Western Digital Corporation (NASDAQ: WDC), a leading manufacturer in the data storage sector, released its financial results for the second quarter of fiscal 2026 following Thursday's market close. The report reveals performance metrics that outpaced analysts' consensus estimates, underscoring the firm's robust operational execution in a competitive market.
The company's top-line revenues stood at $3.02 billion for the quarter, exceeding the forecasted figure of $2.92 billion. This represents a 25% increase compared to the same period last year, marking significant growth driven by sustained demand for high-capacity storage solutions, especially hard-disk drives (HDDs).
On the profitability front, Western Digital's adjusted earnings per share reached $2.13, surpassing market expectations of $1.92. This improvement reflects strategic cost management and operational efficiencies alongside increases in revenue. Gross margin for the quarter was reported at 45.7%, or 46.1% on an adjusted basis, signaling favorable product mix and pricing power amid input cost considerations.
Operational cash flow generation was substantial, with Western Digital recording $745 million from its core business activities during the quarter. Additionally, free cash flow—a critical measure of financial flexibility—amounted to $653 million, supporting the company's ability to invest in growth initiatives and return capital to shareholders.
Irving Tan, Western Digital's Chief Executive Officer, attributed the quarter's success to disciplined operational execution that aligns with heightened demand arising from the data economy's evolution powered by artificial intelligence. He emphasized customer confidence in the company's capacity to deliver reliable, scalable, and high-capacity HDD solutions as a core factor contributing to the strong results.
Looking ahead, Western Digital provided its outlook for the fiscal third quarter, projecting revenues in the range of $3.10 billion to $3.30 billion. These projections notably exceed the $2.96 billion consensus from Benzinga Pro estimates, indicating optimism about continued market momentum.
Furthermore, adjusted earnings per share guidance for the next quarter is set between $2.15 and $2.45, again outperforming the previously forecasted $1.96. The company highlighted ongoing strengthening of its business fundamentals, attributing expected revenue growth and margin improvement to persistent data center demand and wider adoption of their large-capacity drives.
The board of directors declared a quarterly cash dividend of $0.125 per common share, payable on March 18 to shareholders recorded by March 5. This move reaffirms the firm's commitment to delivering shareholder value amid solid cash flow generation.
In response to these results, Western Digital executives planned a conference call at 4:30 p.m. ET Thursday to provide additional insights and answer investor questions. The trading session following the earnings release displayed some volatility, with shares slightly declining by about 0.29% during after-hours trading, priced at approximately $277.59 per share at publication. This reaction underscores typical market dynamics as investors digest both immediate financial outcomes and forward-looking guidance.
Market analysis tools indicate Western Digital maintains strong momentum with notable scores in quality and trending factors, reflecting its competitive positioning in the technology hardware space.
Going forward, Western Digital's ability to maintain pricing discipline, effectively pass through input costs, expand distribution channels, and execute with management discipline will remain critical to sustaining its growth trajectory in an evolving data storage landscape.