Western Digital Reports Revenue of $2.7 bn in April-June, Expects Positive Market Dynamics Ahead

Memory chipmaker Western Digital released its financial report for the fourth quarter of fiscal year 2023, indicating a revenue of $2.7 billion, down 5 percent sequentially (QoQ). The company’s performance was impacted by a net loss of $715 million during April-June 2023, compared to a net loss of $572 million in the preceding quarter.
The revenue breakdown for the fourth quarter revealed a decrease in Cloud revenue by 18 percent (QoQ) to $994 million. However, there were positive signs in other sectors with Client revenue increasing by 6 percent to $1,035 million and Consumer revenue rising by 3 percent (QoQ) to $643 million.

Looking at the overall fiscal year 2023 performance, San Jose, CA-based Western Digital reported a total revenue of $12.3 billion, marking a significant decline of 34 percent compared to the previous year. The revenue decrease affected all sectors, with Cloud revenue reaching $5,252 million (down 34 percent), Client revenue at $4,328 million (down 39 percent), and Consumer revenue at $2,738 million (down 26 percent).
Explaining the results for the fiscal fourth quarter, Western Digital cited specific reasons for the changes in each segment. Cloud revenue’s sequential decline was attributed to a decrease in capacity enterprise drive shipments, while the year-over-year decrease was primarily due to declines in both hard drive and flash product shipments.

The increase in Client revenue was driven by growth in bit shipments for gaming consoles but was offset by year-over-year declines in flash pricing and lower client SSD and hard drive unit shipments for PC applications.

For the Consumer segment, the sequential increase was primarily due to higher retail SSD shipments, but the year-over-year decrease resulted from price declines in Flash and lower retail hard drive shipments.

Despite the challenging year, David Goeckeler, Western Digital’s CEO, expressed optimism about the company’s future. He mentioned that several indicators pointed to improving Flash market dynamics, with Client and Consumer markets returning to growth, inventories stabilizing, content per unit increasing, and price declines moderating.

Goeckeler emphasized that Western Digital had continued to optimize its operations and execute its innovative product roadmap, positioning itself for greater profitability when demand rebounds for hard drives and flash storage.

In line with this positive outlook, Western Digital is expecting its fiscal first quarter 2024 revenue to be in the range of $2.55 billion to $2.75 billion.

The company’s statement comes in the context of a broader industry recovery, with other major players like Samsung Electronics and SK Hynix also expressing confidence that the worst is behind the memory-chip industry.

However, the company also acknowledged the challenges posed by market conditions and revealed its plan to significantly reduce capital expenditure in fiscal year 2024.

Rival Seagate Technology also anticipated downbeat revenue for its first quarter, attributing the decline to weakness in the major market of China and lower technology spending.

Seagate Technology, one of the biggest makers of computer hard drives, earlier said it expected current-quarter revenue to be $1.55 billion, plus or minus $150 million. In the quarter to June 30, Seagate’s revenue dropped by nearly 40 percent to $1.60 billion.

With market dynamics improving, Western Digital is well-positioned to capitalize on long-term growth opportunities in data storage, spanning from client devices to the edge and the cloud.