Western Digital Corporation stock research
FY2025 Q2
Western Digital (WDC) Gross Margin — Quarter Ended Dec 27, 2024
Revenue increased from the previous quarter, and gross profit rose at a faster pace, resulting in a higher gross margin. Compared to the same quarter last year, revenue was lower but gross profit was substantially higher, as cost of revenue declined markedly, leading to a marked improvement in gross margin.
Gross margin takeaway
Quarter ended Dec 27, 2024 · FY2025 Q2
Revenue increased from the previous quarter, and gross profit rose at a faster pace, resulting in a higher gross margin. Compared to the same quarter last year, revenue was lower but gross profit was substantially higher, as cost of revenue declined markedly, leading to a marked improvement in gross margin.
- The strongest observable driver is the year-over-year reduction in cost of revenue relative to the decline in revenue. This shift allowed gross profit to increase substantially despite lower revenue.
- Compared to the prior quarter, gross margin improved as gross profit increased faster than cost of revenue. Compared to the same quarter one year ago, gross margin strengthened markedly due to a larger proportional decline in cost of revenue and a significant increase in gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
37.7%
Gross profit
$907.0M
Revenue
$2.4B
Cost of revenue
$1.5B
Quarter-over-quarter change
+1.2 pts
Year-over-year change
+30.1 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 |
|---|---|---|---|---|
| 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% |
| Dec 27, 2024 | $2.4B | $907.0M | $1.5B | 37.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 27, 2024
+1.2 pts
Year-over-year change
Dec 29, 2023
+30.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the year-over-year reduction in cost of revenue relative to the decline in revenue. This shift allowed gross profit to increase substantially despite lower revenue.
Compared to the prior quarter, gross margin improved as gross profit increased faster than cost of revenue. Compared to the same quarter one year ago, gross margin strengthened markedly due to a larger proportional decline in cost of revenue and a significant increase in gross profit.
Monitor the resolution of IRS tax matters and their impact on cash flows, as mentioned in the filing context.