Western Digital Corporation stock research
FY2026 Q2
Western Digital (WDC) Gross Margin — Quarter Ended Jan 2, 2026
Revenue and gross profit both increased from the prior quarter and from the same quarter a year ago, while cost of revenue was stable compared to the prior quarter and slightly higher than the year-ago quarter. Gross margin improved sequentially and year-over-year, driven by a larger gross profit relative to revenue.
Gross margin takeaway
Quarter ended Jan 2, 2026 · FY2026 Q2
Revenue and gross profit both increased from the prior quarter and from the same quarter a year ago, while cost of revenue was stable compared to the prior quarter and slightly higher than the year-ago quarter. Gross margin improved sequentially and year-over-year, driven by a larger gross profit relative to revenue.
- The relationship between revenue and cost of revenue shifted favorably: revenue grew while cost of revenue remained stable versus the prior quarter, and grew at a slower pace than revenue versus the year-ago quarter, allowing gross profit to expand and gross margin to rise.
- Compared to the immediately preceding quarter, gross margin was higher; compared to the same quarter one year earlier, gross margin was also higher, reflecting sustained improvement.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.7%
Gross profit
$1.4B
Revenue
$3.0B
Cost of revenue
$1.6B
Quarter-over-quarter change
+2.2 pts
Year-over-year change
+8.1 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 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% |
| Jan 2, 2026 | $3.0B | $1.4B | $1.6B | 45.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Oct 3, 2025
+2.2 pts
Year-over-year change
Dec 27, 2024
+8.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship between revenue and cost of revenue shifted favorably: revenue grew while cost of revenue remained stable versus the prior quarter, and grew at a slower pace than revenue versus the year-ago quarter, allowing gross profit to expand and gross margin to rise.
Compared to the immediately preceding quarter, gross margin was higher; compared to the same quarter one year earlier, gross margin was also higher, reflecting sustained improvement.
Monitor whether cost of revenue remains stable as revenue changes, given its direct influence on gross margin.