Highlights

  • Western Digital increased quarterly revenue 55% YoY as stronger exabyte demand and improved pricing supported its storage business.
  • The company expects further revenue growth in 2QFY27, alongside a higher non-GAAP gross margin than the latest quarter.
  • Its 34TB UltraSMR drives provide approximately 21% more capacity than comparable 28TB drives within the same physical footprint.
  • Management raised the quarterly dividend 17% while continuing technology transitions and efforts to broaden relationships with storage customers.

Storage capacity and profitability are advancing together at Western Digital Corporation (NASDAQ:WDC), which supplies infrastructure for hyperscalers, cloud providers and enterprises. October results showed stronger demand and pricing, while the company's latest drive technology aims to help customers add capacity within existing facilities. Shares closed at USD 356.13, up 3.63%, after the market session ended on 26 October 2026. The operating story combines near-term financial growth with a practical infrastructure priority: storing more information without expanding hardware footprints proportionately.

Quarterly Growth Carries Into a Higher Outlook

Revenue reached USD 4.38bn in 1QFY27, ended 2 October, increasing 55% YoY and 17% QoQ. GAAP operating margin rose to 46.7%, while diluted earnings were USD 4.63 per share. Operating cash flow totalled USD 1.60bn and free cash flow was USD 1.38bn.

For 2QFY27, management expects revenue of USD 5.1bn, plus or minus USD 100mn, and non-GAAP gross margin of 60%–61%. Non-GAAP earnings guidance is USD 5.80 per share, plus or minus USD 0.20. The board also increased the quarterly cash dividend to USD 0.175 per share. These figures describe the next-quarter outlook and declared distribution separately from completed operating results.

Drive Density Addresses Physical Infrastructure Limits

The 34TB Ultrastar HC6100 UltraSMR and 28TB Ultrastar HC5090 conventional magnetic recording drives use similar eleven-disk hardware platforms. The higher-capacity option stores approximately 21% more data in the same drive footprint. That difference can reduce the number of devices needed for a given storage target, with corresponding effects on enclosure requirements and rack utilisation.

Western Digital's worked example for 10 petabytes uses 295 higher-capacity drives rather than 358 conventional drives, an approximately 18% reduction in device count. The example illustrates deployment economics rather than a disclosed customer order. UltraSMR also requires changes to software and the storage stack, making implementation requirements part of the technology transition.

Customer Expansion Links Capacity to Deployment Needs

In September, the company outlined an infrastructure approach centred on retaining and accessing the growing volumes of data generated by AI. Its enterprise portfolio targets hyperscalers, cloud service providers, emerging cloud operators and data-centre customers, with capacity, power efficiency and operating economics forming the main design considerations.

That approach places storage deployment alongside computing requirements in customer planning. Management's stated priorities include deepening customer relationships, entering additional areas of the market and improving visibility into future demand. Higher-density drives are one part of that programme; reliable operation at scale and the ability to manage stored information remain part of the wider offering.

The financial outlook therefore sits alongside continued execution of product transitions. Management expects further growth, while customers adopting UltraSMR must accommodate its software requirements. The latest disclosures connect those commercial and technical priorities without assigning a separate revenue forecast to an individual drive model.