Western Digital delivered a revenue win in QQ4 2024 with reported revenue of $3.764 billion, up 24.14% year over year and 8.88% quarter over quarter, and a gross margin of 35.95%. Despite top-line growth, profitability remained modest, with net income of $39 million and a net margin of 1.04%, reflecting elevated other expenses and interest costs. EBITDA stood at $343 million, and operating income was $216 million, yielding an operating margin of roughly 5.74%. The quarter generated strong operating cash flow of $366 million and free cash flow of $250 million, supporting a positive liquidity position as of quarter end. Balance sheet leverage remains substantial: total debt of $7.434 billion and net debt of $5.883 billion, with cash and cash equivalents of $1.551 billion, and a cash balance of about $1.889 billion at the start of the period. The company continued debt reduction (net debt decline via $337 million debt repayment) and executed a modest amount of share repurchases ($21 million), while no cash dividends were paid. Valuation metrics imply a premium to earnings and cash flow relative to many peers, underscoring the importance of margin expansion and de-leveraging to unlock better risk-adjusted returns going forward.
Key Performance Indicators
Revenue
Increasing
3.76B
QoQ: 8.88% | YoY: 24.14%
Gross Profit
Increasing
1.35B
35.95% margin
QoQ: 35.16% | YoY: 175.00%
Operating Income
Increasing
216.00M
QoQ: -20.88% | YoY: 202.86%
Net Income
Increasing
39.00M
QoQ: -71.11% | YoY: 113.59%
EPS
Increasing
0.92
QoQ: 162.86% | YoY: 203.37%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability:
- Revenue: $3.764 billion; YoY +24.14%, QoQ +8.88% (per provided metrics).
- Gross profit: $1.353 billion; gross margin 35.95%; YoY gross profit growth reported at 175.0% and QoQ 35.16% (from dataset).
- Operating income: $216 million; operating margin 5.74%; YoY operating income growth 202.86%; QoQ change -20.88%.
- EBITDA: $343 million; EBITDA margin 9.11%.
- Net income: $39 million; net margin 1.04%; YoY net income growth 113.59%; QoQ change -71.11%.
- Earnings per share (EPS): $0.92 (GAAP), $0.88 (diluted); Weighted average shares outstanding: 346 million.
Cash flow and liquidity:
- Net cash from operating activities: $366 million; capital expenditures: $(116) million; free cash flow: $250 million.
- Cash and cash equivalents: $1.551 billion; total cash at period end approximately $1.879 billion; cash at beginning of period approximately $1.894 billion.
- Net debt: $5.883 billion; total debt: $7.434 billion; debt repayment in the quarter: $337 million; no cash dividends reported; share repurchases: $21 million.
Balance sheet health and efficiency:
- Total assets: $24.188 billion; total liabilities: $13.141 billion; total stockholders’ equity: $11.047 billion.
- Current ratio: 1.324; quick ratio: 0.775; cash ratio: 0.309.
- Working capital dynamics show notable movements in accounts receivable (-$366 million) and inventory (-$127 million) contributing to operating cash flow.
- Efficiency metrics include DSO 51.8 days, DIO 124.8 days, and a cash conversion cycle around 112 days.
Capital structure and positioning:
- Enterprise value and equity metrics imply a high earnings multiple with limited near-term earnings power; leverage remains a key consideration as margins recover and debt is reduced.
- Balance sheet includes goodwill and intangible assets totaling $4.319 billion, presenting potential impairment risk if market conditions deteriorate.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.76B
24.14%
8.88%
Gross Profit
1.35B
175.00%
35.16%
Operating Income
216.00M
202.86%
-20.88%
Net Income
39.00M
113.59%
-71.11%
EPS
0.92
203.37%
162.86%
Key Financial Ratios
Gross Profit Margin
Fair
35.90%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Good
15.80%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Weak
1.04%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.16%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
0.34%
Return on equity suggests inefficient capital allocation
Current Ratio
Adequate
1.32
Current ratio meets minimum requirements but limited cushion
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