Western Digital Corporation stock research
FY2026 Q1
Western Digital (WDC) Gross Margin — Quarter Ended Oct 3, 2025
Revenue increased compared to both the prior quarter and the same quarter a year ago, while cost of revenue also rose. Gross profit grew at a faster pace than cost of revenue, resulting in an improved gross margin for the quarter.
Gross margin takeaway
Quarter ended Oct 3, 2025 · FY2026 Q1
Revenue increased compared to both the prior quarter and the same quarter a year ago, while cost of revenue also rose. Gross profit grew at a faster pace than cost of revenue, resulting in an improved gross margin for the quarter.
- The strongest observable margin driver this quarter was the favorable relationship between revenue growth and cost of revenue growth. Revenue rose at a greater rate than cost of revenue, allowing gross profit to expand more rapidly and lift the gross margin.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, and gross margin improved. Versus the same quarter one year earlier, revenue, gross profit, and cost of revenue were all higher, and gross margin improved as well.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
43.5%
Gross profit
$1.2B
Revenue
$2.8B
Cost of revenue
$1.6B
Quarter-over-quarter change
+3.8 pts
Year-over-year change
+7.1 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 |
|---|---|---|---|---|
| Sep 27, 2024 | $2.2B | $806.0M | $1.4B | 36.4% |
| Dec 27, 2024 | $2.4B | $907.0M | $1.5B | 37.7% |
| Mar 28, 2025 | $2.3B | $912.0M | $1.4B | 39.8% |
| Oct 3, 2025 | $2.8B | $1.2B | $1.6B | 43.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 28, 2025
+3.8 pts
Year-over-year change
Sep 27, 2024
+7.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver this quarter was the favorable relationship between revenue growth and cost of revenue growth. Revenue rose at a greater rate than cost of revenue, allowing gross profit to expand more rapidly and lift the gross margin.
Compared to the immediately preceding quarter, revenue and gross profit were higher, and gross margin improved. Versus the same quarter one year earlier, revenue, gross profit, and cost of revenue were all higher, and gross margin improved as well.
The trajectory of cost of revenue as a proportion of revenue should be monitored to assess whether the margin improvement can be sustained.