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Western Digital Corp. (NASDAQ:WDC)

This company has been moved to the archive! The financial data has not been updated since February 12, 2024.

Common-Size Income Statement
Quarterly Data

Western Digital Corp., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Dec 29, 2023 Sep 29, 2023 Jun 30, 2023 Mar 31, 2023 Dec 30, 2022 Sep 30, 2022 Jul 1, 2022 Apr 1, 2022 Dec 31, 2021 Oct 1, 2021 Jul 2, 2021 Apr 2, 2021 Jan 1, 2021 Oct 2, 2020 Jul 3, 2020 Apr 3, 2020 Jan 3, 2020 Oct 4, 2019 Jun 28, 2019 Mar 29, 2019 Dec 28, 2018 Sep 28, 2018 Jun 29, 2018 Mar 30, 2018 Dec 29, 2017 Sep 29, 2017
Revenue, net 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenue -83.77 -96.40 -96.56 -89.80 -83.01 -73.74 -68.09 -73.04 -67.25 -67.04 -68.17 -73.63 -75.65 -76.95 -74.74 -75.93 -77.92 -81.24 -87.20 -84.24 -75.34 -66.91 -63.81 -61.56 -62.28 -63.08
Gross profit 16.23% 3.60% 3.44% 10.20% 16.99% 26.26% 31.91% 26.96% 32.75% 32.96% 31.83% 26.37% 24.35% 23.05% 25.26% 24.07% 22.08% 18.76% 12.80% 15.76% 24.66% 33.09% 36.19% 38.44% 37.72% 36.92%
Research and development -14.64 -15.67 -17.14 -16.98 -16.83 -14.78 -13.21 -13.06 -11.90 -11.44 -12.15 -13.42 -13.57 -14.15 -12.74 -13.49 -13.65 -14.21 -14.39 -14.81 -12.73 -11.46 -11.28 -12.01 -11.79 -11.43
Selling, general and administrative -6.53 -7.53 -8.65 -8.63 -8.05 -6.61 -5.87 -6.41 -5.77 -5.76 -6.04 -6.94 -6.72 -6.53 -6.27 -6.73 -7.04 -7.55 -8.23 -9.61 -7.30 -7.08 -6.88 -7.50 -7.14 -7.03
Employee termination, asset impairment, and other -0.79 -2.07 -1.98 -1.43 -2.45 -0.64 -0.42 -0.09 -0.04 -0.36 0.08 1.64 -0.05 -0.59 -0.16 -0.19 -0.21 -0.20 -0.66 -2.07 -0.47 -0.91 -1.56 -0.70 -0.90 -1.00
Business separation costs -1.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Operating expenses -23.15% -25.27% -27.77% -27.04% -27.33% -22.03% -19.50% -19.56% -17.71% -17.56% -18.11% -18.71% -20.34% -21.26% -19.17% -20.41% -20.90% -21.96% -23.28% -26.48% -20.51% -19.45% -19.72% -20.21% -19.83% -19.46%
Operating income (loss) -6.93% -21.67% -24.33% -16.84% -10.33% 4.23% 12.41% 7.40% 15.04% 15.40% 13.72% 7.66% 4.01% 1.78% 6.09% 3.66% 1.18% -3.19% -10.48% -10.72% 4.16% 13.64% 16.47% 18.23% 17.90% 17.47%
Interest income 0.40 0.29 0.34 0.36 0.10 0.05 0.04 0.02 0.02 0.04 0.02 0.05 0.05 0.05 0.05 0.14 0.19 0.30 0.39 0.35 0.35 0.30 0.27 0.32 0.26 0.31
Interest expense -3.56 -3.56 -3.33 -2.85 -2.35 -1.87 -1.66 -1.71 -1.57 -1.54 -1.63 -1.96 -2.05 -2.14 -2.03 -2.37 -2.48 -3.02 -3.22 -3.21 -2.79 -2.31 -2.23 -3.19 -3.69 -3.96
Other income (expense), net 1.55 0.15 0.00 0.46 0.19 -0.16 0.49 0.27 -0.12 0.04 0.00 0.27 0.15 0.23 0.21 -0.34 0.17 0.05 0.28 0.60 0.19 -0.04 -0.27 -17.91 0.04 -0.12
Interest and other income (expense), net -1.62% -3.13% -2.99% -2.03% -2.06% -1.98% -1.13% -1.42% -1.68% -1.47% -1.61% -1.64% -1.85% -1.86% -1.77% -2.56% -2.13% -2.67% -2.56% -2.26% -2.24% -2.05% -2.23% -20.79% -3.39% -3.76%
Income (loss) before taxes -8.54% -24.80% -27.32% -18.87% -12.39% 2.25% 11.29% 5.98% 13.37% 13.94% 12.11% 6.02% 2.16% -0.08% 4.32% 1.10% -0.94% -5.87% -13.04% -12.98% 1.91% 11.60% 14.25% -2.55% 14.51% 13.70%
Income tax (expense) benefit -0.92 -0.11 0.56 -1.53 -1.96 -1.53 -4.64 -5.41 -1.70 -1.86 0.53 -1.26 -0.58 -1.45 -0.86 -0.69 -2.34 -0.97 7.62 -2.83 -13.42 -1.43 0.53 3.77 -29.93 -0.56
Net income (loss) -9.47% -24.91% -26.76% -20.41% -14.35% 0.72% 6.65% 0.57% 11.67% 12.08% 12.64% 4.76% 1.57% -1.53% 3.45% 0.41% -3.28% -6.83% -5.42% -15.81% -11.50% 10.16% 14.77% 1.22% -15.42% 13.14%
Cumulative dividends allocated to preferred shareholders -0.46 -0.55 -0.56 -0.32 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income (loss) attributable to common shareholders -9.93% -25.45% -27.32% -20.73% -14.35% 0.72% 6.65% 0.57% 11.67% 12.08% 12.64% 4.76% 1.57% -1.53% 3.45% 0.41% -3.28% -6.83% -5.42% -15.81% -11.50% 10.16% 14.77% 1.22% -15.42% 13.14%

Based on: 10-Q (reporting date: 2023-12-29), 10-Q (reporting date: 2023-09-29), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-30), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-K (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02), 10-Q (reporting date: 2021-01-01), 10-Q (reporting date: 2020-10-02), 10-K (reporting date: 2020-07-03), 10-Q (reporting date: 2020-04-03), 10-Q (reporting date: 2020-01-03), 10-Q (reporting date: 2019-10-04), 10-K (reporting date: 2019-06-28), 10-Q (reporting date: 2019-03-29), 10-Q (reporting date: 2018-12-28), 10-Q (reporting date: 2018-09-28), 10-K (reporting date: 2018-06-29), 10-Q (reporting date: 2018-03-30), 10-Q (reporting date: 2017-12-29), 10-Q (reporting date: 2017-09-29).

The financial performance is characterized by extreme volatility in margins, reflecting a cyclical trend in profitability. The common-size analysis reveals significant fluctuations in the cost of revenue, which directly drive the instability of both operating and net income over the observed period.

Gross Profitability and Cost of Revenue
Gross margins exhibit a cyclical pattern of contraction and expansion. From late 2017 to early 2018, gross profit remained stable between 36% and 38%. This was followed by a sharp decline in 2019, with margins dropping to a low of 12.80% as the cost of revenue peaked at 87.20%. A recovery period occurred through 2021, where margins returned to the 32% range. However, a second and more severe compression took place throughout 2022 and 2023, with gross profit reaching a critical low of 3.44% in June 2023 before beginning a recovery to 16.23% by December 2023.
Operating Expense Analysis
Research and development (R&D) represents the largest consistent component of operating expenses, generally fluctuating between 11% and 17% of revenue. Selling, general, and administrative (SG&A) expenses remained relatively stable, typically ranging from 6% to 9%. Total operating expenses as a percentage of revenue increased during periods of revenue pressure, peaking at 27.77% in June 2023, which compounded the impact of shrinking gross margins.
Operating and Net Income Trends
Operating income margins transitioned from strong positives of approximately 17-18% in 2017 to deep negatives. The company experienced two primary periods of operating losses: first in 2019, and more severely in 2022-2023, where operating losses peaked at -24.33% of revenue. Net income attributable to common shareholders mirrored this volatility, with significant losses reaching -27.32% in June 2023. The discrepancy between operating income and net income in certain quarters suggests the influence of non-operating items and tax adjustments.
Non-Operating and Tax Impacts
Interest expenses remained a consistent drag on profitability, generally fluctuating between 1.5% and 3.6% of revenue. Other income and expenses showed sporadic volatility, most notably a significant negative impact of -17.91% in March 2018. Tax impacts were highly irregular, including a substantial tax expense of -29.93% in December 2017 that resulted in a net loss despite a positive operating margin.

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