Western Digital Beats Q1 Estimates and Guides Q2 Revenue to About $5.1 Billion
Revenue of $4.38 billion and adjusted EPS of $4.64 cleared the top of August's ranges, and the Q2 guide calls for about $5.1 billion. The stock rose 3.50% in a minute after a 6.43% fall in the regular session.
- Fiscal Q1 2027 revenue was $4.38 billion, up 55%, and non-GAAP EPS $4.64, both above the top of the August ranges and above estimates of about $4.14 billion and $4.08.
- Q2 guidance: revenue of $5.1 billion plus or minus $100 million, non-GAAP gross margin of 60% to 61%, EPS of $5.80; the dividend rises 17% to $0.175.
- The stock rose 3.50% in the first minute after the 16:01 ET release, then stood 1.14% higher after twelve minutes, following a 6.43% drop in the regular session.
Western Digital reported fiscal first-quarter 2027 results after the close on Thursday, October 22, 2026, with revenue of $4.38 billion, up 55% from a year earlier, and adjusted earnings per share (EPS) of $4.64. Both cleared the top of the ranges the company gave in August, and analysts had expected about $4.08 a share on $4.14 billion of revenue. The stock rose 3.50% in the first minute after the headline reached the MoveSurge news feed at 16:01:00 ET, from $356.43 to $368.90. It then gave back most of the gain and stood at $360.50 (+1.14%) twelve minutes later.
The report came at the end of a bad day for storage stocks. Western Digital closed the regular session at $354.19, down 6.43%, while Seagate Technology fell 7.86%, Sandisk 8.51% and Micron 6.26% in a broad slide in chip shares. The stock had closed at $473.69 on September 23, so it went into the report down 25.2% in a month.
How far above guidance the quarter came in
| Fiscal Q1 2027 | August guidance | Reported |
|---|---|---|
| Revenue | $4.0 billion to $4.2 billion | $4.38 billion |
| Non-GAAP gross margin | 55% to 56% | 58.1% |
| Non-GAAP EPS | $3.85 to $4.15 | $4.64 |
| GAAP EPS | Not guided | $4.63 |
| Free cash flow | Not guided | $1.38 billion |
Revenue came in $181 million above the top of the range. Chief financial officer Kris Sennesael credited "robust exabyte growth and improved pricing." An exabyte is a billion gigabytes, the unit drive makers use for the total storage they ship, so the company sold more capacity and got more for each unit of it.
GAAP and adjusted profit now match
GAAP EPS of $4.63 and non-GAAP EPS of $4.64 are a cent apart this quarter. A year earlier GAAP EPS was $3.07 against $1.78 adjusted, because GAAP results included a $611 million gain on the stake Western Digital kept in Sandisk when it spun off its flash memory business in February 2025. In the previous quarter the gap was $8.21 GAAP against $3.56 adjusted. With no such gain this time, GAAP EPS rose 51% from a year earlier while adjusted EPS rose 161%.
Q2 guidance and the dividend
For the fiscal second quarter, which ends in early January, Western Digital guided revenue to $5.1 billion, plus or minus $100 million, which would be up 66% to 72% from a year earlier. The midpoint is 16% above the quarter just reported. It expects a non-GAAP gross margin of 60% to 61% and non-GAAP EPS of $5.80, plus or minus $0.20.
Before the report, investors were debating whether the company could keep its pricing as it ramps its highest-capacity drives and as Toshiba adds capacity, Investing.com reported. The 60% to 61% margin guide would extend a steady climb in non-GAAP gross margin:
- Fiscal Q1 2026 (year-ago quarter): 43.9%
- Fiscal Q4 2026: 54.4%
- Fiscal Q1 2027: 58.1%
- Fiscal Q2 2027 guidance: 60% to 61%
The board raised the quarterly dividend 17% to $0.175 per share, payable on December 17, 2026 to holders of record on December 4. Chief executive Irving Tan said the company is working to "extend our visibility into future demand."
Did Western Digital beat Q1 fiscal 2027 estimates?
Yes. Revenue was $4.38 billion and non-GAAP EPS was $4.64, against analyst expectations of about $4.14 billion and $4.08. Both were above the top of the company's own August guidance.
What is Western Digital's Q2 fiscal 2027 guidance?
Revenue of $5.1 billion, plus or minus $100 million, a non-GAAP gross margin of 60% to 61%, and non-GAAP EPS of $5.80, plus or minus $0.20.
Why did Western Digital stock fall on October 22, 2026?
It closed the regular session down 6.43% at $354.19, before the report, as Seagate, Sandisk and Micron also fell in a broad slide in chip and storage shares. After the results it rose 3.50% in the first minute.
Did Western Digital raise its dividend?
Yes. The quarterly dividend rose 17% to $0.175 per share, payable on December 17, 2026 to holders of record on December 4.
Sources
-
WD Reports Fiscal First Quarter 2027 Financial Results (Form 8-K, Exhibit 99.1)
— Western Digital via SEC EDGAR
Revenue $4.38B up 55%, GAAP EPS $4.63, non-GAAP EPS $4.64, gross margins, free cash flow $1.38B, Q2 guidance $5.1B +/- $100M and EPS $5.80 +/- $0.20, dividend raised 17% to $0.175, prior-year Sandisk gain
-
Live: Will Western Digital's Q1 earnings tonight reverse a brutal 24% selloff?
— 24/7 Wall St.
Consensus of about $4.08 EPS on $4.14B revenue; reported results above estimates; shares initially rose about 4% after the report
-
Western Digital faces earnings test as HDD pricing debate looms
— Investing.com
Pre-report expectations of $4.08 EPS and $4.14B revenue; investor debate over hard-drive pricing as high-capacity drives ramp and Toshiba adds capacity
Never miss the next market-moving story
Follow the core market-moving feed across equities, macro, currencies and commodities. Your subscription includes price moves after the news, search, watchlists, alerts and research tools.
Create free accountGo real time Watch live headlines -- free