The cloud segment allowed Western Digital to increase revenue by 49% and exceed investor expectations for profit

Western Digital’s revenue in the last quarter, which was the company’s first in the 2025 fiscal year, increased by 49% to $4.1 billion, and net income grew by 26% to $481 million, exceeding investor expectations. Moreover, in a sequential comparison, the company’s net profit grew by more than 17 times.

Image source: Western Digital

It’s important to understand that this supplier is highly dependent on the solid-state memory segment, since SSD shipments accounted for 46% of its revenue in the last quarter. At the same time, it cannot be argued that the state of the solid-state memory market worsened the company’s reporting. In fact, the profit margin in WD’s solid-state business even exceeded that of the HDD segment, amounting to 38.9% versus 38.1%. The company’s overall profit margin rose 2.2 points sequentially to 38.5%, with year-over-year growth overall measured at 34.4 percentage points.

In the solid-state memory segment, gross shipments in capacity terms grew sequentially by 14%, and average drive costs per GB increased by 4% or 6%, depending on the calculation method. In the HDD segment, capacity shipments increased 14% sequentially and the average drive cost was $164. Revenue from sales of hard drives increased by 85% year-on-year, while in the solid-state segment it grew only by 21%.

In its report, Western Digital more readily operates on the indicators of three market segments in terms of the specific end use of its products: cloud, client and consumer. The cloud segment accounted for more than half of all revenue ($2.2 billion); in annual comparison, it increased revenue by 2.5 times. The client segment added only 5.4% to $1.2 billion, and revenue in the consumer electronics segment generally decreased year-over-year from $731 to $678 million. The cloud segment also showed sequential revenue growth of 17%, while the other two showed relative stability.

Unlike its main competitor, Western Digital continues to publish statistics on the number of hard drives shipped. In the cloud segment, it was able to increase them year-on-year from 5.3 to 9 million units, the client sector dropped from 2.6 to 2.3 million hard drives, and in the consumer electronics segment, deliveries also decreased from 2.5 to 2.1 million things. In other words, the overall increase in HDD shipments from 10.4 to 13.2 million units is driven solely by demand for hard drives from cloud clients.

For the current fiscal quarter, Western Digital expects to generate revenue of $4.2 billion to $4.4 billion and maintain profit margins in the range of 36.5% to 38.5%. Specific earnings per share should be between $1.75 and $2.05, the center of the range just below the $1.93 analysts were citing. The company’s success in the cloud systems market contributed to the stock price rising by 9.36% after the close of the main trading session.