Western Digital (WDCVV) Q1 2026 Earnings Report

Overview of QQ1 2026 results shows a revenue base of $2.818 billion with a robust gross margin of 43.54% and an EBITDA of $792 million, translating into an operating income of $792 million and a net income of $1.182 billion. A meaningful driver of profitability in the quarter was a sizable total other income/expenses net of $545 million, coupled with a negative interest expense of $59 million, which collectively contributed to a strong net margin of 41.94% and an earnings-per-share of $3.34 (GAAP) and $3.07 diluted. While core operating performance demonstrates margin resilience (operating margin 28.10%), the quarterly result is influenced by non-operating items that warrant careful scrutiny for sustainability.

From a cost-structure perspective, research and development expense stood at $294 million, with selling, general and administrative expenses of $138 million, resulting in total operating expenses of $435 million and a cost basis that aligns with a disciplined expense framework given the revenue level. The combination of high gross margin and meaningful non-operating income suggests a favorable near-term profitability profile, yet the absence of disclosed forward guidance and balance-sheet detail in the provided extract requires a cautious view on long-term earnings quality and cash generation.

Going forward, the business remains exposed to the cyclical nature of the data-storage market, including NAND/SSD pricing dynamics, hyperscale capex cycles, and competitive pressures. Investors should monitor the durability of recurring revenue streams, the sustainability of non-operating income items, and management commentary on future demand environments and capital allocation.