Form 10-Q filed with the SEC on November 7, 2023 to which your attention is directed. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements to reflect new information or events, except as required by law.

###
Western Digital, the Western Digital logo, SanDisk and WD are registered trademarks or trademarks of Western Digital Corporation or its affiliates in the US and/or other countries.















WESTERN DIGITAL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions; unaudited; on a US GAAP basis)
December 29,
2023		June 30,
2023
ASSETS
Current assets:
Cash and cash equivalents$2,481 $2,023 
Accounts receivable, net1,523 1,598 
Inventories3,216 3,698 
Other current assets618 567 
Total current assets7,838 7,886 
Property, plant and equipment, net3,315 3,620 
Notes receivable and investments in Flash Ventures1,248 1,297 
Goodwill10,037 10,037 
Other intangible assets, net79 80 
Other non-current assets1,768 1,509 
Total assets$24,285 $24,429 
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$1,504 $1,293 
Accounts payable to related parties251 292 
Accrued expenses1,037 1,288 
Income taxes payable506 999 
Accrued compensation353 349 
Current portion of long-term debt1,042 1,213 
Total current liabilities4,693 5,434 
Long-term debt7,351 5,857 
Other liabilities1,397 1,415 
Total liabilities13,441 12,706 
Convertible preferred stock, aggregate liquidation preference of $953 and $924, respectively
876 876 
Total shareholders’ equity9,968 10,847 
Total liabilities, convertible preferred stock and shareholders’ equity$24,285 $24,429 


WESTERN DIGITAL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts; unaudited; on a US GAAP basis)

Three Months EndedSix Months Ended
December 29,
2023		December 30,
2022		December 29,
2023		December 30,
2022
Revenue, net$3,032 $3,107 $5,782 $6,843 
Cost of revenue2,540 2,579 5,191 5,334 
Gross profit492 528 591 1,509 
Operating expenses:
Research and development444 523 875 1,075 
Selling, general and administrative198 250 405 497 
Employee termination, asset impairment, and other24 76 81 100 
Business separation costs36 — 36 — 
Total operating expenses702 849 1,397 1,672 
Operating loss(210)(321)(806)(163)
Interest and other expense:(30)(64)(116)(138)
Loss before taxes(240)(385)(922)(301)
Income tax expense28 61 31 118 
Net loss(268)(446)(953)(419)
Less: cumulative dividends allocated to preferred shareholders14 — 29 — 
Net loss attributable to common shareholders$(282)$(446)$(982)$(419)
 Net loss per common share:
Basic$(0.87)$(1.40)$(3.03)$(1.32)
Diluted$(0.87)$(1.40)$(3.03)$(1.32)
Weighted average shares outstanding:
Basic325 318 324 317 
Diluted325 318 324 317 



WESTERN DIGITAL CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions; unaudited; on a US GAAP basis)





Three Months EndedSix Months Ended
December 29,
2023		December 30,
2022		December 29,
2023		December 30,
2022
Operating Activities
Net loss$(268)$(446)(953)$(419)
Adjustments to reconcile net loss to net cash provided by (used in) operations:
Depreciation and amortization143 214 290 430 
Stock-based compensation72 86 149 172 
Deferred income taxes(22)67 (68)25 
Loss (Gain) on disposal of assets
— — (87)1 
Non-cash portion of asset impairment— 15 95 15 
Gain on repurchase of debt(4)— (4)— 
Amortization of debt issuance costs and discounts5 2 9 5 
Other non-cash operating activities, net(48)25 (47)69 
Changes in:
Accounts receivable, net(72)517 75 899 
Inventories281 89 482 (135)
Accounts payable274 (396)299 (521)
Accounts payable to related parties(26)74 (41)49 
Accrued expenses(309)(182)(246)(226)
Income taxes payable(169)39 (494)156 
Accrued compensation3 (58)4 (162)
Other assets and liabilities, net48 (11)(181)(317)
Net cash provided by (used in) operating activities(92)35 (718)41 
Investing Activities
Purchases of property, plant and equipment, net(150)(258)(81)(578)
Activity related to Flash Ventures, net66 (17)79 82 
Strategic investments and other, net24 17 26 14 
Net cash provided by (used in) investing activities(60)(258)24 (482)
Financing Activities
Employee stock plans, net33 43 (10)(7)
Net proceeds from convertible preferred stock(2)— (5)— 
Purchase of capped calls(155)— (155)— 
Repurchases of debt(505)— (505)— 
Proceeds from debt, net of repayments1,262 — 1,862 — 
Debt issuance costs(36)(5)(36)(5)
Net cash provided by (used in) financing activities597 38 1,151 (12)
Effect of exchange rate changes on cash4 7 1 (3)
Net increase (decrease) in cash and cash equivalents
449 (178)458 (456)
Cash and cash equivalents, beginning of period2,032 2,049 2,023 2,327 
Cash and cash equivalents, end of period$2,481 $1,871 $2,481 $1,871 


WESTERN DIGITAL CORPORATION
SUPPLEMENTAL OPERATING SEGMENT RESULTS
(in millions; except percentages; unaudited)
Three Months EndedSix Months Ended
December 29,
2023		December 30,
2022		December 29,
2023		December 30,
2022
Net revenue:
Flash$1,665 $1,657 $3,221 $3,379 
HDD1,367 1,450 2,561 3,464 
Total net revenue$3,032 $3,107 $5,782 $6,843 
Gross profit:
Flash$131 $240 $(30)$662 
HDD339 300 612 874 
Total gross profit for segments470 540 582 1,536 
Unallocated corporate items:
Stock-based compensation expense(13)(12)(26)(26)
Amortization of acquired intangible assets(1)— (1)(1)
Recovery from contamination incident36 — 36 — 
Total unallocated corporate items22 (12)9 (27)
Consolidated gross profit$492 $528 $591 $1,509 
Gross margin:
Flash7.9 %14.5 %(0.9)%19.6 %
HDD24.8 %20.7 %23.9 %25.2 %
Total gross margin for segments15.5 %17.4 %10.1 %22.4 %
Consolidated gross margin16.2 %17.0 %10.2 %22.1 %

The Company manages and reports under two reportable segments: flash-based products (“Flash”) and hard disk drives (“HDD”). In the table above, total gross profit for segments and total gross margin for segments are Non-GAAP financial measures, which are also referred to herein as Non-GAAP gross profit and Non-GAAP gross margin, respectively.





WESTERN DIGITAL CORPORATION
PRELIMINARY RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions; unaudited)
Three Months EndedSix Months Ended
 December 29,
2023		September 29,
2023		December 30,
2022		December 29,
2023		December 30,
2022
GAAP gross profit$492 $99 $528 $591 $1,509 
Stock-based compensation expense13 13 12 26 26 
Amortization of acquired intangible assets1 — — 1 1 
Recovery from contamination incident(36)— — (36)— 
Non-GAAP gross profit$470 $112 $540 $582 $1,536 
GAAP operating expenses$702 $695 $849 $1,397 $1,672 
Stock-based compensation expense(59)(64)(74)(123)(146)
Business separation costs(36)— — (36)— 
Employee termination, asset impairment, and other
(24)(57)(76)(81)(100)
Strategic review(20)(17)— (37)— 
Amortization of acquired intangible assets— — (39)— (77)
Other(2)(2)(1)(4)(1)
Non-GAAP operating expenses$561 $555 $659 $1,116 $1,348 
GAAP operating loss$(210)$(596)$(321)$(806)$(163)
Gross profit adjustments(22)13 12 (9)27 
Operating expense adjustments141 140 190 281 324 
Non-GAAP operating income (loss)$(91)$(443)$(119)$(534)$188 
GAAP interest and other expense, net$(30)$(86)$(64)$(116)$(138)
Other
(64)— — (64)(1)
Non-GAAP interest and other expense, net$(94)$(86)$(64)$(180)$(139)
GAAP income tax expense$28 $3 $61 $31 $118 
Income tax adjustments(3)22 (109)19 2 
Non-GAAP income tax expense$25 $25 $(48)$50 $120 


WESTERN DIGITAL CORPORATION
PRELIMINARY RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts; unaudited)

Three Months EndedSix Months Ended
 December 29,
2023		September 29,
2023		December 30,
2022		December 29,
2023		December 30,
2022
GAAP net loss$(268)$(685)$(446)$(953)$(419)
Stock-based compensation expense72 77 86 149 172 
Business separation costs36 — — 36 — 
Employee termination, asset impairment and other
24 57 76 81 100 
Strategic review20 17 — 37 — 
Amortization of acquired intangible assets1 — 39 1 78 
Recovery from contamination incident(36)— — (36)— 
Other
(62)2 1 (60)— 
Income tax adjustments3 (22)109 (19)(2)
Non-GAAP net loss(210)(554)(135)(764)(71)
Less: cumulative dividends allocated to preferred shareholders14 15 — 29 — 
Non-GAAP net loss attributable to common shareholders$(224)$(569)$(135)$(793)$(71)
Diluted loss per common share
GAAP$(0.87)$(2.17)$(1.40)$(3.03)$(1.32)
Non-GAAP$(0.69)$(1.76)$(0.42)$(2.45)$(0.22)
Diluted weighted average shares outstanding:
GAAP325 323 318 324 317 
Non-GAAP325 323 318 324 317 
Cash flows
Cash flow provided by (used in) operating activities$(92)$(626)$35 $(718)$41 
Purchases of property, plant and equipment, net(150)69 (258)(81)(578)
Activity related to Flash Ventures, net66 13 (17)79 82 
Free cash flow$(176)$(544)$(240)$(720)$(455)













To supplement the condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the table above sets forth Non-GAAP gross profit; Non-GAAP gross margin; Non-GAAP operating expenses; Non-GAAP operating income and loss; Non-GAAP interest and other expense, net; Non-GAAP income tax expense; Non-GAAP net income and loss; Non-GAAP diluted income and loss per common share and free cash flow (“Non-GAAP measures”). These Non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different from Non-GAAP measures used by other companies. The company believes the presentation of these Non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors for measuring the company’s earnings performance and comparing it against prior periods. Specifically, the company believes these Non-GAAP measures provide useful information to both management and investors as they exclude certain expenses, gains and losses that the company believes are not indicative of its core operating results or because they are consistent with the financial models and estimates published by many analysts who follow the company and its peers. As discussed further below, these Non-GAAP measures exclude, as applicable, stock-based compensation expense, business separation costs, employee termination, asset impairment, and other, expenses related to our strategic review, amortization of acquired intangible assets, recovery from contamination incident, other adjustments, and income tax adjustments, and the company believes these measures along with the related reconciliations to the GAAP measures provide additional detail and comparability for assessing the company’s results. These Non-GAAP measures are some of the primary indicators management uses for assessing the company’s performance and planning and forecasting future periods. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

As described above, the company excludes the following items from its Non-GAAP measures:

Stock-based compensation expense. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the company’s control, the company believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time and compare it against the company’s peers, a majority of whom also exclude stock-based compensation expense from their Non-GAAP results.

Business separation cost. The company incurred expenses associated with the separation of its HDD and Flash business units to create two independent, public companies. The Company believes these charges do not reflect the company's operating results and that they are not indicative of the underlying performance of its business.



Employee termination, asset impairment, and other. From time-to-time, in order to realign the company’s operations with anticipated market demand or to achieve cost synergies from the integration of acquisitions, the company may terminate employees and/or restructure its operations. From time-to-time, the company may also incur charges from the impairment of intangible assets and other long-lived assets. In addition, the company may record credits related to gains upon sale of property due to restructuring or reversals of charges recorded in prior periods. In addition, the Company has taken actions to reduce the amount of capital invested in facilities, including the sale-leaseback of facilities. These charges or credits are inconsistent in amount and frequency, and the company believes they are not indicative of the underlying performance of its business.

Strategic review. The company incurred expenses associated with its review of strategic alternatives that resulted in the planned separation of its HDD and Flash business units to create two independent, public companies. The company believes these charges do not reflect the company’s operating results and that they are not indicative of the underlying performance of its business.

Amortization of acquired intangible assets. The company incurs expenses from the amortization of acquired intangible assets over their economic lives. Such charges are significantly impacted by the timing and magnitude of the company’s acquisitions and any related impairment charges.

Recovery from contamination incident. In February 2022, a contamination of certain materials used in the company's manufacturing process occurred and affected production operations at the flash-based memory manufacturing facilities in Yokkaichi and Kitakami, Japan, which are operated through the company's joint business ventures with Kioxia Corporation (collectively, "Flash Ventures"). The contamination resulted in scrapped inventory and rework costs, decontamination and other costs needed to restore the facilities to normal capacity, and under absorption of overhead costs which were expensed as incurred. During the quarter ended December 29, 2023, the company received a partial recovery of these losses from other parties. The contamination charges and the related recovery are inconsistent in amount and frequency, and the company believes they are not part of the ongoing production operation of its business.

Other adjustments. From time-to-time, the company sells or impairs investments or other assets which are not considered necessary to its business operations, or incurs other charges or gains that the company believes are not a part of the ongoing operation of its business. The resulting expense or benefit is inconsistent in amount and frequency.



Income tax adjustments. Income tax adjustments include the difference between income taxes based on a forecasted annual Non-GAAP tax rate and a forecasted annual GAAP tax rate as a result of the timing of certain Non-GAAP pre-tax adjustments. The income tax adjustments also include adjustments for the re-measurement of certain unrecognized tax benefits primarily related to tax positions taken in prior quarters, including interest. These adjustments are excluded because the company believes that they are not indicative of the underlying performance of its ongoing business.

Additionally, free cash flow is defined as cash flows provided by (used in) operating activities less purchases of property, plant and equipment, net, and the activity related to Flash Ventures, net. The company considers free cash flow generated in any period to be a useful indicator of cash that is available for strategic opportunities including, among others, investing in the company’s business, making strategic acquisitions, repaying debt and strengthening the balance sheet.


___________________
Contacts:
Western Digital Corp.

Investor Contact:Media Contact:
T. Peter Andrew
Media Relations
949.672.9655
408.801.0021
peter.andrew@wdc.com
WD.Mediainquiries@wdc.com
investor@wdc.com



v3.23.4
Cover Page
Jan. 25, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 25, 2024
Entity Registrant Name WESTERN DIGITAL CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-08703
Entity Tax Identification Number 33-0956711
Entity Address, Address Line One 5601 Great Oaks Parkway
Entity Address, City or Town San Jose
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95119
City Area Code 408
Local Phone Number 717-6000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 Par Value Per Share
Trading Symbol WDC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000106040
Amendment Flag false
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