Western Digital 2025 Q3 Earnings Strong Performance as Net Income Surges 285.2%

Western Digital (WDC) reported its fiscal 2025 Q3 earnings on May 02nd, 2025. Western Digital's third-quarter results exceeded expectations, demonstrating robust growth across key metrics. The company reported a revenue increase of 30.9% to $2.29 billion, surpassing analyst forecasts. Additionally, Western Digital provided an optimistic guidance for the fiscal fourth quarter, projecting revenue of approximately $2.45 billion, with non-GAAP diluted earnings per share expected around $1.45, reflecting stability amid market dynamics. This aligns with the company's strategic positioning and long-term agreements, offering a favorable outlook for investors.

Revenue

The total revenue of Western Digital increased by 30.9% to $2.29 billion in 2025 Q3, up from $1.75 billion in 2024 Q3.

Earnings/Net Income

Western Digital's EPS rose 317.1% to $1.46 in 2025 Q3 from $0.35 in 2024 Q3, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $520 million in 2025 Q3, marking 285.2% growth from $135 million in 2024 Q3. This performance reflects strong earnings momentum.

Post-Earnings Price Action Review

The earnings report metrics have shown particular patterns in Western Digital's stock price from May 2, 2020, to May 2, 2025. Revenue, net income, and EPS displayed similar trends with short-term volatility, as the 3-Day win rate stood at 51.24%, rising to 57.13% over a 30-Day period. Returns followed a similar trajectory, with a 3-Day return of 0.21%, progressing to a 30-Day return of 1.67%. Notably, the maximum return seen was 5.48%, occurring 79 days post-earnings report. These findings suggest that while immediate market reactions to earnings reports are generally subdued, longer-term investors could benefit from more substantial gains as the market processes new financial information. This indicates that short-term volatility is prevalent, but positive returns become more likely as the investment horizon lengthens.

CEO Commentary

Irving Tan, CEO of Western Digital, emphasized the company's strong performance in the fiscal third quarter, achieving revenue at the high end of guidance and gross margins exceeding 40%. He noted that despite geopolitical uncertainties and tariff dynamics, the exponential growth of data remains a constant factor driving demand for Hard Disk Drives (HDDs). Tan expressed confidence in Western Digital's ability to meet mass storage needs through its diverse product portfolio and highlighted the importance of long-term agreements with hyperscale customers, which provide visibility and stability in demand through mid-2026. He conveyed a cautiously optimistic outlook, acknowledging the challenges while focusing on innovation and market positioning.

Guidance

For the fiscal fourth quarter of 2025, Western Digital expects revenue to be approximately $2.45 billion, plus or minus $150 million, with a non-GAAP gross margin projected between 40% and 41%. The company anticipates operating expenses in the range of $330 million to $340 million and non-GAAP diluted earnings per share of $1.45, plus or minus $0.20, reflecting a stable outlook amid ongoing market dynamics.

Additional News

Western Digital has recently completed the planned separation of its Flash business, a move aimed at enhancing strategic focus and operational efficiency. In C-level changes, interim CFO Don Bennett has taken over responsibilities, succeeding Wissam Jabre. Furthermore, Western Digital is actively participating in a rare earth element recovery program to strengthen U.S. supply chains and address environmental concerns. These initiatives reflect the company's commitment to innovation and sustainability, aligning with broader industry trends and investor expectations. The separation is expected to streamline operations and unlock new growth opportunities, positioning Western Digital favorably within the competitive landscape.