Western Digital beats Wall Street expectations for Q1 but notes supply chain disruptions
Western Digital on Thursday reported better-than-expected first quarter financial results, with growth across the cloud segment.
The company's Q1 non-GAAP earnings per share came to $2.49 on revenue of $5.1 billion, up 29% year-over-year.
Analysts were expecting earnings of $2.24 on revenue of $5.1 billion.
Western Digital changed their reported end-markets to Cloud, Client and Consumer. Cloud dominated the company's total revenue, accounting for 44% of all revenue at more than $2.2 billion. Cloud revenue was up 72% year-over-year, and the company attributed the increase to record capacity enterprise hard drive revenue and nearly 30% sequential growth in enterprise SSD revenue.
"During the quarter, Western Digital announced OptiNAND, a revolutionary technology that utilizes flash in the HDD control plane to further increase areal density with industry proven PMR technology. Next month, the company will begin volume shipments of its 20 terabyte CMR hard drives utilizing OptiNAND technology. Within enterprise SSDs, the company experienced continued success in the cloud with another successful quarter of qualifications," the company explained.
Client revenue came in at $1.85 billion while consumer revenue was $973 million in Q1. Both client revenue and consumer revenue were down compared to last quarter but were up year-over-year at 6% and 10% respectively.
Within the client business segment, the company said the flash business unit experienced growth, particularly in mobile, gaming, automotive, IOT and industrial applications.
They attributed the declines to "supply disruptions at our customers and within the company's own operations."
"In Consumer, revenue from both the flash and hard drive business units declined on a sequential basis due to supply disruptions, in addition to uneven geographic demand due to COVID lockdowns," the company said.
Western Digital expects second-quarter 2022 revenue to range from $4.70 billion to $4.90 billion and a non-GAAP EPS of between $1.95 and $2.25.
"Strong demand across diverse end markets, particularly for our cloud products, combined with Western Digital's strong innovation engine, broad routes to market and sharpened execution, enabled us to deliver solid results within our guidance range, even in the face of significant COVID impacts and supply chain disruptions," said David Goeckeler, Western Digital CEO.
"While these disruptions are transitory, the long-term opportunities for Western Digital remain unchanged as the world's digital transformation continues to accelerate. We believe that the migration to the cloud and demand for storage solutions throughout the client and consumer markets will continue to drive a huge opportunity for Western Digital and our customers."