WDC - Earnings call transcript Q2 2025 | Western Digital Corporation

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Operator

Good afternoon, and thank you for standing by. Welcome to Western Digital's Second Quarter Fiscal 2025 Conference Call. [Operator Instructions].

As a reminder, this call is being recorded.

Now I will turn the call over to Mr. Andrew. Peter Planning Investor Financial Analysis and President, Relations. and Vice

may begin, sir. You

T. Peter Andrew

and good you, afternoon, Thank everyone.

are Chief David Wissam today me Joining Goeckeler, Financial Jabre, Executive Officer. Chief and Officer;

forward-looking everyone Before expectations, and such, and today's me begin, risks as on remind include we discussion current let and contains uncertainties. statements does assumptions based management's that

assume performance, ongoing statements our We flash of include product obligation market These financial separation and no for forward-looking future portfolio, our these HD businesses, update the Please Form and refer information filings SEC our report actual expectations business expectations. to our trends our uncertainties plans most differ more statements. and could that to recent with XX-K and financial on to on for and from results other and risks cause the our materially the results.

also that section Investor financial included measures the non-GAAP today. financial We references release being are materials the website. are to posted GAAP measures Relations and non-GAAP comparable will of Reconciliations make our other and press in the between in

With David for call that, introductory over to turn will remarks. I the now

David Goeckeler

call afternoon, Good the for joining quarter discuss XXXX our thank second you Peter. everyone, fiscal and year Thanks, to performance.

of you later the become the third completion know, of in will SanDisk. our the quarter, separation I of with fiscal CEO many As

be the last as As Digital. a result, this will of CEO my Western earnings call

as franchises CEO together success stand-alone position immensely It our tenure. of dive into accomplished my partners customers, proud as long-term employees, a and to been to to want and support shareholders gratitude throughout I'm we privilege our Before their my our second I of what serve an of companies. quarter Western and express for unwavering honor results, has the Digital, to both we've for

to on Now the results.

share non-GAAP Western $X.XX. revenue quarter, of non-GAAP fiscal gross per earnings Digital billion, delivered second of XX.X% the and margin $X.X of For

enduring has driven market us effectively. innovation commitment portfolio dynamics Our quality diversified the enabled by navigate and reliability industry-leading and our to current to

drives, enterprise high headwinds faces robust our business pressure. temporary growth, is capacity our particularly due experiencing HDD to flash While in pricing segment

growing Despite are demand these we from the challenges, strategically on Data positioned AI to long-term storage capitalize well cycle.

perform standard with business innovation Our the gold non-GAAP storage to maintaining enthusiastically, margin. record revenues performance. allows to while The driving reliability, the high push products HDD gross a XX-quarter has and our capacity quality continues responded boundaries cutting-edge to HDD technology. in propelled of well. us This market UltraSMR to a our our by

their of We're final our we're that evolving in adoption market. underscoring report flash our expect plan of ability completed be and newer to separate amount density pleased increasing seeing stages to on the meet the this and to demands businesses of the higher drives, schedule. storage to I'm and HDD our

business will on will us our the you second dedication to completing value During and independent operate to achieved fiscal demonstrate upcoming strategic Thanks entities. as how We financing XX management our of activities share entities. drive filing key Investor SanDisk, separation. quarter, our stand-alone where the finalizing shareholder X Digital, their visions planning join each and respective our on necessary Form XX we for XX February for for February teams were Day meticulous the teams milestones crucial Western to and as for invite ready

Digital and We Day, companies. anticipate trading after a Investor will within weeks that the begin independent few Western shares as SanDisk

line in in In bit shipments. consumer client units business update. better-than-expected our Flash, was and with in expectations. to resulted Strength revenue Turning stable and

offset working down from However, coupled inventory, with to increased our oversupply year was pricing rates results. demand. short-term pressure utilization Cloud calendar pricing AI-driven shipment bit given customers throughout continued a due 'XX, positive increased

a was result decline Taken profitability. sequential together, in the

units as a market from and growth recovery. consumer XXXX, the end experienced across year benefited fiscal revenue, market margins gross In

pricing pressure oversupply sequentially. of quarter units market. XX% SSD the due in to grew broader in Despite shipments this sequentially the 'XX, softening, external margin While caused drive recent grew second our by fiscal revenue declined and NAND gross

preference, expanding expansion. foundation our series demand bolstering launching drive all in and efforts partnerships new to Our and provide consumer organic with SanDisk margin creator at the right CES,

Now we mobile are the pause. demand in in data we outlook. that PC, currently quarter, consumer. to with bit fiscal offset down expect shipments In and We than by center Flash in the believe OEM shipments mid-cycle bit be turning to third the -- a lower in first and stronger more

respond proactively our managing Given across ongoing pricing demand on headwinds and markets. the stronger-than-anticipated to adjustments inventory to production are dynamics we levels end evolving

seeing relative to the intense we are By this to through optimizing as we of profitability aim utilization delivering market. nodes, headwinds with environment on utilization and NAND, expect appropriately this premium we see move capacity, focus In current lower era in supply and key a XXXX. dynamic affecting calendar stabilizing a accelerate to less with historical total demand, recovery responding periods, to growth year we and short-term CapEx new

normalization into with the 'XX the half the will of the half that continue AI-driven in the for to recovery digestion ramp calendar inventory PC refresh gain cycle client to paving expect first we in a way enable Windows second Specifically, year momentum.

capture we In this 'XX, CapEx in fair to cloud to continue and grow we qualifying share good cloud continue of with customers make year products project data our our progress market. to to center,

premium we continues the shipments, overall to our support expect perform brands seasonal providing well business while consumer ASP our weakness Lastly, in are portfolio. bit to and

new look the believe is industry on will February Investor to is team differentiates strong on flash and I of and The at We opportunities, growing, and SanDisk our Day how markets we rapid forward what evolving. Flash the why XX. views are discussing how discuss that AI SanDisk our the creating business adoption

believe and be you excited very as are will well. We

hitting we shared The by products. to strength of in storage an and ongoing drives, another HDD increase the positioned gross provided record innovative performance, margins the customers with TCO data well higher This market underscores achieved our HDD benefit as all-time nearline of also capacity revenue how to tailwinds. quarter center adoption Our business strong from our and delivered solutions continue we our business benefit the are high. achievement of

are work to to where with operations future continually tight exceeds manage product In in We volatility sustainable quarter-to-quarter, customers this, toward a see get we demand environment their shipments longer we an the in we term, visibility growth. for but of needs. continue into business our these from conditions, supply. operating proactively our progress and over might To predictable state profitable

nearline In to to HDD the center third continued across anticipate momentum portfolio. data outlook. Turning strong the quarter, we fiscal drive our demand in

very our helping coming the get I supply mentioned, product for is long-term enabling planning visibility As in better into which us tight, and better customer deliveries demand is now quarters.

for supply demand. future the complexity better need the anticipate customers HD us Our to chain increasingly and appreciate the of

As we largest we complete to of UltraSMR the profitability customers broaden qualification portfolio newest drives adoption continue in our improve to ramp continue will our anticipate of at and our and strong coming cost The operational a the structure on and focused a dynamic. excellence, structural to HD balanced business' transformation quarters. to positive efficient supply-demand remain maintaining We continues momentum. commitment gain

most We are well portfolio, industry to long-term earnings continue innovative establishing profitable the potential. our leadership and positioned delivering through while product

team upcoming the overview Irving, strategic Day HCD's [ During provide his Investor map. WD road of on will XX, ] detailed a February and

us moving at to in X Digital, Western and the to seeing the we successfully made our years end acknowledge many want take behalf us be that on build everyone his an opportunity. the nearly and both of Western outstanding helping navigate ups weeks downs want through another so strong for separation has wish financial the and announcement transition of will X the Wissam After of his company ago. with Wissam HDD and a luck I including contributions, and Digital, a us, flash. and at I leader him through role. been Wissam CFO thank markets profile best to Board On moment at partner next to the

now me discuss will quarter over who call second turn the Let fiscal our results. Wissam, to

Wissam Jabre

generally gave October was Thank XX% delivered within quarter, good Total In everyone. guidance we pricing quarter you, X% revenue a in Digital of David, billion, up earnings $X.XX. in and share challenging sequentially was the the Western Non-GAAP fiscal per $X.X second the face year-over-year. flash. in the ranges for environment afternoon, and results

shipments, sequential of revenue X% markets, and to represented at basis, both an represented down year-over-year. a HDD XX% while billion, at end revenue year-over-year billion, at up a was and increase grew. revenue $X.X due Client $X.X of XX% On total nearline Flash the HDD was than down. X% more X% Cloud On basis, flash in Looking sequentially doubling sequentially year-over-year. total up growth and

growth Flash increase in Consumer declined declined to pressure, flat. as and revenue last revenue HDD lower revenue by Sequentially, year-over-year. bit XX% as higher Compared to HDD HDD by XX% and lower due of was and while Flash the shipments was shipments sequentially drove an flash. ASPs revenue offset grew and headwind. Year-over-year, quarter, X% was pricing represented $X.X and partially decrease at to revenue Year-over-year, bit primarily growth up in billion, in offset flash was a revenue. HDD pricing shipments bid both down while and flash pricing was was shipment due

year basis. $X.X and X% Turning were XX% quarter, last sequential year. exabyte was per to now were price down shipments ago. Average The bit exabytes. shipments quarter basis sequentially XX% a blended XX% ASPs X% the flat of X% the $X.X year-over-year. at Flash level Bit business on was Sequentially, unit up revenue a to record X% delivered billion, Nearline year-over-year. sequentially versus In strength portfolio XX% and of a and up revenue up by like-for-like quarter fiscal X% and Flash from to a a unit. and last second billion, nearline HDD revenue on of our previous XX% compared increased from basis growth decreased XXX on $XXX.

down margin pricing related second XX.X%, ago. the below Moving percentage which comments points the was XX.X%, Gross Sequentially, guidance my non-GAAP year a for percentage margin be our range. note, sequentially Please results margin to statement. the Flash and otherwise. of due was late points in was unless to gross fiscal quarter. X.X points the up to down stated income X.X rest quarter pressure percentage gross from XX.X was will

executing percentage for ago. margin on year synergy the was track. XX.X points million. X.X percentage improvement operating points while from margin percentage a remains the progress expenses points gross HDD, nearline Lower-than-expected ago. $XX million, of the resulted expectations, demand expenses drives XX.X% $XXX up Operating than sequential towards lower a gross on due and year basis including were a in In down Flash synergy to spend being SanDisk costs XX.X of expenses strong were from at to sequentially,

business was expectations variable addition, performance. lower In with compensation aligned than

partially Our cost income $XXX results focus making separation. by sequentially completion was of business discipline while by lower demonstrate lower gross operating margin, continued million, the towards driven Operating on offset the X% down expenses. progress

and effective tax operating points down fiscal basis but cash Income was million, purchase million, which compared generation Operating free expenditures, the cash Cash favorable was plant flow flow equipment year. was XXX of $XXX to related sequentially, the the the represented $XXX Earnings and of rate outflow a margin tax last flash was million. property, ventures cash approximately was was for joint statement cash flow and quarter Operating XX.X%, posted to activity on $XXX million. $X.XX. $XX XX%. and expense capital share per losses second include

flash declining Fiscal $X.X including total at second largely quarter. to and Gross undrawn flat with inventory $X.X inventory The equivalents days by end billion X fiscal $X.X at days. billion, debt quarter inventory. in XXX was second by an inventory in revolver HDD was offset were increase liquidity $X.X was cash billion, days capacity. of outstanding decrease the was and of billion, Cash

successfully During of a the the key for business, fiscal of milestone we towards is financing progress our which quarter, and spin separation SanDisk. upcoming the the second arranged

basis. to non-GAAP Gross revenue turn combined expected to anticipate is quarter XX.X% I'll third range now for a billion fiscal be overall guidance be We XX.X%. of $X.XX and billion. Digital $X.XX the between Western in to to the margin on

be of other increase XX%. be $XXX The the to to between $XXX We range dis-synergy million expenses rate million to expected separation expenses is and expect million. million, anticipated of including million we businesses. $XX a $XXX XX% as Interest are costs operating slightly tax to of to and finalize approximately $XX our to

XXX outstanding. shares We based to expect EPS on of million approximately $X.XX $X.XX

forward in Days our just in of a looking are each specific SanDisk We business to Western detail. Digital couple both of and weeks more Investor discuss to

third expectations now, provide perspective directional fiscal I'll each business the For on in quarter. from

of decline due the and blended to $XX decrease we expect per sequentially mid-teens charges and manage decline revenue supply. expected million to gross we ASPs, percentage to in cost $XX our For to as lower bit higher sequentially margin Flash are by bits percentage. million mid-single-digit underutilization to Flash,

June the also in continue We underutilization to expect quarter. charges

to average mid- to high decrease HDD, continues For percentage revenue sequentially to single-digit improve as expect approximately on is basis while trend by points price per to volume, higher. margin XX we gross unit by lower expected

are I navigating continuing at by final and partner to the with that robust while We deliver the would and to market spin focused stages David team to a close like been it dynamics has executing on current Digital. of saying tremendous Western financial performance. a fantastic honor

of significant X the no extremely accomplishments shareholder in and products I'm and proud both shareholders. HDD strong both over doubt flash to team's past respective the that years. for their marketplace the mind is value There provide businesses will continue to the while unlocking industry-leading my resilient, and are

David. I'll over back that, now With to turn the call

David Goeckeler

Thanks, Wissam.

map. is that end road by our knowing actively this we results markets, solid have industry-leading efforts quarter reflect our Our for across cyclicality product near-term success our a foundation to underscored future manage

respective I be both by and the data value tailwinds solutions. ability AI companies will ability HDD customers flash consistently offer Both As we separation, compelling businesses. the in innovative extremely storage drive to to our of continue confident the and the cycle structural to shareholder complete most the our team's our am and in long-term driven

into to the move the Western at be joined I'd step Q&A. of like and also will that to the assume the highlight position Visoso, we today who Luis SanDisk. Peter, Tan, at by Before who will start CEO we let's Digital, Irving role session, CFO of Q&A will

Operator

And today's Fitzgerald. Muse comes [Operator at question Instructions] Cantor CJ from first

Christopher Muse

first guess on side. the I question HDD

expectations the Q-on-Q really client change. driving March consumer function prepared HDD, your that you seeing and within Curious, speak And to units? a are that to pause a sequential and trying is a lower Or You more talked that, what's simply also about of in cloud? underlying for bit you construct. for decline better Can quarter. a volatility remarks understand about related

David Goeckeler

I'm question. that going Irving the one. for let Thanks take to

Tiang Yew Tan

healthy. over quarters variations Thanks, we for also and quarter-on-quarter support business positive customers very Look, we as timing the of in David. supply-demand will Okay. the seen we've of I strong deployments have. that growth remains balancing revenue outlook X the think tightness and the with be the

decline really QX. slight what's that's So the in driving

Christopher Muse

Great. I for guess, Two Very Dave, question parts. you. And helpful. a

about that done this to next the we just things sort are a are necessary gives within confidence should be pause? what you asset, is the the weeks. First, any of that of other there that midcycle spin And X NAND then regulatory thinking the that technical get in

David Goeckeler

and to to still a think think this PC some of secret. We don't track. quarter. that moved On the just on in quarters. the of bits NAND mid-single were literally still next quarter, of materialize in they're next I We that some you'll can going the the good of go about spin, in more that's days. about seeing We're we're X% dates really couple see volume. up right Look, good down the a feel Wissam that digits being here we expected minute. be through on smartphone the any demand to has seeing couple

much. don't customers. discussions volume. drop market's now. the the a overproduced see good still It's with We see little in right The too our big just industry probably bit We a oversupplied

headwinds, saw especially move So talked we some which the as quarter, pricing we we about. through

Going expect saw next this pricing be but expect quarter. we quarter, them forward, lower we than we headwinds to

be past, we're action, in NAND, this take adjust more the pause, demand So our this much going we as we market. but talked we're the to the like we is feel also of era in signals going production. to a responsive new see to

as faster. we will 'XX, pricing supply take a that think stabilization do and go coming move we're and bit So the going of out of that little back market ahead through support we to and

chart many to about unusual in the -- of in of some all very, overall good feel up a row back market, the down. without have not quarters really now, number sequential changes up business We've unusual. way price of you the going I had is. a see it's an to unprecedented So that and goes this a 'XX cycle we the where It's quite and very a when look quarters here have

we'll strong stabilize think we then market now through 'XX move 'XX. back here market, to the side, get is So just what that into as to the and through and the thing we we'll supply a and do is

Wissam Jabre

David's to distribution the record will the date And for February follow date or and just spend will the on C.J., a around distribution The and the comments the timing. be on be XX. of about

after. active SanDisk the be shortly And would so then of the markets and in -- shares trading

Operator

next Aaron from our Wells comes Rakers And Fargo. at question

Aaron Rakers

ago. your taking? million can the how $XX bid about about XX% underutilization current took it of out. out the I you or doing? back guess think charges, are NAND that about a talked that what If last year charges percent million I so supply that's the I'm competitors of Is and as of their around look you look some asking I out, I you I you is, of of at think assessment or thinking other the XX capacity the or think is the if news way quarter. about I wondering that guys that the taking like looks Is underutilization in to that XX% fair took that you margins, if much how a capacity so they're you're gross $XX being unpack time

David Goeckeler

look Yes. go dynamic a week taking make going at month business. how the We're after we not week, month exactly we over to much decision into That's we're out. as

is I into an discussion think gross important go margin we the as unpacking next quarter.

we about the guys cost to years. that of cost were we're be year managed that downs to new recognize, quarter maybe low see going to NAND very going we're had We increases. era cost decline. we forward of single several talked to XX% go and the thing actually for up you as next think to X see about in over of a now I a XX% good We digits. the start more QX all

big a on impact gross that's So margin.

You ASP then had headwinds underutilization charges on some and as well. that,

Like to this quarter, and I sit versus be the said, then down saw see headwinds we today, mid-single as moderating ASP what we here bits we digits.

gives So forward. margin gross little that kind going the unpacking you a number bit of

Aaron Rakers

clear, of into to And any just should taken is risk how impact underutilization that very there And current build kind to any Yes, we that's the dynamics. frame based to be quarter? way there fourth the think fiscal market about inventory of helpful. on the is charges on just

David Goeckeler

you think come bit from maybe up QX, split. I come in we probably we -- about can think they'll think in or just a XX-XX kind of about split kind XX-XX QX. little what up were they'll expect where of Maybe it

Wissam Jabre

on it Aaron, And Yes. the what look, does. on inventory, depends pricing all

-- as inventory but And our QX, end appropriately so is of stated. of the

Operator

from question with And our Wamsi next comes of Bank today Mohan America.

Wamsi Mohan

the HDD calendar Dave, Dave sequentially can level are we high overall? you you QX guide times just is supply the or exceeding cycle Irving, to slightly. the your said is in be I remarks a prepared demand about in talk where few down like think, that

can ship at just is that is XXXX seasonality? exabytes that? have maybe tight can current beyond Is And amount a the pricing think we about given as if maximum follow-up. that and something And I there supply you So time? think so unpack we quick help that the you us of about should how

David Goeckeler

and this I I'm confidence enormous talk business let entire the in Irving forward in to it have 'XX. about Irving team. in going driving confidence enormous

to to going you're it's we've quarter. supply customers some where components. the quarter, going. order to revenue all volume. visibility to a little see margin We see mean manage -- next improving continue. going the we It's flow next quite have going down the got into We're into more been Look, I it's much to bit just chain, run. going continue do our on a Yes, are

fantastic So getting structurally, a business visibility. is the I place. think more in just We're

Irving of We more have me supply. 'XX increasing about sees how profitability tailwinds a he playing But demand we've AI, talk let and lot got out. than let from

Tiang Yew Tan

Yes. Thanks, David.

rest variations 'XX I be there briefly, as robust. outlook And of relatively outlook some we the quarter-on-quarter, but the for slight forward. being robust As the year still David for relatively the mentioned will is going see mentioned,

of Wissam stable at terms In well, to to to as pricing, for remain QX. alluded looking slightly as pricing up

gives a look into new function And terms mix. well. in forward exabyte us terabyte it's to as exabyte, we provide an And perspective the as to XX that drives of of qualifying more market our really capacity from

Wamsi Mohan

just Great. the on I ask NAND follow-up. A Can quickly side. Okay.

maybe you're kind temporary market think what thinking it second weakness. supply of I and I'm demand you assumptions taking a about word that frame be half of that the is smartphone gets that on are you just side as think recovery, you're side or PC And the again. used you some wondering, the the the time into tight the year, around making of from actions whether when standpoint, not

David Goeckeler

I move up, remain Yes. PCs, out. to going units with the time we we'll 'XX, 'XX, get mean we see done continues strong. see we through units by we're Data we think center as will to see smartphone

market demand year. on demand So see side, the that. undersupplied We slightly we we that for the -- the see mid-teens to calendar

Quite didn't bigger we up but 'XX, let's 'XX question, in step frankly, in but ask the now. with stay a for demand see you

spot of market. thought in that bit. PC was customers has going earlier, this see as I some just where around So out demand in pushed we smartphone time in with a the volume the a good. we now and to little are very business. right been Discussions good said We're come still

we when overall a in back again, up -- we think to go think spending we look optimistic position. so we'll we're wafer market. this very, market 'XX. very we that the be in and is make to from strong our we set throughout at at very going on And we're good in we pricing supply move support some and as adjustments We're where

more over like not earlier, I last kind As price good think respond back past the we increases, go an pause surprising to it's accelerate -- run have the almost see position. bringing decade, equilibrium to much a back When we'd is quickly you time of we're the than we've had very more of to an of this to undersupplied said going market And this in I different supply to this. unprecedented. some what's and adjust we'll

Operator

And comes from our Tim UBS. next with Arcuri question

Unknown Analyst

Aryan on ship can't than and Tim. above X passing when this trend excessive had like XX-year Seagate more capacity, your It for in is that maybe the much for is shipping any XX.X urgency if now million line, I seems you you it really would from This customers BTO. on the more thing there's and think getting orders drives

So have behavior? any a after. follow-up change And then I in

Wissam Jabre

seen change -- We haven't any thanks for the question.

We haven't seen any behavior. change in

we you're visibility that's time aware, a BTO, the of to As more moving giving X things is a really us horizon. pivoted XX-week lot on to

buildup So it inventory right ensuring and became better and our we the plan balance, that's there's a customers with customer ensure environment. within really our that not have supply-demand of

Unknown Analyst

And just The side. we got the my cycle capacity on back NAND NAND on. and then -- follow-up the started turned on

Now correction the side. through consumer we're going another on

this Or HDD you so still the with market that business? you what what to going And would manage like the in share? more carry you you do will to driving regarding share. less is and do Are once higher all a did margins stand-alone

David Goeckeler

Day the that and to bit Yes, of quite going our that's we're question Investor XXth detail. a talk for in a about on

real the thought more in going a to what about how seeing we're of and XD new hope changed NAND here we this think business We in So clear. detail belief in We business, about -- how managing say era, in webcast era way to I that you're you quarter. in on it were going in weeks. you're our now talk see managed. another see about to about couple lot I think that And X.X weeks, forward. put is and time be out York. we the But here very to out a that play it's this we'll needs and how we'll a of here the New more of big we'll have the how

Unknown Analyst

Awesome.

Operator

from [Operator Moore of question Stanley. Morgan Instructions]. comes Joe Today's next

Joseph Moore

in Are could know choppiness I you tracking still wonder you if drives. your on targets? how are segment. some that just enterprise state there? there's an doing to you update solid And been us give I

David Goeckeler

in to point choppy through to the there. certainly We're target. the going lot XX% to what of -- I kind in strong of from quarters we're some and feel we're pricing. at Joe. about we're that I Joe, quarter, it's here plus quarter, yes, was last couple a we're during map to said doing halfway good the tracking thing think supporting road is I fine there, we're still SSD. our seeing a looks This -- There another sitting seeing talk is We still highlight still XX% for about of we're have our demand Investor mix as year. XX% what like at But enterprise a our Day about think

Joseph Moore

spin at -- a just about that? I how guidance a Is Great. procedural there you'll That's Just XX? that and or more where the helpful. question, should X Analyst Day? is And think then happen but it time the Form of give for the just businesses Does separately?

David Goeckeler

what reinforce there remarks, good a here more gave be. another -- Day. to days. numbers was talk Wissam's that are We guidance try you We'll Investor about I he the get that we'll but of kind going idea think that Yes. can it of prepared very XX you at the in enough

Operator

And Barclays. next question from our comes Thomas today of O'Malley

Thomas O'Malley

I wanted just ask to about CapEx.

You're sure broader at in reduction the broader starting seeing new utilization just a and I'm of year calendar a the us you'll give given Day. you're But and pause kind Analyst here, transitions. update sounds lab like a the a the talked update side? on the technology lumpy couple mid-cycle business It any how about of spend You about on thinking pause through business, you're going in quarters. a

particularly. additional you think business, about on spending of the those color in, Just how factors NAND with on side all any of the

Wissam Jabre

Tom, Yes. question. thanks for the

in approach So look, the there's on no change CapEx.

much the next will there's overall as Luis to next have along, David no some an at time to cash sure point, for stay add just to from over want node. thing on on we've perspective, how ramping we pretty disciplined Day, the Obviously, get we change well. we all company. that be more probably I'm deploy and Investor As and the remain But in as real the capital thinking -- the said will

Thomas O'Malley

Helpful. HDD then to Yes. the pivoting side. And

think exabytes has wall a side, for about hit of given XXX some us on So Seagate the they where kind quarterly that's on framework the their HDD capacity basis.

capacity different into You number gotten, is us guys in the similar around of last than potentially quarter. you guys believe, capacity terms have XXX framework talked been Just about, you where running exabyte exabytes. a kind of there bit you've Could ships. guys of ahead into of the start understand help the go to that by? quarter this March law some in you historically, in little has market But terms a I guys you being drawdown

So kind a into -- grow with run of where you help or there? continue to you any

Tiang Yew Tan

going that. Yes, I any don't on to think we're comment make

focused disciplined We right continuing balance we ensuring the are get on right the supply-demand be we have prudent and capital in and very to -- quite our expenditure.

Operator

Ackerman question BNP Karl And next from Paribas. with the

Karl Ackerman

last And XX-terabyte noted you complete in discs. quarter, I launched think quarters. you terabytes coming The XX SMR CMR qualifications with XX the and you would

third hyperscalers and perhaps to have you is a ship X in the think process that one qualifying. now I at beginning of

business the see could you drives, discuss for order think these hoping we throughout about and of high-capacity was rates the and growth I the sustainability HDD So visibility as 'XX. you

Tiang Yew Tan

the question. Thanks Irving. for is This

we outlook line continuing for be healthy. mentioned, see As the to near

the XX excited about calendar are And as customers visibility expect and to, sometime would be more you've QX we'll you in new I CMR move SMR we say XX alluded drives, we completed year. those As of very and forward. our the for qualification our provide to terabyte terabyte

Operator

with Citigroup. next question comes from today And Asiya our Merchant

Asiya Merchant

is supply of we Yes. and variability any here? One I guys how side, the then quarter HDD but supply you thinking there then the some just on rising you at question thinking get. are And And levels about chain seasonality the hyperscalers, into in the demand about the how are March, a -- about? the just visibility inventory I here able chain it? guys being couple understand are understand where meet you thinking to that the

Tiang Yew Tan

where and doing the is when doesn't few talk -- matter Look, for what the when question. -- of orders of just visibility and very guided in we higher good is the of the visibility. about the much a indicate look for customers orders. Thanks timing have next what Yes. necessarily visibility lower we think and quarters. inventory talk It's our We we we or QX

as And look this more where that way going of think isn't inventories at it, least much sort the of best on see is we customers probably how than our and to orders from very so there like.

In look, the side. chain, for supply couple hard terms the of supply said are that of the a drive chain last tighter on operating we in quarters. We've

than many can continues gives few to will great to have think customers to operate continue be greater deliver the to or our as quarters. our in visibility orders many moved that we we fact visibility we The customers with products operations such I to a as of team as next before. that and to build manage to able us the we great

in And to so that helps the when also deliver products continue needed. ability required, the to when

Operator

from our question Vijay Rakesh comes with Mizuho. next And

Vijay Rakesh

create you see terabyte this up move see of to follow on [indiscernible] thoughts XX you a up to side capacity numbers think think as there. follow-up. bit. on going to as the this on And you're I have push side. HAMR rise, the disks, I moving to kind Any need you I there? But Just disk Do the hard good

Wissam Jabre

to We're as always from question. we we capability, get the and on And be our a Yes. density a we for SMR we portfolio will that's major Thanks -- think performance. eventually transition areal advantage. improving our something huge our even obviously, as well. from PMO competitive That's also capability extensible HAMR our focused lift Yes. portfolio and

Vijay Rakesh

CapEx Got about probably that know you of past, Day. talked pricing year. more in you Analyst side, I the the the see on it. Can trend haven't to the on at margins how about giving kind talk talked but... I know And NAND guidance then you

David Goeckeler

talk don't from going into mean much headwinds, -- about We we see quarter. -- Yes. I next I in we too I quarter, that. I but those think some intensity see moderating ASP this see what saw I I said what think

we're is today. here And it's taking we're good get headwinds is we're we this actions -- that's to why here. So as seeing support the sit to pricing a sign some -- taking supply

business. some back in We that quickly bring as throughout have sure as market into -- here undersupplied the a slightly in as demand and the we spot we'll of make some to we but have the and adjustments year, make to margins still pricing possible still balance lot move a we confidence support

Operator

today comes And question with next Baruah, Ananda from Capital. Loop our

Ananda Baruah

just But by love it or represented your any -- big been businesses. of win, hyperscale kind big that's would of view a flash I of about Dave, pretty months I'll sort in few conversation there's over announcement Yes. your in it's keep area the having pretty overwhelmingly been flash a -- systems in made flash jobs, to one. get to December sort public of both vendor that's and on role a the storage, topic a of last pretty public here then hyperscale the new a

love just would me. on in I for get your that That's it to market. view dynamics So

David Goeckeler

going be been use going All use case use This stable right. that a Maybe There's Yes. time. pretty changes This because There's some has to position my to always simply for relatively that tend has quite little driven. you cases be flash cases cases faster. use here is see always to mix use flash. is use for hard bit And stable. been come newer drives. flash. That growing it

use I case. flash good one. driven a think AI training very a That's model is type

to data, once drives. generating hard road However, go that hard on start drives you it's very And going a all the have robust to back map.

there, on drive Irving aerial downs continue innovations. to As strong very about, focus tremendous density, cost

cost the Hard little flash going are some the But a there going quite the to stay And is on arbitrage to faster. is grow same so for time. grow. to drives going

feel about very them. They're strong As they true. can both We both X things of say, true. be

quarter. cloud, a shipped drives the into we As in exabytes cloud. hard XXX the far note I'll as nearly in just that

very There's again, going at-scale a satisfied cases be be in be always is going to come this So can that there's business. with always big to where that up hyperscale use use the cases well. mean see -- the of the It's just hard We're that, bullish very very of expense how that's flash We're we big doesn't as It at it's drives. on right? fans flash. market.

value for We've in the AI a playing a of the innovations AI. good about It's continues gets demand, this of businesses. that which called the to accelerate to businesses. an more it market of that's lot years, We've a train been data mean, of It both there's see It's And I be leads of accelerating the out. creation major for last accelerate, amount matter going continue data. as an increases there's area and up let's way AI going, in data stored. several this all of investment fact, adoption got is level. to conversation that where days look, some take to incredible to to dynamic as models, increases we great these amount going both of the amazing of innovations. for that which

going drives is dramatically. So this to hard drive

As inference edge. to moves the

a talk NAND we about It's to growth, NAND as big business. very SSDs. very in enormous both as is unit. an to going capacity drive it's market. but amount consumption lot moves edge, the Remember, enterprise inference predominantly And an unit per a important, edge well, there of

and dynamics we've the for on bullish great here last very to this over seen And going continue very, market. time. we storage we're some some the quite -- year, So is think

Operator

Mark Company. from is at Benchmark today Miller question The final the And

Mark Miller

reductions competitors? are you I how they're any board just estimate on NAND wondering, the so, across by if reducing? your seeing And was supply much

David Goeckeler

this I we about how are -- been We're about in this mean market very, clear of we've we think about very to little new going era our really focus business. forward talk what I the our don't what we're we've business were in to competitors don't talking been about doing. NAND. going doing. pause going I the We on manage open see very

have on about We've about we about how the have how out and be how how transition. now disciplined the and market we to talked big just expensive that, and is supply given transitions nodal disciplined we to lot productivity CapEx, a of how nodal are the how just very much the comes be market very these

way that's managing business. So we're the the

We throughout year. continue this to see demand good

We actions case portfolio just and to to balanced based continue make on sure undersupplied that's see across going our market, the seeing. what we're a to we're some take

Operator

question-and-answer over the remarks. to concludes like turn this session. for closing I'd And back management you. the to Thank it team

David Goeckeler

you in year. forward us. weeks to for to very to X We forward feel separate And on days. launching over XX, we're and another everybody, and of these you here that great the talking look of these separation York joining the about businesses. right all all good of last in in talking here seeing the just couple about. We've New as companies, doorstep We of here X executed a XX detail you, we look Thank in about

joining seeing to Thanks forward for look we then. today. So you us

Operator

concludes conference thank for today's everyone. We you you, all This Thank call. joining.

day. lines, You may have your a wonderful and now disconnect

Western Digital (WDC) 29 Jan 252025 Q2 Earnings call transcript