Western Digital Non-GAAP Earnings of $4.64 a Share Beat the $4.11 Estimate as Revenue Jumps 55% to $4.381 Billion

Western Digital reported fiscal first-quarter 2027 results on Thursday for the period ended Oct. 2, 2026, with revenue of $4.38 billion, up 55% from a year earlier, non-GAAP gross margin of 58.1% and non-GAAP diluted earnings of $4.64 a share, up 161% year over year.

The quarter cleared the published expectation on both lines. Analysts had expected adjusted earnings of $4.11 a share on revenue of $4.14 billion, so the reported $4.64 a share and $4.38 billion of revenue beat that tally on earnings and sales alike, by $0.53 a share and about $241 million respectively, with both differences calculated by TickerGrove from the reported figures and the expectation tally. GAAP results were nearly identical at the bottom line: GAAP gross margin was 57.8%, GAAP operating income was $2.05 billion, or 46.7% of revenue, GAAP net income was $1.78 billion and GAAP diluted earnings were $4.63 a share. The release's reconciliation also shows non-GAAP diluted net income attributable to common shareholders of $1.78 billion - the same rounded total as GAAP, because the gross-profit, operating-expense, interest and tax adjustments offset one another in the quarter.

The profit engine was margin, not just volume

Non-GAAP operating income was $2.15 billion, or 49.1% of revenue, up from $856 million a year earlier, as non-GAAP gross margin expanded to 58.1% from 43.9% a year earlier. Revenue also rose 17% from the fiscal fourth quarter's $3.75 billion. Cash generation matched the profit: cash flow from operations was $1.6 billion and free cash flow was $1.38 billion, against $672 million and $599 million a year earlier. The company spent the cash visibly: share repurchases were $1 billion in the quarter, dividends paid were $56 million, and cash and equivalents ended the period at $1.31 billion, down from $1.58 billion at the start of the quarter after those returns and a $570 million settlement of convertible-note transactions shown in the financing section. Chief executive Irving Tan said: "Fiscal 2027 is off to a strong start, with results exceeding expectations, driven by robust customer demand and disciplined execution." Tan added that the company is executing well through its technology transitions to meet the growing demand for storage, deepening customer relationships and extending its visibility into future demand.

The second-quarter guide is the larger beat

For the fiscal second quarter of 2027, the company guided, on a non-GAAP basis and at the midpoint of the ranges, to revenue of $5.1 billion, plus or minus $100 million, gross margin of 60% to 61%, operating expenses of $400 million to $410 million, and diluted earnings of $5.80 a share, plus or minus $0.20, on about 380 million diluted shares. The same expectation tally that framed the first quarter had analysts expecting second-quarter earnings of $4.84 a share on sales of $4.57 billion, so the midpoint guide sits $0.96 a share and about $530 million above that tally, both differences calculated by TickerGrove. The release frames the guided revenue as up 66% to 72% year over year. Chief financial officer Kris Sennesael said: "Our first quarter results demonstrate the continued momentum in our business, with robust exabyte growth and improved pricing driving another quarter of strong financial performance." Sennesael said that, at the midpoint of the ranges, the company expects second-quarter revenue of $5.1 billion, non-GAAP gross margin of 60.5% and non-GAAP EPS of $5.80.

A higher dividend, and a stock that rose after hours

The board declared a cash dividend of $0.175 a share, payable Dec. 17, 2026 to stockholders of record as of the close of business on Dec. 4, 2026; Tan described the declaration as raising the quarterly cash dividend by 17% to $0.175 a share. Shares rose 2% in extended trading on Thursday after the results and guidance were published, a reaction measured after the regular session rather than during it. What to watch next is whether the second-quarter delivery matches a guide that assumes another large step up in revenue, whether gross margin reaches the guided 60% to 61% range, and whether customer demand and pricing hold at the levels the first quarter showed. The company hosted its earnings call on Thursday at 4:30 p.m. Eastern Time; no statements from that call are verified in this article.