WDC · 8-K · 20260805PR053305
Gross Margin Drivers
WESTERN DIGITAL CORP · 2026-08-05 · Importance 57 · Surprise 38 · No source text
Q4FY26 GAAP gross margin increased to 54.1% from 41.0% a year earlier and 50.2% in Q3FY26, expanding 1,310 basis points year over year and 390 basis points sequentially. Fiscal 2026 GAAP gross margin was 48.9%, up 1,010 basis points from 38.8% in fiscal 2025. Non-GAAP Q4FY26 gross margin was 54.4%, while non-GAAP fiscal 2026 gross margin was 49.1%.
Key facts
- GAAP Q4FY26 gross margin: 54.1%, up 1310 basis points year-over-year and up 390 basis points sequentially source
- Non-GAAP Q4FY26 gross margin: 54.4%, up 1310 basis points year-over-year and up 390 basis points sequentially source
- Fiscal year 2026 GAAP gross margin: 48.9%, up 1010 basis points year-over-year source
- Company expects Q1FY27 non-GAAP gross margin guidance to exclude stock-based compensation expense totaling approximately $10 million source
- Q4FY26 cost of revenue: $1,719 million source
- Q4FY26 gross profit: $2,028 million source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | positive | realized | +13.1% | GAAP Q4FY26 gross margin: 54.1%, up 1310 basis points year-over-year and up 390 basis points sequentially |
| margin | positive | realized | +13.1% | Non-GAAP Q4FY26 gross margin: 54.4%, up 1310 basis points year-over-year and up 390 basis points sequentially |
| margin | positive | realized | +10.1% | Fiscal year 2026 GAAP gross margin: 48.9%, up 1010 basis points year-over-year |
| operating_income | negative | probable | -0.1% | Company expects Q1FY27 non-GAAP gross margin guidance to exclude stock-based compensation expense totaling approximately $10 million |
| operating_income | positive | realized | — | Q4FY26 gross profit: $2,028 million |