“`html

Image source: The Motley Fool.

Western Digital (NASDAQ: WDC)
Q1 2025 Earnings Call
Oct 24, 2024, 4:30 p.m. ET

Financial Insights: Western Digital Reports Strong Quarter

Overview of the Call

Operator

Good afternoon, and thank you for standing by. Welcome to Western Digital’s fiscal first quarter 2025 conference call. Presently, all participants are in listen-only mode. Later, we will conduct a question-and-answer session.

[Operator instructions] As a reminder, this call is being recorded. Now, I will turn the call over to Mr. Peter Andrew, vice president of financial planning and analysis and investor relations. You may begin.

Opening Remarks from Leadership

T. Peter Andrew — Vice President, Financial Planning and Analysis and Investor Relations

Thank you, and good afternoon, everyone. Today, I’m joined by our CEO, David Goeckeler, and our CFO, Wissam Jabre. Before we dive in, I want to remind everyone that today’s discussion may include forward-looking statements. These statements are based on management’s current assumptions and expectations and include risks and uncertainties related to our business plans and financial outlook.

For further details on the associated risks, please consult our latest Form 10-K and other SEC filings. We may also reference non-GAAP financial measures today; reconciliations of these measures are included in our press release and on our Investor Relations website.

Key Financial Highlights

David V. Goeckeler — Chief Executive Officer

Thank you, Peter. Good afternoon, everyone, and thank you for joining the call. Western Digital achieved revenue of $4.1 billion in the first quarter of fiscal 2025, alongside a non-GAAP gross margin of 38.5% and non-GAAP earnings per share of $1.78. Our strategy of quality and innovation continues to pay off, leading to revenue growth and improved margins in both Flash and HDD segments.

The increasing demand for AI and data storage drives long-term growth in our markets. In the Flash segment, our careful planning during the downturn has improved our agility and margin potential. We’ve successfully focused on our high-demand enterprise SSDs, which helped offset challenges in certain areas of the market, yielding increased revenue and improved gross margins.

In HDD, our unique UltraSMR technology enables us to produce the highest-capacity hard drives available while maintaining exceptional reliability and quality. This success is reflected in record HDD gross margins and revenue levels not seen in over two years.

Looking ahead, we expect continued growth from UltraSMR drives, particularly in cloud storage applications.

Update on Business Separation Plans

We continue to progress with our plan to separate our Flash and HDD businesses. We successfully completed the initial phase at the start of the fiscal second quarter. This initiative has been executed flawlessly thanks to the dedicated teams over the past year working on meticulous planning and project management.

We are now in the midst of regulatory filings and expect our financing efforts to commence soon, which will position us well for a successful separation by the close of the second quarter.

Flash Business Highlights and Future Outlook

Moving on to our Flash business, revenue reached its highest level in nine quarters, driven by a strong recovery in the data center market, with enterprise SSD applications increasing by 76% sequentially. However, we faced challenges in consumer demand due to inventory adjustments by PC OEMs.

Looking forward to the next quarter, we anticipate new enterprise SSD launches will complement the seasonal demand in the consumer market. We are optimistic about stabilizing PC OEM demand while preparing for holiday season opportunities.

“““html

Western Digital Reports Strong Fiscal Results Amid Growing Demand for SSDs and HDDs

As we progress through calendar year 2025, client end markets continue to evolve.

High demand for our enterprise SSD product line is expected to drive significant revenue growth throughout the full fiscal year. Since the beginning of the fiscal fourth quarter 2024, qualifications for our enterprise SSDs have doubled. We now foresee this product mix accounting for over 15% of our total portfolio shipments in fiscal year 2025, with growth rates exceeding previous forecasts. Our outlook on the flash market remains optimistic as we strive to maintain a balance between supply and demand. We are committed to disciplined spending while enhancing profitability through strategic allocation of bids across high-value end markets and gaining greater exposure to enterprise SSDs. Now, let’s discuss HDD.

During the fiscal first quarter, we set a new record in revenue for our data center segment. This success reflects our robust nearline portfolio and our proactive strategies to leverage favorable market conditions. Demand for our products surpasses supply currently. To manage this situation, we collaborate closely with our customers to forecast their future needs, focusing on two- to six-quarter agreements with major clients. This aligns well with our supply management strategy, promoting predictable operations and sustainable growth. Such long-term planning not only enhances customer service but also helps us cope with fluctuations while improving profitability in the long run.

In terms of technology, our Ultra SMR technology is witnessing growing adoption, highlighting confidence in our product’s effectiveness. In the fiscal second quarter, we introduced the world’s first commercially available hard drives with 32-terabyte UltraSMR and 26-terabyte CMR capabilities. Developed using our reliable ePMR and UltraSMR technologies, we aim to finalize customer qualifications and enhance profitability in the upcoming quarters while providing significant total cost of ownership (TCO) benefits to our clients. Now, let’s shift our focus to HDD prospects.

Heading into the fiscal second quarter, we anticipate sustained momentum in our data center division, which is expected to boost growth across our nearline offerings. Particularly among cloud customers, the adoption of our UltraSMR products is on the rise. The HDD sector is undergoing positive structural changes. Our strategic approach to marketing, especially our UltraSMR technologies, has contributed to record revenue even as AI becomes an essential growth component for the industry.

With better visibility into future demand, along with a commitment to operational excellence and maintaining supply-demand balance, we are in a strong position to offer innovative and profitable products. This foundation will help us establish long-term leadership in the industry. Now, I’ll hand over the call to Wissam, who will review our fiscal first-quarter results.

Wissam G. Jabre — Executive Vice President, Chief Financial Officer

Thank you, David, and good afternoon to everyone. In the fiscal first quarter, Western Digital delivered impressive results, with gross margin and earnings per share above guidance projections. Our total revenue reached $4.1 billion, reflecting a 9% sequential increase and a remarkable 49% year-over-year growth. Our non-GAAP earnings per share came in at $1.78.

Looking at end markets, Cloud sales accounted for 54% of our total revenue at $2.2 billion, marking a 17% sequential increase and more than doubling from last year. This surge can be attributed to higher nearline HDD and enterprise SSD bit shipments to our data center customers. Our Client segment represented 29% of total revenue, generating $1.2 billion, remaining flat sequentially but rising by 5% year-over-year. Growth in gaming and mobile Flash shipments was offset by a decline in PC OEM revenue, while HDD revenue remained stable.

On a year-over-year basis, increased Flash revenues primarily resulted from higher average selling prices (ASPs) despite a decline in bit shipments, partially countered by lower HDD revenues. Consumer sales accounted for 17% of revenue, standing at $0.7 billion, flat sequentially but down 7% year-over-year. A slight increase in HDD revenue helped offset a decline in Flash due to reduced consumer demand. Year-on-year comparisons revealed a decrease in both Flash and HDD shipments, though we benefitted from improved pricing across both segments.

Now, let’s review revenue by segment. In the fiscal first quarter, Flash revenue was $1.9 billion, up 7% from the previous quarter and 21% year over year. The recovery in data centers spurred strong demand for enterprise SSD products. Sequential Flash ASPs rose by 4% on a like-for-like basis but dropped 6% on a blended basis.

Bit shipments increased by 14% relative to the previous quarter but dipped 12% compared to last year. HDD revenue saw an uptick to $2.2 billion, a 10% sequential increase and an impressive 85% rise year over year. Strong performance in the nearline portfolio led to a 14% boost in HDD exabyte shipments. Year-over-year, total HDD exabyte shipments jumped 107%, and the average price per unit rose by 46% to $164.

A record 141 exabytes were shipped in nearline, reflecting a 12% increase from the previous quarter and a 157% rise from the same quarter of 2024. Now, turning to the rest of our income statement. My comments relate to non-GAAP results unless stated otherwise. Gross margin for the fiscal first quarter stood at 38.5%, at the high end of our guidance range.

This gross margin climbed 220 basis points sequentially due to a better product mix, enhanced pricing strategies, and ongoing cost management efforts. Flash gross margin reached 38.9%, a 240 basis point rise over the previous quarter, driven by a higher share of enterprise SSD bits, better like-for-like pricing, and continued cost reductions. Meanwhile, robust demand for nearline drives combined with our effective manufacturing processes led to HDD gross margins of 38.1%, also reflecting a 200 basis point increase sequentially. We have fundamentally altered our operational approach in recent times.

Our strong product lineup has enabled us to achieve gross margins that exceed our long-term targets for both Flash and HDD. Operating expenses fell to $691 million sequentially, including $8 million in synergies. These results demonstrate our ongoing commitment to cost discipline while we progress with our business separation plans. Operating income reached $884 million, a 33% sequential increase due to higher gross margins and careful spending.

Notably, operating margin climbed to 21.6%, an increase of 390 basis points sequentially and the highest levels we’ve seen in the past five years, achieved at lower revenue levels. Our income tax expense totaled $124 million, with an effective tax rate of 16.1%. Earnings per share remained at $1.78. Operating cash flow for the fiscal first quarter tallied $34 million, while free cash flow showed an outflow of $14 million.

These cash flows included payments of $418 million for repatriation taxes, along with various IRS settlements. Capital expenditures amounted to a cash outflow of $48 million, covering property, plant, and equipment purchases, as well as activities related to flash joint ventures. By the end of the fiscal first quarter, inventory stood at $3.4 billion, reflecting a sequential rise but a decline in inventory days to 121 days. A decrease in HDD inventory was offset by an increase in Flash inventory.

Lastly, our gross debt was $7.5 billion at the close of the fiscal first quarter, with $1.7 billion in cash and equivalents, yielding total liquidity of $3.9 billion, including undrawn revolver capacity.

“`

SanDisk Reports Positive Outlook, Post-80% Stake Sale to JCET

In a strategic maneuver, SanDisk has made progress following the sale of 80% of its equity in SanDisk Semiconductor Shanghai to JCET, creating a new joint venture. This transaction is expected to significantly influence SanDisk’s financial landscape moving forward.

Fiscal First Quarter Results and Future Projections

After concluding the fiscal first quarter with a revenue of $2.2 billion, the proceeds from the recent sale will be shown in the next quarter’s cash flow. Looking ahead, management projects growth in both Flash and HDD revenue. For Flash, the anticipated surge in enterprise SSD products and seasonal consumer demand should lead to mid-single-digit percentage increases in bit shipments. Meanwhile, HDD growth continues to build, particularly in the nearline product category.

Revenue expectations for the fiscal second quarter range from $4.2 billion to $4.4 billion, with gross margins projected between 37% and 39%. Operating expenses are slated to rise modestly, estimated between $695 million and $715 million, which includes $25 million to $35 million in synergy costs tied to ongoing business separation efforts. Interest and other expenses are forecasted at about $110 million, with a tax rate between 15% and 17%. Earnings per share (EPS) is expected to fall within the range of $1.75 to $2.05, based on approximately 357 million shares outstanding.

Addressing the Business Separation Goals

In discussions about business practices, executives stressed their commitment to efficiency and profitability. David V. Goeckeler, Chief Executive Officer, expressed confidence in the strategic direction of the company, highlighting a robust roadmap for both Flash and HDD sectors. The ongoing proliferation of artificial intelligence data presents exciting opportunities for future growth.

Q&A Session: Analyst Insights

Operator

Thank you. We will now begin the question-and-answer segment of today’s discussion. Please hold for the first question.

Our inaugural question comes from C.J. Muse with Cantor Fitzgerald. Please proceed.

C.J. Muse — Analyst

Good afternoon. Thanks for taking my question. Starting with the recent qualifications in your enterprise SSD, could you elaborate on the significance of the 15% increase and the qualification with NVIDIA’s GB200 NVL72 rack system? How should we understand the potential financial impact of this development?

David V. Goeckeler — Chief Executive Officer

Thank you, C.J. We’re pleased with the recent advancements in our portfolio, particularly our PCIe Gen 5 products, which received qualification from NVIDIA. This opens pathways for collaboration with various manufacturers involved in this space. Additionally, we’ve established significant relationships with major hyperscalers, giving us confidence in the enterprise SSD market’s demand.

We’ve revised our estimates regarding the mix of bits, now projecting it to reach between 15% and 20%. This uptick is driven by an increase in qualifications and aligns well with the ongoing AI data cycle.

C.J. Muse — Analyst

Thank you, that’s informative. As a follow-up, could you share insights into pricing trends within the HDD industry and whether you have a view on pricing dynamics stretching beyond the current quarter?

David V. Goeckeler — Chief Executive Officer

Indeed, the balance of supply and demand within our sector is improving. Our UltraSMR technology has been well-received, allowing for better capacity on each drive, which is prompting customers to adopt our solutions at scale. Looking ahead, we’re optimistic about launching our new 26-terabyte CMR and 32-terabyte UltraSMR drives, which should positively influence our pricing and margins as we move into 2025.

C.J. Muse — Analyst

Thank you. I appreciate the insights.

Operator

Our next question will be from Joe Moore at Morgan Stanley. Please go ahead.

Joe Moore — Analyst

Thank you. I want to confirm the steps you’re taking toward separating the companies. You mentioned preparing for a soft spin. Will there be two separate sets of financial results for the December quarter? And should we expect to see the Form 10 filed during the March quarter?

Western Digital’s Strategic Shift: A Deep Dive into the Soft Spin Process

CEO David V. Goeckeler Explains the Path Ahead

In a recent update, David V. Goeckeler, Chief Executive Officer of Western Digital, elaborated on the company’s ongoing transition, known as the “soft spin” phase. The company remains operational as a single entity while preparing to split into two distinct companies for its HDD and Flash segments.

The Current State of Operations

Currently, Western Digital operates under a unified structure, but behind the scenes, the company has divided its systems into two separate stacks. This means customers must place orders for HDD and Flash products separately due to differing vendor IDs and operational systems. Goeckeler emphasized the importance of this process, stating, “We’re doing all that work to build confidence we could do it as two separate companies.” The aim is to thoroughly test both systems over a complete quarter before any formal division happens.

Timeline for Separation

Looking forward, Western Digital plans to complete this transition during the second quarter. They will finalize financial statements for the December quarter while only releasing consolidated information for the company as a whole. Goeckeler projected that public disclosure through a Form 10 could occur within a few months, paving the way for financing activities for both future entities. “It’s on track,” he remarked, suggesting that more updates will be shared around the next earnings call.

The Commitment to Shareholders Amid Challenges

Analyst Joe Moore inquired about potential challenges relating to joint ventures and market conditions affecting their plans. Goeckeler reassured investors that the decision to separate was thoroughly considered following a strategic review announced in October last year. “We’re not trying to time the cycle,” he noted, emphasizing that their priority is to ensure both new companies can operate independently and effectively.

Analyzing Capacity and Growth Strategies

Analyst Karl Ackerman raised further questions regarding Western Digital’s current manufacturing capacities, particularly concerning hard disk drives. Although precise figures were not disclosed, Goeckeler mentioned that the company routinely assesses customer demand and aligns its production strategies accordingly. Plans are in place to manage new capacity without being overwhelmed by market volatility, aiming for a more predictable production schedule moving forward.

Recovery from recent downturns has been pivotal in restructuring the operations to maintain tight control over costs while increasing production capabilities. Goeckeler expressed optimism regarding the anticipated deployment of its new 32-terabyte drives, expected to be rolled out by 2025 as customer readiness is confirmed.

Thoughts on Future Capacity

In response to Aaron Rakers from Wells Fargo, Goeckeler highlighted potential dissynergies in the upcoming December quarter, due to the expenses of maintaining two separate operational structures. The focus remains on expanding nearline capacity aggressively, with projected increases up to 25% above previous records. Addressing any capacity constraints will rely heavily on technological advancements and the ability to meet customer demands efficiently.

As Western Digital navigates this crucial period of transformation, all eyes are on how effectively the company can adapt to its new structure while maintaining strong operational performance.

“`html

Hard Drive Manufacturer Discusses Current Operations and Future Expectations

Operating Expenses and Opportunities for Synergies

Aaron noted that in the first quarter, the company faced approximately $8 million in dissynergies within operating expenses. The guidance indicates projected operating expenses (opex) at $25 million to $35 million. To clarify, the midpoint for opex of $705 million includes about $30 million associated with these dissynergies. This reflects a general expectation that synergies will be evenly split across the two operating divisions, as discussed previously.

As for steady-state projections, nothing has changed since last quarter. The anticipated steady state remains around $40 million, distributed evenly between each business segment. For the current quarter, the estimated figure is about $30 million, give or take $5 million.

Focus on Supply Management in the Hard Drive Sector

Our manufacturing focus in the hard drive business continues to prioritize profitability and maintaining supply-demand balance. Currently, we’re confident in our manufacturing capacity. With good visibility from customers and the implementation of a build-to-order model, we see no immediate need to expand our manufacturing footprint.

David added that examining the shipped units over the past few quarters shows consistent results, with minor fluctuations of less than one million units. Given the vast number of units processed in the industry, this smaller range indicates stability.

The future demand is a critical aspect we’re evaluating, especially since it typically takes a year to produce hard drives from the initial wafer stage. Understanding customer demand perspectives a year ahead is vital, and we are actively collaborating with them to clarify their needs.

Current Dynamics and Order Strategies

The industry is currently experiencing an evolution in its dynamics. Unlike in the past when transactions occurred quarterly, we’re now asking customers for more detailed forecasts of their demands. The goal is to create significant trust between us and our major clients, particularly the large hyperscalers.

While we recognize the challenges of forecasting in this evolving environment, our priority remains ensuring we align production capabilities with realistic customer demand. Presently, it is not a take-or-pay model; rather, it’s about accurate visibility into infrastructure needs so that we can synchronize supply accordingly.

Understanding Margin Changes Amid New Product Launches

Wamsi raised a point regarding guidance indicating a marginal decline in gross margins. David confirmed that launching new products offers the opportunity to enhance margins, although the newly introduced product is still in the qualification phase and won’t be deployed for a couple of quarters.

For the hard drive business, margins are anticipated to remain stable quarter-over-quarter. In contrast, the flash segment may see a slight decline due to elevated costs, which are expected to influence the upcoming quarter’s expenses. This context should illuminate the trajectory of margin expectations moving forward.

Conclusion

With ongoing evaluation of manufacturing capacity and a commitment to understanding future demand, the company stands poised to adapt to industry changes while focusing on profitability and strategic growth.

“`

Strong Growth in Enterprise SSDs Signals Positive Trends for Flash Revenues

Improving Percentages in Flash Revenue Share

Recent figures show a steady rise in the enterprise SSD segment, representing 12-13% of total Flash revenues in the September quarter. This marks an increase from 7-8% in June. Executives noted that enterprise SSDs are expected to contribute about 15-20% of total Flash business revenues this year.

Key Competitive Advantages in AI-targeted Technologies

During a recent financial discussion, executives highlighted gains from high-capacity platforms, particularly those featuring 64-terabyte and 128-terabyte capacities, aimed at AI computing. They pointed to important factors driving better performance, such as advancements in controller technology and improved firmware reliability. The company has built upon robust NAND technology while anticipating the 2-terabit die integration that will enable higher-density SSDs.

Future Outlook for Flash and Hard Drive Markets

Executives discussed the overall flash market dynamics, noting that mixed signals are emerging. The smartphone and PC segments remain somewhat weak due to inventory adjustments, while enterprise SSDs continue to show strength. They predict recovery in the consumer sectors over the next year, but margin pressures may affect sequential pricing trends.

Addressing Inventory Concerns and Capex Outlook

In response to queries regarding hard drive deployments, executives expressed confidence that the current shipment levels reflect actual customer demand, rather than excess inventory. Ongoing evaluations are being conducted to ensure alignment with market needs. The capex expectations for both HDD and Flash sectors remain stable, with no significant changes anticipated in upcoming quarters.

Emerging Opportunities and Strategic Focus

Executives conveyed a sense of optimism regarding the enterprise SSD’s upward trajectory, emphasizing their commitment to a focused business unit strategy. This approach has allowed them to respond effectively to market demands and capitalize on new opportunities, particularly in AI data cycles. As they continue to refine their offerings, the company is well-positioned for future growth.

In-Depth Analysis: Flash and HDD Performance in the Market

Operator

Thank you. Our next question comes from Srinivas Pajjuri with Raymond James. Please proceed.

Srinivas Pajjuri — Analyst

Thank you. David, I want to follow up on the previous inquiry. Your Flash averaged selling prices (ASPs) are down 6% on a blended basis, but only down 4% on a like-for-like basis. This appears counterintuitive, especially as your SSD mix increases. Can you explain this dynamic further and what we might expect for blended ASPs as SSD sales grow? Thank you.

David V. Goeckeler — Chief Executive Officer

That’s an insightful question, Srini. In fact, I need to clarify that the like-for-like ASPs were actually up, while the blended ASPs were down by 6%. This situation is primarily mix-related. As we highlighted this quarter, we have been shifting more towards mobile, and the increase in enterprise SSD sales is contributing positively. Thus, this mix dynamic explains the pricing trends you mentioned.

Operator

Thank you. Next, we’ll hear from Ananda Baruah with Loop Capital. Please go ahead.

Ananda Baruah — Analyst

Thank you. David, could you provide an overview of your conventional technology aerial density roadmap leading up to HAMR? I understand you have mentioned HAMR, but what should we expect from conventional technology until then?

David V. Goeckeler — Chief Executive Officer

This is a notable area to discuss. The trajectory of aerial density is indeed evolving. A recent example is our launch of an 11-platter drive; for a long time, 10 platters seemed to be the maximum due to form factor constraints. However, advances in materials science have enabled us to produce thinner platters, leading to a 10% increase with the addition of the 11th platter. We currently anticipate that our existing platform can reach 40 terabytes, acting as a bridge from 30 terabytes. We are actively working through that transition. While I won’t announce any new products, we expect to introduce additional generations as the demand grows. Clients are currently validating the latest 30-terabyte generation in their labs, and we have confidence in our strategic decisions to fuel market growth, supported by current AI trends.

Operator

Thank you. Our next question comes from Asiya Merchant with Citigroup. Please go ahead.

Asiya Merchant — Citi — Analyst

Thank you for taking my question. Regarding HDDs, I see strong performance in the December quarter, while the Flash sector experiences seasonal fluctuations in the March quarter. Given the current robust HDD performance, should we anticipate similar seasonal trends for HDDs in terms of bit shipments and ASPs for March? Thank you.

David V. Goeckeler — Chief Executive Officer

While it’s somewhat premature to speculate about March, anticipating some seasonal behavior on the HDD side would seem reasonable based on our current situation.

Operator

Thank you. Next we have Steven Fox from Fox Advisors. Please go ahead.

Steven Fox — Analyst

Good afternoon. Can you shed light on the manufacturing efficiencies in your HDD business? Are there ongoing debottlenecking efforts? Additionally, how does our changing product mix affect utilization for heads and platters?

Wissam G. Jabre — Executive Vice President, Chief Financial Officer

We have several cost reduction initiatives aimed at improving our manufacturing efficiency and yield across different phases of our production process. Typically, we seek cost improvements in the mid- to high single-digit percentage range annually. However, this is not a straightforward or linear process as capacities change.

Operator

Thank you. Our next question comes from Vijay Rakesh with Mizuho. Please proceed.

Vijay Rakesh — Analyst

Thanks. Regarding the UltraSMR terabyte with the 11th disk, will this addition remain accretive to your margins? Also, could you share insights on next year’s Flash capex? Last year was relatively low at 0.8; what do you anticipate for next year?

David V. Goeckeler — Chief Executive Officer

The 32-terabyte UltraSMR drive exemplifies our commitment to delivering products that lower total cost of ownership (TCO) for customers, which in turn enhances our profitability. We are eager to see this model utilized in the market. As for Flash capex, while we aren’t providing long-range quantitative guidance, we anticipate an increase from last year’s low levels to support ongoing business profitability.

Operator

Thank you. Our final question today comes from…

Stability in Hard Drive Pricing: Insights from WDC’s Recent Conference Call

Matt Bryson — Wedbush Securities — Analyst

Thank you for allowing me to ask a question. I noticed that hard drive pricing remained stable from last quarter. Given the rise in cloud shipments and a shift towards higher-capacity drives, shouldn’t there have been a positive impact on pricing? Additionally, I’ve heard that production testing is facing constraints. Paradigm has mentioned they aren’t receiving test orders. Could this suggest that the hard drive industry is becoming more rational compared to the past? Thank you.

David V. Goeckeler — Chief Executive Officer

Thank you for the question. Regarding your second point, we have been transparent about our manufacturing capacity. We’ve set our production for a specific number of units, which we believe will meet the expected growth in exabytes across the industry. However, we need clear signals from our customers before adjusting our production capacity significantly. This could take four to six quarters.

On pricing, we did see a slight increase in like-for-like pricing, with low single-digit growth this quarter. Our hard disk drive (HDD) margins, now at 38.1%, are impressive, reflecting a more than 15-point rise over the last four quarters. It has been a successful period for us.

We may experience a brief pause in growth for this quarter, but as we roll out new products, we anticipate additional positive momentum. Overall, we believe our business is in a strong position. This is largely due to the robust technological advancements we’ve achieved, which our customers are actively supporting with their purchases.

During the downturn, our teams worked diligently to streamline costs and achieve a balance between supply and demand. We feel optimistic about our future growth and are excited about the next several years.

Operator

Thank you, everyone. This wraps up our Q&A session. We’ll now turn it back over to management for any closing remarks.

David V. Goeckeler — Chief Executive Officer

Thank you all for joining today. We sincerely appreciate your interest in our business and the insightful questions you’ve raised. We look forward to discussing more throughout the quarter. Take care.

Operator

[Operator signoff]

Duration: 0 minutes

Call Participants:

T. Peter Andrew — Vice President, Financial Planning and Analysis and Investor Relations

David V. Goeckeler — Chief Executive Officer

Wissam G. Jabre — Executive Vice President, Chief Financial Officer

C.J. Muse — Analyst

Joe Moore — Analyst

Karl Ackerman — Analyst

Aaron Rakers — Analyst

Timothy Arcuri — Analyst

Wamsi Mohan — Analyst

Harlan Sur — Analyst

Krish Sankar — Analyst

Amit Daryanani — Analyst

Tom O’Malley — Analyst

Srini Pajjuri — Analyst

Ananda Baruah — Analyst

Asiya Merchant — Citi — Analyst

Steven Fox — Analyst

Vijay Rakesh — Analyst

Matt Bryson — Wedbush Securities — Analyst

More WDC analysis

All earnings call transcripts

This article is a transcript of this conference call produced for The Motley Fool. While we strive for accuracy, there may be errors or inaccuracies in this transcript. The Motley Fool does not assume liability for your use of this content and encourages you to conduct your own research.

The Motley Fool has no positions in any of the stocks mentioned. The company has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.