Western Digital Sets the Pace for a Strong Fiscal Year: Q1 2027 Delivers Robust Growth and Industry-Leading Innovation
Western Digital, a leading provider of data storage solutions, has kicked off fiscal year 2027 with a bang, reporting a 55% year-over-year revenue growth in its first quarter. The company's strong execution across the business and results ahead of expectations have set the tone for a promising year.
"Q1 marked a solid start to fiscal 2027," said Irving Tan, WD's Chief Executive Officer, during the company's conference call on October 22nd. "Our revenue grew 55% year-over-year, while gross and operating margins expanded meaningfully to 58% and 49%, respectively."
The company generated $1.4 billion in free cash flow, with earnings per share (EPS) growing a staggering 161% year-over-year. Western Digital's robust customer demand, operational discipline, and successful execution of its product and technology roadmap have contributed to these impressive results.
One of the key highlights from the quarter is the growth of storage demand beyond the company's core cloud and hyperscale customers into enterprise environments and new end markets such as NeoCloud and AI Frontier labs. Western Digital's customers are making longer-term infrastructure investments, planning ahead for the next decade, driven by the increasing value of data.
A recent IDC survey of over 750 companies across several countries found that organizations are storing more data, retaining it for longer periods, and increasingly putting archive data back to work. At the core of these trends is continued data growth, fueled by the expansion of cloud environments and the increasing storage demands from AI.
Western Digital believes that AI is fundamentally a data system, where every workload creates more data that must be stored, managed, and accessed in a scalable and economical manner. As AI adoption continues to expand across industries worldwide, data creation and storage requirements are expanding with it.
The company's industry-leading technology and innovative products have been executed well against its roadmap, transitioning customers to higher capacity drives. Western Digital is on track to transition customers to its next generation ePMR platform, delivering up to 40 terabytes of capacity, which is expected to represent close to 30% of nearline shipments by the second quarter and 50% by the third quarter of fiscal 2027.
The company's volume production of its latest ePMR platform has started strong, with customer adoption progressing ahead of prior transitions. Western Digital is also on schedule to begin volume shipments of its first generation HAMR product in the first half of calendar year 2027 and expects to begin qualifications with two additional customers during the same period.
