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We also lease office space in various other locations worldwide primarily for R&D, marketing and sales, and administration. We believe our present facilities are adequate for our current needs.
Item 3. Legal Proceedings
See Part II, Item 8, Note 17, Legal Proceedings of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for disclosures regarding certain legal proceedings, which are incorporated by reference herein.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information for Common Stock
Our common stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WDC”. The approximate number of holders of record of our common stock as of July 23, 2025 was 720.
Dividends
Cash Dividend Program
On April 29, 2025, our Board of Directors authorized the adoption of a quarterly cash dividend program. Under the cash dividend program, holders of our common stock will receive dividends when and as declared by our Board of Directors. During the year ended June 27, 2025, we paid cash dividends of $0.10 per share of our outstanding common stock, totaling $36 million, including payment to holders of our Series A Preferred Stock in accordance with their participation rights.
Subsequent to year-end, on July 29, 2025, our Board of Directors declared a cash dividend of $0.10 per share of our common stock, which will be paid on September 18, 2025 to our shareholders of record as of the close of business on September 4, 2025.
We may modify, suspend, or cancel our cash dividend program in any manner and at any time. The amount of future dividends under our cash dividend program, and the declaration and payment thereof, will be based upon all relevant factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our Loan Agreement and other financing agreements, and shall be in compliance with applicable law.
Issuer Purchases of Equity Securities
The following table provides information about repurchases by us of shares of our common stock during the quarter ended June 27, 2025:
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| (in millions, except average price paid per share) | Total Number of Shares Purchased | | Average Price Paid per Share(1) | | Total Number of Shares Purchased As Part of Publicly Announced Program(2) | | Maximum Value of Shares that May Yet be Purchased Under the Program(2) |
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| (902) | | | (14.4) | % |
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| | 2025 | | 2024 | | 2023 |
| (in millions) |
| Net cash provided by (used in): | | | | | |
| Operating activities | $ | 1,691 | | | $ | (294) | | | $ | (408) | |
| Investing activities | 150 | | | (27) | | | (762) | |
| Financing activities | (1,612) | | | 187 | | | 875 | |
Effect of exchange rate changes on cash | 6 | | | (10) | | | (9) | |
Net increase (decrease) in cash and cash equivalents | $ | 235 | | | $ | (144) | | | $ | (304) | |
We had previously reached a final agreement with the IRS and received notices of deficiency with respect to years 2008 through 2012, and in February 2024, we also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015. During the year ended June 27, 2025, we made payments of $130 million for interest with respect to years 2008 through 2012 and $32 million for tax and interest with respect to years 2013 through 2015, resulting in no remaining liability as of June 27, 2025 related to all years from 2008 through 2015.
In connection with settlements for the years 2008 through 2015, we expect to realize reductions to our mandatory deemed repatriation tax obligations and tax savings from interest deductions in future years aggregating to $166 million. Of this amount, $65 million of interest savings from the interest paid with respect to years 2008 through 2015 is classified as a deferred tax asset due to interest expense limitation rules. See Part II, Item 8, Note 13, Income Taxes, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further details.
In August 2024, we filed a shelf registration statement (the “Shelf Registration Statement”) with the Securities and Exchange Commission that expires in August 2027. The Shelf Registration Statement allows us to offer and sell shares of common stock, preferred stock, warrants, and debt securities. We may use the Shelf Registration Statement or other capital sources, including other offerings of equity or debt securities or the credit markets, to satisfy future financing needs, including planned or unanticipated capital expenditures, investments, debt repayments or other expenses. Any such additional financing will be subject to market conditions and may not be available on terms acceptable to us or at all.
As a result of the Separation, we no longer have any capital expenditure requirements for the Flash business or its joint ventures with Kioxia Corporation. We expect our capital expenditures for fiscal year 2026 to be between 4% to 6% of our net revenue.
We believe our cash and cash equivalents and our available 2027 Revolving Credit Facility will be sufficient to meet our working capital, debt, dividend and capital expenditure needs for at least the next twelve months and for the foreseeable future thereafter. We believe we can also access the various debt and equity capital markets to further supplement our liquidity position if necessary. Our ability to sustain our working capital position is subject to a number of risks that we discuss in Part I, Item 1A, Risk Factors, in this Annual Report on Form 10-K.
A total of $0.98 billion and $1.43 billion of our cash and cash equivalents were held outside of the U.S. as of June 27, 2025 and June 28, 2024, respectively. There are no material tax consequences that were not previously accrued for on the repatriation of this cash.
Our cash equivalents are primarily invested in money market funds that invest in U.S. Treasury securities and U.S. Government agency securities. In addition, from time to time, we also invest directly in certificates of deposit, asset-backed securities and corporate and municipal notes and bonds.
Operating Activities
Net cash provided by or used in operating activities primarily consists of net income or loss, adjusted for non-cash charges, plus or minus changes in operating assets and liabilities. Net cash used for changes in operating assets and liabilities was $1.03 billion for 2025, as compared to $307 million of net cash used for such changes for 2024, which largely reflects an increase in net operating assets and liabilities resulting from the increase in the volume of our business as well as the timing and amount of tax payments. Changes in our operating assets and liabilities are largely affected by our working capital requirements, which are dependent on our volume of business and the effective management of our cash conversion cycle as well as timing of payments for taxes. Our cash conversion cycle measures how quickly we can convert our products into cash through sales. At the end of the respective fourth quarters, the cash conversion cycles were as follows (in days):
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| 2025 | | 2024 | | 2023 |
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| Days sales outstanding | 52 | | | 56 | | | 56 | |
| Days in inventory | 76 | | | 97 | | | 107 | |
| Days payables outstanding | (75) | | | (73) | | | (66) | |
| Cash conversion cycle | 53 | | | 80 | | | 97 | |
Changes in days sales outstanding (“DSO”) are generally due to the timing of shipments to and collections from customers. Changes in days in inventory (“DIO”) are generally related to the timing of inventory builds and shipments to customers. Changes in days payables outstanding (“DPO”) are generally related to production volume and the timing of purchases during the period. From time to time, we make payment term modifications with vendors through negotiations with them or by granting to, or receiving from, our vendors payment term accommodations. We make modifications primarily to manage our vendor relationships and to manage our cash flows, including our cash balances.
In 2025, DSO decreased by 4 days over the prior year, reflecting timing of shipments and customer collections. DIO decreased by 21 days over the prior year, primarily reflecting improvements in inventory management. DPO increased by 2 days over the prior year, primarily due to more favorable payment terms and routine variations in the timing of purchases and payments during the period.
Investing Activities
Net cash provided by investing activities in 2025 primarily consisted of $401 million in net proceeds from our sale of a majority interest in one of our subsidiaries and $148 million in net notes receivable proceeds from Flash Ventures, partially offset by $412 million in capital expenditures. Net cash used in investing activities in 2024 primarily consisted of $487 million of capital expenditures, partially offset by $239 million in net notes receivable proceeds from Flash Ventures and $195 million in proceeds from the sale-leaseback of property, plant and equipment.
Financing Activities
During 2025, net cash used in financing activities primarily consisted of $2.09 billion used for the partial repayment of the 2026 Notes, repayment of borrowings on the 2027 Revolving Credit Facility, and scheduled principal payments on our Term Loan A-2 and Term Loan A-3; $1.37 billion of cash transferred to Sandisk at the Separation; $149 million in share repurchases; $113 million for taxes paid on vested stock awards; $73 million in debt issuance costs; and $44 million in dividends on our common stock and our Series A Preferred Stock. These uses were partially offset by $2.00 billion of proceeds from drawing on the Sandisk credit facilities in connection with the Separation, $150 million from the 2027 Revolving Credit Facility, and $77 million from issuances of shares under our employee stock plans. During 2024, net cash provided by financing activities primarily consisted of $3.00 billion in proceeds from the issuance of the 2028 Convertible Notes, the drawdown of a delayed draw term loan and draws on the revolving credit facility. These sources were partially offset by $2.10 billion used for the repayment of draws on the revolving credit facility, repayments of a delayed draw term loan, scheduled payments on the Term Loan A-2, and settlement of our remaining 1.50% convertible senior notes due February 1, 2024 (the “2024 Convertible Notes”); $505 million used to repurchase a portion of the 2024 Convertible Notes; and $155 million for the purchase of capped calls to hedge the potential dilution impact of the conversion feature of the 2028 Convertible Notes.
A discussion of our cash flows for 2023, including a comparison of such cash flows to 2024, is included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources, included in our Annual Report on Form 10-K for the year ended June 28, 2024 filed with the SEC on August 20, 2024.
Off-Balance Sheet Arrangements
Other than certain indemnification provisions (see “Short- and Long-term Liquidity – Purchase Obligations and Other Commitments” below), we do not have any other material off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets, or any other obligation arising out of a material variable interest in an unconsolidated entity. We do not have any majority-owned subsidiaries that are not included in the Consolidated Financial Statements. Additionally, we do not have an interest in, or relationships with, any variable interest entities.
Short- and Long-term Liquidity
Material Cash Requirements
The following is a summary of our known material cash requirements, including those for capital expenditures, as of June 27, 2025. In addition, see the discussions further below related to unrecognized tax benefits, litigation matters, cash dividend program, dividend rights with respect to the Series A Preferred Stock, foreign exchange contracts and indemnifications. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | 1 Year (2026) | | 2-3 Years (2027-2028) | | 4-5 Years (2029-2030) | | More than 5 Years (Beyond 2030) |
| (in millions) |
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Long-term debt, including current portion(1) | $ | 4,749 | | | $ | 2,226 | | | $ | 1,523 | | | $ | 500 | | | $ | 500 | |
| Interest on debt | 507 | | | 203 | | | 204 | | | 69 | | | 31 | |
| Operating leases | 165 | | | 36 | | | 53 | | | 30 | | | 46 | |
| Purchase obligations and other commitments | 76 | | | 50 | | | 26 | | | — | | | — | |
| Mandatory deemed repatriation tax | 331 | | | 331 | | | — | | | — | | | — | |
| Total | $ | 5,828 | | | $ | 2,846 | | | $ | 1,806 | | | $ | 599 | | | $ | 577 | |
(1)Principal portion of debt, excluding issuance costs.
Unrecognized Tax Benefits
As of June 27, 2025, the liability for unrecognized tax benefits (excluding accrued interest and penalties) was approximately $569 million. Accrued interest and penalties related to unrecognized tax benefits are recognized in liabilities for uncertain tax positions and are recorded in the provision for income taxes. Accrued interest and penalties related to unrecognized tax benefits as of June 27, 2025, were approximately $82 million. Of these amounts, approximately $498 million could result in potential cash payments, of which $332 million is reasonably expected to be paid within the next twelve months. This potential cash payment is expected to be netted with offsetting favorable tax receivables totaling $148 million, including a reduction to our mandatory deemed repatriation tax obligations related to the settlement for the years 2008 through 2015, for a potential net cash payment of $184 million.
As noted above, we had previously reached a final agreement with the IRS regarding notices of deficiency with respect to years 2008 through 2012 and in February 2024, we also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015. During the year ended June 27, 2025, we made payments of $130 million for interest with respect to years 2008 through 2012 and $32 million for tax and interest with respect to years 2013 through 2015, resulting in no remaining liability as of June 27, 2025 related to all years from 2008 through 2015.
In connection with settlements for the years 2008 through 2015, we expect to realize reductions to our mandatory deemed repatriation tax obligations and tax savings from interest deductions in future years aggregating to approximately $166 million. Of this amount, $65 million of interest savings from the interest paid with respect to years 2008 through 2015 is classified as a deferred tax asset due to interest expense limitation rules. See Part II, Item 8, Note 13, Income Taxes of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Litigation Matters
For additional information on our litigation matters, see Part II, Item 8, Note 17, Legal Proceedings, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Cash Dividend Program
On April 29, 2025, our Board of Directors authorized the adoption of a quarterly cash dividend program. Under the cash dividend program, holders of our common stock will receive dividends when and as declared by our Board of Directors. During the year ended June 27, 2025, we paid cash dividends of $0.10 per share of our outstanding common stock, totaling $36 million, including payment to holders of our Series A Preferred Stock in accordance with their participation rights.
Subsequent to year-end, on July 29, 2025, our Board of Directors declared a cash dividend of $0.10 per share of our common stock, which will be paid on September 18, 2025 to our shareholders of record as of the close of business on September 4, 2025.
We may modify, suspend, or cancel our cash dividend program in any manner and at any time. The amount of future dividends under our cash dividend program, and the declaration and payment thereof, will be based upon all relevant factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our Loan Agreement and other financing agreements, and shall be in compliance with applicable law.
Dividend Rights
As of June 27, 2025, 235,000 shares of our Series A Preferred Stock remained outstanding. These shares are entitled to cumulative preferred dividends and will also participate in any dividends declared for common shareholders on an as-converted equivalent basis. See Part II, Item 8, Note 12, Shareholders’ Equity and Convertible Preferred Stock, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information regarding these dividend provisions.
Debt
As described in “Key Developments – Capital Allocation Actions” above, we undertook several financing actions during 2025, including the amendment of our Credit Facility in connection with the Separation and the exchange of a portion of our retained interest in Sandisk shares to reduce a portion of our TLA-3 loan balance.
The Company issued $1.60 billion aggregate principal amount of convertible senior notes in November 2023, which bear interest at an annual rate of 3.00% and mature on November 15, 2028 (the “2028 Convertible Notes”). The 2028 Convertible Notes are convertible at the option of any holder beginning August 15, 2028 at a conversion price of approximately $37.82 per share of common stock (which conversion price has been adjusted from approximately $52.20 in accordance with the indenture as a result of the Separation). Prior to August 15, 2028, if the trading price of our common stock remains above 130% of the conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading-day period prior to the end of a calendar quarter, holders of the 2028 Convertible Notes would have the right to convert the 2028 Convertible Notes during the next succeeding calendar quarter. The 2028 Convertible Notes are also convertible prior to August 15, 2028 upon the occurrence of certain corporate events. Upon any conversion of the 2028 Convertible Notes, we will pay cash for the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted.
The sale price conditional conversion feature of the 2028 Convertible Notes was triggered during the calendar quarter ended June 30, 2025 and, accordingly, the holders of the 2028 Convertible Notes have the right to convert the notes during the succeeding calendar quarter ending September 30, 2025. As a result, the 2028 Convertible Notes were classified as Short-term debt in the Consolidated Financial Statements as of June 27, 2025. The Company will continue to evaluate the conversion feature quarterly to determine if the 2028 Convertible Notes become convertible in future periods.
In addition to our outstanding debt, as of June 27, 2025, we had $1.25 billion available for borrowing under our revolving credit facility maturing in January 2027 (the “2027 Revolving Credit Facility”), subject to customary conditions under the Loan Agreement. The agreements governing our credit facilities each include limits on secured indebtedness and certain types of unsecured subsidiary indebtedness and require us and certain of our subsidiaries to provide guarantees and collateral to the extent the conditions providing for such guarantees and collateral are met. The loan agreement governing our 2027 Revolving Credit Facility and our Term Loan A-3 (as amended, the “Loan Agreement”) requires us to comply with a financial leverage ratio covenant. As of June 27, 2025, we were in compliance with the financial covenant. Additional information regarding our indebtedness, including information about availability under our 2027 Revolving Credit Facility and the principal repayment terms, interest rates, covenants, collateral and other key terms of our outstanding indebtedness, is included in Part II, Item 8, Note 8, Debt, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
In connection with the Separation, we entered into an amendment with our existing lenders under the Loan Agreement governing our Term Loan Facility and the 2027 Revolving Credit Facility that, among other changes, (a) permitted the Separation, (b) provided for the automatic release, in connection with the Separation, of guarantees and liens on collateral provided by Sandisk and Sandisk Technologies, Inc. under the Loan Agreement, (c) provided for the issuance of a new $2.51 billion Term Loan A-3 maturing in January 2027 (the “Term Loan A-3”) in a non-cash exchange to replace our previously
existing Term Loan A-2 (the “Term Loan A-2” and, together with the Term Loan A-3, the “Term Loan Facility”), (d) facilitated the debt for equity exchange with respect to the Term Loan A-3 in connection with the Sandisk retained interest, and (e) in connection with the Separation, reduced the aggregate commitments under the 2027 Revolving Credit Facility from $2.25 billion to $1.25 billion. In June 2025, we settled $800 million of the Term Loan A-3 principal amount, through a non-cash exchange of 21.3 million shares of Sandisk common stock held by us, and a $4 million cash payment.
We may issue additional debt securities in the future that may be guaranteed by our 100% owned domestic subsidiary, Western Digital Technologies, Inc. (“Guarantor” and, together with Western Digital Corporation, the “Obligor Group”). Such guarantees may be full and unconditional, joint and several, on a secured or unsecured, subordinated or unsubordinated basis, and may be subject to certain customary guarantor release conditions. We conduct operations almost entirely through our subsidiaries. Accordingly, the Obligor Group’s cash flow and ability to service any guaranteed registered debt securities will depend on the earnings of our subsidiaries and the distribution of those earnings to the Obligor Group, including the earnings of the non-guarantor subsidiaries, whether by dividends, loans or otherwise. Holders of such guaranteed registered debt securities would have a direct claim only against the Obligor Group.
The following tables include summarized financial information for the Obligor Group. The financial information for the Obligor Group is presented on combined basis, excluding intercompany balances and transactions between the Company and the Guarantor, excluding net intercompany balances between the Obligor Group and non-guarantor subsidiaries, and excluding investments in and equity in the earnings of non-guarantor subsidiaries. The Obligor Group’s amounts due from, amounts due to, and transactions with non-guarantor subsidiaries have been presented in separate line items in the tables below.
The assets and liabilities of the Obligor Group include the following:
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| June 27,
2025 | | June 28,
2024 |
| (in millions) |
| Current assets | $ | 2,992 | | | $ | 2,149 | |
| Non-current assets | 4,553 | | | 2,208 | |
| Net intercompany receivables from (payables to) non-guarantor subsidiaries | (1,543) | | | 2,473 | |
| Current liabilities | 3,800 | | | 3,758 | |
| Non-current liabilities | 2,873 | | | 6,626 | |
The operating results of the Obligor Group include the following: | | | | | | | | | | | |
| Year Ended |
| June 27,
2025 | | June 28,
2024 |
| (in millions) |
| Net sales | $ | 5,249 | | | $ | 4,066 | |
| Gross profit | 1,941 | | | 1,002 | |
| Operating income (loss) | 279 | | | (927) | |
| Net income (loss) | (320) | | | (1,211) | |
Results for the Obligor Group include the following transactions with non-guarantor subsidiaries:
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| Year Ended |
| June 27,
2025 | | June 28,
2024 |
| (in millions) |
| Intercompany revenue | $ | 1,378 | | | $ | 1,416 | |
| Net intercompany interest (income) expense | (4) | | | 8 | |
| Intercompany dividend income | 2,215 | | | 567 | |
Purchase Obligations and Other Commitments
In the normal course of business, we enter into purchase orders with suppliers for the purchase of components used to manufacture our products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. We also enter into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. These arrangements are included under “Purchase obligations and other commitments” in the table above.
Mandatory Deemed Repatriation Tax
As of June 27, 2025, our final estimated mandatory deemed repatriation tax obligation is $331 million and is expected to be paid within the next twelve months.
Mandatory Research and Development Expense Capitalization
Since the beginning of 2023, we have been required to capitalize and amortize both domestic and foreign R&D expenditures rather than expensing them in the year incurred. The OBBBA, which was signed into law on July 4, 2025, includes broad tax reform provisions that extend and modify key elements of the TCJA. Notably, the new legislation now allows an option for the immediate expensing of domestic R&D expenditures, beginning with our fiscal year 2026, which is expected to result in lower cash tax payments in future periods than previously anticipated.
Foreign Exchange Contracts
We purchase foreign exchange contracts to hedge the impact of foreign currency fluctuations on certain underlying assets, liabilities and commitments for operating expenses and product costs denominated in foreign currencies. For a description of our current foreign exchange contract commitments, see Part II, Item 8, Note 7, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Indemnifications
In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of agreements, products or services to be provided by us, environmental compliance, or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain of our officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers in certain circumstances.
It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses. Historically, we have not incurred material costs as a result of obligations under these agreements.
Recent Accounting Pronouncements
For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see Part II, Item 8, Note 2, Recent Accounting Pronouncements, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
We have prepared the accompanying Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of the financial statements requires the use of judgments and estimates that affect the reported amounts of revenues, expenses, assets, liabilities and shareholders’ equity. We have adopted accounting policies and practices that are generally accepted in the industry in which we operate. If these estimates differ significantly from actual results, the impact to the Consolidated Financial Statements may be material.
Revenue
We provide distributors and retailers (collectively referred to as “resellers”) with limited price protection for inventories held by resellers at the time of published list price reductions. We also provide resellers and OEMs with other sales incentive programs. We record estimated variable consideration related to these items as a reduction to revenue at the time of revenue recognition. We use judgment in our assessment of variable consideration in contracts to be included in the transaction price. We use the expected value method to arrive at the amount of variable consideration. We constrain variable consideration until the likelihood of a significant revenue reversal is not probable and believe that the expected value method is the appropriate estimate of the amount of variable consideration based on the fact that we have a large number of contracts with similar characteristics.
For sales to OEMs, our methodology for estimating variable consideration is based on the amount of consideration expected to be earned based on the OEMs’ volume of purchases from us or other agreed-upon sales incentive programs. For sales to resellers, the methodology for estimating variable consideration is based on several factors including historical pricing information, current pricing trends and channel inventory levels. Estimating the impact of these factors requires significant judgement and the estimated amount of variable consideration can differ from the actual amount.
Inventories
We value inventories at the lower of cost or net realizable value (“NRV”) with cost determined on a first-in, first-out basis. We record inventory write-downs of our inventory to the lower of cost or net realizable value or for obsolete or excess inventory based on assumptions, which requires significant judgement. The determination of NRV involves estimating the ASPs less any selling expenses of inventory based on market conditions and customer demand. To estimate the ASPs and selling expenses of inventory, we review historical sales, future demand, economic conditions, contract prices and other information.
We periodically perform an analysis of potential excess and obsolete inventory based on assumptions, which includes changes in business and economic conditions, changes in technology and projected demand of our products. If in any period we anticipate a change in those assumptions to be less favorable than our previous estimates, additional inventory write-downs may be required and could materially and negatively impact our gross margin. If in any period, we can sell inventories that had been written down to a level below the realized selling price in previous periods, higher gross profit would be recognized in the current period.
Income Taxes
We account for income taxes under the asset and liability method, which provides that deferred tax assets and liabilities be recognized for temporary differences between the financial reporting bases and the tax bases of our assets and liabilities and expected benefits of utilizing net operating loss and tax credit carryforwards. We record a valuation allowance when it is more likely than not that the deferred tax assets will not be realized. Each quarter, we evaluate the need for a valuation allowance for our deferred tax assets and we adjust the valuation allowance so that we record net deferred tax assets only to the extent that we conclude it is more likely than not that these deferred tax assets will be realized. The assessment of valuation allowances against our deferred tax assets requires estimations and significant judgment. We continue to assess and adjust our valuation allowance based on operating results and market conditions. We account for interest and penalties related to income taxes as a component of the provision for income taxes.
We recognize liabilities for uncertain tax positions based on a two-step process. To the extent a tax position does not meet a more-likely-than-not level of certainty, no benefit is recognized in the Consolidated Financial Statements. If a position meets the more-likely-than-not level of certainty, it is recognized in the Consolidated Financial Statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties related to unrecognized tax benefits are recognized on liabilities recorded for uncertain tax positions and are recorded in our provision for income taxes. The actual liability for unrealized tax benefits in any such contingency may be materially different from our estimates, which could result in the need to record additional liabilities for unrecognized tax benefits or potentially adjust previously recorded liabilities for unrealized tax benefits and materially affect our operating results.
Litigation and Contingencies
We disclose information regarding claims and contingencies where the likelihood of a material loss is probable or reasonably possible. If a loss contingency is probable and the amount of the loss can be reasonably estimated, we record an accrual for the loss. In such cases, there may be an exposure to potential loss in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the amount accrued is reasonably possible, we disclose the matter and an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible losses is not material to our financial position, results of operations or cash flows. The ability to predict the ultimate outcome of such matters involves significant judgments about the merits of the claim, applicable law, potential outcomes, estimates and inherent uncertainties. We engage relevant subject matter experts to assist us with our assessment of available information to reach conclusions on the likelihood and amount, or range, of potential loss. The actual outcome of such matters could differ materially from our estimates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Disclosure About Foreign Currency Risk
Although the majority of our transactions are in U.S. dollars, some transactions are based in various foreign currencies. We purchase short-term foreign exchange contracts to hedge the impact of foreign currency exchange fluctuations on certain underlying assets, liabilities and commitments for product costs and Operating expenses denominated in foreign currencies. The purpose of entering into these hedge transactions is to minimize the impact of foreign currency fluctuations on our results of operations. Substantially all of the contract maturity dates do not exceed 12 months. We do not purchase foreign exchange contracts for speculative or trading purposes. For additional information, see Part II, Item 8, Note 6, Fair Value Measurements and Investments, and Note 7, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
We have performed sensitivity analyses for 2025 using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant. The analyses cover all of our foreign currency derivative contracts used to offset the underlying exposures. The foreign currency exchange rates used in performing the sensitivity analyses were based on market rates in effect at June 27, 2025. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar would result in a foreign exchange fair value loss of $75 million at June 27, 2025.
During 2025, 2024 and 2023, total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to our Consolidated Financial Statements.
Notwithstanding our efforts to mitigate some foreign exchange risks, we do not hedge all of our foreign currency exposures, and there can be no assurance that our mitigating activities related to the exposures that we hedge will adequately protect us against risks associated with foreign currency fluctuations.
Disclosure About Interest Rate Risk
Variable Interest Rate Risk
We have generally held a balance of fixed and variable rate debt. As of June 27, 2025, our variable rate debt outstanding consisted of our Term Loan A-3, which is based on various index rates as discussed further in Note 8, Debt, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. As of June 27, 2025, the outstanding balance on our Term Loan A-3 was $1.65 billion, and a 1% increase in the variable rate of interest would increase annual interest expense by $16 million.
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements | | | | | |
| PAGE NO. |
Consolidated Financial Statements: | |
Report of Independent Registered Public Accounting Firm (Auditor Firm ID: ) | |
| Consolidated Balance Sheets — As of June 27, 2025 and June 28, 2024 | |
| Consolidated Statements of Operations — Three Years Ended June 27, 2025 | |
| Consolidated Statements of Comprehensive Income (Loss) — Three Years Ended June 27, 2025 | |
| Consolidated Statements of Cash Flows — Three Years Ended June 27, 2025 | |
| Consolidated Statements of Convertible Preferred Stock and Shareholders’ Equity — Three Years Ended June 27, 2025 | |
Notes to Consolidated Financial Statements | |
|
|
|
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors
Western Digital Corporation:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Western Digital Corporation and subsidiaries (the Company) as of June 27, 2025 and June 28, 2024, the related consolidated statements of operations, comprehensive income (loss), cash flows, and convertible preferred stock and shareholders’ equity for each of the fiscal years in the three-year period ended June 27, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of June 27, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 27, 2025 and June 28, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended June 27, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 27, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of sufficiency of audit evidence over certain variable consideration reductions to revenue
As discussed in Note 1 to the consolidated financial statements, the Company provides distributors and retailers (collectively referred to as resellers) with limited price protection and resellers and original equipment manufacturers (OEMs) with other sales incentive programs. The Company records the estimated variable consideration related to these items as a reduction to revenue at the time of revenue recognition.
We identified the evaluation of the sufficiency of audit evidence over certain variable consideration reductions to revenue for sales to resellers and OEMs as a critical audit matter. This matter required a high degree of auditor effort in performing procedures to assess the reasonableness of certain variable consideration and associated customer-related accruals as such reductions to revenue involve a number of complex integrated information technology (IT) systems. Therefore, our audit procedures required the involvement of IT professionals with specialized skills and knowledge and auditor judgment was required to determine the nature and extent of audit evidence obtained and to evaluate the results of the procedures.
The following are the primary procedures we performed to address this critical audit matter.
•We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process for determining variable consideration.
•We involved IT professionals with specialized skills and knowledge, who assisted in the determination and testing of certain IT general and application controls that are used by the Company to determine variable consideration.
•We assessed certain of the recorded variable consideration by selecting a sample of transactions and comparing the amounts recognized for consistency with underlying documentation.
•We evaluated the overall sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of such evidence.
Tax-free determination of the Flash business separation and the debt-for-equity exchange
As described in Note 3 to the consolidated financial statements, on February 21, 2025, the Company completed the separation of its Flash business through a pro rata distribution of 80.1% of the outstanding shares of Sandisk Corporation (Sandisk) to the Company’s stockholders. In connection with the separation, the Company completed an external spin-off transaction and an exchange of Sandisk common stock for a portion of the Company’s Term Loan A-3. Management has determined that the separation and the debt-for-equity exchange (collectively referred to as the Transactions) qualified as tax-free transactions under the applicable sections of the United States (U.S.) Internal Revenue Code. The determination of the tax consequences of these Transactions required management to make judgments about the application of tax laws and regulations.
We identified the evaluation of income tax treatment of the Transactions as a critical audit matter. This matter required especially subjective auditor judgment and effort in assessing the significant judgments by management in applying relevant tax laws and regulations in determining the tax-free treatment of the Transactions and in performing procedures and evaluating audit evidence. Involvement of professionals with specialized tax skills and knowledge was required.
The following are the primary procedures we performed to address this critical audit matter.
•We evaluated the design and tested the operating effectiveness of certain internal controls relating to management’s determination of the tax-free treatment of the Transactions.
•We involved professionals with specialized skills and knowledge to assist in assessing the Company’s identification, interpretation, and application of tax laws and evaluating the Company’s analyses prepared to support management’s determination that the Transactions qualified as tax-free.
/s/
We have served as the Company’s auditor since 1970.
August 13, 2025
WESTERN DIGITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
| | | | | | | | | | | |
| June 27,
2025 | | June 28,
2024 |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ | | | | $ | | |
| Accounts receivable, net | | | | | |
| Inventories | | | | | |
| Retained interest in Sandisk | | | | | |
| Other current assets | | | | | |
| Current assets of discontinued operations | | | | | |
| Total current assets | | | | | |
| Property, plant and equipment, net | | | | | |
| Goodwill | | | | | |
|
| Other non-current assets | | | | | |
| Non-current assets of discontinued operations | | | | | |
| Total assets | $ | | | | $ | | |
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY |
| Current liabilities: | | | |
| Accounts payable | $ | | | | $ | | |
|
| Accrued expenses | | | | | |
| Income taxes payable | | | | | |
| Accrued compensation | | | | | |
| Current portion of long-term debt | | | | | |
| Current liabilities of discontinued operations | | | | | |
| Total current liabilities | | | | | |
| Long-term debt | | | | | |
| Other liabilities | | | | | |
| Non-current liabilities of discontinued operations | | | | | |
| Total liabilities | | | | | |
Commitments and contingencies (Notes 10, 13 and 17) | | | |
Convertible preferred stock, $ par value; authorized — shares; issued and outstanding — shares as of both June 27, 2025 and June 28, 2024; aggregate liquidation preference of $ and $ as of June 27, 2025 and June 28, 2024, respectively | | | | | |
| Shareholders’ equity: | | | |
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))
))))) ) | | | | $ | () | | | $ | () | |
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) | | | | $ | () | | | $ | () | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
WESTERN DIGITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| | | | | | | | | | | | | | | | | |
| Year Ended |
| June 27,
2025 | | June 28,
2024 | | June 30,
2023 |
| Cash flows from operating activities | | | | | |
| Net income (loss) | $ | | | | $ | () | | | $ | () | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: | | | | | |
| Depreciation and amortization | | | | | | | | |
| Stock-based compensation | | | | | | | | |
| Deferred income taxes | () | | | () | | | () | |
| Gain on disposal of assets | () | | | () | | | () | |
Non-cash asset impairment | | | | | | | | |
| Gain on business divestiture | () | | | | | | | |
| Amortization of debt issuance costs and discounts | | | | | | | | |
Loss on retained interest in Sandisk | | | | | | | | |
Loss on extinguishment of debt | | | | | | | | |
| Other non-cash operating activities, net | | | | | | | | |
| Changes in: | | | | | |
| Accounts receivable, net | | | | () | | | | |
| Inventories | () | | | | | | () | |
| Accounts payable | | | | | | | () | |
| Accounts payable to related parties | () | | | | | | () | |
| Accrued expenses | () | | | | | | () | |
| Income taxes payable | | | | () | | | | |
| Accrued compensation | () | | | | | | () | |
| Other assets and liabilities, net | () | | | () | | | () | |
| Net cash provided by (used in) operating activities | | | | () | | | () | |
| Cash flows from investing activities | | | | | |
| Purchases of property, plant and equipment | () | | | () | | | () | |
| Proceeds from the sale of property, plant and equipment | | | | | | | | |
| |
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| |
| |
Proceeds from business divestiture | | | | | | | | |
| Notes receivable issuances to Flash Ventures | () | | | () | | | () | |
| Notes receivable proceeds from Flash Ventures | | | | | | | | |
| Distribution from Flash Ventures | | | | | | | | |
| Strategic investments and other, net | | | | | | | | |
Net cash provided by (used in) investing activities | | | | () | | | () | |
| Cash flows from financing activities | | | | | |
| Issuance of stock under employee stock plans | | | | | | | | |
| Taxes paid on vested stock awards under employee stock plans | () | | | () | | | () | |
Purchase of capped calls | | | | () | | | | |
Proceeds from convertible preferred stock, net of issuance costs | | | | () | | | | |
| Repurchases of common stock | () | | | | | | | |
| Dividends paid to shareholders | () | | | | | | | |
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Repurchases of debt | | | | () | | | | |
| Repayment of debt | () | | | () | | | () | |
| Proceeds from debt issuance | | | | | | | | |
| Debt issuance costs | () | | | () | | | () | |
Cash transferred to Sandisk related to Separation | () | | | | | | | |
| Net cash provided by (used in) financing activities | () | | | | | | | |
| Effect of exchange rate changes on cash | | | | () | | | () | |
Net increase (decrease) in cash and cash equivalents | | | | () | | | () | |
| Cash and cash equivalents, beginning of year | | | | | | | | |
| Cash and cash equivalents, end of year | $ | | | | $ | | | | $ | | |
| Supplemental disclosure of cash flow information: | | | | | |
| Cash paid for income taxes | $ | | | | $ | | | | $ | | |
| Cash paid for interest | $ | | | | $ | | | | $ | | |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
WESTERN DIGITAL CORPORATION
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
(in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Convertible Preferred Stock | | | Common Stock | | Treasury Stock | | Additional Paid-In Capital | | Accumulated Other Comprehensive Income (Loss) | | Retained Earnings | | Total Shareholders’ Equity |
| Shares | | Amount | | | Shares | | Amount | | Shares | | Amount | | | | |
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| Balance at July 1, 2022 | | | | $ | | | | | | | | $ | | | | | | | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
| Net loss | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | () | | | () | |
| Adoption of new accounting standard | — | | | — | | | | — | | | — | | | — | | | — | | | () | | | — | | | | | | () | |
| Employee stock plans | — | | | — | | | | | | | — | | | — | | | — | | | | | | — | | | — | | | | |
| Stock-based compensation | — | | | — | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | | |
| Issuance of convertible preferred stock, net of issuance costs | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
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| Actuarial pension gain | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Foreign currency translation adjustment | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Net unrealized gain on derivative contracts | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Balance at June 30, 2023 | | | | | | | | | | | | | | | | | | | | | | | () | | | | | | | |
| Net loss | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | () | | | () | |
| | | | | | | | | | | | | |
| Purchase of capped calls related to the issuance of convertible notes, net of tax | — | | | — | | | | — | | | — | | | — | | | — | | | () | | | — | | | — | | | () | |
| Conversion of convertible preferred stock | () | | | () | | | | | | | — | | | — | | | — | | | | | | — | | | — | | | | |
| Employee stock plans | — | | | — | | | | | | | — | | | — | | | — | | | () | | | — | | | — | | | () | |
| Stock-based compensation | — | | | — | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | | |
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| Actuarial pension gain | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Foreign currency translation adjustment | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Net unrealized loss on derivative contracts | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | () | | | — | | | () | |
| Balance at June 28, 2024 | | | | | | | | | | | | | | | | | | | | | | | () | | | | | | | |
| Net income | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | |
| | | | | | | | | | | | | |
| Distribution in connection with the Separation | — | | | — | | | | — | | | — | | | — | | | — | | | () | | | | | | () | | | () | |
| Employee stock plans | — | | | — | | | | | | | — | | | | | | | | | () | | | — | | | — | | | () | |
| Stock-based compensation | — | | | — | | | | — | | | — | | | — | | | — | | | | | | — | | | — | | | | |
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| Repurchases of common stock | — | | | — | | | | — | | | — | | | () | | | () | | | — | | | — | | | — | | | () | |
Preferred stock dividends | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | — | | | () | | | () | |
Common stock dividends ($ per share) | — | | | — | | | | — | | | — | | | — | | | — | | | | | | — | | | () | | | () | |
| Actuarial pension gain | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Foreign currency translation adjustment | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Net unrealized gain on derivative contracts | — | | | — | | | | — | | | — | | | — | | | — | | | — | | | | | | — | | | | |
| Balance at June 27, 2025 | | | | $ | | | | | | | | $ | | | | () | | | $ | () | | | $ | | | | $ | | | | $ | | | | $ | | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.
reportable segments: HDD and Flash-based products (“Flash”). As a result of the Separation (as defined in Note 3, Discontinued Operations) and disposition of the Flash segment, the Company’s continuing operations now consist of a single reportable segment, HDD. The Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), now evaluates the performance of the Company and makes decisions regarding the allocation of resources based on the Company’s consolidated results.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
impairment of goodwill in 2025, 2024 or 2023.
The Company is required to use judgment when applying goodwill impairment tests, including the identification of its reporting unit and the determination of fair value. In addition, the estimates used to determine the fair value of its reporting unit may change based on the results of operations, macroeconomic conditions or other factors. Changes in these estimates could materially affect the Company’s assessment of the fair value and goodwill impairment. If the Company’s stock price decreases significantly, goodwill could become impaired, which could result in a material charge and adversely affect the Company’s results of operations.
In-process research and development (“IPR&D”) is an intangible asset accounted for as an indefinite-lived asset until the completion or abandonment of the associated research and development effort. During the development period, the Company conducts an IPR&D impairment test at least annually or whenever events or changes in facts and circumstances indicate that it is more likely than not that the IPR&D is impaired. Events which might indicate impairment include, but are not limited to, adverse cost factors, strategic decisions made in response to economic, market, and competitive conditions, and the impact of the economic environment on the Company and on its customer base. If impairment is indicated, the impairment is measured as the amount by which the carrying amounts of the assets exceed the fair values of the assets. The Company’s assessment resulted in impairment of IPR&D in 2025, 2024 or 2023.
See Note 5, Supplemental Financial Statement Data, for additional disclosures related to the Company’s other long-lived assets.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
, with a small number of products having a warranty ranging up to or more. The warranty provision considers estimated product failure rates and trends, estimated replacement costs, estimated repair costs which include scrap costs and estimated costs for customer compensatory claims related to product quality issues, if any. For warranties ten years or greater, including lifetime warranties, the Company uses the estimated useful life of the product to calculate the warranty exposure. A statistical warranty tracking model is used to help prepare estimates and assist the Company in exercising judgment in determining the underlying estimates. The statistical tracking model captures specific detail on product reliability, such as factory test data, historical field return rates and costs to repair by product type. Management’s judgment is subject to a greater degree of subjectivity with respect to newly introduced products because of limited field experience with those products upon which to base warranty estimates. Management reviews the warranty accrual quarterly for products shipped in prior periods and which are still under warranty. Any changes in the estimates underlying the accrual may result in adjustments that impact current period gross profit and income. Such changes are generally a result of differences between forecasted and actual return rate experience and costs to repair and could differ significantly from the estimates.
See Note 17, Legal Proceedings, for additional disclosures related to the Company’s litigation.
and amounted to $ million, $ million and $ million in 2025, 2024 and 2023, respectively. These expenses are included in Selling, general and administrative in the Consolidated Statements of Operations.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
billion and $ billion at June 27, 2025 and June 28, 2024, respectively.
If the derivative is designated as a cash flow hedge and is determined to be highly effective, the change in fair value of the derivative is initially deferred in Other comprehensive income (loss), net of tax. These amounts are subsequently recognized into earnings when the underlying cash flow being hedged is recognized into earnings. Recognized gains and losses on foreign exchange contracts are reported in Cost of revenue and Operating expenses and presented within cash flows from operating activities. Hedge effectiveness is measured by comparing the hedging instrument’s cumulative change in fair value from inception to maturity to the underlying exposure’s terminal value. The Company determined the ineffectiveness associated with its cash flow hedges to be immaterial to the Consolidated Financial Statements for all years presented.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 2.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 3.
independent public companies. In connection with the Separation (as defined below), the Company has incurred separation and transition costs, which are recorded as Business separation costs within discontinued operations in the Company’s Consolidated Financial Statements, as further detailed in the summary of net income (loss) from discontinued operations, net of taxes, below.
On February 21, 2025, the Company completed the previously announced separation of its Flash business (the “Separation”) through a pro rata distribution of % of the outstanding shares of Sandisk Corporation (“Sandisk”) to Western Digital stockholders. The Separation is intended to be tax-free for U.S. federal income tax purposes. To reflect the completion of the Separation, the Company recorded a decrease in shareholders’ equity for the net book value of applicable assets and liabilities derecognized in connection with the Separation, net of the Company’s retained % ownership interest, or million shares, initially based on the net book value of the applicable assets and liabilities derecognized. As a result of the Separation, Sandisk became an independent public company and Western Digital no longer consolidates Sandisk into the Company’s financial results. The historical net income of Sandisk and applicable assets and liabilities included in the Separation are now reported in the Company’s Consolidated Financial Statements as discontinued operations for all periods prior to the Separation on February 21, 2025. Following the Separation, as the Company no longer controls or has the ability to exert significant influence over Sandisk, the Company measures its retained ownership interest in Sandisk common stock at fair value on a recurring basis (see additional information in Note 6, Fair Value Measurements and Investments). In June 2025, the Company disposed of million shares of its Sandisk common stock, along with $ million in cash, in a tax-free exchange for $ million principal amount of the Company’s Term Loan A-3. The Company expects to monetize its remaining shares of Sandisk within one year from the Separation Date.
The Company entered into various agreements to effect the Separation and provide for the temporary framework of the relationship between Western Digital and Sandisk following the Separation, including, among others, a separation and distribution agreement, a tax matters agreement, and a transition services agreement. The transition services agreement provides for transition service support to be provided for various periods of time ranging up to months. The amounts involved under these agreements were not material for the fiscal year ended June 27, 2025 and are not expected to be material.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | Accounts receivable, net | | | |
| Inventories | | | |
| Other current assets | | | |
Current assets of discontinued operations | | $ | | |
| Property, plant and equipment, net | | $ | | |
| Notes receivable and investments in Flash Ventures | | | |
| Goodwill | | | |
| Other non-current assets | | | |
Non-current assets of discontinued operations | | $ | | |
Liabilities |
| Accounts payable | | $ | | |
| Accounts payable to related parties | | | |
| Accrued expenses | | | |
| Income taxes payable | | | |
| Accrued compensation | | | |
Current liabilities of discontinued operations | | $ | | |
|
Non-current liabilities of discontinued operations | | $ | | |
The following table provides a summary of net income (loss) from discontinued operations, net of taxes:
| | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) from Discontinued Operations, Net of Taxes | | 2025 | | 2024 | | 2023 | |
| | (in millions) |
| Revenue, net | | $ | | | | $ | | | | $ | | | |
| Cost of revenue | | | | | | | | | | |
| | |
| Operating expenses: | | | | | | | |
| Research and development | | | | | | | | | | |
| Selling, general and administrative | | | | | | | | | | |
| | |
Gain on business divestiture | | () | | | | | | | | |
| Business separation costs | | | | | | | | | | |
Business realignment charges | | | | | () | | | | | |
| | |
| | |
| Operating income (loss) | | | | | | | | () | | |
| | |
| | |
| | |
| | |
Total interest and other income (expense), net | | () | | | () | | | | | |
| Income (loss) before taxes | | | | | | | | () | | |
| Income tax expense | | | | | | | | | | |
Net income (loss) from discontinued operations, net of taxes | | $ | | | | $ | () | | | $ | () | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | $ | | | | $ | | | Purchases of property, plant and equipment | | | | | | | | | |
Stock-based compensation | | | | | | | | | |
|
| |
|
| | | | $ | | | | $ | | |
| | |
))| | | | $ | | | | $ | | |
The current portion of the warranty accrual is classified in Accrued expenses and the long-term portion is classified in Other liabilities as noted below: | | | | | | | | | | | | | |
| June 27,
2025 | | June 28,
2024 | | |
| (in millions) |
Warranty accrual: | | | | | |
| Current portion (included in Accrued expenses) | $ | | | | $ | | | | |
| Long-term portion (included in Other liabilities) | | | | | | | |
| Total warranty accrual | $ | | | | $ | | | | |
| Total Accumulated Comprehensive Income (Loss) |
| (in millions) |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
) )) ) | | | | $ | | |
During 2025 and 2024, the amounts reclassified out of Accumulated other comprehensive income (loss) included losses of $ million and $ million, respectively, related to foreign exchange contracts.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 6.
| | $ | | | | $ | | | | $ | | | | Cash equivalents – Money market funds | | | | | | | | | | | |
| Foreign exchange contracts | | | | | | | | | | | |
| Total assets at fair value | $ | | | | $ | | | | $ | | | | $ | | |
| Liabilities: | | | | | | | |
| Foreign exchange contracts | $ | | | | $ | | | | $ | | | | $ | | |
| Total liabilities at fair value | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| June 28, 2024 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| (in millions) |
| Assets: | | | | | | | |
|
| Cash equivalents – Money market funds | $ | | | | $ | | | | $ | | | | $ | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange contracts | | | | | | | | | | | |
|
|
| Total assets at fair value | $ | | | | $ | | | | $ | | | | $ | | |
| Liabilities: | | | | | | | |
| Foreign exchange contracts | $ | | | | $ | | | | $ | | | | $ | | |
|
|
| Total liabilities at fair value | $ | | | | $ | | | | $ | | | | $ | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Money Market Funds. The Company’s money market funds are funds that invest in U.S. Treasury and U.S. Government agency securities. Money market funds are valued based on quoted market prices.
Foreign Exchange Contracts. The Company’s foreign exchange contracts are short-term contracts to hedge the Company’s foreign currency risk. Foreign exchange contracts are valued using an income approach that is based on a present value of future cash flows model. The market-based observable inputs for the model include forward rates and credit default swap rates. For more information on the Company’s foreign exchange contracts, see Note 7, Derivative Instruments and Hedging Activities. Derivative assets and liabilities are reflected in the Company’s Consolidated Balance Sheets under Other current assets and Accrued expenses, respectively.
During 2025 and 2024, the Company had no transfers of financial assets and liabilities between levels and there were no changes in valuation techniques and the inputs used in the fair value measurement.
Financial Instruments Not Carried at Fair Value
% senior unsecured notes due 2026$ | | | | $ | | | | $ | | | | $ | | | | Variable interest rate Term Loan A-2 maturing 2027 | | | | | | | | | | | |
| Variable interest rate Term Loan A-3 maturing 2027 | | | | | | | | | | | |
% convertible notes due 2028 | | | | | | | | | | | |
% senior notes due 2029 | | | | | | | | | | | |
% senior notes due 2032 | | | | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | | | $ | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 7.
months or less. As of June 27, 2025, the Company did not have any derivative contracts with credit risk related contingent features.
Changes in fair values of the non-designated foreign exchange contracts are recognized in Other income (expense), net and are largely offset by corresponding changes in the fair values of the foreign-currency denominated monetary assets and liabilities. For each of 2025, 2024 and 2023, total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to the Company’s Consolidated Financial Statements.
Unrealized gains or losses on designated cash flow hedges are recognized in Accumulated other comprehensive income (loss). For more information regarding cash flow hedges, see Note 5, Supplemental Financial Statement Data – Accumulated other comprehensive income (loss).
Netting Arrangements
Under certain provisions and conditions within agreements with counterparties to the Company’s foreign exchange forward contracts, subject to applicable requirements, the Company has the right of offset associated with the Company’s foreign exchange forward contracts and is allowed to net settle transactions of the same currency with a single net amount payable by one party to the other. As of June 27, 2025 and June 28, 2024, the effect of rights of offset was not material and the Company did not offset or net the fair value amounts of derivative instruments in its Consolidated Balance Sheets.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 8.
% senior unsecured notes due 2026$ | | | | $ | | | | Variable interest rate Term Loan A-2 maturing 2027 | | | | | |
| Variable interest rate Term Loan A-3 maturing 2027 | | | | | |
% convertible notes due 2028 | | | | | |
% senior notes due 2029 | | | | | |
% senior notes due 2032 | | | | | |
| Total debt | | | | | |
| Issuance costs | () | | | () | |
| Subtotal | | | | | |
| Less: current portion of long-term debt | () | | | () | |
| Long-term debt | $ | | | | $ | | |
Revolving Credit Facility and Term Loans
On February 20, 2025, the Company entered into a fourth amendment to the loan agreement governing the Company’s revolving credit facility maturing in January 2027 (the “2027 Revolving Credit Facility”) and Term Loan Facility (as defined below), dated as of January 7, 2022 (as amended, the “Loan Agreement”) that, among other changes, (a) permitted the Separation, (b) provided for the automatic release, in connection with the Separation, of guarantees and liens on collateral provided by Sandisk and Sandisk Technologies, Inc. under the Loan Agreement, (c) provided for the issuance of a new $ billion Term Loan A-3 maturing in January 2027 (the “Term Loan A-3”) in a noncash exchange to replace the Company’s previously existing Term Loan A-2 (the “Term Loan A-2” and, together with the Term Loan A-3, the “Term Loan Facility”), (d) facilitated the exchange of Sandisk shares retained at the Separation to settle a portion of the Term Loan A-3 in connection with the Sandisk retained interest, and (e) in connection with the Separation, reduced the aggregate commitments under the 2027 Revolving Credit Facility from $ billion to $ billion. In June 2025, the Company settled $ million of the Term Loan A-3 principal amount, through a non-cash exchange of million shares of Sandisk common stock held by the Company, and a $ million cash payment, resulting in a loss on extinguishment of debt of $ million.
During the year ended June 27, 2025, the Company also made principal repayments aggregating to $ million on its Term Loan Facility. As of June 27, 2025, the remaining balance of Term Loan A-3 amortizes in quarterly installments of $ million per quarter beginning with the quarter ending October 3, 2025, and the remaining balance is payable at maturity on January 7, 2027. Issuance costs for the Term Loan Facility are amortized to Interest expense over its term and unamortized costs were $ million as of June 27, 2025.
The Term Loan A-3 Loan bears interest, at the Company’s option, at a per annum rate equal to either (x) the Adjusted Term SOFR (as defined in the Loan Agreement) plus an applicable margin varying from % to % or (y) a base rate plus an applicable margin varying from % to %, in each case depending on the corporate family ratings of the Company from at least two of the Credit Rating Agencies (as defined in the Loan Agreement), with an initial interest rate of Adjusted Term SOFR plus %. The all-in interest rate for Term Loan A-3 as of June 27, 2025 was %.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of June 27, 2025, the Company had an insignificant amount of issued standby letters of credit.
The Loan Agreement governing the 2027 Revolving Credit Facility and the term loan facility requires the Company to maintain a ratio (“Leverage Ratio”) of total funded debt to Consolidated Adjusted EBITDA (as defined in the Loan Agreement) below a maximum, at the end of each quarter, which was times through June 27, 2025 and will be times thereafter. As of June 27, 2025, the Company was in compliance with all financial covenants under the Loan Agreement.
The Loan Agreement also requires the Company to comply with customary covenants that include, among others, limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolution, asset sales, dividends and distribution, and other payments in respect of the Company’s capital stock, prepayments of certain debt, transactions with affiliates and certain modifications of organizational documents and certain debt agreements.
Senior Notes
In February 2018, the Company issued $ billion aggregate principal amount of senior unsecured notes due February 15, 2026 (the “2026 Senior Unsecured Notes”). The 2026 Senior Unsecured Notes bear interest at an annual rate of % with interest payable on February 15 and August 15 of each year. The Company is not required to make principal payments on the 2026 Senior Unsecured Notes prior to the maturity date. In April 2025 however, the Company redeemed, at its election, $ billion aggregate principal amount of its 2026 Unsecured Notes at par plus accrued interest.
On November 3, 2023, the Company issued $ billion aggregate principal amount of convertible senior notes which bear interest at an annual rate of % and mature on November 15, 2028, unless earlier repurchased, redeemed or converted (the “2028 Convertible Notes”). The Company is not required to make principal payments on the 2028 Convertible Notes prior to the maturity date. The 2028 Convertible Notes are guaranteed by Western Digital Technologies, Inc., the Company’s wholly-owned subsidiary that also guarantees the 2026 Senior Unsecured Notes.
The 2028 Convertible Notes are convertible at the option of any holder beginning on August 15, 2028, at a conversion price of approximately $ per share of common stock (which conversion price has been adjusted from its original conversion price of approximately $ in accordance with the Indenture, as a result of the Separation and dividends paid on the Company’s common stock). Prior to August 15, 2028, if the trading price of the Company’s common stock remains above % of the conversion price for at least trading days (whether or not consecutive) during the consecutive trading-day period prior to the end of a calendar quarter, holders of the 2028 Convertible Notes would have the right to convert the 2028 Convertible Notes during the next succeeding calendar quarter. The 2028 Convertible Notes are also convertible prior to August 15, 2028 upon the occurrence of certain corporate events. Upon any conversion of the 2028 Convertible Notes, the Company will pay cash for the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes being converted. On or after November 15, 2026, the Company may redeem for cash, at par plus accrued interest, all or any portion of the 2028 Convertible Notes, at its option, if the last reported sale price of the Company’s common stock has been at least % of the conversion price then in effect for at least trading days during any consecutive trading day period immediately preceding the date of the Company’s redemption notice.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In connection with the issuance of the 2028 Convertible Notes, the Company also entered into privately negotiated capped call transactions with certain counterparties (the “Capped Calls”). The Capped Calls each have a strike price of approximately $ per share, which has been adjusted from its original strike price of approximately $, in accordance with the terms of the agreements, and corresponds to the current conversion price of the 2028 Convertible Notes. The Capped Calls are subject to the same adjustments applicable to the conversion price of the convertible notes, which the Company expects will result in adjusted cap prices of approximately $ per share, subject to certain adjustments. The Capped Calls are generally intended to reduce or offset the potential dilution to the Company’s common stock upon any conversion of the 2028 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. If the market price per share of the Company’s common stock, as measured under the terms of the Capped Calls, exceeds the cap prices of the Capped Calls, there would not be an offset for the excess. The Capped Calls are separate transactions and not part of the terms of the 2028 Convertible Notes. As these transactions met certain accounting criteria, the Capped Calls were recorded in shareholders’ equity and are not accounted for as derivatives. The cost of the Capped Calls of $ million, net of $ million in deferred tax assets, was recorded as a decrease to Additional paid-in capital on the Company’s Consolidated Balance Sheets.
In December 2021, the Company issued $ million aggregate principal amount of % senior notes due February 1, 2029 (the “2029 Senior Notes”) and issued $ million aggregate principal amount of % senior notes due February 1, 2032 (the “2032 Senior Notes”), pursuant to the terms of an indenture, dated as of December 10, 2021 (the “Base Indenture”) between the Company and U.S. Bank National Association, as trustee (the “Senior Notes Trustee”), as supplemented by the first supplemental indenture dated as of December 10, 2021 (the “Senior Notes First Supplemental Indenture”) between the Company and the Senior Notes Trustee. As used herein, “Indenture” means the Base Indenture, as supplemented by the Senior Notes First Supplemental Indenture. Interest for both the 2029 Senior Notes and 2032 Senior Notes is payable on February 1 and August 1 of each year. The Company is not required to make principal payments on either the 2029 Senior Notes or 2032 Senior Notes prior to their maturity dates.
In February 2018, the Company issued $ billion aggregate principal amount of convertible senior notes due February 1, 2024 (the “2024 Convertible Notes”). The 2024 Convertible Notes bore interest at an annual rate of % with interest payable on February 1 and August 1 of each year. Contemporaneously with the issuance of the 2028 Convertible Notes as noted above, the Company entered into individually negotiated transactions with certain holders of the Company’s 2024 Convertible Notes to repurchase approximately $ million aggregate principal amount of such notes at an immaterial discount. On February 1, 2024, the Company settled all remaining 2024 Convertible Notes in accordance with their original terms for an aggregate cash principal payment of $ million plus interest.
Collateral and Restrictive Covenants
Under the terms of the Loan Agreement, the 2027 Revolving Facility and Term Loan Facility (together, the “Credit Facilities”) are unconditionally guaranteed by Western Digital Technologies, Inc. (the “Guarantor”) and are secured on a first-priority basis (subject to permitted liens) by a lien on substantially all assets and properties of the Company and the Guarantor (the “Collateral”), subject to certain exceptions. Furthermore, under the terms of the applicable indentures, the obligations under the Company’s % Senior Notes due 2029 and % Senior Notes due 2032 have been secured by the Collateral on an equal and ratable basis to the obligations under the Credit Facilities, and the obligations under the Company’s 2026 Senior Unsecured Notes have been guaranteed by the Guarantor pursuant to the First Supplemental Indenture dated as of June 20, 2023 and the Second Supplemental Indenture dated as of April 26, 2024 (the “2026 Senior Notes Supplemental Indentures”).
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | 2027 | | | |
| 2028 | | | |
| 2029 | | | |
| 2030 | | | |
| 2031 and thereafter | | | |
| Total debt maturities | | | |
Issuance costs | | () | |
| Net carrying value | | $ | | |
(1) As of June 30, 2025, the holders of the 2028 Convertible Notes will have the option to convert the notes from July 1, 2025 through September 30, 2025. As such, the principal portion of these notes is reflected as current in the table above.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 9.
%.
Obligations and Funded Status
| | $ | | | | $ | | | | Service cost | | | | | | | | |
| Interest cost | | | | | | | | |
| Plan amendments | | | | | | | | |
Actuarial gain | () | | | () | | | () | |
| Benefits paid | () | | | () | | | () | |
| Settlement/curtailment | | | | | | | () | |
| Other | | | | | | | | |
| Non-U.S. currency movement | | | | () | | | () | |
| Projected benefit obligation at end of period | | | | | | | | |
| Change in plan assets: | | | | | |
| Fair value of plan assets at beginning of period | | | | | | | | |
| Actual return on plan assets | | | | | | | | |
| Employer contributions | | | | | | | | |
| Benefits paid | () | | | () | | | () | |
| |
| Non-U.S. currency movement | | | | () | | | () | |
| Fair value of plan assets at end of period | | | | | | | | |
| Unfunded status | $ | | | | $ | | | | $ | | |
| | $ | | | | Non-current liabilities | | | | | |
| Net amount recognized | $ | | | | $ | | |
The accumulated benefit obligation for the Pension Plans was $ million at June 27, 2025. As of June 27, 2025, the accumulated other income pension balance was $ million. There were material prior service credits for the Pension Plans recognized in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheet as of June 27, 2025.
Net periodic benefit costs were not material for 2025, 2024 and 2023.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
% | | | % | | | % | | Rate of compensation increase | | % | | | % | | | % |
The weighted-average actuarial assumptions used to determine benefit costs for the Pension Plans were as follows: | | | | | | | | | | | | | | | | | |
|
| 2025 | | 2024 | | 2023 |
| Discount rate | | % | | | % | | | % |
| Expected long-term rate of return on plan assets | | % | | | % | | | % |
| Rate of compensation increase | | % | | | % | | | % |
The Company develops a discount rate by calculating when the estimated benefit payments will be due. Management then matches the benefit payments to high quality bonds which match the timing of the expected benefit payments to determine the appropriate discount rate.
The Company develops the expected long-term rate of return on plan assets by analyzing rates of return in each plan as well as the investment portfolio applicable to the plan depending on each plan’s economic environment. The Company’s estimates of future rates of return on assets is based in large part on the projected rate of return from the respective investment managers using a long-term view of historical returns, as well as actuarial recommendations using the most current generational and mortality tables and rates. As of June 27, 2025, the Pension Plans’ assets materially consisted of plan assets related to the Japan pension plan and, as such, the assumption used herein is primarily related to the Japan pension plan.
The Company develops the rate of compensation increase assumptions using local compensation practices and historical rates of increases.
Plan Assets
Investment Policies and Strategies
The investment policy in the Pension Plans is to generate a stable return on investments over a long-term horizon in order to have adequate pension funds to meet the Company’s future obligations. In order to achieve this investment goal, a diversified portfolio with target asset allocation and expected rate of return is established by considering factors such as composition of participants, level of funded status, capacity to absorb risks and the current economic environment. The target asset allocation is % in debt securities, % in equity securities, and the remaining % in other assets. Risk management is accomplished through diversification, periodic review of plan asset performance and appropriate realignment of asset allocation. Assumptions regarding the expected long-term rate of return on plan assets are periodically reviewed and are based on the historical trend of returns, the risk and correlation of each asset and the latest economic environment.
The expected long-term rate of return is estimated based on many factors, including expected forecast for inflation, risk premiums for each asset class, expected asset allocation, current and future financial market conditions and diversification and rebalancing strategies. Historical return patterns and correlations, consensus return forecasts and other relevant financial factors are analyzed periodically by the investment advisor so as to ensure that the expected long-term rate of return is reasonable and appropriate.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | $ | | | | $ | | | | $ | | | | Fixed income: | | | | | | | |
|
Fixed income commingled/mutual funds(1)(3) | | | | | | | | | | | |
|
|
|
| Net plan assets subject to leveling | | | | | | | | | | | |
|
| Real estate investment trust at net asset value | — | | | — | | | — | | | | |
| Total investments at fair value | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| June 28, 2024 |
| Level 1 | | Level 2 | | Level 3 | | Total |
| (in millions) |
| Plan assets measured at fair value: | | | |
| Equity: | | | | | |
|
Equity commingled/mutual funds(1)(2) | $ | | | | $ | | | | $ | | | | $ | | |
| Fixed income: | | | | | | | |
|
Fixed income commingled/mutual funds(1)(3) | | | | | | | | | | | |
|
|
|
| Net plan assets subject to leveling | | | | | | | | | | | |
|
|
| | |
|
| | | |
| | |
The weighted average remaining lease term and discount rate for the Company’s operating leases were as follows: | | | | | | | | | | | |
| June 27,
2025 | | June 28,
2024 |
Weighted average remaining lease term in years | | | |
Weighted average discount rate | | % | | | % |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | | 2027 | | | |
| 2028 | | | |
| 2029 | | | |
| 2030 | | | |
| Thereafter | | | |
| Total future minimum lease payments | | | |
Less: imputed interest | | | |
| Present value of lease liabilities | $ | | | |
Purchase Agreements and Other Commitments
In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components.
|
| 2027 | | | |
|
|
|
|
|
| |
|
| | |
| | | | $ | | | | $ | | |
| | |
| | |
| |
|
| | | | | | |
| | |
)| | | | $ | | | | $ | | |
Any shortfalls or excess windfall tax benefits related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were not material for the periods presented.
Compensation costs related to unvested RSUs, PSUs and rights to purchase shares of common stock under the ESPP will generally be amortized on a straight-line basis over the remaining average service period.
| | | | ESPP | | | | |
| Total unamortized compensation cost | $ | | | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
RSUs and PSUs
| | $ | | | | | | Granted | | | | | | | |
| |
| Vested | () | | | | | | $ | | |
| Forfeited | () | | | | | | |
| RSUs and PSUs outstanding at June 30, 2023 | | | | | | | |
| Granted | | | | | | | |
| |
| Vested | () | | | | | | $ | | |
| Forfeited | () | | | | | | |
| RSUs and PSUs outstanding at June 28, 2024 | | | | | | | |
| Granted | | | | | | | |
| |
| Vested | () | | | | | | $ | | |
| Forfeited | () | | | | | | |
| Share conversion due to Separation | | | | | | | |
| Awards cancelled due to Separation | () | | | | | | |
| RSUs and PSUs outstanding at June 27, 2025 | | | | $ | | | | |
RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units.
Fair Value Valuation Assumptions
RSU and PSU Grants
The fair value of the Company’s RSU and PSU awards is determined based upon the closing price of the Company’s stock price on the date of grant. The fair value of PSU awards with a market condition is estimated using a Monte Carlo simulation model on the date of grant.
ESPP – Black-Scholes-Merton Model
The fair value of ESPP purchase rights issued is estimated at the date of grant of the purchase rights using the Black-Scholes-Merton option pricing model. The Black-Scholes-Merton option pricing model requires the input of assumptions such as the expected stock price volatility and the expected period until options are exercised. Purchase rights under the ESPP are generally granted on either June 1st or December 1st of each year.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| $ |
Convertible Preferred Stock
On January 31, 2023, the Board of Directors of the Company authorized the designation of shares of Series A Convertible Perpetual Preferred Stock, par value $ per share (the “Preferred Shares”) from the Company’s existing authorized but unissued shares of preferred stock and issued the Preferred Shares through a private placement for an aggregate purchase price of $ million, less issuance costs of $ million. During the year ended June 28, 2024, of the Preferred Shares were converted into approximately million shares of common stock in accordance with the original terms of the Preferred Shares. As of both June 27, 2025 and June 28, 2024, Preferred Shares were outstanding.
Preferred dividend provisions
The Preferred Shares have an initial stated value of $ per share and accrue a cumulative preferred dividend at an annual rate of % per annum (increasing to % per annum on January 31, 2030 and to % per annum on January 31, 2033) compounded on a quarterly basis. Such dividends are payable on a quarterly basis in cash or in-kind through an increase to the stated value. Dividends in-kind were declared from the date of issuance of the Preferred Shares through December 31, 2024. Preferred dividends in cash of $ million were declared and paid in 2025. The Preferred Shares also participate in any dividends declared for common shareholders on an as-converted equivalent basis. As of June 27, 2025 and June 28, 2024, accumulated dividends in-kind were $ million and $ million, respectively.
Conversion rights
The Preferred Shares are convertible into shares of the Company’s common stock at a conversion rate of approximately $ per share (the “Conversion Price”). The conversion rate was adjusted from the initial conversion rate of $ per share as a result of the Separation, in accordance with the Certificate of Designations for the Preferred Shares, using a ratio of the closing price of the Company’s and Sandisk’s common stock over the first trading days after the Separation. This rate is subject to future anti-dilution adjustments and certain other one-time adjustments in the event of various specified spin-off-related transactions. This Conversion Price applies to the total of the stated value of the Preferred Shares plus any cumulative accrued but unpaid dividends (the “Accumulated Stated Value”). In the case of future standalone spin-off transactions, the holders of the Preferred Shares may convert one-third of their Preferred Shares into a similar class of preferred shares of the spin-off entity. The Company may opt to convert the Preferred Shares after January 31, 2026, if the closing price per share of the Company’s common stock exceeds % of the Conversion Price for at least out of consecutive trading days immediately before the Company’s conversion notice.
As of June 27, 2025 and June 28, 2024, the Preferred Shares outstanding would have been convertible, if otherwise permitted, into million and million shares of common stock, respectively, based on the conversion rate in effect at each such date.
Redemption
After January 31, 2030, the Company will have the right, but not the obligation, to redeem the Preferred Shares for an amount in cash equal to % of the Accumulated Stated Value. Redemption is contingently mandatory in the event of a fundamental change in the business as defined in the designation of the Preferred Shares.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Share Repurchase Program
On May 9, 2025, the Company’s Board of Directors authorized a share repurchase program for the repurchase of up to $ billion of the Company’s common stock. There is no expiration date for the share repurchase program. For the year ended June 27, 2025, the Company repurchased million shares for a total cost of $ million. The remaining amount available to be repurchased under the Company’s share repurchase program as of June 27, 2025 was $ billion. Repurchases under the share repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan. The Company expects share repurchases to be funded principally by operating cash flows. The amount and timing of share repurchases will depend on market conditions and other corporate considerations. The company may suspend or discontinue the share repurchase program at any time.
Stock Reserved for Issuance
| | Outstanding awards and shares available for award grants | | |
Convertible preferred stock | | |
| ESPP | | |
| Total | | |
Dividends to Common Shareholders
On April 29, 2025, the Company’s Board of Directors authorized the adoption of a quarterly cash dividend program. Under the cash dividend program, holders of the Company’s common stock will receive dividends when and as declared by the Board of Directors. During the year ended June 27, 2025, the Company paid cash dividends of $ per share of its outstanding common stock, totaling $ million, including payment to holders of the Company’s Series A Preferred Stock in accordance with their participation rights.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company may modify, suspend, or cancel its cash dividend program in any matter and at any time. The amount of future dividends under the Company’s cash dividend program, and the declaration and payment thereof, will be based upon all relevant factors, including the Company’s financial position, results of operations, cash flows, capital requirements and restrictions under the Company’s Loan Agreement and other financing agreements, and shall be in compliance with applicable law.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 13.
| | $ | () | | | $ | () | | | Domestic | () | | | () | | | () | |
| Income (loss) before taxes | $ | | | | $ | () | | | $ | () | |
Income Tax Expense (Benefit)
| | $ | | | | $ | | | | Domestic - Federal | | | | | | | | |
| Domestic - State | () | | | | | | () | |
| | | | | | | | |
| Deferred: | | | | | |
| Foreign | () | | | () | | | | |
| Domestic - Federal | () | | | () | | | | |
| Domestic - State | () | | | () | | | () | |
| () | | | () | | | | |
Income tax expense (benefit) | $ | () | | | $ | | | | $ | | |
Previously, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the ability to deduct research and development (“R&D”) expenditures in the year incurred, requiring capitalization and amortization under Internal Revenue Code Section 174. On July 4, 2025, the One Big Beautiful Bill Act of 2025 (“OBBBA”) was signed into law, which includes broad tax reform provisions that extend and modify key elements of the TCJA. Notably, the new legislation now allows an option for the immediate expensing of domestic R&D expenditures, beginning with fiscal year 2026. The legislation also includes favorable modifications to international tax provisions, including changes to the Global Intangible Low-Taxed Income regime and enhancements to the Foreign-Derived Intangible Income deduction. Because the OBBBA provisions are not effective for the Company until fiscal year 2026 and the enactment date occurred after the balance sheet date, the tax effects of the OBBBA are not included in the operating results for the fiscal year ended June 27, 2025.
On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which contained, among other things, a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income (“AFSI”) exceeding $1.00 billion. The CAMT became effective for the Company beginning with fiscal year 2024. The Company was not subject to CAMT in fiscal year 2024 and does not expect to be subject to CAMT for fiscal year 2025 as its average annual AFSI did not exceed $1.00 billion for the preceding three-year period.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | $ | | | | Accrued compensation and benefits not currently deductible | | | | | |
|
| Net operating loss carryforward | | | | | |
| Business credit carryforward | | | | | |
| Long-lived assets | | | | | |
| Interest and hedging costs not currently deductible | | | | | |
| Other | | | | | |
| Total deferred tax assets | | | | | |
| Deferred tax liabilities: | | | |
| Long-lived assets | () | | | () | |
| Unremitted earnings of certain non-U.S. entities | () | | | () | |
| Other | () | | | | |
| Total deferred tax liabilities | () | | | () | |
| Valuation allowances | () | | | () | |
| Deferred tax assets, net | $ | | | | $ | | |
The increase in the deferred tax assets is attributable primarily to one-time deferred tax benefits related to the inter-entity asset transfer in conjunction with the Separation and the mandatory capitalization of R&D expenditures. While the OBBBA allows for the immediate expensing of domestic R&D expenditures, these provisions are not effective for Company until fiscal year 2026. As such, the Company is required to capitalize a portion of its R&D expenditures in fiscal year 2025 under the prior law. The change in the deferred tax liabilities is attributable primarily to a remeasurement of the Company’s California taxes associated with its un-remitted earnings of its non-U.S. entities. This change is offset entirely by an equal and offsetting change in the valuation allowance. The Company continues to assess and adjust its valuation allowance based on operating results and market conditions. After weighing both the positive and negative evidence available, including, but not limited to, earnings history, projected future outcomes, industry and market trends and the nature of each of the deferred tax assets, the Company determined that it is able to realize its deferred tax assets except for certain loss and credit carryforwards.
The Company is permanently reinvested with respect to certain foreign earnings. There is no unrecognized deferred tax liability associated with the repatriation of these foreign undistributed earnings as it can be achieved without additional federal tax consequences.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
% | | | % | | | % | | Tax rate differential on international income | () | | | () | | | () | |
| |
| |
| Tax effect of U.S. foreign income inclusion | | | | () | | | () | |
| Tax effect of U.S. foreign minimum tax | | | | () | | | | |
| |
| Tax effect of U.S. stock-based compensation | () | | | () | | | () | |
| Tax effect of non-deductible loss on retained interest in Sandisk | | | | | | | | |
| Tax effect of U.S. permanent differences | | | | | | | () | |
| State income tax, net of federal tax | | | | | | | () | |
| |
| |
| |
| |
| Change in valuation allowance | | | | () | | | | |
| Unremitted earnings of certain non-U.S. entities | () | | | () | | | () | |
| |
| Foreign income tax credits | () | | | | | | | |
| R&D tax credits | () | | | | | | | |
| U.S. return to provision | | | | | | | () | |
| Tax reserves | | | | () | | | () | |
| Inter-entity asset transfer | () | | | | | | | |
| Other | () | | | | | | () | |
| Effective tax rate | () | % | | () | % | | () | % |
The tax rate differentials on international income are comprised primarily of reduced tax rates from the Company tax holidays and tax incentive programs in the Philippines and Thailand in fiscal years 2025 and 2024, and in Malaysia, the Philippines, and Thailand in fiscal 2023.
Tax Holidays and Carryforwards
A substantial portion of the Company’s manufacturing operations in the Philippines and Thailand operate under various tax holidays and tax incentive programs, which will expire in whole or in part at various dates during 2026 through 2033. Certain tax holidays and tax incentive programs may be extended if specific conditions are met. On November 1, 2023, the Company’s tax holiday in Malaysia expired. The Company has applied for an extension and continues to be engaged in active discussions with the Malaysian Investment Development Authority. Because the exact terms of an extension are not currently known, the Company is applying the Malaysia corporate statutory tax rate on its Malaysian income for the full fiscal year. If an extension is granted, the Company will make an adjustment to its effective tax rate in that period.
The direct tax impact of these tax holidays and tax incentives was an increase to the Company’s net earnings by $ million, or $ per diluted share, $ million, or $ per diluted share, and $ million, or $ per diluted share, in 2025, 2024 and 2023, respectively.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
| | 2026 to 2038 | California NOL | | | | 2040 to 2047 |
Other State NOL | | | | Various |
| Federal tax credits | | | | 2027 to 2036 |
| State tax credits | | | | No expiration |
The federal and state NOLs and credits relating to various acquisitions are subject to limitations under Sections 382 and 383 of the U.S. Internal Revenue Code. The Company expects the total amount of federal and state NOLs ultimately realized will be reduced as a result of these provisions by $ million and $ million, respectively. The Company expects the total amount of federal and state credits ultimately realized will be reduced as a result of these provisions by $ million and $ million, respectively.
As of June 27, 2025, the Company had varying amounts of foreign NOL carryforwards that do not expire or, if not used, expire in various years, depending on the country. | | 2029 | | Japan | | | | 2026 |
|
Uncertain Tax Positions
With the exception of certain unrecognized tax benefits that are directly associated with the tax position taken, unrecognized tax benefits are presented gross in the Consolidated Balance Sheets.
| | $ | | | | $ | | |
| Gross increases related to current year tax positions | | | | | | | | |
| Gross increases related to prior year tax positions | | | | | | | | |
| Gross decreases related to prior year tax positions | () | | | () | | | () | |
| Settlements | () | | | () | | | () | |
| Lapse of statute of limitations | () | | | () | | | () | |
| |
Distribution in connection with the Separation | () | | | | | | | |
| Unrecognized tax benefit, ending balance | $ | | | | $ | | | | $ | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
This potential cash payment is expected to be netted with offsetting favorable tax receivables totaling $ million, including among other things, a reduction to our mandatory deemed repatriation tax obligations related to the settlement for the years 2008 through 2015, for a potential net cash payment of $ million. These tax receivables are classified in Other current assets on the Consolidated Balance Sheets as of June 27, 2025.
The Company files U.S. Federal, U.S. state and foreign tax returns. For both federal and state tax returns, with few exceptions, the Company is subject to examination for 2016 through 2024. The Company is no longer subject to examination by the IRS for periods prior to 2016, although carry forwards generated prior to those periods may still be adjusted upon examination by the IRS or state taxing authority if they either have been or will be used in a subsequent period.
The Company had previously reached a final agreement with the IRS regarding notices of deficiency with respect to years 2008 through 2012 and in February 2024, the Company also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015. During the year ended June 27, 2025, the Company made payments of $ million for interest with respect to years 2008 through 2012 and $ million for tax and interest with respect to years 2013 through 2015, resulting in no remaining liability as of June 27, 2025 related to all years from 2008 through 2015.
In connection with settlements for the years 2008 through 2015, the Company expects to realize reductions to its mandatory deemed repatriation tax obligations and tax savings from interest deductions in future years aggregating to approximately $ million. Of this amount, $ million of interest savings from the interest paid with respect to years 2008 through 2015 is classified as a deferred tax asset due to interest expense limitation rules.
The Company believes that adequate provision has been made for any adjustments that may result from any other tax examinations. However, the outcome of such tax examinations cannot be predicted with certainty. If any issues addressed in the Company’s tax examinations are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. As of June 27, 2025, with the exception of the net potential payment of $ million, it was not possible to estimate the amount of change, if any, in the unrecognized tax benefits that is reasonably possible within the next twelve months. Any significant change in the amount of the Company’s liability for unrecognized tax benefits would most likely result from additional information relating to the examination of the Company’s tax returns.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 14.
| | | |
Basic income (loss) per share attributable to common shareholders is computed using (i) net income (loss) less (ii) dividends paid to holders of Preferred Shares less (iii) net income (loss) attributable to participating securities divided by (iv) weighted average basic shares outstanding. Diluted net income (loss) per share attributable to common shareholders is computed as (i) basic net income (loss) attributable to common shareholders plus (ii) diluted adjustments to income allocable to participating securities divided by (iii) weighted average diluted shares outstanding. The “if-converted” method is used to determine the dilutive impact for the convertible notes and the Preferred Shares. The treasury stock method is used to determine the dilutive impact of unvested equity awards.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15.
| | | | | | |
| () | | | $ | | | | $ | | |
The following table presents an analysis of the components of these activities against the reserve (included in Accrued expenses) during the year ended June 27, 2025:
| | | | | | | | | | | | | | | | | |
| Employee Termination Benefits | | Contract Termination and Other | | Total |
| (in millions) |
| Accrual balance at June 28, 2024 | $ | | | | $ | | | | $ | | |
| Charges | | | | | | | | |
| Cash payments | () | | | () | | | () | |
Recovery of non-cancellable purchase orders | | | | () | | | () | |
| Accrual balance at June 27, 2025 | $ | | | | $ | | | | $ | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 16.
to days and payment terms that the Company negotiates with its suppliers are not impacted by whether a supplier participates in the program. The Company does not provide any guarantees to any third parties, and no assets are pledged in connection with the arrangements.
The Company’s outstanding payment obligations to vendors eligible to participate under its supplier finance program were $ million and $ million as of June 27, 2025 and June 28, 2024, respectively, and are included within Accounts payable on the Company’s Consolidated Balance Sheets with the associated payments reflected in the operating activities section of the Consolidated Statements of Cash Flows.
| Invoices confirmed during the year | | |
Confirmed invoices paid during the year | () | |
|
Confirmed obligations outstanding at the end of the year | $ | | |
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 17.
patents (together, the “MRT Patents”). The trial concluded on July 26, 2024, and the jury awarded MRT a lump sum of $ million for use of the MRT Patents in the past and through their remaining lives. MRT also requested and was awarded prejudgment interest totaling $ million in a judgment entered on August 15, 2024. In addition, MRT requested attorney’s fees and post-judgment interest.
In the fourth quarter of fiscal year 2024, the Company recognized an aggregate liability for this matter of $ million with $ million recognized as an Operating expense under Litigation matter for the year ended June 28, 2024 and $ million recognized as Other non-current assets for the patent licenses, to be amortized over their remaining lives.
Subsequently, in April 2025, pursuant to a confidential agreement, MRT and the Company reached a global settlement of $ million for all pending legal disputes. The settlement resulted in the dismissal of the MRT matter, as well as a second patent litigation matter MRT filed on August 22, 2024 against the Company. As a result of the settlement, the Company reversed $ million of previously recorded charges in Operating expense under Litigation matter and $ million of post-judgment interest previously recorded in Other income (expense), net.
On September 28, 2016, SPEX Technologies, Inc. (“SPEX”) filed a lawsuit in the Central District Court against the Company and two of the Company’s current or former wholly-owned subsidiaries, Western Digital Technologies, Inc. and HGST Inc., alleging infringement of U.S. Patent Nos. 6,088,802 and 6,003,135, both of which allegedly relate to moving a security mechanism (e.g., the encrypting/decrypting mechanism) from a host computer or a separate device to a peripheral device that provides data storage. As the case progressed, SPEX dismissed its allegations relating to U.S. Patent No. 6,003,135 and narrowed its case to claim related to U.S. Patent No. 6,088,802 and asserted this against certain HDD products that may include certain encryption capabilities. The trial commenced on October 8, 2024, and concluded on October 18, 2024, and the jury awarded SPEX damages of $ million for the use of claim related to U.S. Patent No. 6,088,802 in the past, prior to its expiration in 2017. On January 8, 2025, the Court entered judgment for SPEX in accordance with the verdict and also awarded SPEX prejudgment interest of $ million and legal costs. On June 16, 2025, the Court ruled on the Company’s post-trial motions, finding that SPEX did not present sufficient evidence on which a damages award could be determined and therefore awarded nominal damages of $. On June 27, 2025, the Court entered an amended judgment awarding SPEX nominal damages of $ with no prejudgment interest and no legal costs. The Company has appealed the infringement finding, and SPEX has appealed damages-related issues. Based on available appellate arguments, the Company believes a loss is not probable and has not accrued a liability as a result of the jury verdict or the entry of amended judgment in its financial statements as of June 27, 2025.
Other Matters
In the normal course of business, the Company is subject to legal proceedings, lawsuits and other claims. Although the ultimate aggregate amount of reasonably possible monetary liability or financial impact with respect to these other matters is subject to many uncertainties, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, any monetary liability and financial impact to the Company from these matters could differ materially from management’s expectations.
The ability to predict the ultimate outcome of any legal proceeding involves judgments, estimates and inherent uncertainties. The actual outcome of these matters could differ materially from management’s estimates.
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 18.
| | $ | | | | $ | | | | $ | | | | Gross profit | | | | | | | | | | | |
Net income from continuing operations | | | | | | | | | | | |
|
Net income | | | | | | | | | | | |
|
| | | | | | | |
|
|
Net income per common share: | | | | | | | |
Continuing operations - basic | $ | | | | $ | | | | $ | | | | $ | | |
|
Earnings per common share - basic | | | | | | | | | | | |
Continuing operations - diluted | | | | | | | | | | | |
|
Earnings per common share - diluted | | | | | | | | | | | |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| First | | Second | | Third | | Fourth |
| (in millions, except per share amounts) |
| 2024 | | | | | | | |
| Revenue, net | $ | | | | $ | | | | $ | | | | $ | | |
| Gross profit | | | | | | | | | | | |
| Net income (loss) from continuing operations | () | | | () | | | () | | | () | |
|
| Net income (loss) | () | | | () | | | | | | | |
|
| | | | | | | |
|
|
|
Net income (loss) per common share: | | | | | | | |
Continuing operations - basic | $ | () | | | $ | () | | | $ | () | | | $ | () | |
|
Earnings (loss) per common share - basic | () | | | () | | | | | | | |
|
Continuing operations - diluted | () | | | () | | | () | | | () | |
|
Earnings (loss) per common share - diluted | () | | | () | | | | | | | |
|
|
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a‑15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10‑K.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report on Form 10‑K, our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) of the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Our management evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the period covered by this Annual Report on Form 10‑K. KPMG LLP, our independent registered public accounting firm, which audited the Consolidated Financial Statements included in this Annual Report on Form 10-K, has issued an audit report on our internal control over financial reporting. See Report of Independent Registered Public Accounting Firm herein.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during the quarter ended June 27, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations of Effectiveness of Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a system of internal control over financial reporting, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9B. Other Information
During the quarter ended June 27, 2025, the following officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted trading arrangements for the purchase or sale of securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (“Rule 10b5-1 Plan”):
•, of the Company a Rule 10b5-1 Plan on . Under this plan, up to an aggregate of shares of the Company’s common stock may be sold before the plan expires on .
•, of the Company, a Rule 10b5-1 Plan on . Under this plan, up to an aggregate of shares of the Company’s common stock may be sold before the plan expires on .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the 2025 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission (the “SEC”) no later than 120 days after the close of the year ended June 27, 2025. In addition, our Board of Directors has adopted a Code of Business Ethics that applies to all of our directors, employees and officers, including our Chief Executive Officer and Chief Financial Officer. The current version of the Code of Business Ethics is available on our website under the Corporate Governance section at www.westerndigital.com. To the extent required by rules adopted by the SEC and The Nasdaq Stock Market LLC, we intend to promptly disclose future amendments to certain provisions of the Code of Business Ethics, or waivers of such provisions granted to executive officers and directors, on our website under the Corporate Governance section at www.westerndigital.com.
Item 11. Executive Compensation
There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC no later than 120 days after the close of the year ended June 27, 2025.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC no later than 120 days after the close of the year ended June 27, 2025.
Item 13. Certain Relationships and Related Transactions, and Director Independence
There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC no later than 120 days after the close of the year ended June 27, 2025.
Item 14. Principal Accountant Fees and Services
There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC no later than 120 days after the close of the year ended June 27, 2025.
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as a part of this Annual Report on Form 10‑K:
(1)Financial Statements. The financial statements included in Part II, Item 8 of this document are filed as part of this Annual Report on Form 10‑K.
(2)Financial Statement Schedules.
All schedules are omitted as the required information is immaterial, inapplicable or the information is presented in the Consolidated Financial Statements or related Notes.
(3)Exhibits. The exhibits listed in the Exhibit Index below are filed with, or incorporated by reference in, this Annual Report on Form 10‑K, as specified in the Exhibit List, from exhibits previously filed with the SEC. Certain agreements listed in the Exhibit List that we have filed or incorporated by reference may contain representations and warranties by us or our subsidiaries. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosures, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe the actual state of affairs at the date hereof and should not be relied upon.
EXHIBIT INDEX | | | | | | | | |
Exhibit
Number | | Description |
| | Separation and Distribution Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Amended and Restated Certificate of Incorporation of Western Digital Corporation, as amended to date (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Certificate of Designations, Preferences and Rights of Series A Convertible Perpetual Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on February 1, 2023) |
| | Amended and Restated Bylaws of Western Digital Corporation, as amended effective as of March 13, 2025 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on March 13, 2025) |
| | Description of Western Digital Corporation’s Capital Stock (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Indenture (including Form of 4.750% Senior Notes due 2026), dated as of February 13, 2018, among Western Digital Corporation, HGST, Inc., WD Media, LLC, Western Digital (Fremont), LLC and Western Digital Technologies, Inc., as guarantors; and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Company on February 13, 2018) |
| | First Supplemental Indenture, dated as of June 20, 2023, by and among Western Digital Technologies, Inc. and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed by the Company on June 21, 2023) |
| | Second Supplemental Indenture, dated as of April 26, 2024, between Western Digital Corporation, SanDisk Corporation, SanDisk Technologies, Inc., and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.4 to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Indenture, dated as of December 10, 2021, between Western Digital Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Company on December 10, 2021) |
| | First Supplemental Indenture (including Form of 2.850% Senior Notes due 2029 and Form of 3.100% Senior Notes due 2032), dated as of December 10, 2021, between Western Digital Corporation and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by the Company on December 10, 2021) |
| | Indenture (including Form of 3.00% Convertible Senior Notes due 2028), dated as of November 3, 2023 (the “Indenture”), among (i) Western Digital Corporation, (ii) Western Digital Technologies, Inc., as guarantor, and (iii) U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K the Securities and Exchange Commission on November 3, 2023) |
| | First Supplemental Indenture, dated as of April 26, 2024, between (i) Western Digital Corporation, (ii) SanDisk Corporation, (iii) SanDisk Technologies, Inc., and (iv) U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.8 to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Restatement Agreement, dated January 7, 2022, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Company on May 4, 2022) |
| | Amendment No. 1, dated as of December 23, 2022, to the Amended and Restated Loan Agreement, dated as of January 7, 2022, by and among Western Digital Corporation, each lender party thereto, J.P. Morgan Chase Bank, N.A. as Administrative Agent and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on December 23, 2022) |
| | Amendment No. 2, dated as of June 20, 2023, to the Amended and Restated Loan Agreement, dated as of January 7, 2022, by and among Western Digital Corporation, each lender party thereto, J.P. Morgan Chase Bank, N.A. as Administrative Agent and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on June 21, 2023) |
| | Amendment No. 3, dated as of June 11, 2024, to the Amended and Restated Loan Agreement dated as of January 7, 2022, by and among Western Digital Corporation, each lender party thereto, J.P. Morgan Chase Bank, N.A. as Administrative Agent and the other parties thereto (incorporated by reference to Exhibit 10.16(3) to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Amendment No. 4, dated as of February 20, 2025, to the Amended and Restated Loan Agreement, dated as of January 7, 2022, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Amendment No. 5, dated as of May 21, 2025, to the Amended and Restated Loan Agreement, dated as of January 7, 2022, by and among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto† |
| | Guaranty, dated as of June 20, 2023, by and among Western Digital Corporation, Western Digital Technologies, Inc. and JPMorgan Chase Bank, N.A. as Administrative Agent (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by the Company on June 21, 2023) |
| | | | | | | | |
Exhibit
Number | | Description |
| | Assumption and Supplement to Guaranty Agreement, dated as of April 26, 2024, made by each of (i) SanDisk Technologies, Inc. and (ii) SanDisk Corporation (incorporated by reference to Exhibit 10.17(1) to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Security Agreement, dated as of June 20, 2023, by and among Western Digital Corporation, Western Digital Technologies, Inc and JPMorgan Chase Bank, N.A. as collateral agent (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Company on June 21, 2023) |
| | Assumption and Supplemental Security Agreement, dated as of April 26, 2024, from SanDisk Corporation and SanDisk Technologies, Inc. to JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.18(1) to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
| | Form of Confirmation for Capped Call Transactions (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on November 3, 2023) |
| | Amended and Restated Letter Agreement, dated January 31, 2023, by and between Western Digital Corporation and Elliott Investment Management L.P. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by the Company on February 1, 2023) |
| | Investment Agreement, dated January 31, 2023, by and among Western Digital Corporation, Elliott Associates, L.P. and Elliott International, L.P. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Company on May 10, 2023) |
| | Transition Services Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Tax Matters Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Employee Matters Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Intellectual Property Cross-License Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Transitional Trademark License Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Stockholder’s and Registration Rights Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Company on February 24, 2025)# |
| | Western Digital Corporation Amended and Restated 2017 Performance Incentive Plan, amended and restated as of August 11, 2020 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Company on February 9, 2021)** |
| | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement – Vice President and Above, under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed by the Company on February 9, 2021)** |
| | Western Digital Corporation Amended and Restated 2021 Long-Term Incentive Plan, amended and restated as of May 28, 2025 (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 filed by the Company on June 4, 2025)** |
| | Form of Notice of Grant of Performance Stock Units and Performance Stock Unit Award Agreement under the Western Digital Corporation 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Company on November 2, 2022)** |
|
|
|
| | Form of Grant Notice for Performance Stock Unit Award under the Western Digital Corporation 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Company on November 7, 2023)** |
| | Form of Grant Notice for Restricted Stock Unit Award – Vice President and Above, under the Western Digital Corporation 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed by the Company on February 3, 2022)** |
| | Form of Grant Notice for Restricted Stock Unit Award – Vice President and Above, under the Western Digital Corporation Amended and Restated 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2(3) to the Annual Report on Form 10-K filed by the Company on August 22, 2023)** |
| | Form of Grant Notice for Restricted Stock Unit Award – Vice President and Above, under the Western Digital Corporation Amended and Restated 2021 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the Company on October 31, 2024)** |
| | | | | | | | |
Exhibit
Number | | Description |
| | Western Digital Corporation Amended and Restated 2021 Long-Term Incentive Plan Non-Employee Director Restricted Stock Unit Grant Program, amended and restated as of May 23, 2023 (incorporated by reference to Exhibit 10.2(4) to the Annual Report on Form 10-K filed by the Company on August 22, 2023)** |
| | Western Digital Corporation Executive Short-Term Incentive Plan (supersedes the Western Digital Corporation Executive Short-Term Incentive Plan dated August 7, 2019), dated February 9, 2021 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10‑Q filed by the Company on May 6, 2021)** |
| | Western Digital Corporation Amended and Restated 2005 Employee Stock Purchase Plan, amended and restated as of May 28, 2025 (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-8 filed by the Company on June 4, 2025)** |
| | Western Digital Corporation Deferred Compensation Plan, amended and restated effective January 1, 2013 (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed by the Company on November 2, 2012)** |
| | Amendment No. 1, effective December 1, 2024, to the Western Digital Corporation Deferred Compensation Plan, amended and restated effective January 1, 2013 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the Company on January 31, 2025)** |
| | Western Digital Corporation Amended and Restated Change in Control Severance Plan, amended and restated as of March 13, 2025 (incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q filed by the Company on May 2, 2025)** |
| | Western Digital Corporation Amended and Restated Executive Severance Plan, amended and restated as of May 24, 2021 (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K filed by the Company on August 27, 2021)** |
| | Form of Indemnification Agreement for Directors and Officers of Western Digital Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on January 30, 2025)** |
| | Offer Letter, dated as of February 11, 2025, to Irving Tan (incorporated by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q filed by the Company on May 2, 2025)** |
| | Offer Letter, dated as of May 1 2025, to Kris Sennesael†** |
| | Amended and Restated Offer Letter, dated as of April 18, 2025, to Ahmed Shihab (incorporated by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q filed by the Company on May 2, 2025)** |
| |
|
| | Subsidiaries of Western Digital Corporation† |
| | Consent of Independent Registered Public Accounting Firm† |
| | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002† |
| | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002† |
| | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
| | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* |
| | Western Digital Corporation Compensation Recovery (Clawback) Policy (incorporated by reference to Exhibit 97.1 to the Annual Report on Form 10-K filed by the Company on August 20, 2024) |
101.INS | | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH | | XBRL Taxonomy Extension Schema Document† |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document† |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document† |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document† |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document† |
104 | | Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101 |
† Filed with this report.
* Furnished with this report.
** Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.
# Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission upon request.
Item 16. Form 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10‑K to be signed on its behalf by the undersigned, thereunto duly authorized. | | | | | | | | |
| WESTERN DIGITAL CORPORATION |
| | |
| By: | /s/ Gene Zamiska |
| | Gene Zamiska |
| | Senior Vice President, Global Accounting and Chief Accounting Officer |
| | (Principal Accounting Officer and Duly Authorized Officer) |
Dated: August 13, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10‑K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. | | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | |
| /s/ Irving Tan | | Chief Executive Officer, Director
(Principal Executive Officer) | | August 13, 2025 |
| Irving Tan | | | |
| | | | |
| /s/ Kris Sennesael | | Executive Vice President and Chief Financial Officer
(Principal Financial Officer) | | August 13, 2025 |
| Kris Sennesael | | | |
| | | | |
| /s/ Gene Zamiska | | Senior Vice President, Global Accounting and Chief Accounting Officer
(Principal Accounting Officer) | | August 13, 2025 |
| Gene Zamiska | | | |
| | | | |
| /s/ Martin I. Cole | | Chair of the Board | | August 13, 2025 |
| Martin I. Cole | | | | |
| | | | |
| /s/ Kimberly E. Alexy | | Director | | August 13, 2025 |
| Kimberly E. Alexy | | | | |
|
|
|
| | | | |
| /s/ Tunҫ Doluca | | Director | | August 13, 2025 |
| Tunҫ Doluca | | | | |
| | | | |
|
|
|
| /s/ Bruce Kiddoo | | Director | | August 13, 2025 |
| Bruce Kiddoo | | | | |
| | | | |
| /s/ Matthew E. Massengill | | Director | | August 13, 2025 |
| Matthew E. Massengill | | | | |
| | | | |
| /s/ Roxanne Oulman | | Director | | August 13, 2025 |
| Roxanne Oulman | | | | |
| | | | |
| /s/ Stephanie A. Streeter | | Director | | August 13, 2025 |
| Stephanie A. Streeter | | | | |
| | | | |
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