Western Digital Corporation stock research
FY2024 Q2
Western Digital (WDC) Gross Margin — Quarter Ended Dec 29, 2023
Revenue increased substantially from the prior quarter, while cost of revenue decreased, leading to a higher gross profit but a lower gross margin. Compared with the same quarter last year, revenue was higher, gross profit was lower, and gross margin weakened.
Gross margin takeaway
Quarter ended Dec 29, 2023 · FY2024 Q2
Revenue increased substantially from the prior quarter, while cost of revenue decreased, leading to a higher gross profit but a lower gross margin. Compared with the same quarter last year, revenue was higher, gross profit was lower, and gross margin weakened.
- The most observable driver of gross margin was the relationship between revenue and cost of revenue. Revenue rose sharply from the prior quarter while cost of revenue declined, which expanded gross profit but compressed the margin percentage.
- Gross margin of the current quarter was lower than both the immediate prior quarter and the same quarter a year ago. Revenue increased compared with both periods, but gross profit was lower than the year-ago level.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
7.6%
Gross profit
$347.0M
Revenue
$4.6B
Cost of revenue
$2.5B
Quarter-over-quarter change
-12.9 pts
Year-over-year change
-9.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $2.8B | $286.0M | $2.5B | 10.2% |
| Jun 30, 2023 | -$3.4B | -$404.0M | -$3.0B | 11.9% |
| Sep 29, 2023 | $1.2B | $244.0M | $2.7B | 20.4% |
| Dec 29, 2023 | $4.6B | $347.0M | $2.5B | 7.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 29, 2023
-12.9 pts
Year-over-year change
Dec 30, 2022
-9.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of gross margin was the relationship between revenue and cost of revenue. Revenue rose sharply from the prior quarter while cost of revenue declined, which expanded gross profit but compressed the margin percentage.
Gross margin of the current quarter was lower than both the immediate prior quarter and the same quarter a year ago. Revenue increased compared with both periods, but gross profit was lower than the year-ago level.
Monitor whether the revenue growth relative to cost of revenue can sustain or improve the gross margin in upcoming quarters.