Western Digital FY2026 10-K: Revenue up 36%, $6.5B Sandisk gain, debt slashed to $1.06B
WDC has more than doubled off its 52-week low of $73.14.
Summary
Western Digital's FY2026 10-K shows revenue up 36% to $12.9B, gross margin at 48.9%, and net income of $9.4B including a $6.5B Sandisk gain. Debt was cut to $1.06B and $2.59B was returned via buybacks.
Key Events · Earnings and Guidance · WDC
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FY2026 Revenue and Margin Surge
Revenue rose 36% to $12.919 billion, with Cloud revenue up 38% to $11.49 billion. Gross margin expanded 10.1 points to 48.9% on higher volumes, better cost structure, and improved pricing.
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Net Income Boosted by Sandisk Gain
Net income of $9.424 billion includes a $6.498 billion mark-to-market gain on the retained Sandisk interest, which was fully monetized during the year. Excluding this non-cash item, operating income was $4.453 billion.
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Aggressive Debt Reduction
Total debt fell from $4.749 billion to $1.060 billion. The company settled $858 million of convertible notes for $860 million cash plus 21.3 million shares, and redeemed all senior notes. Remaining $710 million convertible notes are classified as current.
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Shareholder Returns
Repurchased 14.7 million shares for $2.59 billion during the year, with $3.26 billion remaining under authorization. Declared a $0.15 per share dividend payable September 17, 2026.
Analysis · WDC · Technology
Western Digital's annual report confirms a transformative fiscal year. Revenue jumped 36% to $12.9 billion with gross margin expanding over 10 points to 48.9%, driven by cloud demand for high-capacity HDDs. Net income of $9.4 billion includes a $6.5 billion non-cash mark-to-market gain on the retained Sandisk stake, which was fully monetized during the year. The company aggressively deleveraged, cutting total debt from $4.75 billion to $1.06 billion through convertible note settlements and debt-for-equity exchanges, while returning $2.59 billion via buybacks. Remaining convertible notes are now current liabilities, with $710 million principal outstanding and conversion rights active through September 2026. The balance sheet is dramatically stronger, with shareholders' equity up 67% to $8.86 billion.
At the time of this filing, WDC was trading at $508.70 on NASDAQ in the Technology sector, with a market capitalization of approximately $175.4B. The 52-week trading range was $73.14 to $799.87. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.