Western Digital Corporation stock research
FY2025 Q1
Western Digital (WDC) Gross Margin — Quarter Ended Sep 27, 2024
Revenue and gross profit both increased compared to the prior quarter and the same quarter a year ago, while cost of revenue rose sequentially but fell sharply year-over-year. Gross margin improved from the prior quarter and from the year-ago period, reflecting a more favorable relationship between revenue and cost of revenue.
Gross margin takeaway
Quarter ended Sep 27, 2024 · FY2025 Q1
Revenue and gross profit both increased compared to the prior quarter and the same quarter a year ago, while cost of revenue rose sequentially but fell sharply year-over-year. Gross margin improved from the prior quarter and from the year-ago period, reflecting a more favorable relationship between revenue and cost of revenue.
- The strongest observable driver of the gross margin change is the shift in the relative growth rates of revenue and cost of revenue. Revenue increased from the prior quarter while cost of revenue rose at a slower pace, and versus the year-ago quarter revenue grew substantially while cost of revenue declined.
- Compared to the immediately preceding quarter, gross margin improved, driven by higher revenue and a smaller increase in cost of revenue. Compared to the same quarter one year earlier, gross margin strengthened significantly, as revenue increased and cost of revenue decreased.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
36.4%
Gross profit
$806.0M
Revenue
$2.2B
Cost of revenue
$1.4B
Quarter-over-quarter change
+69.5 pts
Year-over-year change
+16.0 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 |
|---|---|---|---|---|
| Sep 29, 2023 | $1.2B | $244.0M | $2.7B | 20.4% |
| Dec 29, 2023 | $4.6B | $347.0M | $2.5B | 7.6% |
| Mar 29, 2024 | -$1.5B | $485.0M | $1.2B | -33.0% |
| Sep 27, 2024 | $2.2B | $806.0M | $1.4B | 36.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 29, 2024
+69.5 pts
Year-over-year change
Sep 29, 2023
+16.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the gross margin change is the shift in the relative growth rates of revenue and cost of revenue. Revenue increased from the prior quarter while cost of revenue rose at a slower pace, and versus the year-ago quarter revenue grew substantially while cost of revenue declined.
Compared to the immediately preceding quarter, gross margin improved, driven by higher revenue and a smaller increase in cost of revenue. Compared to the same quarter one year earlier, gross margin strengthened significantly, as revenue increased and cost of revenue decreased.
The filing notes that the company has made cash payments for tax settlements and expects to pay a remaining balance within twelve months, which may be relevant to monitor for potential impact on liquidity and operations.