Western Digital Revenue Jumps 55% to $4.4B on Cloud Storage

Western Digital said on 22 October 2026 that revenue for its fiscal first quarter of 2027 rose 55% year over year to $4.38 billion, and it expects revenue to rise 66% to 72% in the current quarter. The company’s earnings deck, titled “Growth Driven by Cloud and AI Workloads” on its end-market slide, puts the Cloud end market at 88% of revenue.

Revenue grew faster than the storage it shipped. Exabytes shipped rose to 248 from 204 a year earlier, about 22%, while revenue rose 55%. By our arithmetic, revenue per exabyte rose about 28%, to about $17.7 million from about $13.8 million. Chief financial officer Kris Sennesael credited “robust exabyte growth and improved pricing” for the quarter.

Business Pill · CONCENTRATION

A short explainer on concentration: when a few big pieces make up most of a total. It teaches the general idea only and says nothing about any company in this piece.

What Western Digital Reported

The figures below come from the company’s press release, filed with an 8-K on 22 October 2026, for the quarter ended 2 October 2026:

• Revenue. $4,381 million, up 55% from $2,818 million a year earlier and up 17% from $3,747 million in the prior quarter.
• Margins. Non-GAAP gross margin of 58.1%, up 1,420 basis points year over year; non-GAAP operating margin of 49.1%.
• Earnings. Non-GAAP diluted earnings per share of $4.64, up 161%; GAAP diluted earnings per share of $4.63.
• Cash. Cash flow from operations of $1.60 billion and free cash flow of $1.38 billion; the deck gives a free cash flow margin of 31.4%.
• Dividend. The quarterly dividend rises 17% to $0.175 per share.

Chief executive Irving Tan said the results reflected “robust customer demand and disciplined execution” and that the company is “executing well through our technology transitions to meet the growing demand for storage.”

The Guidance

For the fiscal second quarter of 2027, Western Digital guided to revenue of $5.1 billion, plus or minus $100 million, non-GAAP gross margin of 60% to 61% and non-GAAP earnings per share of $5.80, plus or minus $0.20. The release says that implies revenue up 66% to 72% year over year; the deck puts revenue in the same quarter a year earlier at $3,017 million.

Cloud, Exabytes and Price

The deck shows the Cloud end market at 89% of revenue in each of the four quarters of fiscal 2026 and 88% in the latest quarter, with Client at 7% and Consumer at 5%. Nearline exabytes rose to 223 from 183 a year earlier, and non-nearline exabytes to 25 from 21. The release lists “concentration of revenue in the company’s Cloud end market and among the company’s top customers” among its risk factors.

The table sets revenue against exabytes for five quarters. Revenue per exabyte, our arithmetic, rose in each quarter.

Revenue, cloud share and exabytes from Western Digital’s fiscal first quarter 2027 earnings deck, 22 October 2026. Revenue per exabyte is our arithmetic: revenue divided by total exabytes shipped (nearline plus non-nearline). It is a rough average, not a price Western Digital reports.

The Memory Thread in Our Coverage

• Our piece on the Kospi sell-off covers BofA’s view of Samsung and SK Hynix valuations and, in its update, Jensen Huang telling CNBC that a memory glut is unlikely by 2029.
• Our piece on Micron covers its view that AI context grows 30 times a year and its plan for HBM6 by 2030.
• Our piece on the off-balance-sheet commitments covers the about $3.56 trillion of commitments that eight AI companies list in their filings, by our arithmetic.

The Structural Read

As we read it, the business is now almost entirely one customer group: the deck puts the Cloud end market at 88% of revenue, and the release lists concentration in Cloud and among top customers as a risk.

As we read it, margins moved with price: non-GAAP gross margin rose 1,420 basis points to 58.1%, and the company guides to 60% to 61% for the current quarter.

As we read it, the guide carries the trend forward: $5.1 billion of revenue at the midpoint, which the release puts at 66% to 72% above a year earlier.

Three Implications

FOR STORAGE BUYERS The deck shows nearline exabytes up to 223 from 183 a year earlier while revenue per exabyte rose, by our arithmetic; as we read it, data-centre customers are buying more capacity at higher average prices.

FOR THE MEMORY THREAD Western Digital’s results land in a week of memory-stock swings covered in our Kospi piece, where Jensen Huang told CNBC that a memory glut is unlikely by 2029.

FOR INVESTORS The company raised its quarterly dividend 17% to $0.175 and reported free cash flow of $1.38 billion; the release lists Cloud and top-customer concentration among its risks.

The Business Engineer Lens

This story maps onto the Business Engineer framework The AI Capex Map.

The framework sets out to map the financing of AI: “How the money flows, where it cracks, what it buys, who can absorb it, and what happens when revenue can’t catch up.”

As we read it, Western Digital sits on the “what it buys” side: Cloud is 88% of its revenue. The framework was published in May 2026 and does not discuss Western Digital.

What Is Not Established

Western Digital does not report revenue per exabyte; our figure divides total revenue by total exabytes shipped and mixes product types, so it is a rough average. The release does not name its top customers or say how much of Cloud demand comes from AI workloads beyond the deck’s slide title. We have not read the earnings call. Nothing here is investment advice.

The Bottom Line

Western Digital’s revenue rose 55% to $4.38 billion in its fiscal first quarter, with the Cloud end market at 88% of revenue, and the company guided to $5.1 billion for the current quarter. Exabytes shipped rose about 22%, so by our arithmetic revenue per exabyte rose about 28%.