UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~October 283, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-8703

WESTERN DIGITAL CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware

33-0956711

(State or other jurisdiction ofincorporation or organization)

(I.R.S. Employer Identification No.)

5601 Great Oaks Parkway

San Jose,

California

95119

5601 Great Oaks Parkway,

San Jose,

California

95119

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (408) 717-6000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	WDC	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of the close of business on ~~April~~October 2523, 2025, ~~348~~341,~~878~~899,~~365~~281 shares of common stock, par value $0.01 per share, were outstanding.

WESTERN DIGITAL CORPORATION

~~INDEX~~TABLE OF CONTENTS

		PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets — As of March 28, 2025 and June 28, 2024	6
	Condensed Consolidated Balance Sheets — As of October 3, 2025 and June 27, 2025	6
	Condensed Consolidated Statements of Operations — Three and Nine Months Ended March 28, 2025 and March 29, 2024	7
	Condensed Consolidated Statements of Operations — Three Months Ended October 3, 2025 and September 27, 2024	7
	Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Nine Months Ended March 28, 2025 and March 29, 2024	8
	Condensed Consolidated Statements of Comprehensive Income — Three Months Ended October 3, 2025 and September 27, 2024	8
	Condensed Consolidated Statements of Cash Flows — Nine Months Ended March 28, 2025 and March 29, 2024	9
	Condensed Consolidated Statements of Cash Flows — Three Months Ended October 3, 2025 and September 27, 2024	9
	Condensed Consolidated Statements of Convertible Preferred Stock and Shareholders’ Equity — Nine Months Ended March 28, 2025 and March 29, 2024	10
	Condensed Consolidated Statements of Convertible Preferred Stock and Shareholders’ Equity — Three Months Ended October 3, 2025 and September 27, 2024	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4036
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5547
Item 4.	Controls and Procedures	5547
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	5648
Item 1A.	Risk Factors	5648
Item 5.	Other Information	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6.	Exhibits	57
Item 5.	Other Information	48
Item 6.	Exhibits	49

Unless otherwise indicated, references herein to specific years and quarters are to our fiscal years and fiscal quarters, and references to financial information are on a consolidated basis. As used herein, the terms “we,” “us,” “our,” the “Company,” “WDC,” and “Western Digital” refer to Western Digital Corporation and its subsidiaries, unless we state, or the context indicates, otherwise.

WDC, a Delaware corporation, is the parent company of our data storage business. Our principal executive offices are located at 5601 Great Oaks Parkway, San Jose, California 95119. Our telephone number is (408) 717-6000.

Western Digital, the Western Digital logo and WD are registered trademarks or trademarks of Western Digital or its affiliates in the United States and~~/or~~ other countries. All other trademarks, registered trademarks and~~/or~~ service marks, indicated or otherwise, are the property of their respective owners.

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FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the meaning of the federal securities laws. Any statements that do not relate to historical or current facts or matters are forward-looking statements. You can identify some of the forward-looking statements by the use of forward-looking words, such as “may,” “will,” “could,” “would,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast,” and the like, or the use of future tense. Statements concerning current conditions may also be forward-looking if they imply a continuation of current conditions. Examples of forward-looking statements include, but are not limited to, statements concerning: our expectations regarding the completed separation of our hard disk drives (“HDD”) and flash-based products (“Flash”) business units (the “Separation”); the impact of the global macroeconomic environment, including tariffs; expectations regarding demand trends and market conditions for our products; expectations regarding our tax resolutions, effective tax rate and unrecognized tax benefits; expectations regarding the merits of our positions and plans with respect to certain litigation matters; statements regarding our quarterly dividend program; and our beliefs regarding our capital allocation plans and the sufficiency of our available liquidity to meet our working capital, debt and capital expenditure needs.

These forward-looking statements are based on management’s current expectations, represent the most current information available to us as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and other factors that could cause actual results or performance to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to:

•adverse global or regional ~~conditions,~~economic ~~including new or additional tariffs or trade restrictions,~~ and ~~our~~social ~~responsive actions thereto~~conditions;

•changes in U.S. trade policy and the impact of tariffs or trade restrictions, and our responsive actions thereto;

•dependence on a limited number of suppliers or disruptions in our supply chain;

•~~the~~risks ~~outcome~~related ~~and~~to ~~impact of~~ the ~~completed~~Separation ~~separation~~ of Sandisk, our ~~HDD~~former ~~and~~ Flash business ~~units~~, ~~including~~into ~~with~~an ~~respect~~independent topublic ~~stock price volatility and the diversion of management’s attention from ongoing business operations and opportunities~~company;

•future responses to and effects of public health crises;

•the impact of business and market conditions;

•damage or disruption to our operations or to those of our suppliers;

•hiring and retention of key employees;

•compromise, damage or interruption from cybersecurity incidents or other data or system security risks;

•product defects;

•our reliance on strategic relationships with key partners;

•the competitive environment, including actions by our competitors, and the impact of competitive products and pricing;

•our development and introduction of products based on new technologies and expansion into new data storage markets;

•risks associated with cost saving initiatives, restructurings, acquisitions, divestitures, mergers, joint ventures and our strategic relationships;

•changes to our relationships with key customers;

•our ability to respond to market and other changes in our distribution channel and retail market;

•our level of debt and other financial obligations;

•changes in tax laws or unanticipated tax liabilities;

•fluctuations in currency exchange rates in connection with our international operations;

•risks associated with compliance with changing legal and regulatory requirements and the outcome of legal proceedings;

•any decisions to reduce or discontinue paying cash dividends;

•risks associated with our goals relating to sustainability matters, including our ability to meet our greenhouse gas emissions reduction and other sustainability goals;

•our reliance on intellectual property and other proprietary information; and

•the other risks and uncertainties disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended June 2827, ~~2024~~2025 (our “~~2024~~2025 Annual Report on Form 10-K”), as amended, supplemented or superseded in our other reports filed with the Securities and Exchange Commission (“SEC”), including under “Risk Factors” in Item 1A of our subsequent Quarterly Reports on Form 10-Q.

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You are urged to carefully review the disclosures we make concerning these risks and review the additional disclosures we make concerning material risks and other factors that may affect the outcome of our forward-looking statements and our business and operating results, including those made in Part I, Item 1A of our ~~2024~~2025 Annual Report on Form 10-K and any of those made in our other reports filed with the SEC, including under “Risk Factors” in Item 1A of subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q that may from time to time amend, supplement or supersede the risks and uncertainties disclosed in our ~~2024~~2025 Annual Report on Form 10-K. You are cautioned not to place undue reliance on the forward-looking statements included in this Quarterly Report on Form 10-Q, which speak only as of the date of this document. We do not intend, and undertake no obligation, to update or revise these forward-looking statements to reflect new information or events after the date of this document or to reflect the occurrence of unanticipated events, except as required by law.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value)

(Unaudited)

	March 28,2025		June 28,2024
	October 3,2025		June 27,2025
ASSETS
Current assets:
Cash and cash equivalents	$	32,~~477~~048	$	12,~~551~~114
Accounts receivable, net	1,~~469~~355		1,~~231~~486
Inventories	1,~~311~~393		1,~~387~~291
Retained interest in Sandisk	~~1,412~~965		—354
Other current assets	~~417~~514		~~360~~611
Current assets of discontinued operations	—		3,531
Total current assets	6,275		5,856
Total current assets	8,086		8,060
Property, plant and equipment, net	2,345		2,343
Property, plant and equipment, net	2,347		2,359
Goodwill	4,319		4,319
Other intangible assets, net	76		78
Other non-current assets	1,420		1,484
Other non-current assets	1,540		759
Total assets	$	14,359	$	14,002
Non-current assets of discontinued operations	—		8,613
Total assets	$	16,368	$	24,188
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,~~287~~533	$	1,~~054~~266
Accrued expenses	~~774~~703		~~1,053~~719
Income taxes payable	373		471
Accrued compensation	413		407
Accrued compensation	322		435
Income taxes payable	298		800
Current portion of long-term debt	2,~~426~~226		12,~~750~~226
Current liabilities of discontinued operations	—		1,324
Total current liabilities	5,173		5,418
Total current liabilities	5,182		6,087
Long-term debt	2,457		2,485
Long-term debt	4,907		5,684
Other liabilities	612		559
Other liabilities	873		1,002
Total liabilities	8,242		8,462
Non-current liabilities of discontinued operations	—		368
Commitments and contingencies (Notes 8 and 14)
Total liabilities	10,962		13,141
Convertible preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — 0.2 shares as of both October 3, 2025 and June 27, 2025; aggregate liquidation preference of $265 as of both October 3, 2025 and June 27, 2025	229		229
Commitments and contingencies (Notes 10, 12 and 16)
Convertible preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — 0.2 shares; aggregate liquidation preference of $265 and $257, respectively	229		229
Shareholders’ equity:
Common stock, $0.01 par value; authorized — 750 shares; issued and outstanding — 349 shares and 343 shares, respectively	3		3
Common stock, $0.01 par value; authorized — 750 shares; issued — 349 shares as of both October 3, 2025 and June 27, 2025; issued and outstanding — 342 shares and 347 shares as of October 3, 2025 and June 27, 2025, respectively	3		3
Additional paid-in capital	4,~~642~~550		4,~~752~~621
Accumulated other comprehensive income (loss)	11		(712)
Accumulated other comprehensive income	14		20
Retained earnings	~~521~~1,904		~~6,775~~762
Total shareholders’ equity	5,177		10,818
Treasury stock — common shares at cost; 7 shares and 2 shares	(583)		(95)
Total liabilities, convertible preferred stock and shareholders’ equity	$	16,368	$	24,188
Total shareholders’ equity	5,888		5,311
Total liabilities, convertible preferred stock and shareholders’ equity	$	14,359	$	14,002

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(Unaudited)

	Three Months Ended				~~Nine Months Ended~~
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	October 3,2025		September 27,2024
Revenue, net	$	2,~~294~~818	$	12,~~752~~212	$	~~6,915~~	$	~~4,313~~
Cost of revenue	1,~~382~~591		1,~~233~~406		~~4,290~~		~~3,237~~
Gross profit	~~912~~1,227		~~519~~806		~~2,625~~		~~1,076~~
Operating expenses:
Research and development	~~245~~294		~~243~~262		~~732~~		~~683~~
Selling, general and administrative	~~108~~138		~~176~~204		~~444~~		~~542~~
Litigation matter	~~(201)~~—		—3		~~(198)~~		—
Employee termination, asset impairment and other	—		6		(7)		163
Business realignment charges	3		3
Total operating expenses	~~152~~435		~~425~~472		~~971~~		~~1,388~~
Operating income (loss)	760		94		1,654		(312)
Operating income	792		334
Interest and other expense:
Interest and other income (expense):
Interest income	1017		87		25		25
Interest expense	(9159)		(~~108~~99)		~~(283)~~		~~(312)~~
Unrealized loss on retained interest in Sandisk	(606)		—		(606)		—
Gain on retained interest in Sandisk	611		—
Other income (expense), net	1(24)		~~(6)~~1		~~(7)~~		53
Total interest and other expense, net	(686)		(106)		(871)		(234)
Total interest and other income (expense), net	545		(91)
Income (loss) before taxes	74		(12)		783		(546)
Income before taxes	1,337		243
Income tax benefit	(698)		(4)		(608)		(27)
Income tax expense	155		90
Net income (loss) from continuing operations	772		(8)		1,391		(519)
Net income from continuing operations	1,182		153
Net income (loss) from discontinued operations, net of taxes	(252)		143		216		(318)
Net income from discontinued operations, net of taxes	—		340
Net income (loss)	$	520	$	135	$	1,607	$	(837)
Net income	$	1,182	$	493
Net income (loss) per common share:
Net income per common share:
Basic:
Continuing operations	$	23.1734	$	(0.~~07)~~43	$	~~3.91~~	$	~~(1.74)~~
Discontinued operations	$—	~~(0.71)~~	$0.97	~~0.42~~	$	~~0.62~~	$	~~(0.98)~~
Net income (loss) per share	$	1.46	$	0.35	$	4.53	$	(2.72)
Net income per common share	3.34		1.40
Diluted:
Continuing operations	$3.07	~~2.11~~	$0.42	~~(0.07)~~	$	~~3.79~~	$	~~(1.74)~~
Discontinued operations	$—	~~(0.69)~~	$0.93	~~0.41~~	$	~~0.59~~	$	~~(0.98)~~
Net income (loss) per share	$	1.42	$	0.34	$	4.38	$	(2.72)
Net income per common share	3.07		1.35

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(in millions)

(Unaudited)

	Three Months Ended				~~Nine Months Ended~~
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	October 3,2025		September 27,2024
Net income (loss)	$	520	$	135	$	1,607	$	(837)
Net income	$	1,182	$	493
Other comprehensive income (loss), before tax:
Foreign currency translation adjustment	24—		~~(75)~~121		45		~~(55)~~
Net unrealized gain (loss) on derivative contracts	98(7)		~~(86)~~243		~~172~~		~~(45)~~
Total other comprehensive income (loss), before tax	~~122~~(7)		~~(161)~~364		~~217~~		~~(100)~~
Income tax benefit (expense) related to items of other comprehensive income (loss), before tax	~~(24)~~1		18(52)		~~(40)~~		12
Other comprehensive income (loss), net of tax	98(6)		~~(143)~~312		~~177~~		~~(88)~~
Total comprehensive income (loss)	$	618	$	(8)	$	1,784	$	(925)
Total comprehensive income	$	1,176	$	805

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)

	Nine Months Ended
	Three Months Ended
	March 28,2025		March 29,2024
	October 3,2025		September 27,2024
Cash flows from operating activities
Net income (loss)	$	1,607	$	(837)
Net income	$	1,182	$	493
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	~~365~~88		~~430~~135
Stock-based compensation	~~220~~53		~~226~~84
Deferred income taxes	~~(682)~~55		~~(120)~~54
Gain on disposal of assets	(3)		(87)
Gain on retained interest in Sandisk	(611)		—
Gain on business divestiture	(113)		—
Other non-cash operating activities, net	4		21
Asset impairment	—		99
Gain on repurchase of debt	—		(4)
Amortization of debt issuance costs and discounts	21		14
Unrealized loss on retained interest in Sandisk	606		—
Other non-cash operating activities, net	75		24
Changes in:
Accounts receivable, net	96131		(~~202~~292)
Inventories	(~~429~~101)		~~483~~(76)
Accounts payable	~~341~~248		~~211~~216
Accounts payable to related parties	~~(39)~~—		1839
Accrued expenses	(~~316~~21)		(~~310~~153)
Income taxes payable	(80)		(524)
Accrued compensation	6		(50)
Accrued compensation	(131)		97
Income taxes payable	(503)		(77)
Other assets and liabilities, net	~~(593)~~141		(~~178~~360)
Net cash provided by (used in) operating activities	945		(660)
Net cash provided by operating activities	672		34
Cash flows from investing activities
Purchases of property, plant and equipment	(~~341~~73)		(~~371~~96)
Proceeds from the sale of property, plant and equipment	5—		~~195~~1
Net proceeds from business divestiture	401		—
Notes receivable issuances to Flash Ventures	—		(14)
Notes receivable issuances to Flash Ventures	(266)		(184)
Notes receivable proceeds from Flash Ventures	—		61
Notes receivable proceeds from Flash Ventures	239		391
Strategic investments and other, net	16		3
Distribution from Flash Ventures	175		—
Net cash used in investing activities	(57)		(45)
Strategic investments and other, net	7		—
Net cash provided by investing activities	220		31
Cash flows from financing activities
Issuance of stock under employee stock plans	69		40
Taxes paid on vested stock awards under employee stock plans	(55)		(64)
Taxes paid on vested stock awards under employee stock plans	(92)		(66)
Repurchases of common stock	(553)		—
Convertible preferred stock issuance costs	—		(5)
Dividends paid to common shareholders	(34)		—
Purchase of capped calls	—		(155)
Dividends paid to preferred shareholders	(5)		—
Repurchases of debt	—		(505)
Repayments of debt	(31)		(188)
Repayments of debt	(257)		(1,267)
Proceeds from debt	—		150
Proceeds from debt	2,150		2,500
Net cash used in financing activities	(678)		(102)
Debt issuance costs	(74)		(36)
Effect of exchange rate changes on cash	(3)		10
Cash transferred to Sandisk related to Separation	(1,366)		—
Cash and cash equivalents reclassified to assets held for sale	—		(71)
Net cash provided by financing activities	430		506
Net decrease in cash and cash equivalents	(66)		(174)
Effect of exchange rate changes on cash	3		(6)
Cash and cash equivalents, beginning of period	2,114		1,879
Net increase in cash and cash equivalents	1,598		(129)
Cash and cash equivalents, end of period	$	2,048	$	1,705
Cash and cash equivalents, beginning of year	1,879		2,023
Cash and cash equivalents, end of period	$	3,477	$	1,894
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	~~762~~446	$	~~874~~479
Cash paid for interest	$	~~295~~50	$	~~321~~115

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY

(in millions)

(Unaudited)

	Convertible Preferred Stock			Common Stock			Treasury Stock	~~Additional Paid-In Capital~~		~~Accumulated~~Additional ~~Other~~Paid-In ~~Comprehensive Income (Loss)~~Capital		~~Retained~~Accumulated ~~Earnings~~Other Comprehensive Income		~~Total~~Retained ~~Shareholders’ Equity~~Earnings		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at June 28, 2024	0.2	$	229	343	$	3				$	4,752	$	(712)	$	6,775	$	10,818
Balance at June 27, 2025	0.2	$	229	349	$	3	(2)	$	(95)	$	4,621	$	20	$	762	$	5,311
Net income	—	—		—	—		—	—		—		—		~~493~~1,182		~~493~~1,182
Employee stock plans	—	—		3—	—		1	69		(64125)		—		—		(6456)
Stock-based compensation	—	—		—	—		—	—		8453		—		—		8453
Foreign currency translation adjustment	—	—		—	—					—		121		—		121
Repurchases of common stock	—	—		—	—		(6)	(557)		—		—		—		(557)
Net unrealized gain on derivative contracts, net of taxes	—	—		—	—					—		191		—		191
Preferred stock dividends	—	—		—	—		—	—		—		—		(5)		(5)
Balance at September 27, 2024	0.2	229		346	3					4,772		(400)		7,268		11,643
Common stock dividends	—	—		—	—		—	—		1		—		(35)		(34)
Net income	—	—		—	—					—		—		594		594
Net unrealized loss on derivative contracts, net of taxes	—	—		—	—		—	—		—		(6)		—		(6)
Employee stock plans	—	—		2	—					36		—		—		36
Balance at October 3, 2025	0.2	$	229	349	$	3	(7)	$	(583)	$	4,550	$	14	$	1,904	$	5,888
Stock-based compensation	—	—		—	—					77		—		—		77
Foreign currency translation adjustment	—	—		—	—					—		(100)		—		(100)
Net unrealized loss on derivative contracts, net of taxes	—	—		—	—					—		(133)		—		(133)
Balance at December 27, 2024	0.2	229		348	3					4,885		(633)		7,862		12,117
Net income	—	—		—	—					—		—		520		520
Distribution in connection with the Separation	—	—		—	—					(307)		546		(7,857)		(7,618)
Employee stock plans	—	—		1	—					5		—		—		5
Stock-based compensation	—	—		—	—					59		—		—		59
Dividends to shareholders	—	—		—	—					—		—		(4)		(4)
Foreign currency translation adjustment	—	—		—	—					—		24		—		24
Net unrealized gain on derivative contracts, net of taxes	—	—		—	—					—		74		—		74
Balance at March 28, 2025	0.2	$	229	349	$	3				$	4,642	$	11	$	521	$	5,177

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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WESTERN DIGITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY

(in millions)

(Unaudited)

	Convertible Preferred Stock			Common Stock			Additional Paid-In Capital	Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2023	0.9	$	876	322	$	3		$	3,936	$	(548)	$	7,573	$	10,964
Balance at June 28, 2024	0.2	$	229	343	$	3		$	4,752	$	(712)	$	6,775	$	10,818
Net loss	—	—		—	—			—		—		(685)		(685)
Net income	—	—		—	—			—		—		493		493
Employee stock plans	—	—		23	—			(4364)		—		—		(4364)
Stock-based compensation	—	—		—	—			7784		—		—		7784
Foreign currency translation adjustment	—	—		—	—			—		~~(38)~~121		—		~~(38)~~121
Net unrealized loss on derivative contracts, net of taxes	—	—		—	—			—		(45)		—		(45)
Net unrealized gain on derivative contracts, net of taxes	—	—		—	—			—		191		—		191
Balance at September 29, 2023	0.9	876		324	3			3,970		(631)		6,888		10,230
Balance at September 27, 2024	0.2	$	229	346	$	3		$	4,772	$	(400)	$	7,268	$	11,643
Net loss	—	—		—	—			—		—		(287)		(287)
Employee stock plans	—	—		2	—			33		—		—		33
Stock-based compensation	—	—		—	—			72		—		—		72
Purchase of capped calls related to the issuance of convertible notes, net of tax	—	—		—	—			(118)		—		—		(118)
Foreign currency translation adjustment	—	—		—	—			—		58		—		58
Net unrealized gain on derivative contracts, net of taxes	—	—		—	—			—		80		—		80
Balance at December 29, 2023	0.9	876		326	3			3,957		(493)		6,601		10,068
Net income	—	—		—	—			—		—		135		135
Employee stock plans	—	—		—	—			(16)		—		—		(16)
Stock-based compensation	—	—		—	—			77		—		—		77
Foreign currency translation adjustment	—	—		—	—			—		(75)		—		(75)
Net unrealized loss on derivative contracts, net of taxes	—	—		—	—			—		(68)		—		(68)
Balance at March 29, 2024	0.9	$	876	326	$	3		$	4,018	$	(636)	$	6,736	$	10,121

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

Western Digital Corporation (“Western Digital” or the “Company”) is a leading developer, manufacturer, and provider of data storage devices and solutions based on hard disk ~~drive~~drives (“HDD”) ~~technology~~technologies.

The Company manufactures, markets, and sells data storage devices and solutions in the United States (“U.S.”) and in foreign countries through its sales personnel, dealers, distributors, retailers, and subsidiaries. Its broad portfolio of technology and products addresses the following key end markets: Cloud, Client, and Consumer. ~~The~~Cloud ~~Company~~is ~~also~~comprised ~~generates~~primarily ~~immaterial~~of ~~license~~products for public or private cloud environments and ~~royalty~~enterprise ~~revenue~~customers. ~~from~~Through the Client end market, the Company provides its ~~extensive~~OEM ~~intellectual~~and ~~property~~channel ~~portfolio~~customers a broad array of high-performance HDD solutions across desktop and notebooks. The Consumer end market provides a broad range of retail and other end-user products, which iscapitalize ~~included~~on inthe ~~each~~strength of ~~these~~the ~~three~~Company’s ~~end~~product ~~market~~brand ~~categories~~recognition and vast presence around the world.

The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Organization and Basis of Presentation, of the Notes to ~~the~~ Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended June 2827, ~~2024~~2025 (the “~~2024~~2025 Annual Report on Form 10-K”). In the opinion of management, all adjustments necessary to fairly state the Condensed Consolidated Financial Statements have been made. Such adjustments consist of items of a normal, recurring nature. Certain information and ~~footnote~~ disclosures normally included in the Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the ~~2024~~2025 Annual Report on Form 10‑K. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

Information provided herein for the three months ended September 27, 2024 is presented on a continuing operations basis to reflect the impact of the Separation of the Company’s Flash business as discussed in further detail in Note 34, Discontinued Operations.

Fiscal Year

The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, the Company reports a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year ~~2025~~2026, which will end on ~~June~~July 273, ~~2025~~2026, will be comprised of 53 weeks, with the first quarter consisting of 14 weeks and ~~fiscal~~the remaining quarters consisting of 13 weeks each. Fiscal year ~~2024~~2025, which ended on June 2827, ~~2024~~2025, ~~are~~was ~~each~~ comprised of 52 weeks, with all quarters presented consisting of 13 weeks. Unless otherwise indicated, references herein to specific years and quarters are to fiscal years and fiscal quarters, and references to financial information are on a consolidated continuing operations basis.

Segment Reporting

~~Historically,~~The ~~the~~ Company’s ~~had~~Chief ~~been~~Executive ~~managed~~Officer ~~and~~is ~~operated~~the ~~under~~Company’s ~~two~~Chief ~~reportable~~Operating ~~segments:~~Decision ~~hard~~Maker ~~disk drives~~ (“~~HDD~~CODM”) ~~and Flash-based products (“Flash”)~~. AsThe aCODM ~~result~~manages of the ~~Separation~~business (as ~~defined~~a inprovider ~~Note 3, Discontinued Operations) and disposition~~ of ~~the~~data ~~Flash~~storage ~~segment,~~devices ~~the~~based ~~Company’s~~on ~~continuing operations now consist of a single reportable segment,~~ HDD technology. 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~~Net ~~results~~income from continuing operations and Total assets. The Company has, therefore, determined that it has one reportable segment.

Use of Estimates

Company management has made estimates and assumptions relating to the reporting of certain assets and liabilities in conformity with U.S. GAAP. These estimates and assumptions have been applied using methodologies that are consistent throughout the periods presented.; ~~However~~however, actual results could differ materially ~~from these estimates~~.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2. Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In September 2022, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. 2022-04, “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations” (“ASU 2022-04”), which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. As required by ASU 2022-04, the Company began to provide disclosure of outstanding obligations to such suppliers for all balance sheet dates presented beginning with the Company’s first quarter of 2024 (see Note 15, Supplier Finance Program). Additionally, the Company will provide certain annual roll-forward information related to those obligations beginning with the Company’s financial statements for the year ending June 27, 2025.

Recently Issued Accounting Pronouncements Not Yet Adopted

In ~~November~~September ~~2024~~2025, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) No. ~~2024~~2025-0307, “~~Income~~Derivatives ~~Statement—Reporting~~and ~~Comprehensive~~Hedging ~~Income—Expense Disaggregation Disclosures~~ (~~Subtopic~~Topic ~~220-40~~815): ~~Disaggregation~~and ofRevenue ~~Income~~from ~~Statement~~Contracts ~~Expenses,”~~with ~~which~~Customers is(Topic ~~intended~~606): toDerivatives ~~improve~~Scope ~~disclosures~~Refinements ~~about~~and ~~the~~Scope ~~expenses~~Clarification offor ~~public~~Share-Based ~~entities.~~Noncash ~~The~~Consideration ~~new~~from ~~guidance~~a ~~requires~~Customer ~~more detailed information about the types of expenses~~ in ~~commonly~~a ~~presented~~Revenue ~~expense~~Contract. ~~captions~~ (~~such~~“ASU as2025-07”) ~~cost~~which ~~of sales and selling, general and administrative expenses~~(i) ~~and~~expands ~~requires public entities to disclose, on an annual and interim basis,~~ the ~~amounts~~scope ofexception ~~expenses included in each relevant expense caption presented on the face~~ of ~~the~~Topic ~~income~~815 ~~statement,~~to ~~within~~exclude ~~continuing~~certain ~~operations,~~contracts inwith a ~~tabular~~variable ~~format.~~that ~~Additionally,~~is ~~public~~based ~~entities~~on ~~will~~operations beor ~~required~~activities specific to ~~disclose~~one ~~a qualitative description~~ of the ~~amounts~~parties ~~remaining~~to inthe ~~relevant~~contract ~~expense~~and ~~captions~~(ii) ~~that~~clarifies ~~are not separately disaggregated quantitatively,~~ the ~~total~~scope ~~amount~~ of ~~selling~~share-based ~~expenses,~~payments ~~and,~~from ina ~~annual~~customer ~~reporting~~in ~~periods,~~a ~~the~~revenue ~~definition of selling expenses~~contract. ~~This~~ASU ~~standard~~2025-07 is effective ~~on either a prospective or retrospective basis~~ for ~~fiscal~~the ~~years~~year beginning ~~after~~July ~~December 15~~3, ~~2026~~2027, and interim periods within ~~fiscal~~that ~~years~~year. ~~following~~Early adoption, ~~with~~is ~~early adoption~~ permitted. ~~The~~and ~~Company~~must isbe ~~currently~~applied ~~compiling~~as of the ~~information~~beginning ~~required~~of ~~for~~the ~~these~~fiscal ~~disclosures~~year ~~and~~that ~~assessing~~includes the ~~basis~~interim ofperiod. ~~adoption~~The ~~and~~Company ~~expects~~currently todoes ~~adopt~~not ~~the~~expect ~~guidance~~this ~~for~~standard ~~annual~~to ~~reporting~~have ~~periods~~a inmaterial ~~its~~impact ~~annual~~on ~~report~~its ~~for~~condensed ~~the~~consolidated ~~year~~financial ~~ending~~statements ~~June~~and ~~30,~~related ~~2028~~disclosures.

In ~~November~~September ~~2023~~2025, the FASB issued ASU No. ~~2023~~2025-0706, “~~Segment~~Intangibles ~~Reporting~~– Goodwill and Other – Internal-Use Software (Topic ~~280~~350): Targeted Improvements to ~~Reportable~~the ~~Segment~~Accounting ~~Disclosures~~for Internal-Use Software” (“ASU ~~2023~~2025-0706”),. ~~which~~ASU ~~expands~~2025-06 onamends ~~segment~~existing ~~reporting~~references ~~requirements~~to ~~primarily~~prescriptive ~~through~~and ~~enhanced~~sequential ~~disclosures~~software ~~surrounding~~development ~~significant~~stages ~~segment~~to ~~expenses.~~better ~~ASU~~align ~~2023-07~~with ~~requires~~current ~~that~~software adevelopment ~~public~~methods, ~~entity~~such ~~disclose,~~as onagile andevelopment. ~~annual~~Under ~~and~~the ~~interim~~new ~~basis~~standard, ~~significant~~entities ~~segment~~will ~~expenses~~begin ~~that~~to ~~are~~capitalize ~~regularly~~eligible ~~provided~~software tocosts anwhen ~~entity’s~~(i) ~~CODM,~~management ahas ~~description~~authorized ofand ~~other~~committed ~~segment~~to ~~items~~funding bythe ~~reportable~~software ~~segment~~project, and ~~any~~(ii) ~~additional~~it ~~measures~~is ofprobable athat ~~segment’s~~the ~~profit~~project orwill ~~loss~~be ~~used~~completed byand the ~~CODM~~software ~~when~~will ~~deciding~~be ~~how~~used to ~~allocate~~perform ~~resources~~the function intended. ~~These~~ASU ~~incremental~~2025-06 ~~disclosures~~is ~~will~~effective befor ~~required~~the year beginning ~~with~~July ~~the~~1, ~~Company’s~~2028, ~~financial~~and ~~statements~~interim ~~for~~periods ~~the~~within that year, ~~ending~~with ~~June~~early ~~27,~~adoption ~~2025~~permitted. The Company is currently assessing ~~these~~the ~~reporting~~impact ~~requirements~~of ~~and~~this ~~expects~~standard toon ~~provide~~its ~~any~~condensed ~~required~~consolidated ~~disclosures~~financial atstatements ~~the~~and ~~required~~related ~~time~~disclosures.

In ~~December~~November ~~2023~~2024, the FASB issued ASU No. ~~2023~~2024-0903, “Income ~~Taxes~~Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses” (“ASU ~~2023~~2024-0903”)., ~~ASU~~which ~~2023-09~~is ~~calls~~intended ~~for~~to ~~enhanced~~improve ~~income~~disclosures ~~tax~~about ~~disclosure~~the ~~requirements~~expenses ~~surrounding~~of public entities. The new guidance requires more detailed information about the ~~tabular~~types ~~rate~~of ~~reconciliation~~expenses in commonly presented expense captions (such as cost of sales and selling, general and administrative expenses) and requires public entities to disclose, on an annual and interim basis, the amounts of expenses included in each relevant expense caption presented on the face of the income ~~taxes~~statement, ~~paid~~within continuing operations, in a tabular format. ~~These~~Additionally, ~~incremental~~public ~~disclosures~~entities will be required ~~beginning~~to ~~with~~disclose a qualitative description of the ~~Company’s~~amounts ~~financial~~remaining ~~statements~~in ~~for~~relevant expense captions that are not separately disaggregated quantitatively, the ~~year~~total ~~ending~~amount ~~July~~of 3selling expenses, ~~2026~~and, in annual reporting periods, the definition of selling expenses. This standard is effective on either a prospective or retrospective basis with early adoption permitted. The Company is currently compiling the information required for these disclosures and assessing the basis of adoption and expects to ~~provide~~adopt ~~any~~the ~~required~~guidance ~~disclosures~~for annual reporting periods in its annual report for the year ending ~~July~~June 330, ~~2026~~2028.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 calls for enhanced income tax disclosure requirements surrounding the tabular rate reconciliation and income taxes paid. This standard is effective on either a prospective or retrospective basis. These incremental disclosures will be required beginning with the Company’s financial statements for the year ending July 3, 2026. The Company is currently compiling the information required for these disclosures and expects to provide any required disclosures in its annual report for the year ending July 3, 2026.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3. ~~Discontinued~~Disaggregated ~~Operations~~Revenue, Geographic Information, Concentrations of Risk, and Segment Reporting

The following table summarizes the Company’s disaggregated revenue:

On October 30, 2023, the Company announced that its Board of Directors had completed its strategic review of the business and, after evaluating a comprehensive range of alternatives, authorized the Company to pursue a plan to separate its HDD and Flash business units to create two independent, public companies. In connection with the Separation, the Company has incurred separation and transition costs, which are recorded as Business separation costs within discontinued operations in the Company’s Condensed Consolidated Financial Statements as further detailed in the summary of net income (loss) from discontinued operations, net of taxes, below.



	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)





Revenue by end market
Cloud	$	2,510	$	1,909
Client	146		139
Consumer	162		164
Total revenue	$	2,818	$	2,212

Revenue by geography(1)
Asia	$	1,175	$	686
Americas	1,100		1,247
Europe, Middle East and Africa	543		279
Total revenue	$	2,818	$	2,212

~~On February 21, 2025, the Company completed the previously announced separation of its Flash business~~ (~~the “Separation”) through a pro rata distribution of 80.~~1~~% of the outstanding shares of Sandisk Corporation (“Sandisk”~~) Net torevenue ~~Western Digital stockholders. The Separation~~ is ~~intended~~attributed to begeographic ~~tax-free~~regions 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 19.9% ownership interest, initially based on the ~~net~~ship-to ~~book~~location ~~value~~ of the ~~applicable assets and liabilities derecognized~~customer. 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 Condensed Consolidated Financial Statements as discontinued operations. Following the Separation, as the Company no longer controls or has the ability to exert significant influence over Sandisk, the Company measures, at fair value on a recurring basis, its retained ownership interest in Sandisk common stock (see additional information in Note 6, Fair Value Measurements and Investments). The Company expects to monetize its stake in Sandisk within one year from the Separation date.

The Company’s ~~entered~~top ~~into~~10 ~~various~~customers ~~agreements~~accounted tofor ~~effect~~77% ~~the~~of ~~Separation~~its ~~and~~net ~~provide~~revenue for the ~~temporary~~three ~~framework~~months ofended ~~the~~October 3, ~~relationship~~2025, ~~between~~compared ~~Western~~to ~~Digital~~65% ~~and~~of ~~Sandisk~~its ~~following~~net revenue for the ~~Separation,~~three ~~including,~~months ~~among~~ended ~~others~~September 27, a2024. ~~separation~~For ~~and~~the ~~distribution~~three ~~agreement,~~months aended ~~tax~~October 3, ~~matters agreement~~2025, ~~and~~three acustomers ~~transition~~accounted ~~services~~for ~~agreement.~~18%, ~~The~~16%, ~~transition~~and ~~services~~14%, ~~agreement~~respectively, ~~provides~~of ~~for~~the ~~transition~~Company’s ~~service~~net ~~support~~revenue, toand ~~be provided~~ for ~~various~~the ~~periods~~three ~~of time ranging up to 15~~ months. ~~The~~ended ~~amounts~~September 27, ~~involved~~2024, ~~under~~one ~~these~~customer ~~agreements~~accounted ~~are~~for ~~not~~18% ~~expected~~of tothe beCompany’s ~~material~~net revenue.

~~The~~As ~~historical~~of ~~results~~October 3, 2025 and June 27, 2025, net accounts receivable were $1.36 billion and $1.49 billion, respectively, and reserves for potential credit losses were not material. As of ~~Sandisk~~October 3, ~~have~~2025, ~~been~~five ~~reflected~~customers asaccounted ~~discontinued~~for ~~operations~~17%, in16%, 12%, 12%, and 10%, respectively, of the Company’s ~~Condensed~~net ~~Consolidated~~accounts ~~Financial~~receivable, ~~Statements~~and ~~for~~as ~~all~~of ~~periods~~June 27, ~~prior~~2025, tothree ~~the~~customers ~~Separation~~accounted onfor ~~February~~20%, 2119%, ~~2025~~and 12%, respectively, of the Company’s net accounts receivable.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table ~~provides~~is a ~~summary~~reconciliation of the ~~assets~~Company’s ~~and~~measure ~~liabilities~~of ~~classified~~segment asprofit ~~discontinued~~or ~~operations~~loss, significant segment expenses and other segment items:

Assets and Liabilities of Discontinued Operations			June 28,2024
	Three Months Ended
			(in millions)
	October 3,2025				September 27,2024
Assets
	(in millions)
Cash and cash equivalents			$	328
Revenue, net	$	2,818			$	2,212
Accounts receivable, net			935
Less: Significant expenses and other segment items
Inventories			1,955
Cost of revenue(1)	1,581				1,386
Other current assets			313
Research and development(1)	270				243
Current assets of discontinued operations			$	3,531
Selling, general and administrative(1)	111				176
Property, plant and equipment, net			$	808
Litigation matter	—				14
Notes receivable and investments in Flash Ventures			991
Business realignment charges	3				3
Goodwill			5,713
Stock-based compensation	53				57
Other non-current assets			1,101
Interest expense, net	42				92
Non-current assets of discontinued operations			$	8,613
Gain on retained interest in Sandisk	(611)				—
Liabilities
Other expense, net	2				(4)
Accounts payable			$	357
Other segment items(2)	30				2
Accounts payable to related parties			313
Income tax expense	155				90
Accrued expenses			427
Net income from continuing operations	$	1,182			$	153
Income taxes payable			54
Accrued compensation			173
Current liabilities of discontinued operations			$	1,324
Non-current liabilities of discontinued operations			$	368

	Three Months Ended				Nine Months Ended
Net Income (Loss) from Discontinued Operations, Net of Taxes	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	(in millions)
Revenue, net	$	602	$	1,705	$	4,361	$	4,926
Cost of revenue	485		1,223		2,892		4,410
Operating expenses:
Research and development	185		251		718		686
Selling, general and administrative	84		27		229		66
Gain on business divestiture	—		—		(113)		—
Business separation costs	57		23		144		59
Employee termination, asset impairment and other	—		2		3		(74)
Operating income (loss)	(209)		179		488		(221)
Total interest and other income (expense), net	1		11		(36)		4
Income (loss) before taxes	(208)		190		452		(217)
Income tax expense	44		47		236		101
Net income (loss) from discontinued operations, net of taxes	$	(252)	$	143	$	216	$	(318)

(1) Excludes amounts related to stock-based compensation and other segment items which are presented separately in the table above.

(2) Other segment items include strategic investment activity and other charges.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Cash flows related to discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows for all periods presented~~Note 4. Discontinued ~~The following table provides selected financial information related to cash flows from discontinued operations:~~Operations

	Nine Months Ended
Select Cash Flow Information from Discontinued Operations	March 28,2025		March 29,2024
	(in millions)
Depreciation and amortization	$	117	$	166
Purchases of property, plant and equipment	139		128
Stock-based compensation	98		71

On October 30, 2023, the Company announced that its Board of Directors had completed its strategic review of the business and, after evaluating a comprehensive range of alternatives, authorized the Company to pursue a plan to separate its HDD and Flash business units to create two independent, public companies. In connection with the Separation (as defined below), the Company incurred separation and transition costs, which are recorded as Business separation costs within discontinued operations in the Company’s Condensed Consolidated Financial Statements, as further detailed in the summary of Net income from discontinued operations, net of taxes, below.

On February 21, 2025, ~~prior~~the toCompany completed the ~~effective~~separation ~~time~~ of its Flash business (the “Separation,”) ~~Sandisk~~through ~~entered~~a ~~into~~pro arata ~~loan~~distribution ~~agreement~~of (80.1% of the “outstanding shares of Sandisk ~~Loan~~Corporation ~~Agreement~~(“Sandisk”) byto ~~and~~Western ~~among~~Digital ~~Sandisk~~stockholders. The Separation is intended to be tax-free for U.S. federal income tax purposes. To reflect the completion of the Separation, the ~~lenders~~Company ~~party~~recorded ~~thereto~~a decrease in shareholders’ equity for the net book value of applicable assets and liabilities derecognized in connection with the Separation, ~~JPMorgan~~net ~~Chase~~of ~~Bank~~the Company’s retained ownership interest, Nwhich was initially 19.~~A.,~~9% asand ~~administrative~~was ~~agent~~based on the net book value of the applicable assets and ~~collateral~~liabilities ~~agent~~derecognized. As a result of the Separation, Sandisk became an independent public company and ~~others~~Western ~~party~~Digital ~~thereto~~no longer consolidates Sandisk into the Company’s financial results. The ~~Sandisk~~historical ~~Loan~~results ~~Agreement~~of ~~comprises~~operations aof ~~term~~Sandisk ~~loan~~are Bnow ~~facility~~reported in the ~~principal~~Company’s ~~amount~~Condensed ofConsolidated ~~$2 billion~~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, ~~Term~~the ~~Loan~~Company ~~Facility”)~~measures, ~~and~~at fair value on a ~~revolving~~recurring ~~credit~~basis, ~~facility~~its retained ownership interest in Sandisk common stock (see additional information in Note 6, Fair Value Measurements and Investments). In June 2025, the ~~principal~~Company ~~amount~~disposed of $121.53 ~~billion~~million ~~(the~~shares ~~“Sandisk~~of ~~Revolving~~its ~~Credit~~Sandisk ~~Facility”~~common ~~and~~stock, ~~together~~along with ~~the~~$4 million ~~Sandisk~~in ~~Term~~cash, ~~Loan~~in ~~Facility,~~a tax-free exchange for $800 million principal amount of the ~~“Sandisk~~Company’s ~~Facilities”)~~Term Loan A-3. The ~~obligations~~Company ~~under~~expects ~~this~~to ~~facility~~monetize ~~were~~its ~~retained~~remaining bystake in Sandisk ~~upon~~within one year from the Separation date.

The Company ~~previously~~entered ~~had~~into ~~business~~various ~~ventures~~agreements ~~with~~to ~~Kioxia~~effect ~~Corporation~~the ~~(“Kioxia”),~~Separation ~~which~~and ~~consisted~~provide offor ~~three~~the ~~separate~~temporary ~~legal~~framework ~~entities:~~of ~~Flash~~the ~~Partners~~relationship ~~Ltd.,~~between ~~Flash~~Western ~~Alliance~~Digital ~~Ltd.,~~ and ~~Flash~~Sandisk ~~Forward~~following ~~Ltd.~~the ~~The~~Separation, ~~Company~~including, ~~also~~among ~~previously~~others, ~~had~~ a ~~business~~separation ~~venture~~and ~~with~~distribution ~~Unisplendour~~agreement, ~~Corporation~~a ~~Limited~~tax matters agreement, and ~~Unissoft~~a ~~(Wuxi)~~transition ~~Group~~services Coagreement. ~~Ltd.,~~The ~~both~~transition ~~collectively~~services ~~referred~~agreement toprovides asfor ~~the~~transition ~~“Unis~~service ~~Venture.”~~support ~~All~~to ~~business~~be ~~ventures~~provided ~~with~~for ~~Kioxia~~various ~~and~~periods ~~Unis~~of ~~Venture~~time ~~were~~ranging ~~distributed~~up to ~~Sandisk~~15 inmonths. ~~connection~~The ~~with~~amounts ~~the~~involved ~~Separation~~under ~~and~~these agreements are ~~included~~not inexpected ~~discontinued~~to ~~operations~~be material.

Prior to the Separation, effective September 28, 2024, the Company sold 80% of its equity interest in an indirect wholly-owned subsidiary in its Flash business, SanDisk Semiconductor (Shanghai) Co. Ltd. (“SDSS”), resulting in a gain on divestiture of $113 million. Net proceeds from the sale received prior to the Separation were $401 million. The rights to the remaining future proceeds from the sale and the 20% retained interest in SDSS were distributed to Sandisk in connection with the Separation.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table provides a summary of the historical results of Sandisk for the three months ended September 27, 2024 which have been reflected as Net income from discontinued operations, net of taxes in the Condensed Consolidated Statements of Operations:

Note 4. Disaggregated Revenue, Geographic Information, and Concentrations of Risk



Net Income from Discontinued Operations, Net of Taxes	September 27, 2024
	(in millions)
Revenue, net	$	1,883
Cost of revenue	1,138

Operating expenses:
Research and development	257
Selling, general and administrative	38

Business separation costs	43
Business realignment charges	(1)

Operating income	408




Total interest and other expense, net	(23)
Income before taxes	385
Income tax expense	45
Net income from discontinued operations, net of taxes	$	340

~~Disaggregated~~Cash ~~Revenue~~flows related to discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows for all periods presented. The following table provides selected financial information related to cash flows from discontinued operations:

The Company’s broad portfolio of technology and products addresses multiple end markets. Cloud is comprised primarily of products for public or private cloud environments and enterprise customers. Through the Client end market, the Company provides its original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance HDD solutions across desktop and notebooks. The Consumer end market provides a broad range of retail and other end-user products, which capitalize on the strength of the Company’s product brand recognition and vast presence around the world.

Three Months Ended

Select Cash Flow Information from Discontinued Operations

September 27,
2024

(in millions)

Depreciation and amortization

Purchases of property, plant and equipment

Stock-based compensation

	Three Months Ended				Nine Months Ended
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	(in millions)
Revenue by end market
Cloud	$	2,007	$	1,455	$	6,012	$	3,340
Client	137		140		416		440
Consumer	150		157		487		533
Total revenue	$	2,294	$	1,752	$	6,915	$	4,313
Revenue by geography
Asia	$	753	$	600	$	2,349	$	1,677
Americas	1,182		882		3,468		1,844
Europe, Middle East and Africa	359		270		1,098		792
Total revenue	$	2,294	$	1,752	$	6,915	$	4,313

The Company’s top 10 customers accounted for 73% and 68% of its net revenue for the three and nine months ended March 28, 2025, respectively, compared to 59% and 53% of its net revenue for the three and nine months ended March 29, 2024, respectively. For the three months ended March 28, 2025, three customers accounted for 18%, 16%, and 13% of the Company’s net revenue, and for the nine months ended March 28, 2025, two customers accounted for 18% and 11% of the Company’s net revenue. For the three months ended March 29, 2024, one customer accounted for 12% of the Company’s net revenue, and for the nine months ended March 29, 2024, no customer accounted for 10% or more of the Company’s net revenue.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 5. Supplemental Financial Statement Data

Inventories

Accounts receivable, net


	October 3, 2025		June 27, 2025
	(in millions)
Inventories:
Raw materials and component parts	$	238	$	227
Work-in-process	793		785
Finished goods	362		279
Total inventories	$	1,393	$	1,291

Property, plant and equipment, net

From time to time, in connection with factoring agreements, the Company sells trade accounts receivable without recourse to third-party purchasers in exchange for cash. There were no trade accounts receivable sold during the nine months ended March 28, 2025. During the nine months ended March 29, 2024, the Company sold trade accounts receivable aggregating to $284 million. The discounts on the trade accounts receivable sold were not material and were recorded within Other income (expense), net in the Condensed Consolidated Statements of Operations. There were no factored receivables outstanding as of March 28, 2025 and June 28, 2024.


	October 3, 2025		June 27, 2025
	(in millions)
Property, plant and equipment:
Land and improvements	$	225	$	225
Buildings and improvements	1,576		1,550
Machinery and equipment	6,548		6,488
Computer equipment and software	263		257
Furniture and fixtures	35		33
Construction-in-process	486		532
Property, plant and equipment, gross	9,133		9,085
Accumulated depreciation	(6,788)		(6,742)
Property, plant and equipment, net	$	2,345	$	2,343

	March 28,2025		June 28,2024
	(in millions)
Inventories:
Raw materials and component parts	$	227	$	329
Work-in-process	786		829
Finished goods	298		229
Total inventories	$	1,311	$	1,387

Non-current assets

	March 28,2025		June 28,2024
	October 3,2025		June 27,2025
	(in millions)
Property, plant and equipment:
Non-current assets:
Land and improvements	$	225	$	225
Deferred tax assets	$	953	$	1,007
Buildings and improvements	1,543		1,419
Other non-current assets	467		477
Machinery and equipment	6,468		6,301
Total non-current assets	$	1,420	$	1,484
Computer equipment and software	323		313
Furniture and fixtures	33		32
Construction-in-process	576		685
Property, plant and equipment, gross	9,168		8,975
Accumulated depreciation	(6,821)		(6,616)
Property, plant and equipment, net	$	2,347	$	2,359

Other intangible assets, net

As part of the Company’s prior acquisitions, the Company recorded, at the time of each acquisition, acquired in-process research and development (“IPR&D”) for projects in progress that had not yet reached technological feasibility. IPR&D is initially accounted for as an indefinite-lived intangible asset. Once a project reaches technological feasibility, the Company reclassifies the balance to existing technology and begins to amortize the intangible asset over its estimated useful life. As of both March 28, 2025 and June 28, 2024, IPR&D included in intangible assets, net was $72 million. During the three and nine months ended March 28, 2025 and March 29, 2024, the Company did not record any impairment charges related to IPR&D.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Non-current assets

	March 28,2025		June 28,2024
	(in millions)
Non-current assets:
Deferred tax assets	$	989	$	225
Other non-current assets	551		534
Total non-current assets	$	1,540	$	759

Product warranty liability

Changes in the warranty accrual were as follows:

Three Months Ended

~~Nine Months Ended~~

March 28,2025

March 29,2024

March 28,2025

March 29,2024

October 3,2025

September 27,2024

(in millions)

Warranty accrual, beginning of period

~~121~~152

~~159~~142

~~142~~

~~202~~

Charges to operations

2427

2124

Utilization

(1824)

(2130)

~~(61)~~

~~(87)~~

Changes in estimate related to pre-existing warranties

~~(11)~~5

1(17)

~~(38)~~

~~(10)~~

Warranty accrual, end of period

~~116~~160

~~160~~119

~~116~~

~~160~~

The current portion of the warranty accrual was classified in Accrued expenses and the long-term portion was classified in Other liabilities as noted below:

March 28,2025

June 28,2024

October 3,2025

June 27,2025

(in millions)

Warranty accrual:

Current portion

3345

957

Long-term portion

83115

~~133~~95

Total warranty accrual

~~116~~160

~~142~~152

Other liabilities

	March 28,2025		June 28,2024
	October 3,2025		June 27,2025
	(in millions)
Other liabilities:
Non-current net tax payable	$	—	$	144
Non-current portion of unrecognized tax benefits	$	193	$	163
Non-current portion of unrecognized tax benefits	473		499
Other non-current liabilities	419		396
Other non-current liabilities	400		359
Total other liabilities	$	612	$	559
Total other liabilities	$	873	$	1,002

Goodwill

Goodwill is not amortized. Instead, it is tested for impairment annually as of the beginning of the Company’s fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Management performed goodwill impairment assessments and concluded there were no impairments for the three- ~~and nine-~~month periods ended ~~March 28~~October 3, 2025 and ~~March 29~~September 27, 2024. The carrying amount of goodwill was $4.32 billion as of both ~~March~~October 283, 2025 and June 2827, ~~2024~~2025.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Accumulated other comprehensive income ~~(loss)~~

Accumulated other comprehensive income ~~(loss), net of tax,~~ refers to expenses, gains, and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The components of ~~accumulated~~Accumulated other comprehensive income ~~(loss)~~ were as follows:

	Actuarial Pension Gains		Foreign Currency Translation Adjustment		Unrealized ~~Losses~~Gains on Derivative Contracts		Total Accumulated Other Comprehensive Income ~~(Loss)~~
	(in millions)
Balance at June 28, 2024	$	14	$	(505)	$	(221)	$	(712)
Balance at June 27, 2025	$	16	$	(2)	$	6	$	20
Other comprehensive income before reclassifications	—		45		21		66
Other comprehensive loss before reclassifications	—		—		(4)		(4)
Amounts reclassified from accumulated other comprehensive loss	—		—		151		151
Amounts reclassified from accumulated other comprehensive income	—		—		(3)		(3)
Income tax expense related to items of other comprehensive income	—		—		(40)		(40)
Income tax benefit related to items of other comprehensive loss	—		—		1		1
Net current-period other comprehensive income	—		45		132		177
Net current-period other comprehensive loss	—		—		(6)		(6)
Distribution in connection with the Separation	—		458		88		546
Balance at October 3, 2025	$	16	$	(2)	$	—	$	14
Balance at March 28, 2025	$	14	$	(2)	$	(1)	$	11

During the three ~~and nine~~ months ended ~~March~~October 283, 2025, the amounts reclassified out of ~~accumulated~~Accumulated other comprehensive ~~loss~~income were losses related to foreign exchange contracts that were substantially charged to Cost of revenue in the Condensed Consolidated Statements of Operations.

As of ~~March~~October 283, 2025, all existing net ~~losses~~gains related to cash flow hedges recorded in ~~accumulated~~Accumulated other comprehensive income ~~(loss)~~ are expected to be reclassified to earnings within the next twelve months.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6. Fair Value Measurements and Investments

Financial Instruments Carried at Fair Value

Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three levels:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3. Inputs that are unobservable for the asset or liability and that are significant to the fair value of the assets or liabilities.

The following tables present information about the Company’s financial instruments that were measured at fair value on a recurring basis for the periods presented and indicate the fair value hierarchy of the valuation techniques utilized to determine such values:

	March 28, 2025
	October 3, 2025
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents - Money market funds	$	1,447	$	—	$	—	$	1,447
Retained interest in Sandisk	$	965	$	—	$	—	$	965
Retained interest in Sandisk	1,412		—		—		1,412
Cash equivalents - Money market funds	140		—		—		140
Foreign exchange contracts	—		54		—		54
Total assets at fair value	$	21,~~859~~105	$	54	$	—	$	21,~~864~~109
Liabilities:
Foreign exchange contracts	$	—	$	95	$	—	$	95
Total liabilities at fair value	$	—	$	95	$	—	$	95

	June 28, 2024
	June 27, 2025
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Cash equivalents - Money market funds	$	388	$	—	$	—	$	388
Retained interest in Sandisk	$	354	$	—	$	—	$	354
Foreign exchange contracts	—		1		—		1
Cash equivalents - Money market funds	285		—		—		285
Total assets at fair value	$	388	$	1	$	—	$	389
Foreign exchange contracts	—		10		—		10
Total assets at fair value	$	639	$	10	$	—	$	649
Liabilities:
Foreign exchange contracts	$	—	$	184	$	—	$	184
Total liabilities at fair value	$	—	$	184	$	—	$	184

During the periods presented, the Company had no transfers of financial instruments between levels and there were no changes in valuation techniques or the inputs used in the fair value measurement.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Financial Instruments Not Carried at Fair Value

For financial instruments where the carrying value (which includes principal adjusted for any unamortized issuance costs and discounts or premiums) differs from fair value (which is based on quoted market prices), the following table represents the related carrying value and fair value for each of the Company’s outstanding financial instruments. Each of the financial instruments presented below ~~was~~were categorized as Level 2 for all periods presented, based on the frequency of trading immediately prior to the end of the ~~third~~first quarter of ~~2025~~2026 and the fourth quarter of ~~2024~~2025, respectively.

	March 28, 2025				June 28, 2024
	October 3, 2025				June 27, 2025
	CarryingValue		FairValue		CarryingValue		FairValue
	(in millions)
4.75% senior unsecured notes due 2026	$	~~2,298~~500	$	~~2,292~~500	$	~~2,296~~500	$	~~2,253~~499
Variable interest rate Term Loan A-2 maturing 2027	—		—		2,578		2,539
Variable interest rate Term Loan A-3 maturing 2027	1,612		1,622		1,642		1,655
Variable interest rate Term Loan A-3 maturing 2027	2,469		2,458		—		—
3.00% convertible notes due 2028	1,577		5,598		1,575		2,849
3.00% convertible notes due 2028	1,573		2,068		1,568		2,556
2.85% senior notes due 2029	498		472		498		463
2.85% senior notes due 2029	497		454		496		434
3.10% senior notes due 2032	496		454		496		442
3.10% senior notes due 2032	496		421		496		407
Total	$	4,683	$	8,646	$	4,711	$	5,908
Total	$	7,333	$	7,693	$	7,434	$	8,189

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7. ~~Derivative Instruments and Hedging Activities~~Debt

Debt consisted of the following:

As of March 28, 2025, the Company had outstanding foreign exchange forward contracts that were designated as either cash flow hedges or non-designated hedges. All of the contract maturity dates of these foreign exchange forward contracts do not exceed 12 months. As of March 28, 2025, the Company did not have any derivative contracts with credit risk related contingent features.


	October 3, 2025		June 27, 2025
	(in millions)
4.75% senior unsecured notes due 2026	$	500	$	500

Variable interest rate Term Loan A-3 maturing 2027	1,617		1,649
3.00% convertible notes due 2028	1,600		1,600
2.85% senior notes due 2029	500		500
3.10% senior notes due 2032	500		500
Total debt	4,717		4,749
Issuance costs	(34)		(38)
Subtotal	4,683		4,711
Less: current portion of long-term debt	(2,226)		(2,226)
Long-term debt	$	2,457	$	2,485

~~Changes~~During inthe ~~fair~~three ~~values~~months ofended October 3, 2025, the ~~non-designated~~Company ~~foreign~~made ~~exchange~~scheduled ~~contracts~~repayments ~~were~~of ~~recognized~~$31 million under the Term Loan A-3 maturing in ~~Other~~January ~~income~~2027 (~~expense),~~the ~~net~~“Term ~~and~~Loan ~~were~~A-3”). ~~largely~~The ~~offset~~Term byLoan ~~corresponding~~A-3 ~~changes~~bears ininterest, at the ~~fair~~Company’s ~~values~~option, ofat ~~the~~a ~~foreign~~base ~~currency-denominated~~rate ~~monetary~~plus ~~assets~~an ~~and~~applicable ~~liabilities.~~margin ~~For~~(as ~~each~~defined ofin the ~~three~~loan ~~and~~agreement ~~nine~~governing ~~months~~the ~~ended~~Term ~~March 28,~~Loan ~~2025 and March 29~~A-3, ~~2024,~~which ~~total~~the ~~net~~Company ~~realized~~refers ~~and~~to ~~unrealized~~as ~~transaction~~the ~~and~~“Loan ~~foreign~~Agreement”). ~~exchange~~The ~~contract~~all-in ~~currency~~interest ~~gains~~rate ~~and~~for ~~losses~~Term ~~were~~Loan ~~not~~A-3 ~~material~~as toof ~~the~~October 3, ~~Company’s~~2025 ~~Condensed~~was ~~Consolidated Financial Statements~~5.774%.

~~Unrealized~~As ~~gains~~of orOctober 3, ~~losses~~2025, onthe ~~designated~~Company ~~cash~~had ~~flow~~no ~~hedges~~outstanding ~~were~~standby ~~recognized~~letters inof ~~Accumulated~~credit ~~other~~and ~~comprehensive~~the ~~income~~available ~~(loss).~~capacity ~~For~~under ~~more~~the ~~information~~revolving ~~regarding~~credit ~~cash~~facility ~~flow~~maturing ~~hedges,~~in ~~see~~January ~~Note~~2027 5,was ~~Supplemental~~$1.25 billion ~~Financial~~as ~~Statement~~of ~~Data~~that ~~– Accumulated other comprehensive income (loss)~~date.

~~Netting~~The ~~Arrangements~~Loan Agreement requires the Company to comply with a financial leverage ratio covenant. As of October 3, 2025, the Company was in compliance with the financial covenant.

~~Under~~As ~~certain~~of ~~provisions and conditions within agreements with counterparties to the Company’s foreign exchange forward contracts~~October 3, ~~subject to applicable requirements~~2025, the Company ~~has~~had ~~the~~outstanding ~~right~~$1.60 billion ofaggregate ~~offset~~principal ~~associated~~amount ~~with~~of ~~the~~convertible ~~Company’s~~senior ~~foreign~~notes ~~exchange~~pursuant ~~forward~~to ~~contracts~~an ~~and~~indenture isdated ~~allowed~~as toof ~~net~~November ~~settle~~3, ~~transactions~~2023 of (the ~~same~~“Indenture”), ~~currency~~which ~~with~~bear ainterest ~~single~~at ~~net~~an ~~amount~~annual ~~payable~~rate byof ~~one party to the other~~3.00% Asand ~~of March 28,~~mature ~~2025~~on ~~and~~November ~~June 28~~15, ~~2024~~2028, ~~the~~unless ~~effect~~earlier ~~of offset rights was not material~~repurchased, ~~and~~redeemed ~~the Company did not offset~~ or ~~net~~converted (the ~~fair~~“2028 ~~value~~Convertible ~~amounts of derivative instruments in its Condensed Consolidated Balance Sheets~~Notes”).

As of October 3, 2025, the 2028 Convertible Notes were convertible at the option of any holder beginning August 15, 2028, at a conversion price of approximately $37.77 per share of common stock (as adjusted 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 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, 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 130% of the conversion price then in effect for at least 10 trading days during any 20 consecutive trading day period immediately preceding the date of the Company’s redemption notice.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Note 8~~During the calendar quarters ended September 30, 2025 and June 30, 2025, the sale price conditional conversion feature of the 2028 Convertible Notes was triggered. ~~Debt~~ As a result, the holders of the 2028 Convertible Notes have the right to convert the 2028 Convertible Notes during the next succeeding calendar quarter through December 31, 2025. Consequently, the Company classified the 2028 Convertible Notes in the Current portion of long-term debt in the Condensed Consolidated Financial Statements as of October 3, 2025 and June 27, 2025. The Company will continue to evaluate the conversion feature quarterly to determine if the 2028 Convertible Notes remain convertible in future periods.

	March 28,2025		June 28,2024
	(in millions)
4.75% senior unsecured notes due 2026	$	2,300	$	2,300
Variable interest rate Term Loan A-2 maturing 2027	—		2,588
Variable interest rate Term Loan A-3 maturing 2027	2,480		—
3.00% convertible notes due 2028	1,600		1,600
2.85% senior notes due 2029	500		500
3.10% senior notes due 2032	500		500
Total debt	7,380		7,488
Issuance costs	(47)		(54)
Subtotal	7,333		7,434
Less: current portion of long-term debt	(2,426)		(1,750)
Long-term debt	$	4,907	$	5,684

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”). As of October 3, 2025, the Capped Calls each have a strike price of approximately $37.77 per share, as adjusted 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 $50.47 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 meet certain accounting criteria, the Capped Calls are recorded in shareholders’ equity and are not accounted for as derivatives.

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, 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 (as defined below) 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 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) facilitates a potential future 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.

During the three and nine months ended March 28, 2025, the Company made scheduled repayments of $32 million and $107 million, respectively, under the Term Loan Facility. The Term Loan A-3 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 1.125% to 2.000% or (y) a base rate plus an applicable margin varying from 0.125% to 1.000%, 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 1.500%. The all-in interest rate for Term Loan A-3 as of March 28, 2025 was 5.927%.

During the nine months ended March 28, 2025, the Company drew and repaid $150 million principal amount under the 2027 Revolving Credit Facility. As of March 28, 2025, the Company had no outstanding standby letters of credit and the available capacity under the 2027 Revolving Credit Facility was $1.25 billion as of that date.

The Loan Agreement requires the Company to comply with a financial leverage ratio covenant. As of March 28, 2025, the Company was in compliance with the financial covenant.

As of March 28, 2025, the Company had outstanding $1.60 billion aggregate principal amount of convertible senior notes pursuant to an indenture dated as of November 3, 2023 (the “Indenture”), which bear interest at an annual rate of 3.00% and mature on November 15, 2028, unless earlier repurchased, redeemed or converted (the “2028 Convertible Notes”).

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~The~~Note ~~2028 Convertible Notes are convertible at the option of any holder beginning August 15, 2028, at a conversion price of approximately $37~~8.89 Leases per share of common stock (which conversion price has been adjusted from its original conversion price of approximately $52.20 in accordance with the Indenture as a result of the Separation). Prior to August 15, 2028, if the trading price of the Company’s 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 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~~Other orCommitments 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.

During the calendar quarter ended June 30, 2024, the sale price conditional conversion feature of the 2028 Convertible Notes was triggered. As a result, the holder of the 2028 Convertible Notes had the right to convert the 2028 Convertible Notes during the next succeeding calendar quarter through September 30, 2024. Consequently, the Company classified the 2028 Convertible Notes in the Current portion of long-term debt in the Condensed Consolidated Financial Statements as of June 28, 2024. The sale price conditional conversion feature was not triggered during the calendar quarter ended March 31, 2025 and accordingly, the holders of the 2028 Convertible Notes do not have the right to convert the notes during the succeeding calendar quarter ending June 30, 2025. As a result, the 2028 Convertible Notes were classified as Long-term debt in the Condensed Consolidated Financial Statements as of March 28, 2025. The Company will continue to evaluate the conversion feature quarterly to determine if the 2028 Convertible Notes become convertible in future periods. Leases

The ~~In connection with the issuance of the 2028 Convertible Notes, the~~ Company ~~also~~leases ~~entered~~certain ~~into~~domestic ~~privately~~and ~~negotiated~~international ~~capped~~facilities ~~call~~and ~~transactions~~data ~~with~~center ~~certain~~space ~~counterparties~~under ~~(the~~long-term, ~~“Capped~~non-cancelable ~~Calls”).~~operating ~~The~~leases ~~Capped~~that ~~Calls~~expire ~~each~~at ~~have~~various adates ~~strike~~through ~~price of approximately $37~~2034.89 ~~per~~These ~~share,~~leases ~~which~~include ~~has~~no ~~been~~material ~~adjusted~~variable ~~from~~or ~~its~~contingent ~~original~~lease ~~conversion price of approximately $52~~payments.20 ~~per~~Operating ~~share~~lease ~~according~~assets ~~to the terms of the agreements~~ and ~~corresponds~~liabilities ~~to the current conversion price of the 2028 Convertible Notes. The Capped Calls~~ are ~~subject~~recognized tobased ~~the~~on ~~same adjustments applicable to~~ the ~~conversion~~present ~~price~~value of the ~~convertible~~remaining ~~notes,~~lease ~~which~~payments ~~the~~discounted ~~Company~~using expects will result in adjusted cap prices of approximately $51.00 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 11 million shares of the Company’s ~~common~~incremental ~~stock~~borrowing rate. ~~The~~Operating ~~Capped~~lease ~~Calls~~assets ~~are~~also ~~generally~~include ~~intended~~prepaid tolease ~~reduce~~payments orminus ~~offset the potential dilution to the Company’s common stock upon~~ any ~~conversion~~lease ofincentives. ~~the~~Extension ~~2028 Convertible Notes with such reduction~~ or ~~offset,~~termination asoptions ~~the~~present ~~case~~in ~~may be, subject to a cap based on~~ the ~~cap price. However, if the market price per share of the~~ Company’s ~~common~~lease ~~stock,~~agreements asare ~~measured~~included ~~under~~in ~~the~~determining ~~terms of~~ the ~~Capped Calls, exceeds the cap prices~~ right-of-use ~~the~~asset ~~Capped~~and ~~Calls,~~lease ~~there~~liability ~~would~~when ~~not~~it beis anreasonably ~~offset~~certain ~~for~~ the ~~excess.~~Company ~~The~~will ~~Capped~~exercise ~~Calls~~those ~~are~~options. ~~separate~~Lease ~~transactions~~expense ~~and~~is ~~not~~recognized ~~part~~on ofa ~~the~~straight-line ~~terms~~basis ofover the ~~2028~~lease ~~Convertible Notes~~term. ~~As these transactions meet certain accounting criteria, the Capped Calls are recorded in shareholders’ equity and are not accounted for as derivatives.~~

The following table presents right-of-use lease assets and lease liabilities included in the Company’s Condensed Consolidated Balance Sheets:

Subsequent to March 28, 2025, the Company redeemed, at its election, $1.80 billion aggregate principal amount of its 4.75% senior unsecured notes due 2026 (the “2026 Notes”) at par plus accrued interest. Following such redemption, $500 million aggregate principal amount of the 2026 Notes remained outstanding.


	October 3, 2025		June 27, 2025
	(in millions)
Operating lease right-of-use assets (included in Other non-current assets)	$	116	$	123

Operating lease liabilities:
Current portion of long-term operating lease liabilities (included in Accrued expenses)	29		31
Long-term operating lease liabilities (included in Other liabilities)	103		110
Total operating lease liabilities	$	132	$	141

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Cost of operating leases	$	9	$	10
Cash paid for operating leases	10		11
Operating lease assets obtained in exchange for operating lease liabilities	—		5

The weighted average remaining lease term and discount rate for the Company’s operating leases were as follows:


	October 3, 2025		June 27, 2025
Weighted average remaining lease term in years	6.0		6.1
Weighted average discount rate	5.0	%	5.0	%

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Note~~As ~~9. Pension~~of ~~and~~October 3, ~~Other~~2025, ~~Post-Retirement~~minimum ~~Benefit~~lease ~~Plans~~payments were as follows:

The Company has pension and other post-retirement benefit plans in various countries. The Company’s principal pension plans are in Japan, Thailand, and the Philippines. All pension and other post-retirement benefit plans outside of the Company’s Japan, Thailand, and the Philippines defined benefit pension plans (the “Pension Plans”) are immaterial to the Condensed Consolidated Financial Statements. The expected long-term rate of return on the Pension Plans’ assets is 2.5%.


	Lease Amounts
	(in millions)
Remaining nine months of 2026	$	25
2027	30
2028	23
2029	18
2030	12
Thereafter	46
Total future minimum lease payments	154
Less: imputed interest	22
Present value of lease liabilities	$	132

Purchase Obligations and ~~Funded~~Other ~~Status~~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. As of October 3, 2025, the Company had the following minimum long-term commitments:

	March 28,2025		June 28,2024
	Long-Term Commitments
	(in millions)
Benefit obligation at end of period	$	256	$	244
Remaining nine months of 2026	$	35
Fair value of plan assets at end of period	188		184
2027	27
Unfunded status	$	68	$	60
Total	$	62

	March 28,2025		June 28,2024
	(in millions)
Current liabilities (included in Accrued expenses)	$	1	$	1
Non-current liabilities (included in Other liabilities)	67		59
Net amount recognized	$	68	$	60

Net periodic benefit costs were immaterial for the three and nine months ended March 28, 2025 and March 29, 2024.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 10 9. ~~Leases~~Income ~~and Other Commitments~~ Taxes

~~Leases~~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 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 Deduction Eligible Income (“FDDEI”) deduction that will become effective for the Company in 2027.

~~The~~On ~~Company~~August ~~leases~~16, ~~certain~~2022, ~~domestic~~the ~~and~~Inflation ~~international~~Reduction ~~facilities~~Act ~~and~~of ~~data~~2022 ~~center~~was ~~space~~signed ~~under~~into ~~long-term~~law, ~~non-cancelable~~which ~~operating~~contained, ~~leases~~among ~~that~~other ~~expire~~things, ata ~~various~~corporate ~~dates~~alternative ~~through~~minimum ~~2034.~~tax ~~These~~(“CAMT”) ~~leases~~of ~~include~~15% noon ~~material~~corporations ~~variable~~with orthree-year ~~contingent~~average ~~lease~~annual ~~payments.~~adjusted ~~Operating~~financial ~~lease~~statement ~~assets~~income ~~and~~(“AFSI”) ~~liabilities~~exceeding ~~are~~$1.0 billion. ~~recognized~~Although ~~based~~CAMT onbecame ~~the~~effective ~~present~~for ~~value of~~ the ~~remaining~~Company ~~lease~~beginning ~~payments~~with ~~discounted~~2024, ~~using~~ the Company’s ~~incremental~~was ~~borrowing~~not ~~rate.~~subject ~~Operating~~to ~~lease~~CAMT ~~assets~~in ~~also~~2024 ~~include~~and ~~prepaid lease payments minus any lease incentives~~2025. ~~Extension~~The orCompany ~~termination~~does ~~options~~not ~~present~~expect into ~~the~~be ~~Company’s~~subject ~~lease~~to ~~agreements~~CAMT ~~are included~~ in ~~determining~~2026 ~~the~~as ~~right-of-use~~its ~~asset~~average ~~and~~annual ~~lease~~AFSI ~~liability~~did ~~when~~not itexceed is$1.0 billion ~~reasonably~~for ~~certain~~ the ~~Company~~preceding ~~will exercise those options. Lease expense is recognized on a straight~~three-~~line~~year ~~basis over the lease term~~period.

	March 28,2025		June 28,2024
	(in millions)
Operating lease right-of-use assets (included in Other non-current assets)	$	129	$	143
Operating lease liabilities:
Current portion of long-term operating lease liabilities (included in Accrued expenses)	31		28
Long-term operating lease liabilities (included in Other liabilities)	116		133
Total operating lease liabilities	$	147	$	161

The following table presents the Company’s Income tax expense and the effective tax rate:

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases:


	Three Months Ended
	October 3, 2025			September 27, 2024
	($ in millions)
Income before taxes	$	1,337		$	243
Income tax expense	155			90
Effective tax rate	12		%	37		%

	Three Months Ended				Nine Months Ended
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	(in millions)
Cost of operating leases	$	7	$	10	$	24	$	30
Cash paid for operating leases	8		11		28		33
Operating lease assets obtained in exchange for operating lease liabilities	6		1		18		10

The primary drivers of the difference between the effective tax rate for the three months ended October 3, 2025 and the U.S. Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the deduction for FDDEI, tax credits and the gain on the retained Sandisk interest being tax-free due to the Separation of the Flash business. These resulted in decreases to the Company’s effective tax rate below the U.S. statutory rate for the three months ended October 3, 2025. The Company’s income tax provision for the three months ended October includes GMT taxes for Thailand and the Philippines, countries for which the Company maintains tax holidays.

	March 28,2025		June 28,2024
Weighted average remaining lease term in years	6.2		6.6
Weighted average discount rate	5.0	%	5.0	%

The primary drivers of the difference between the effective tax rate for the three months ended September 27, 2024 and the U.S. Federal statutory rate of 21% were the relative mix of earnings and losses by jurisdiction, tax credits, and tax holidays in Thailand and the Philippines. In addition, the effective tax rate for the three months ended September 27, 2024 includes the discrete effect of a net decrease of $30 million to the liability for unrecognized tax benefits, which includes interest and offsetting tax benefits, as a result of adjustments to align with U.S. Internal Revenue Service (“IRS”) calculations.

Liability for 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 Condensed Consolidated Balance Sheets.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

AsThe following is a reconciliation of ~~March 28,~~the ~~2025,~~total ~~minimum~~amounts ~~lease~~of ~~payments~~unrecognized ~~were~~tax asbenefits ~~follows~~excluding accrued interest and penalties for the three months ended October 3, 2025 (in millions):

	Lease Amounts
Accrual balance at June 27, 2025	$	569
	(in millions)
Gross increases related to current year tax positions	8
Remaining three months of 2025	$	9
Gross increases related to prior year tax positions	24
2026	36
Gross decreases related to prior year tax positions	(1)
2027	30
Lapse of statute of limitations	(2)
2028	23
Accrual balance at October 3, 2025	$	598
2029	17
Thereafter	57
Total future minimum lease payments	172
Less: imputed interest	25
Present value of lease liabilities	$	147

~~Purchase~~In ~~Agreements~~addition to the amounts noted above, interest and ~~Other~~penalties ~~Commitments~~related to unrecognized tax benefits are recognized in liabilities recorded for uncertain tax positions and are recorded in the provision for income taxes. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of October 3, 2025 was $93 million. Of the aggregate unrecognized tax benefits, including interest and penalties, approximately $130 million could result in potential cash payments to be made within the next twelve months.

	Long-Term Commitments
	(in millions)
Remaining three months of 2025	$	45
2026	49
2027	27
Total	$	121

The Company believes that an 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.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1110. ~~Shareholders’~~ Business ~~Equity~~Realignment ~~and Convertible Preferred Stock~~Charges

~~Stock-based~~The ~~Compensation~~Company ~~Expense~~periodically incurs charges to realign its business operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure, and focus its resources. These actions may result in charges for employee termination benefits or charges from the impairment of intangible assets and other long-lived assets.

In connection with the Separation (as discussed in Note 3, Discontinued Operations), on February 21, 2025, all outstanding stock-based compensation awards associated with continuing Western Digital employees were adjusted with the intent to preserve the intrinsic value of each award immediately before and after the Separation. The ~~adjustments were determined using a ratio calculated based on the closing price of the~~ Company’s ~~common~~recorded ~~stock immediately before~~ the ~~Separation~~following ~~and~~net ~~the~~charges ~~average~~related ~~of the closing price on each of the first five days of trading after the Separation. The terms of the outstanding awards remain the same and any unvested stock awards will continue~~ to ~~vest~~these ~~over~~actions ~~the~~for ~~original vesting periods. An incremental value of approximately $40 million resulting from~~ the ~~adjustment of the unvested awards will be recognized ratably over the remaining service~~ periods. Upon the Separation, approximately 3.1 million unvested stock-based compensation awards were retained by Sandisk employees and will vest upon completion of any remaining service period with Sandisk and approximately 3.5 million awards were cancelled from the Company’s incentive plans.presented:

The following tables present the Company’s stock-based compensation for equity-settled awards by type (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”), and rights to purchase shares of common stock under the Company’s Employee Stock Purchase Plan (“ESPP”)) and financial statement line items as well as the related tax benefit included in the Company’s Condensed Consolidated Statements of Operations:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Employee termination benefits	$	3	$	—




Contract termination and other	—		3

Total business realignment charges	$	3	$	3

	Three Months Ended				Nine Months Ended
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	(in millions)
RSUs and PSUs	$	34	$	44	$	110	$	137
ESPP	1		8		12		18
Total	$	35	$	52	$	122	$	155

The following table presents an analysis of the components of these activities against the reserve (included in Accrued expenses) during the three months ended October 3, 2025:

	Three Months Ended				Nine Months Ended
	Employee Termination Benefits		Contract Termination and Other		Total
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	(in millions)
	(in millions)
Accrual balance at June 27, 2025	$	1	$	9	$	10
Cost of revenue	$	7	$	8	$	26	$	28
Charges	3		—		3
Research and development	17		17		52		49
Cash payments	(2)		(1)		(3)
Selling, general and administrative	11		27		44		78
Accrual balance at October 3, 2025	$	2	$	8	$	10
Subtotal	35		52		122		155
Tax benefit	(4)		(7)		(15)		(21)
Total	$	31	$	45	$	107	$	134

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Any~~Note ~~shortfalls~~11. Pension ~~or excess windfall tax benefits~~ and ~~tax~~Other ~~deficiencies for shortfalls related to the vesting and exercise of stock~~Post-~~based~~Retirement ~~awards,~~Benefit ~~which are recognized as a component of the Company’s Income tax benefit, were immaterial for the periods presented.~~Plans

	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)
RSUs and PSUs (1)	$	270	2.2

~~(1) Weighted~~Obligations ~~average~~and ~~service~~Funded ~~period assumes the performance conditions are met for the PSUs.~~Status

The following table presents the unfunded status of the benefit obligations for the Pension Plans:

Plan Activities


	October 3, 2025		June 27, 2025
	(in millions)











Benefit obligation at end of period	$	262	$	272









Less: Fair value of plan assets at end of period	191		204
Unfunded status	$	71	$	68

The following table presents the unfunded amounts related to the Pension Plans as recognized on the Company’s Condensed Consolidated Balance Sheets:

RSUs and PSUs


	October 3, 2025		June 27, 2025
	(in millions)
Current liabilities (included in Accrued expenses)	$	1	$	1
Non-current liabilities (included in Other liabilities)	70		67
Net amount recognized	$	71	$	68

	Number of Shares	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value at Vest Date
	(in millions)			(in millions)
RSUs and PSUs outstanding at June 28, 2024	13.0	$	44.42
Granted	5.2	59.54
Vested	(5.0)	42.92		$	304
Forfeited	(1.1)	45.71
Share conversion due to Separation	2.6	52.15
Awards cancelled due to Separation	(3.5)	52.32
RSUs and PSUs outstanding at March 28, 2025	11.2	$	37.88

Net periodic benefit costs were immaterial for the three months ended October 3, 2025 and September 27, 2024.

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.

Dividends

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. In conjunction with the adoption of the cash dividend program, the Board of Directors declared a cash dividend of $0.10 per share of the Company’s common stock, which will be paid on June 18, 2025 to shareholders of record as of the close of business on June 4, 2025. The Company may suspend or discontinue its cash dividend program at any time.

Convertible Preferred Stock

On January 31, 2023, the Board of Directors of the Company authorized the designation of 900,000 shares of Series A Convertible Perpetual Preferred Stock, par value $0.01 per share (the “Preferred Shares”), from the Company’s existing 5,000,000 authorized but unissued shares of preferred stock and issued the Preferred Shares through a private placement. As of March 28, 2025 and June 28, 2024, 235,000 of the Preferred Shares were outstanding.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Preferred Shares have an initial stated value of $1,000 per share and accrue a cumulative preferred dividend at an annual rate of 6.25% per annum (increasing to 7.25% per annum on January 31, 2030 and to 8.25% 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. Through DecemberNote ~~27, 2024, the Company paid quarterly dividends on the Preferred Shares in-kind through an increase to the stated value~~12. Shareholders’ OnEquity January 25, 2025, the Board of the Directors of the Company declared its first cash dividend on the Preferred Shares, which was paid subsequent to quarter end on March 31, 2025, to the holders of the Preferred Shares as of March 15, 2025, the record date for the dividend. As of March 28, 2025 and ~~June 28,~~Convertible ~~2024, unpaid and cumulative dividends payable with respect to the~~ Preferred ~~Shares were $30 million and $22 million, respectively. The Preferred Shares also participate in any dividends declared for common shareholders on an as-converted equivalent basis.~~Stock

As of March 28, 2025, the Preferred Shares are convertible into shares of the Company’s common stock at a conversion rate of approximately $35.51 per share (the “Conversion Price”). The conversion rate was adjusted from the initial conversion rate of $47.75 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 10 trading days after the Separation. This rate is subject to future antiStock-~~dilution~~based ~~adjustments~~Compensation and certain other one-time adjustments in the event of various specified spin-off transactions. The conversion applies to the total of the stated value of the Preferred Shares plus any cumulative accrued but unpaid dividends. In the case of future standalone spin-off transactions, holders of the Preferred Shares may convert one-third of their 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 150% of the Conversion Price for at least 20 out of 30 consecutive trading days immediately before the Company's conversion notice.Expense

AsThe offollowing ~~March 28,~~tables ~~2025~~present ~~and June 28, 2024,~~ the ~~Preferred~~Company’s ~~Shares~~stock-based ~~outstanding~~compensation ~~had~~for anequity-settled ~~aggregate~~awards ~~liquidation~~by ~~preference~~type of(i.e., ~~$265 million~~restricted ~~and~~stock ~~$257 million,~~units ~~respectively~~(“RSUs”), ~~and~~restricted ~~would~~stock ~~have~~unit ~~been~~awards ~~convertible,~~with ifperformance ~~otherwise~~conditions ~~permitted,~~or ~~into~~market ~~approximately~~conditions ~~7 million~~(“PSUs”), and 5rights ~~million~~to purchase shares of common stock, ~~respectively,~~under ~~based~~the onCompany’s Employee Stock Purchase Plan (“ESPP”)) and financial statement line items as well as the ~~conversion~~related ~~rate~~tax benefit included in ~~effect~~the atCompany’s ~~each~~Condensed ~~date.~~Consolidated Statements of Operations:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)

RSUs and PSUs	$	49	$	49
ESPP	4		8
Total	$	53	$	57


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Cost of revenue	$	9	$	10
Research and development	23		20
Selling, general and administrative	21		27

Subtotal	53		57
Tax benefit	(7)		(6)
Total	$	46	$	51

Any shortfalls or excess windfall tax benefits and tax deficiencies for shortfalls related to the vesting and exercise of stock-based awards, which are recognized as a component of the Company’s Income tax expense, were immaterial for the periods presented.

Compensation cost related to unvested RSUs, PSUs, and rights to purchase shares of common stock under the ESPP are generally amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of October 3, 2025:


	Unamortized Compensation Costs		Weighted Average Service Period
	(in millions)		(years)

RSUs and PSUs (1)	$	382	2.2
ESPP	19		1.2
Total unamortized compensation cost	$	401

(1) Weighted average service period assumes the performance conditions are met for the PSUs.

Table of Contents

WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Note 12. Income~~Plan ~~Taxes~~ Activities

~~Beginning~~RSUs ~~in fiscal year 2023, the Tax Cuts~~ and Jobs Act requires the Company to capitalize and amortize research and development (“R&D”) expenses rather than expensing them in the year incurred. The tax effects related to the capitalization of R&D expenses are included in the effective tax rate for the three and nine months ended March 28, 2025 and March 29, 2024.PSUs

The following table summarizes RSU and PSU activity under the Company’s incentive plans:

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which contained significant changes to laws related to tax, climate, energy, and health care. The tax measures include, among other things, a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income (“AFSI”) exceeding $1.0 billion. The CAMT was effective for the Company beginning with fiscal year 2024. The Company does not expect to be subject to CAMT for fiscal year 2025 as its average annual AFSI did not exceed $1.0 billion for the preceding three-year period.


	Number of Shares	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value at Vest Date
	(in millions)			(in millions)










































RSUs and PSUs outstanding at June 27, 2025	9.7	$	33.56
Granted	2.4	70.89

Vested	(2.0)	34.49		$	154
Forfeited	(0.1)	24.71
RSUs and PSUs outstanding at October 3, 2025	10.0	$	43.12

OnRSUs ~~December 20, 2021, the Organization for Economic Co-operation~~ and ~~Development~~PSUs ~~G20~~are ~~(“OECD/G20”)~~generally ~~Inclusive~~settled ~~Framework~~in onan ~~Base~~equal ~~Erosion~~number and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two. Several non-U.S. jurisdictions have either enacted legislation or announced their intention to enact future legislation to adopt certain or all components of ~~Pillar~~shares ~~Two, also known as Global Minimum Tax (“GMT”), some~~ of ~~which are effective for~~ the Company’s incommon ~~fiscal~~stock ~~year~~at ~~2025. For fiscal year 2025,~~ the ~~Company~~time ~~currently~~of ~~expects~~vesting toof ~~be able to meet certain transitional safe harbors and does not expect any material GMT taxes. As more jurisdictions adopt this legislation in fiscal year 2026, there may be material increases in~~ the ~~Company’s future tax obligations in certain jurisdictions~~units.

	Three Months Ended						Nine Months Ended
	March 28,2025			March 29,2024			March 28,2025			March 29,2024
	($ in millions)
Income (loss) before taxes	$	74		$	(12)		$	783		$	(546)
Income tax benefit	(698)			(4)			(608)			(27)
Effective tax rate	(943)		%	33		%	(78)		%	5		%

Convertible Preferred Stock

~~The~~On ~~primary~~January ~~drivers~~31, of2023, the ~~difference~~Board ~~between~~of ~~the~~Directors ~~effective~~of ~~tax rate for~~ the ~~three~~Company ~~and~~authorized ~~nine months ended March 28, 2025 and~~ the ~~U.S.~~designation ~~Federal statutory rate~~ of ~~21%~~900,000 ~~are~~shares ~~the relative mix~~ of ~~earnings~~Series ~~and~~A ~~losses~~Convertible byPerpetual ~~jurisdiction,~~Preferred ~~credits~~Stock, ~~and~~par ~~tax~~value ~~holidays in the Philippines and Thailand that will expire at various dates during years 2026 through 2033~~$0.01 ~~These~~per ~~resulted~~share in(the ~~decreases~~“Preferred toShares”), from the Company’s ~~effective~~existing ~~tax rate below the U.S. statutory rate for the three and nine months ended March 28~~5, ~~2025. However~~000,000 ~~the~~authorized ~~tax~~but ~~effects~~unissued ofshares ~~the mandatory capitalization~~ of ~~R&D~~preferred ~~expenses~~stock ~~offset~~and ~~these~~issued ~~decreases, resulting in~~ the ~~Company’s~~Preferred ~~effective~~Shares ~~tax~~through ~~rate~~a ~~being~~private ~~close to the U~~placement.S. ~~Federal~~As ~~statutory~~of ~~rate~~October 3, ~~for~~2025 ~~the three~~ and ~~nine months ended March~~June 2827, 2025., ~~In anticipation of operating as a standalone HDD business in a GMT environment~~235,000 ~~the Company executed an inter-entity asset transfer in conjunction with the separation~~ of ~~its Flash business. This resulted in~~ the ~~recognition~~Preferred ofShares ~~one-time~~were ~~deferred tax benefits to continuing operations of $711 million for the three and nine months ended March 28, 2025~~outstanding.

The ~~primary~~Preferred ~~drivers~~Shares have an initial stated value of ~~the~~$1,000 ~~difference~~per ~~between~~share ~~the~~and ~~effective~~accrue ~~tax~~a cumulative preferred dividend at an annual rate ~~for~~of ~~the~~6.25% ~~three~~per ~~and~~annum ~~nine~~(increasing ~~months~~to ~~ended~~7.25% ~~March 29~~per annum on January 31, ~~2024~~2030 and ~~the~~to U8.S25% per annum on January 31, 2033) compounded on a quarterly basis. ~~Federal~~Such ~~statutory~~dividends ~~rate~~are ofpayable ~~21%~~on ~~were~~a ~~the~~quarterly ~~relative~~basis ~~mix~~in ofcash ~~earnings~~or ~~and~~in-kind ~~losses~~through byan ~~jurisdiction,~~increase to the ~~deduction~~stated ~~for~~value. ~~foreign-derived~~Through ~~intangible~~December ~~income~~27, ~~credits~~2024, ~~and~~the ~~tax~~Company ~~holidays~~paid inquarterly ~~Malaysia,~~dividends on the ~~Philippines,~~Preferred ~~and~~Shares ~~Thailand.~~in-kind Inthrough ~~addition~~an increase to the stated value. Subsequently, quarterly dividends on the ~~effective~~Preferred ~~tax~~Shares ~~rate~~have ~~for~~been made in cash, including $4 million paid in the ~~nine~~three months ended ~~March~~October 293, ~~2024~~2025. ~~includes~~As of October 3, 2025 and June 27, 2025, the ~~discrete~~Preferred ~~effect~~Shares ofoutstanding ahad ~~net~~an ~~decrease~~aggregate liquidation preference, including previous dividends paid in-kind, of $30265 million toas ~~the~~of ~~liability~~each ~~for~~date, ~~unrecognized~~and ~~tax~~would ~~benefits~~have been convertible, ~~which~~if ~~includes~~otherwise ~~interest~~permitted, ~~and~~into ~~offsetting~~approximately ~~tax~~7 million ~~benefits,~~shares asof acommon ~~result~~stock as of ~~adjustments~~each todate. ~~align~~The ~~with~~Preferred ~~U.S.~~Shares ~~Internal~~also ~~Revenue~~participate ~~Service~~in ~~(“IRS”)~~any ~~calculations~~dividends declared for common shareholders on an as-converted equivalent basis.

~~Uncertain~~As ~~Tax~~of ~~Positions~~October 3, 2025, the Preferred Shares are convertible into shares of the Company’s common stock at a conversion rate of approximately $35.51 per share, as adjusted in accordance with the Certificate of Designations for the Preferred Shares (the “Conversion Price”). This rate is subject to future anti-dilution adjustments and certain other one-time adjustments in the event of various specified spin-off transactions. The conversion applies to the total of the stated value of the Preferred Shares, including dividends paid in-kind. In the case of future standalone spin-off transactions, holders of the Preferred Shares may convert one-third of their 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 150% of the Conversion Price for at least 20 out of 30 consecutive trading days immediately before the Company's conversion notice.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~The~~Share ~~following~~Repurchase ~~is a tabular reconciliation of the total amounts of unrecognized tax benefits excluding accrued interest and penalties for the nine months ended March 28, 2025 (in millions):~~Program

Accrual balance at June 28, 2024	$	721
Gross increases related to current year tax positions	11
Gross increases related to prior year tax positions	4
Gross decreases related to prior year tax positions	(7)
Settlements	(40)
Lapse of statute of limitations	(2)
Transfer to discontinued operations	(126)
Accrual balance at March 28, 2025	$	561

On May 9, 2025, the Company’s Board of Directors authorized a share repurchase program for the repurchase of up to $2.0 billion of the Company’s common stock (the “Share Repurchase Program”). There is no expiration date for the Share Repurchase Program. During the three months ended October 3, 2025, the Company repurchased 6.4 million shares under the Share Repurchase Program for a total cash cost of $553 million plus $4 million for accrued excise taxes. As of October 3, 2025 the Company had $1.30 billion available for purchases pursuant to the Share Repurchase Program. 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 shares repurchased under the Share Repurchase Program 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.

InDividends ~~addition~~ to ~~the~~Common amounts noted above, interest and penalties related to unrecognized tax benefits are recognized in liabilities recorded for uncertain tax positions and are recorded in the provision for income taxes. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of March 28, 2025 were $70 million. Of the aggregate unrecognized tax benefits, including interest and penalties, as of March 28, 2025, approximately $476 million could result in potential cash payments. The Company is not able to provide a reasonable estimate of the timing of future tax payments related to these obligations.Shareholders

~~The~~On ~~Company~~April ~~had~~29, ~~previously~~2025, ~~reached a final agreement with~~ the ~~IRS~~Company’s ~~regarding~~Board ~~notices~~ of ~~deficiency~~Directors ~~with~~authorized ~~respect~~the toadoption ~~years~~of ~~2008~~a ~~through~~cash ~~2012~~dividend ~~and~~program. inUnder ~~February~~the ~~2024~~cash ~~also~~dividend ~~reached~~program, aholders ~~final~~of ~~agreement~~the ~~for~~Company’s ~~resolving~~common ~~the~~stock ~~notices~~will ofreceive ~~proposed~~dividends ~~adjustments~~when ~~with~~and ~~respect~~as todeclared ~~years~~by ~~2013~~the ~~through~~Board ~~2015~~of Directors. During the ~~nine~~three months ended ~~March~~October 283, 2025, the Company ~~made~~paid acash ~~payment~~dividends of $~~130 million~~0.10 ~~for~~per ~~interest~~share ~~with~~of ~~respect~~its tooutstanding ~~years~~common ~~2008~~stock, ~~through~~totaling ~~2012~~$34 million, ~~and~~plus $321 million ~~for~~paid ~~tax and interest with respect~~ to ~~years~~holders ~~2013 through 2015, resulting in no remaining liability as~~ of ~~March 28,~~the ~~2025~~Company’s ~~related~~Preferred toShares ~~all~~in ~~years~~accordance ~~from~~with ~~2008~~their ~~through~~participation ~~2015~~rights.

InSubsequent ~~connection~~to ~~with~~quarter-end, ~~settlements~~on ~~for~~October ~~the~~29, ~~years 2008 through 2015~~2025, the ~~Company~~Board ~~expects~~of toDirectors ~~realize~~declared ~~reductions~~a tocash ~~its~~dividend ~~mandatory~~of ~~deemed repatriation tax obligations and tax savings from interest deductions in future years aggregating to approximately~~ $~~166 million~~0.125 Ofper ~~this~~share ~~amount, $65 million~~ of the ~~interest~~Company’s ~~savings~~common ~~from~~stock, ~~the~~which ~~interest~~will be paid ~~with~~on ~~respect~~December to18, ~~years~~2025 ~~2008~~to ~~through~~shareholders ~~2015~~of isrecord ~~classified~~ as aof ~~deferred~~the ~~tax~~close ~~asset~~of ~~due~~business toon ~~interest~~December ~~expense~~4, ~~limitation rules~~2025.

The Company ~~believes~~may ~~that~~modify, ansuspend, ~~adequate~~or ~~provision~~cancel ~~has~~its ~~been~~cash ~~made~~dividend ~~for~~program in any ~~adjustments~~matter ~~that~~and ~~may~~at ~~result from~~ any ~~other tax examinations~~time. ~~However,~~The ~~the~~amount ~~outcome~~ of ~~such~~future ~~tax~~dividends ~~examinations~~under ~~cannot be predicted with certainty. If any issues addressed in~~ the Company’s ~~tax~~cash ~~examinations~~dividend ~~are~~program, ~~resolved~~and inthe adeclaration ~~manner~~and ~~not~~payment ~~consistent with management’s expectations~~thereof, ~~the~~will ~~Company could~~ be ~~required~~based toupon ~~adjust~~all ~~its~~relevant ~~provision for income taxes in the period such resolution occurs. As of March 28~~factors, ~~2025,~~including ~~with~~ the ~~exception~~Company’s offinancial ~~the IRS matter discussed above~~position, itresults ~~was not possible to estimate the amount~~ of ~~change~~operations, ifcash ~~any~~flows, incapital ~~the~~requirements ~~unrecognized~~and ~~tax~~restrictions ~~benefits~~under ~~that is reasonably possible within~~ the ~~next twelve months. Any significant change in the amount of the~~ Company’s ~~liability~~Loan ~~for~~Agreement ~~unrecognized~~and ~~tax~~other ~~benefits~~financing ~~would~~agreements, ~~most~~and ~~likely~~shall ~~result~~be ~~from~~in ~~additional~~compliance ~~information~~with orapplicable ~~settlements relating to the examination of the Company’s tax returns~~law.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 13. Net Income ~~(Loss)~~ Per Common Share

The following table presents the computation of basic and diluted income per common share:

	Three Months Ended				~~Nine Months Ended~~
	March 28,2025		March 29,2024			March 28,2025		March 29,2024
	October 3,2025		September 27,2024
	(in millions, except per share data)
Net income (loss) from continuing operations	$	772	$	(8)		$	1,391	$	(519)
Net income from continuing operations	$	1,182	$	153
Less: dividends allocated to preferred shareholders	4		15			12		44
Dividends allocated to preferred shareholders	(5)		(2)
Less: income attributable to participating securities(1)	13		(1)			25		—
Income attributable to participating securities(1)	(25)		(2)
Net income (loss) from continuing operations attributable to common shareholders - basic	755		(22)			1,354		(563)
Net income from continuing operations attributable to common shareholders - basic	1,152		149
Net income (loss) from discontinued operations, net of taxes	(248)		135			213		(318)
Net income from discontinued operations, net of taxes, attributable to common shareholders	—		332
Net income (loss) attributable to common shareholders - basic	$	507	$	113		$	1,567	$	(881)
Net income attributable to common shareholders - basic	$	1,152	$	481
Net income (loss) from continuing operations attributable to common shareholders - basic	$	755	$	(22)		$	1,354	$	(563)
Net income from continuing operations attributable to common shareholders - basic	$	1,152	$	149
Re-allocation of participating securities considered potentially dilutive securities	—		—			1		—
Re-allocation of participating securities considered potentially dilutive	2		—
Net income (loss) from continuing operations attributable to common shareholders - diluted	755		(22)			1,355		(563)
Net income from continuing operations attributable to common shareholders - diluted	1,154		149
Net income (loss) from discontinued operations, net of taxes	(248)		135			213		(318)
Net income from discontinued operations, net of taxes, attributable to common shareholders	—		332
Net income (loss) attributable to common shareholders - diluted	$	507	$	113		$	1,568	$	(881)
Net income attributable to common shareholders - diluted	$	1,154	$	481
Weighted average shares outstanding:
Weighted average shares:
Basic	~~348~~345		~~326~~344			~~346~~		~~324~~
RSUs, PSUs, ESPP, and the convertible notes	10		9			12		—
RSUs, PSUs, ESPP, and convertible notes	31		13
Diluted	~~358~~376		~~335~~357			~~358~~		~~324~~
Net income (loss) per common share
Net income per common share:
Continuing operations - basic	$	2.17	$	(0.07)		$	3.91	$	(1.74)
Basic:
Discontinued operations - basic	$	(0.71)	$	0.42		$	0.62	$	(0.98)
Continuing operations	$	3.34	$	0.43
Net income (loss) per common share - basic	$	1.46	$	0.35		$	4.53	$	(2.72)
Discontinued operations	—		0.97
Continuing operations - diluted	$	2.11	$	(0.07)		$	3.79	$	(1.74)
Net income per common share	3.34		1.40
Discontinued operations - diluted	$	(0.69)	$	0.41		$	0.59	$	(0.98)
Diluted:
Net income (loss) per common share - diluted	$	1.42	$	0.34		$	4.38	$	(2.72)
Continuing operations	3.07		0.42
Anti-dilutive potential common shares excluded	—		—			—		13
Discontinued operations	—		0.93
Net income per common share	3.07		1.35

(1) ~~Preferred~~Participating ~~stock represents participating~~ securities ~~because~~consist ~~they~~of ~~participate~~preferred instock ~~any~~because ~~dividends~~it onparticipates ~~shares of common stock~~ on a ~~pari passu,~~ pro rata basis. ~~Preferred~~in ~~stock~~any ~~does~~dividends ~~not~~declared ~~participate~~on inshares ~~undistributed~~of ~~net~~common ~~losses~~stock.

Basic net income ~~(loss)~~ per ~~share attributable to~~ common ~~shareholders~~share is computed using (i) net income ~~(loss)~~ less (ii) dividends allocated to preferred shareholders less (iii) net income ~~(loss)~~ attributable to participating securities divided by (iv) basic weighted average ~~basic~~ shares outstanding. Diluted net income ~~or loss~~ per ~~share attributable to~~ common ~~shareholders~~share 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) diluted 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.

Potentially dilutive common shares include dilutive outstanding RSUs and PSUs, rights to purchase shares of common stock under the Company’s ESPP, shares issuable in connection with the Company’s convertible notes, and Preferred Shares. For the three months ended October 3, 2025 and September 27, 2024, based on the Company’s average stock price during the period, an insignificant number of common shares subject to outstanding equity awards were anti-dilutive.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Potentially dilutive common shares include dilutive outstanding employee stock options, RSUs and PSUs, rights to purchase shares of common stock under the Company’s ESPP, shares issuable in connection with the Company’s convertible notes, and preferred shares. For the nine months ended MarchNote 29, 2024, the Company recorded a net loss, and all shares subject to outstanding equity awards were excluded from the calculation of diluted shares for those periods because their impact would have been anti-dilutive14. Legal For the three and nine months ended March 28, 2025 and three months ended March 29, 2024, based on the Company’s average stock price during the period, an insignificant number of common shares subject to outstanding equity awards were anti-dilutive. Proceedings

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 14. Employee Termination, Asset Impairment and Other

Business Realignment

The Company periodically incurs charges to realign its operations with anticipated market demand, primarily consisting of organization rationalization designed to streamline its business, reduce its cost structure, and focus its resources. The Company may also record credits related to gains upon sale of property in connection with these activities. In this regard, for the nine months ended March 29, 2024, the Company reassessed existing capacity development plans and made a decision to cancel certain projects, including projects to expand capacity in its Penang, Malaysia facility, resulting in the impairment of existing construction in progress and other assets and the recognition of a liability for certain contract termination costs.

The Company recorded the following net charges related to these actions for the periods presented:

	Three Months Ended				Nine Months Ended
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	(in millions)
Employee termination benefits	$	—	$	1	$	—	$	35
Asset impairments	—		5		—		99
Other charges (gains):
Recovery of non-cancellable purchase order	—		—		(9)		—
Contract termination and other	—		—		2		29
Total employee termination, asset impairment and other	$	—	$	6	$	(7)	$	163

The following table presents an analysis of the components of these activities against the reserve (included in Accrued expenses) during the nine months ended March 28, 2025:

	Contract Termination and Other
	(in millions)
Accrual balance at June 28, 2024	$	28
Charges	2
Cash payments	(9)
Recovery of non-cancellable purchase order	(9)
Accrual balance at March 28, 2025	$	12

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 15. Supplier Finance Program

The Company maintains a voluntary supplier finance program that provides participating suppliers with enhanced receivable options. The program allows participating suppliers of the Company, at their sole discretion and cost, to sell their receivables due from the Company to a third-party financial institution and receive early payment at terms negotiated between the supplier and the third-party financial institution. The Company’s vendor payment terms and amounts are not impacted by a supplier’s decision to participate in this program.

The Company’s current payment terms with its suppliers under these programs generally range from 60 to 90 days. 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 $44 million and $37 million as of March 28, 2025 and June 28, 2024, respectively, and are included within Accounts payable on the Company’s Condensed Consolidated Balance Sheets.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 16. Legal Proceedings

Tax

For disclosures regarding the status of statutory notices of deficiency issued by the IRS with regard to tax years 2008 through 2015, see Note 12, Income Taxes.

Intellectual Property Litigation

On ~~August~~September 2628, ~~2022~~2016, MRSPEX Technologies, ~~GmbH~~Inc. (“~~MRT~~SPEX”) filed ana ~~action~~lawsuit in the ~~United~~Central ~~States~~ District Court ~~for~~against the ~~Central~~Company ~~District~~and two of ~~California (~~the ~~“Central District Court”) against the~~ Company’s current or former wholly-owned ~~subsidiary~~subsidiaries, Western Digital Technologies, Inc. and HGST Inc., alleging infringement of U.S. Patent Nos. 96,~~978~~088,~~413,~~802 ~~9,928,864, 11,133,031~~ and 116,~~138~~003,~~997~~135, ~~each~~both of which allegedly relate to ~~hard~~moving ~~disk~~a ~~drive~~security ~~media~~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, ~~MRT~~SPEX ~~dropped~~dismissed its ~~claims~~allegations ~~with~~relating ~~respect~~ to U.S. Patent ~~Nos~~No. 96,~~978~~003,~~413~~135 and ~~11,133,031,~~narrowed ~~and~~its ~~the~~ case ~~proceeded~~to one claim related to ~~trial~~U.S. inPatent ~~July~~No. ~~2024~~6,088,802 onand ~~the~~asserted ~~remaining~~this ~~two~~against ~~patents~~certain ~~(together,~~HDD ~~the~~products ~~“MRT~~that ~~Patents”)~~may include certain encryption capabilities. The trial commenced on October 8, 2024, and concluded on ~~July~~October 2618, 2024, and the jury awarded ~~MRT~~SPEX adamages ~~lump sum~~ of $~~262~~316 million for the use of ~~the~~one ~~MRT~~claim ~~Patents~~related to U.S. Patent No. 6,088,802 in the past, ~~and~~prior ~~through~~to ~~their~~its ~~remaining~~expiration ~~lives~~in 2017. ~~MRT~~On ~~also~~January ~~requested~~8, 2025, the Court entered judgment for SPEX in accordance with the verdict and ~~was~~also awarded SPEX prejudgment interest ~~totaling~~of $~~117~~237 million inand alegal ~~judgment~~costs. ~~entered~~On June 16, 2025, the Court ruled on ~~August~~the 15Company’s post-trial motions, ~~2024~~finding that SPEX did not present sufficient evidence on which a damages award could be determined and therefore awarded nominal damages of $1. InOn ~~addition~~June 27, ~~MRT~~2025, ~~requested~~the ~~attorney’s~~Court ~~fees~~entered an amended judgment awarding SPEX nominal damages of $1 with no prejudgment interest and ~~post~~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 ~~interest~~in its financial statements as of October 3, 2025.

In the fourth quarter of fiscal year 2024, the Company recognized an aggregate liability for this matter of $384 million with $291 million recognized as an Operating expense under Litigation matter for the year ended June 28, 2024 and $93 million recognized as Other non-current assets for the patent licenses, to be amortized over their remaining lives.

Subsequent to March 28, 2025, pursuant to a confidential agreement effective as of April 17, 2025, MRT and the Company reached a global settlement of $130 million for all pending legal disputes. The settlement results 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 $201 million of previously recorded charges in Operating expense under Litigation matter and $6 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 one 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 $316 million for the use of one 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 $237 million and legal costs. The Company is contesting the judgment and, based on available arguments, the Company believes the judgment, including any prejudgment interest and legal costs will be reversed, amended or vacated based on the Company’s motions for judgment as a matter of law in the district court or when the Company presents its appeal to the United States Court of Appeals for the Federal Circuit, if necessary. The Company therefore believes a loss is not probable and has not accrued a liability as a result of the jury verdict or the entry of judgment in its financial statements as of March 28, 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.

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WESTERN DIGITAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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.

3935

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results. You should read this information in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited Consolidated Financial Statements and notes thereto included in Part II, Item 8 of our ~~2024~~2025 Annual Report on Form 10-K. See also “Forward-Looking Statements” immediately prior to Part I, Item 1 in this Quarterly Report on Form 10‑Q.

Unless otherwise indicated, references herein to specific years and quarters are to our fiscal years and fiscal quarters. As used herein, the terms “we,” “us,” “our,” and the “Company” refer to Western Digital Corporation and its subsidiaries.

Our Company

We are a leading developer, manufacturer, and provider of data storage devices and solutions based on hard disk drive (“HDD”) technology. ~~With~~We aleverage ~~differentiated~~our ~~innovation~~capability ~~engine~~in ~~driving~~the ~~advancements~~HDD inindustry ~~storage~~primarily for the cloud and ~~semiconductor~~hyperscale ~~technologies,~~data ~~our~~center ~~broad~~markets. ~~and~~HDDs ~~ever-expanding~~are ~~portfolio~~critical ~~delivers~~components ~~powerful~~in ~~HDD~~the ~~solutions~~worldwide ~~for~~data ~~everyone~~infrastructure ~~from~~market, ~~students~~powering the digital economy. HDDs provide reliable, ~~gamers~~cost-effective, ~~and~~high-capacity ~~home~~storage ~~offices~~needs tofor ~~the~~a ~~largest~~wide ~~enterprises~~range ~~and~~of ~~public~~applications, ~~clouds~~ranging tofrom ~~capture,~~cloud ~~preserve~~data centers, ~~access~~enterprise storage systems, ~~and~~edge ~~transform~~computing, anvideo ~~ever-increasing~~surveillance ~~diversity~~to ofclient ~~data~~and consumer.

Our broad portfolio of technology and products addresses our customers’ storage needs through multiple end markets: “Cloud,” “Client,” and “Consumer”. Cloud is comprised primarily of products for public or private cloud environments and enterprise customers. Through the Client end market, we provide our original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance HDD solutions across desktop and notebooks. The Consumer end market provides a broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

Our fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year ~~2025~~2026, which will end on ~~June~~July 273, ~~2025~~2026, will be comprised of 53 weeks, with the first quarter consisting of 14 weeks and ~~fiscal~~the remaining quarters consisting of 13 weeks each. Fiscal year ~~2024~~2025, which ended on June 2827, ~~2024~~2025, ~~are~~was ~~each~~ comprised of 52 weeks, with all quarters presented consisting of 13 weeks.

Key Developments

Separation of Business Units

On February 21, 2025 (the “Separation Date”), we completed the separation of our HDD and Flash business units (the “Separation”) to create two independent, public companies, with Western Digital continuing our existing HDD business and Sandisk Corporation (“Sandisk”), formerly a wholly-owned subsidiary of the Company, holding the Flash business~~, and Western Digital focusing on our existing HDD business~~. We believe the Separation has better ~~positions~~positioned ~~each~~us ~~business~~as ~~unit~~a topure-play HDD company that can execute innovative technology and product development, capitalize on unique growth opportunities, extend ~~respective~~our leadership ~~positions~~position, ~~and~~ operate more efficiently, ~~with~~and ~~distinct~~pursue capital ~~structures.~~allocation ~~The~~strategies ~~Separation~~to ~~was~~maximize ~~effected~~long-term ~~through~~shareholder ~~a pro rata distribution of 80~~value.1% ofAs ~~the~~part ~~outstanding shares~~ of ~~Sandisk common stock to holders of~~ the ~~Company’s common stock as of February 12~~Separation, ~~2025,~~we ~~the~~initially ~~record~~retained ~~date for the distribution~~28.8 million ~~The Company did not issue fractional~~ shares of Sandisk common stock, inof ~~connection~~which ~~with the distribution~~21.3 million ~~Sandisk~~shares iswere ~~now~~used anin ~~independent public company, and Sandisk common stock commenced trading “regular way” under~~ the ~~symbol~~three ~~“SNDK”~~months onended ~~the~~June ~~Nasdaq Stock Market LLC (“Nasdaq”) on February 24~~27, 2025, ~~which~~in ~~was~~a ~~the~~tax-free ~~next~~exchange ~~trading day following the distribution date. The Company continues~~ to ~~trade~~reduce onapproximately ~~Nasdaq~~$800 million ~~under~~principal ~~the~~amount ~~symbol “WDC” following the Separation. Following the Separation, the Company beneficially owns 19.9%~~ of ~~the~~our ~~outstanding~~term ~~shares~~loan ~~of Sandisk common stock and no longer consolidates Sandisk within the Company’s financial results~~A-3. ~~The~~We ~~Company~~expect ~~expects~~ to monetize ~~its~~our remaining stake in Sandisk within one year from the Separation ~~date~~Date.

Information provided herein is presented on a continuing operations basis to reflect the impact of the Separation. See Part I, Item 1, Note 34, Discontinued Operations, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Separation.

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Macroeconomic Conditions and Outlook

The ~~United States has recently announced changes to its trade policy, including~~ increasing ~~tariffs~~long-term ondemand ~~imports,~~for indata ~~some~~storage cases significantly. Several of these recent tariff actions have been followed by announcements of limited exemptions and temporary pauses. These actions are unprecedented, have caused substantial uncertainty and have also resulted in ~~retaliatory~~the ~~measures~~cloud onis ~~U.S.~~benefiting ~~goods.~~our ~~Our~~HDD business. ~~and~~The ~~results~~adoption of ~~operations~~artificial ~~were~~intelligence ~~not~~(“AI”) ~~materially~~and ~~impacted~~data-driven ~~during~~workloads ~~the~~is ~~third~~driving ~~quarter~~growth ofin ~~2025~~data orstorage ~~to date during the fourth quarter of 2025~~ as ~~a result of the recent tariff actions~~well. WeThis ~~are~~creates ~~actively~~an ~~monitoring~~accelerated ~~developments~~demand ~~and~~for ~~plan~~high-capacity todrives, ~~leverage tariff exemptions where possible and will take other actions as appropriate to offset any~~ resulting ~~increase~~ in ~~the~~greater ~~cost~~manufacturing ofcomplexity ~~importing~~and ~~our~~longer ~~products~~production orlead ~~the costs for materials or components in our products, including optimizing our supply chain, sourcing from alternative suppliers or increasing our prices~~times. ~~There can be no assurance that we will be able to successfully offset or mitigate any resulting increase in our costs.~~ In ~~addition~~response, ~~the impact of the tariff actions on our~~ customers, ~~retaliatory~~are ~~measures~~partnering bywith ~~other~~us ~~countries~~earlier ~~in response~~ to ~~U.S.~~support ~~trade~~their ~~policy~~future ~~and~~growth ~~any~~requirements ~~resulting decline in consumer confidence, significant inflation~~ and ~~diminished~~are ~~expectations~~extending ~~for~~ the ~~economy~~duration ~~could reduce demand for our products and adversely affect our business, financial condition and results~~ of ~~operations.~~their ~~For~~commercial ~~additional information, please see Part II, Item 1A, Risk Factors, included in this Quarterly Report on Form 10-Q~~arrangements.

~~Operational~~The ~~Update~~United States has been making changes to its trade policy, including increasing tariffs on imports, in some cases significantly. Several of these tariff actions have been followed by announcements of limited exemptions, temporary pauses or other changes. These actions have caused substantial uncertainty and have also resulted in retaliatory measures. Our business and results of operations have not been materially impacted through the first quarter of 2026 as a result of the recent tariff actions, but we are actively monitoring developments and exploring opportunities to mitigate potential future tariff and retaliatory actions. For additional information, please see Part I, Item 1A, Risk Factors, included in our 2025 Annual Report on Form 10-K.

Macroeconomic factors such as inflation, changes in interest rates, and recession concerns softened demand for our products during 2024. As a result, we and our industry experienced a supply-demand imbalance, which resulted in reduced shipments, negatively impacted pricing, and resulted in incremental charges for employee termination, asset impairment, and charges for unabsorbed manufacturing overhead costs due to the underutilization of facilities as we temporarily scaled back production and took other actions to align our operations to the market at the time. However, we have seen an improvement in the supply and demand dynamic in HDD, leading to improved revenues in fiscal 2025 from the comparable period in the prior year. We anticipate that digital transformation, including the artificial intelligence data-cycle, will drive improved market conditions in the long term.37

We will continue to actively monitor developments impacting our business and may take additional responsive actions that we determine to be in the best interest of our business and stakeholders.

Tax Resolution

As previously disclosed, we had reached a final agreement with the IRS and received notices of deficiency with respect to years 2008 through 2012 and in February 2024, also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015. During the nine months ended March 28, 2025, we made payments aggregating to $162 million for tax and interest with respect to years 2008 through 2015 and have no remaining liability as of March 28, 2025 related to all years from 2008 through 2015. Additional information regarding these settlements and related tax matters is provided in Part I, Item 1, Note 12, Income Taxes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

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Results of Operations

~~Third~~First Quarter ~~and Nine Month~~ Overview

The following table sets forth, for the periods presented, selected summary information from our Condensed Consolidated Statements of Operations by dollars and percentage of net revenue(1):

	Three Months Ended
	March 28,2025				March 29,2024				$ Change		% Change
	October 3,2025				September 27,2024				$ Change		% Change
	$ in millions
Revenue, net	$	2,~~294~~818	100.0	%	$	12,~~752~~212	100.0	%	$	~~542~~606	3127	%
Cost of revenue	1,~~382~~591		6056.25		1,~~233~~406		7063.46		~~149~~185		1213
Gross profit	~~912~~1,227		3943.85		~~519~~806		2936.64		~~393~~421		7652
Operating expenses:
Research and development	~~245~~294		10.74		~~243~~262		1311.98		232		112
Selling, general and administrative	~~108~~138		4.79		~~176~~204		109.02		(6866)		(3932)
Litigation matter	~~(201)~~—		~~(8.8)~~—		—3		—0.1		(~~201~~3)		~~n/a~~(100)
Employee termination, asset impairment and other	—		—		6		0.3		(6)		(100)
Business realignment charges	3		0.1		3		0.1		—		—
Total operating expenses	~~152~~435		615.64		~~425~~472		2421.3		(~~273~~37)		(648)
Operating income	~~760~~792		3328.1		94334		515.41		~~666~~458		~~709~~137
Interest and other expense:
Interest and other income (expense):
Interest income	1017		0.46		87		0.53		210		25143
Interest expense	(9159)		(42.01)		(~~108~~99)		(64.25)		1740		(1640)
Unrealized loss on retained interest in Sandisk	(606)		(26.4)		—		—		(606)		n/a
Gain on retained interest in Sandisk	611		21.7		—		—		611		n/a
Other income (expense), net	1(24)		—(0.9)		~~(6)~~1		~~(0.3)~~—		7(25)		~~117~~(2,500)
Total interest and other expense, net	(686)		(29.9)		(106)		(6.1)		(580)		547
Total interest and other income (expense), net	545		19.3		(91)		(4.1)		636		(699)
Income (loss) before taxes	74		3.2		(12)		(0.7)		86		717
Income before taxes	1,337		47.4		243		11.0		1,094		450
Income tax benefit	(698)		(30.4)		(4)		(0.2)		(694)		17,350
Income tax expense	155		5.5		90		4.1		65		72
Net income (loss) from continuing operations	$	772	33.7	%	$	(8)	(0.5)	%	$	780	9,750	%
Net income from continuing operations	$	1,182	41.9	%	$	153	6.9	%	$	1,029	673	%

(1) Percentages may not total due to rounding.

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	Nine Months Ended
	March 28,2025				March 29,2024				$ Change		% Change
	$ in millions
Revenue, net	$	6,915	100.0	%	$	4,313	100.0	%	$	2,602	60	%
Cost of revenue	4,290		62.0		3,237		75.1		1,053		33
Gross profit	2,625		38.0		1,076		24.9		1,549		144
Operating expenses:
Research and development	732		10.6		683		15.8		49		7
Selling, general and administrative	444		6.4		542		12.6		(98)		(18)
Litigation matter	(198)		(2.9)		—		—		(198)		n/a
Employee termination, asset impairment and other	(7)		(0.1)		163		3.8		(170)		(104)
Total operating expenses	971		14.0		1,388		32.2		(417)		(30)
Operating income (loss)	1,654		23.9		(312)		(7.2)		1,966		630
Interest and other expense:
Interest income	25		0.4		25		0.6		—		—
Interest expense	(283)		(4.1)		(312)		(7.2)		29		(9)
Unrealized loss on retained interest in Sandisk	(606)		(8.8)		—		—		(606)		n/a
Other income (expense), net	(7)		(0.1)		53		1.2		(60)		(113)
Total interest and other expense, net	(871)		(12.6)		(234)		(5.4)		(637)		272
Income (loss) before taxes	783		11.3		(546)		(12.7)		1,329		243
Income tax benefit	(608)		(8.8)		(27)		(0.6)		(581)		2,152
Net income (loss) from continuing operations	$	1,391	20.1	%	$	(519)	(12.0)	%	$	1,910	368	%

(1) Percentages may not total due to rounding.

The following table sets forth for the periods presented, summary information regarding our disaggregated revenue:

Three Months Ended

~~Nine Months Ended~~

March 28,2025

March 29,2024

March 28,2025

March 29,2024

October 3,2025

September 27,2024

(in millions)

Revenue by end market

Cloud

2,~~007~~510

1,~~455~~909

~~6,012~~

~~3,340~~

Client

~~137~~146

~~140~~139

~~416~~

~~440~~

Consumer

~~150~~162

~~157~~164

~~487~~

~~533~~

Total revenue

2,~~294~~818

12,~~752~~212

~~6,915~~

~~4,313~~

Revenue by geography

Asia

~~753~~1,175

~~600~~686

~~2,349~~

~~1,677~~

Americas

1,~~182~~100

~~882~~1,247

~~3,468~~

~~1,844~~

Europe, Middle East and Africa

~~359~~543

~~270~~279

~~1,098~~

~~792~~

Total revenue

2,~~294~~818

12,~~752~~212

~~6,915~~

~~4,313~~

(1) Net revenue is attributed to geographic regions based on the ship-to location of the customer.

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Net Revenue

Comparison of Three ~~and Nine~~ Months Ended ~~March~~October 283, 2025 to Three ~~and Nine~~ Months Ended ~~March~~September 2927, 2024

Net revenue increased by 3127% for the three months ended ~~March~~October 283, 2025 from the comparable period in the prior year, asprimarily adriven ~~result~~by of a 43% increase in units sold, ~~primarily~~and ~~from higher shipments of our high capacity enterprise products stemming from data center expansions, with~~ a 2319% increase in ~~pricing.~~average ~~Net~~selling ~~revenue~~price ~~increased~~per ~~by 60% for the nine months ended March 28~~unit, ~~2025~~primarily ~~from the comparable period in the prior year,~~ as a result of ana ~~18%~~shift ~~increase~~ in ~~units~~product ~~sold,~~mix ~~with~~to ahigher ~~35%~~capacity ~~increase~~drives. inIn ~~average~~addition, ~~selling~~approximately ~~price~~4 ~~per~~percentage ~~unit,~~points ~~primarily~~of growth was due to aan ~~shift~~increase in ~~the~~data ~~product~~storage ~~mix~~systems ~~to larger capacity drives~~revenues.

Cloud revenue increased by 3831% for the three months ended ~~March~~October 283, 2025 from the comparable period in the prior year, ~~reflecting~~primarily driven by a 145% increase in units sold and ana 1819% increase in average selling price per unit. The increase in units sold was driven by higher shipments of our high-capacity enterprise products ~~stemming from data center expansions~~. The increase in average selling price per unit was primarily due to ~~variations~~a shift in product mix ~~during~~to ~~the~~higher ~~period~~capacity drives. ~~Cloud~~In ~~revenue increased by 80% for the nine months ended March 28~~addition, ~~2025~~approximately ~~from~~6 ~~the~~percentage ~~comparable~~points ~~period~~of ingrowth ~~the~~was ~~prior~~due ~~year,~~to ~~reflecting~~an ~~a 44%~~ increase in ~~units~~data ~~sold~~storage ~~and~~systems ~~a 24% increase in average selling price per unit~~revenues. ~~The increase in units sold and increase in average selling price per unit are attributed to the same factors described for the three-month period.~~

Client revenue ~~declined~~increased by 25% for the three months ended ~~March~~October 283, 2025 from the comparable period in the prior year, ~~reflecting~~primarily adriven ~~23% decrease in units sold, partially offset~~ by aan 2711% increase in average selling price per unit., ~~Client~~partially ~~revenue~~offset ~~decreased~~ by 5a 6% ~~for~~decrease ~~the~~in ~~nine~~units ~~months~~sold. ~~ended~~The ~~March 28,~~increase ~~2025 from the comparable period~~ in ~~the~~average ~~prior~~selling ~~year,~~price ~~reflecting~~per anunit ~~18%~~and decrease in units ~~sold,~~were ~~partially~~both ~~offset~~due byto a ~~15%~~shift ~~increase~~ in ~~average~~product ~~selling~~mix ~~price~~to ~~per~~higher ~~unit~~capacity drives.

Consumer revenue ~~declined by 4%~~ for the three months ended ~~March~~October 283, 2025 ~~from the comparable period in the prior year, which~~ was ~~driven by a drop in pricing, while volume remained~~ relatively flat. ~~Consumer~~compared ~~revenue~~to ~~declined by 9% for~~ the ~~nine months ended March 28, 2025 from the~~ comparable period in the prior year, ~~reflecting~~with aboth ~~13%~~volume ~~decline~~and ~~in units due to softer demand in the market, partially offset by improved~~ pricing ~~due~~being torelatively ~~product mix~~consistent.

Net revenue by geography for the three months ended ~~March~~October 283, 2025 ~~was~~compared ~~relatively~~to ~~consistent with~~ the prior year. ~~The~~period ~~changes~~reflects inhigher ~~net~~ revenue byin ~~geography for~~ the ~~nine~~Asia ~~months~~and ~~ended March 28~~Europe, ~~2025~~Middle ~~from~~East ~~the~~and ~~comparable~~Africa ~~period~~regions inas ~~the~~customers ~~prior~~expand ~~year~~data ~~reflected~~center ~~higher~~capacity ~~revenue~~ in ~~the~~these ~~Americas region in the current year from higher sales to Cloud customers, as noted above~~regions.

Our top 10 customers accounted for 7377% ~~and 68%~~ of our net revenue for the three ~~and nine~~ months ended ~~March~~October 283, 2025, ~~respectively,~~ compared to 5965% ~~and 53%~~ of our net revenue for the three ~~and nine~~ months ended ~~March~~September 2927, 2024~~, respectively~~. For the three months ended ~~March~~October 283, 2025, three customers accounted for 18%, 16% and 1314% ~~of our net revenue~~, ~~and for the nine months ended March 28~~respectively, ~~2025, two customers accounted for 18% and 11%~~ of our net revenue~~. For the three months ended March 29~~, ~~2024, one customer accounted for 12% of our net revenue,~~ and for the ~~nine~~three months ended ~~March~~September 2927, 2024, noone customer accounted for 1018% ~~or more~~ of our net revenue.

Consistent with standard industry practice, we have sales incentive and marketing programs that provide customers with price protection and other incentives or reimbursements that are recorded as a reduction to gross revenue. These programs represented 11% and 10% of gross revenue for the three and nine months ended March 28, 2025 and 10% and 12% for the three and nine months ended March 29, 2024, respectively. The amounts attributed to our sales incentive and marketing programs generally vary according to several factors, including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix, and overall availability of products. The decrease in program amounts in the current period reflects the improved demand and pricing environment. Changes in future customer demand and market conditions may require us to adjust our incentive programs as a percentage of gross revenue.

Gross Profit and Gross Margin

Gross profit increased by $~~393~~421 million for the three months ended ~~March~~October 283, 2025 from the comparable period in the prior year, primarily due to higher product shipments and improved pricing. In addition, the prior year period included charges for unabsorbed manufacturing overhead costs as a result of the reduced utilization of our manufacturing capacity of $16 million, which were not incurred in the current period. Gross margin increased by 107 percentage points year over year, ~~mainly~~primarily due to ~~improved~~higher ~~pricing~~volumes, ~~with~~product ~~approximately~~cost 1reductions ~~percentage~~and ~~point~~improved ~~of the increase due to the unabsorbed manufacturing overhead costs incurred in the prior year period but not incurred in the current period~~pricing.

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Gross profit increased by $1.55 billion for the nine months ended March 28, 2025 from the comparable period in the prior year, primarily due to higher product shipments, improved pricing, and favorable product mix. In addition, the prior year period included charges for unabsorbed manufacturing overhead costs as a result of the reduced utilization of our manufacturing capacity of $148 million, which were not incurred in the current period. Gross margin increased by approximately 13 percentage points year over year, mainly due to improved pricing and favorable product mix with approximately 3 percentage points of the increase due to the unabsorbed manufacturing overhead costs incurred in the prior year period but not incurred in the current period.

Operating Expenses

Research and development (“R&D”) expense ~~for the three months ended March 28, 2025 remained relatively consistent with the comparable period in the prior year. R&D expense~~ increased by $4932 million for the ~~nine~~three months ended ~~March~~October 283, 2025 from the comparable period in the prior year. The increase was ~~primarily~~ driven by ~~a $41 million increase in compensation and benefits due to~~ higher variable compensation and ~~increased~~continued ~~headcount~~investment ~~and increases in spending~~ for ~~R&D~~innovation, ~~projects~~technology asand weproduct ~~continue to invest in innovation~~development.

Selling, general and administrative (“SG&A”) expense decreased by $6866 million for the three months ended ~~March~~October 283, 2025 from the comparable period in the prior year. The decrease primarily reflects a $5537 million ~~decrease~~lower in compensation and benefits, which was driven by certain general corporate overhead roles in the prior year that have since transferred to Sandisk and were not backfilled after the Separation. The decrease also reflects a $1330 million ~~decrease~~lower inservice ~~services~~fees ~~due~~resulting tofrom ~~decreased~~reduced ~~sales and~~ marketing ~~expenses~~activities and legal ~~fees~~costs. SG&A expense decreased by $98 million for the nine months ended March 28, 2025 from the comparable period in the prior year. The decrease was primarily driven by a $76 million decrease in compensation and benefits due to the same factors noted above for the three-month period along with a $16 million decrease in services due to decreased sales and marketing expenses.

For information regarding ~~Employee~~litigation ~~termination~~matters, ~~asset impairment and other,~~ see Part I, Item 1, Note 14, ~~Employee~~Legal ~~Termination~~Proceedings, ~~Asset Impairment and Other,~~ of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

For information regarding ~~litigation~~Business ~~matters~~realignment charges, see Part I, Item 1, Note 1610, ~~Legal~~Business ~~Proceedings~~Realignment Charges, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

~~Interest and Other Expense~~39

~~Total~~Table interest and other expense, net increased by $580 million and $637 million for the three and nine months ended March 28, 2025, respectively, from the comparable periods in the prior year. The increases primarily reflect an unrealized loss of ~~$606 million on our retained interest in Sandisk based on the mark-to-market value as of March 28, 2025 and lower foreign exchange transaction gains.~~Contents

Interest and Other Income (Expense)

Total interest and other income (expense), changed by $636 million for the three months ended October 3, 2025 from the comparable period in the prior year. The change primarily reflects an unrealized gain of $611 million on our retained interest in Sandisk based on the mark-to-market value as of October 3, 2025, and lower interest expense of $40 million, which reflects the reduction in our debt.

Income Taxes

~~Beginning in 2023~~Previously, the Tax Cuts and Jobs Act ~~(the~~of “2017 ~~Act~~(“TCJA”) ~~has~~eliminated ~~required~~the usability to ~~capitalize~~deduct ~~and amortize~~ R&D ~~expenses~~expenditures ~~rather than expensing them~~ in the year incurred., ~~The~~requiring ~~tax~~capitalization ~~effects~~and ~~related~~amortization tounder Internal Revenue Code Section 174. On July 4, 2025, the ~~capitalization~~One Big Beautiful Bill Act of ~~R&D~~2025 ~~expenses~~(“OBBBA”) ~~are~~was ~~included~~signed ininto ~~our~~law, ~~effective~~which includes broad tax ~~rate~~reform ~~for~~provisions ~~the~~that ~~three~~extend and ~~nine~~modify ~~months~~key ~~ended~~elements ~~March 28,~~of ~~2025~~the ~~and~~TCJA. ~~March 29~~Notably, ~~2024.~~the ~~The~~new ~~tax~~legislation ~~effects~~now ~~related~~allows toan option for the ~~capitalization~~immediate expensing of domestic R&D ~~expenses~~expenditures, ~~had~~beginning awith ~~material~~2026. ~~impact~~The onlegislation ~~our~~also ~~effective~~includes ~~tax~~favorable ~~rate~~modifications ~~for~~to ~~the~~international ~~three~~tax ~~and~~provisions, ~~nine~~including ~~months~~changes ~~ended~~to ~~March 28,~~the ~~2025~~Global ~~but~~Intangible ~~did~~Low-Taxed ~~not~~Income ~~have~~regime aand ~~material~~enhancements ~~impact~~to on the ~~effective~~Foreign-Derived ~~tax~~Deduction ~~rate~~Eligible ~~for~~Income ~~the~~(FDDEI) ~~three~~deduction ~~and~~that ~~nine~~will ~~months~~become ~~ended~~effective ~~March 29,~~for ~~2024~~us in 2027.

On August 16, 2022, ~~President Biden signed into law~~ the Inflation Reduction Act of 2022, ~~which~~was ~~contained~~signed ~~significant~~into ~~changes to laws related to tax~~law, ~~climate,~~which ~~energy~~contained, ~~and health care. The tax measures include,~~ among other things, a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income (“AFSI”) exceeding $1.0 billion. ~~The~~Although CAMT became effective for us beginning with ~~fiscal year~~ 2024., Wewe dowere not ~~expect to be~~ subject to the CAMT of 15% for ~~fiscal~~2024 ~~year~~and 2025. We do not expect to be subject to CAMT in 2026 as our annual average AFSI did not exceed $1.0 billion for the preceding three-year period.

On December 20, 2021, the Organization for Economic Co-operation and Development G20 (“OECD/G20”) Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two. Several non-U.S. jurisdictions have either enacted legislation or announced their intention to enact future legislation to adopt certain or all components of Pillar Two, ~~some~~also ofknown ~~which~~as ~~are~~Global ~~effective~~Minimum ~~for~~Tax ~~us in fiscal year 2025~~(“GMT”). For ~~fiscal year 2025~~2026, we ~~currently~~are ~~expect~~subject to ~~be able to meet certain transitional safe harbors and do not expect any material~~ GMT ~~taxes. As more jurisdictions adopt this legislation~~ in ~~fiscal~~Thailand ~~year~~and ~~2026,~~the ~~there may be material increases in our future tax obligations in certain jurisdictions~~Philippines.

The following table presents our Income tax expense and the effective tax rate:


	Three Months Ended
	October 3, 2025		September 27, 2024
	$ in millions
Income before taxes	$	1,337	$	243
Income tax expense	155		90
Effective tax rate	12%		37%

The primary drivers of the difference between the effective tax rate for the three months ended October 3, 2025 and the U.S. Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, the deduction for FDDEI, tax credits and the gain on the retained Sandisk interest being tax-free due to the Separation of the Flash business. These resulted in decreases to our effective tax rate below the U.S. Federal statutory rate for the three months ended October 3, 2025. Our income tax provision for the three months ended October 3, 2025 includes GMT taxes for Thailand and the Philippines, countries for which we maintain tax holidays.

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	Three Months Ended				Nine Months Ended
	March 28,2025		March 29,2024		March 28,2025		March 29,2024
	$ in millions
Income (loss) before taxes	$	74	$	(12)	$	783	$	(546)
Income tax benefit	(698)		(4)		(608)		(27)
Effective tax rate	(943)%		33%		(78)%		5%

The primary drivers of the difference between the effective tax rate for the three and nine months ended March 28, 2025 and the U.S. Federal statutory rate of 21% are the relative mix of earnings and losses by jurisdiction, credits, and tax holidays in the Philippines and Thailand that will expire at various dates during years 2026 through 2033. These resulted in decreases to our effective tax rate below the U.S. Federal statutory rate for the three and nine months ended March 28, 2025. In anticipation of us operating as a standalone HDD business in a GMT environment, we executed an inter-entity asset transfer in conjunction with the separation of our Flash business. This resulted in the recognition of one-time deferred tax benefits to continuing operations of $711 million for the three and nine months ended March 28, 2025.

The primary drivers of the difference between the effective tax rate for the three and nine months ended March 29, 2024 and the U.S. Federal statutory rate of 21% were the relative mix of earnings and losses by jurisdiction, the deduction for foreign-derived intangible income, credits, and tax holidays in Malaysia, the Philippines, and Thailand. In addition, the effective tax rate for the nine months ended March 29, 2024 includes the discrete effect of a net decrease of $30 million to the liability for unrecognized tax benefits, which includes interest and offsetting tax benefits, as a result of adjustments to align with IRS calculations.

For additional information regarding Income tax benefit, see Part I, Item 1, Note 12, Income Taxes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

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Liquidity and Capital Resources

The following table summarizes our statements of cash flows. Cash flows for the prior year period are presented on a consolidated basis and activity related to discontinued operations has not been segregated. See Part I, Item 1, Note 4, Discontinued Operations, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional cash flow information related to our discontinued operations.

	Nine Months Ended
	Three Months Ended
	March 28,2025		March 29,2024
	October 3,2025		September 27,2024
	(in millions)
Net cash provided by (used in):
Operating activities	$	~~945~~672	$	~~(660)~~34
Investing activities	~~220~~(57)		31(45)
Financing activities	~~430~~(678)		~~506~~(102)
Effect of exchange rate changes on cash	(3)		~~(6)~~10
Net increase (decrease) in cash and cash equivalents	$	1,598	$	(129)
Cash and cash equivalents reclassified to assets held for sale	—		(71)
Net decrease in cash and cash equivalents	$	(66)	$	(174)

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, also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015. During the nine months ended March 28, 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 March 28, 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 I, Item 1, Note 12, Income Taxes, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q 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 currently expect our capital expenditures for ~~the~~2026 ~~remainder~~to ofbe ~~fiscal~~approximately ~~2025~~4% to be6% ~~approximately~~of ~~$100 million~~our net revenue.

We believe our cash and cash equivalents and our available 2027 Revolving Credit Facility (as defined below) 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 II, Item 1A, Risk Factors, in this Quarterly Report on Form 10-Q and in Part I, Item 1A, Risk Factors, in our ~~2024~~2025 Annual Report on Form 10-K.

A total of $1.0523 billion and $0.98 billion of our ~~Cash~~cash and cash equivalents was held by our foreign subsidiaries as of ~~March~~October 283, 2025 and June 2827, ~~2024~~2025, 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.

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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 $~~1.15~~99 ~~billion~~million for the ~~nine~~three months ended ~~March~~October 283, 2025, compared to $~~405~~753 million for the ~~nine~~three months ended ~~March~~September 2927, 2024,. ~~which~~The year over year decrease largely reflects ana ~~increase~~$423 million improvement in ~~the~~timing ~~volume~~and collection of accounts receivable, a $132 million improvement from accrued expenses resulting from a significant reduction in our derivative hedging activities since the Separation of the Flash business, asand ~~discussed~~a ~~above~~$501 million improvement in other assets and liabilities driven by the timing of recognition and realization of income taxes receivable. These were partially offset by a $426 million increase in cash used driven by the timing of recognition and payment of income taxes.

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 the timing of payments for taxes. Our cash conversion cycle measures how quickly we can convert our products into cash through sales. The cash conversion cycles, calculated on a continuing operations basis, were as follows (in days):

	Three Months Ended
	March 28,2025	March 29,2024
Days sales outstanding	58	51
Days in inventory	86	110
Days payable outstanding	(85)	(75)
Cash conversion cycle	59	86

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.

For the three months ended March 28, 2025, DSO increased by seven days from the comparable period in the prior year, of which four days reflected an increase from lower trade accounts receivable factoring and the remainder reflected the timing of shipments and customer collections. DIO decreased by 24 days from the comparable period in the prior year, primarily reflecting higher consumption of inventory driven by increased sales in the current period. DPO increased by 10 days from the comparable period in 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~~used byin investing activities for the ~~nine~~three months ended ~~March~~October 283, 2025 primarily consisted of $~~401~~73 million in ~~net proceeds from our sale of a majority interest in one of our subsidiaries and $148 million in net proceeds from activity related to Flash Ventures, partially offset by $336 million in~~ capital expenditures, net of proceeds from disposals of assets. Net cash ~~provided~~used byin investing activities for the ~~nine~~three months ended ~~March~~September 2927, 2024 primarily consisted of $~~207~~95 million in capital expenditures, net of proceeds from ~~activity~~disposals ~~related~~of ~~to Flash Ventures~~assets, partially offset by $~~176~~47 million in ~~capital expenditures,~~ net of proceeds from ~~disposals~~activity ofrelated ~~assets,~~to ~~which~~Flash ~~included the proceeds from the sale-leaseback of our Milpitas, California facility~~Ventures.

Financing Activities

~~During~~Net ~~the nine months ended March 28, 2025, net~~ cash ~~provided~~used byin financing activities ~~primarily~~for ~~consisted of $2.15 billion of proceeds from drawing on~~ the ~~Sandisk~~three ~~credit~~months ~~facilities~~ended inOctober 3, ~~connection~~2025 ~~with~~primarily ~~the~~consisted ~~Separation as well as the 2027 Revolving Credit Facility and $69 million~~ of ~~proceeds from the issuance of stock under employee stock plans, partially offset by~~ $~~1.37~~553 ~~billion~~million offor ~~cash~~share ~~transferred to Sandisk in connection with the Separation~~repurchases, $~~257~~ 39 million for ~~repayment~~dividends ~~of amounts borrowed under the 2027 Revolving Credit Facility and scheduled repayments~~ on ~~the~~our ~~Term~~common ~~Loan~~stock ~~A-2~~ and ~~Term~~Preferred ~~Loan A-3~~Shares, $92 55 million for taxes paid on vested stock awards under employee stock plans, and $74 31 million ~~paid~~ for ~~debt~~scheduled ~~issuance~~repayments ~~costs.~~on ~~During~~our ~~the~~term ~~nine~~loan. ~~months~~Net ~~ended March 29, 2024, net~~ cash ~~provided~~used byin financing activities ~~primarily~~for ~~consisted~~the ofthree ~~$2.50 billion~~months inended ~~proceeds~~September 27, ~~from~~2024 ~~the~~primarily ~~issuance~~consisted of ~~the~~$64 million ~~2028~~for ~~Convertible~~taxes ~~Notes~~paid ~~and~~on ~~the~~vested ~~drawdown~~stock ofawards ~~our~~under ~~delayed~~employee ~~draw~~stock ~~term~~plans ~~loan,~~and ~~partially offset by~~ $~~1.27~~38 ~~billion~~million tofor ~~settle~~scheduled ~~the remainder of the 2024 Convertible Notes at maturity and~~ repayments ofon our ~~delayed draw~~ term loan. ~~and~~During ~~Term~~the ~~Loan~~three ~~A-2,~~months ~~$505~~ended ~~million~~September 27, ~~used to repurchase a portion of the~~ 2024, ~~Convertible~~we ~~Notes,~~also drew and ~~$155~~repaid $150 million ~~for~~under ~~the~~our ~~purchase~~2027 ofRevolving ~~capped~~Credit ~~calls to hedge the potential dilution impact of the conversion feature of the 2028 Convertible Notes~~Facility.

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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 Condensed Consolidated Financial Statements. Additionally, we do not have an interest in, or relationships with, any variable interest entities.

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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 ~~March~~October 283, 2025. In addition, see the discussions further below related to liability for unrecognized tax benefits, litigation matters, cash dividend program, dividend rights with respect to the ~~Series~~Preferred AShares, ~~Preferred~~global ~~Stock~~minimum tax, foreign exchange contracts and indemnifications.

	Total		1 Year (Remaining ~~Three~~Nine Months of ~~2025~~2026)		2-3 Years (~~2026-~~2027-2028)		4-5 Years (~~2028-~~2029-2030)		More than 5 Years (Beyond ~~2029~~2030)
	(in millions)
Long-term debt, including current portion(1)	$	74,~~380~~717	$	312,194	$	41,~~749~~523	$	~~2,100~~500	$	500
Interest on debt	~~734~~448		63146		~~492~~202		~~132~~69		4731
Operating leases	~~172~~154		925		6653		4130		5646
Purchase obligations and other commitments	~~121~~62		4535		7627		—		—
Mandatory deemed repatriation tax	331		—		331		—		—
Total	$	5,381	$	2,400	$	1,805	$	599	$	577
Total	$	8,738	$	148	$	5,714	$	2,273	$	603

(1)Principal portion of debt, excluding issuance costs.

Liability for Unrecognized Tax Benefits

As of ~~March~~October 283, 2025, the liability for unrecognized tax benefits (excluding accrued interest and penalties) was $~~561~~598 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 included in our liability related to unrecognized tax benefits as of ~~March~~October 283, 2025 was $7093 million. Of these amounts, approximately $~~476~~130 million could result in potential cash payments. ~~As of March 28, 2025, with respect~~ to ~~the~~be ~~IRS~~made ~~matter discussed below, 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.

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 also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015. During the nine months ended March 28, 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 March 28, 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.

Litigation Matters

For additional information on ~~the~~our litigation matters, see Part I, Item 1, Note 1614, Legal Proceedings, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

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. InDuring ~~conjunction with~~ the ~~adoption~~three ofmonths ~~the~~ended ~~cash~~October 3, ~~dividend program~~2025, ~~our~~we ~~Board~~paid ~~of Directors declared a~~ cash ~~dividend~~dividends of $0.10 per share of our outstanding common stock, ~~which~~totaling ~~will~~$34 million, beplus $1 million paid ~~on June 18, 2025~~ to ~~our~~holders ~~shareholders~~ of ~~record~~our asPreferred ofShares ~~the~~in ~~close~~accordance ofwith ~~business~~their onparticipation ~~June 4, 2025~~rights. ~~We may suspend or discontinue our cash dividend program at any time.~~

50Subsequent to quarter-end, on October 29, 2025, our Board of Directors declared a cash dividend of $0.125 per share of our common stock, which will be paid on December 18, 2025 to our shareholders of record as of the close of business on December 4, 2025.

~~Table~~We may modify, suspend, or cancel our cash dividend program in any manner and at any time. The amount of ~~Contents~~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 ~~March~~October 283, 2025, 235,000 shares of our ~~Series A~~ Preferred ~~Stock~~Shares 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 ~~the~~ Consolidated Financial Statements in our ~~2024~~2025 Annual Report on Form 10-K and Part I, Item 1, Note 1112, Shareholders’ Equity and Convertible Preferred Stock, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for more information regarding the dividend provisions.

~~Debt~~43

As described in Part I, Item 1, Note 8, Debt, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, 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 $37.89 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 not triggered during the calendar quarter ended March 31, 2025 and, accordingly, the holders of the 2028 Convertible Notes do not have the right to convert the notes during the succeeding calendar quarter ending June 30, 2025. As a result, the 2028 Convertible Notes were classified as Long-term debt in the Condensed Consolidated Financial Statements as of March 28, 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 March 28, 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 March 28, 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 7, Debt, of the Notes to the Consolidated Financial Statements included in our 2024 Annual Report on Form 10-K and Note 8, Debt, of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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”) 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) facilitates a potential future 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.

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Debt

As described in Part I, Item 1, Note 7, Debt, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, 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 $37.77 per share of common stock (as adjusted in accordance with the indenture as a result of the Separation and the payment of dividends on the Company’s common stock). 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. On or after November 15, 2026, we may redeem for cash, at par plus accrued interest, all or any portion of the 2028 Convertible Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 10 trading days during any 20 consecutive trading day period immediately preceding the date of our redemption notice.

The sale price conditional conversion feature of the 2028 Convertible Notes was triggered during the calendar quarter ended September 30, 2025 and, accordingly, the holders of the 2028 Convertible Notes have the right to convert the notes during the succeeding calendar quarter ending December 31, 2025. As a result, the 2028 Convertible Notes have been classified as Current portion of long-term debt in the Condensed Consolidated Financial Statements as of October 3, 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 October 3, 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 requires us to comply with a financial leverage ratio covenant. As of October 3, 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 our 2025 Annual Report on Form 10-K and Note 7, Debt, of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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.

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The assets and liabilities of the Obligor Group include the following:

	March 28,2025		June 28,2024
	October 3,2025		June 27,2025
	(in millions)
Current assets	$	53,~~313~~115	$	2,~~149~~992
Non-current assets	4,~~677~~502		24,~~208~~553
Net intercompany receivables from (payables to) non-guarantor subsidiaries	(757)		2,473
Net intercompany payables to non-guarantor subsidiaries	(1,679)		(1,543)
Current liabilities	3,~~530~~317		3,~~758~~800
Non-current liabilities	52,~~502~~848		62,~~626~~873

The operating results of the Obligor Group include the following:

	Nine Months Ended		Year Ended
	Three Months Ended		Year Ended
	March 28,2025		June 28,2024
	October 3,2025		June 27,2025
	(in millions)
Net sales	$	41,~~115~~158	$	45,~~066~~249
Gross profit	~~1,656~~459		1,~~002~~941
Operating income (loss)	435		(927)
Operating income	107		279
Net income (loss)	~~138~~550		(~~1,211~~320)

Results for the Obligor Group include the following transactions with non-guarantor subsidiaries:

	Nine Months Ended		Year Ended
	Three Months Ended		Year Ended
	March 28,2025		June 28,2024
	October 3,2025		June 27,2025
	(in millions)
Intercompany revenue	$	1,~~128~~715	$	1,~~416~~378
Net intercompany interest (income) expense	~~(4)~~—		8(4)
Intercompany dividend income	~~1,695~~33		~~567~~2,215

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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~~Global ~~Deemed~~Minimum ~~Repatriation~~ Tax

As of ~~March 28~~October 3, 2025, ~~our~~we ~~estimated~~have ~~mandatory~~accrued ~~deemed~~GMT ~~repatriation~~taxes ~~tax~~of ~~obligation was~~ $~~331~~ 21 million ~~and~~that isare not expected to be paid ~~within~~until the ~~next~~second ~~twelve~~quarter ~~months~~of 2028.

Mandatory Research and Development Expense Capitalization

Since the beginning of 2023, the 2017 Act has required us to capitalize and amortize R&D expenses rather than expensing them in the year incurred, which is expected to result in higher cash tax payments in future profitable periods, if not repealed or otherwise modified.

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. See Part I, Item 3, Quantitative and Qualitative Disclosures About Market Risk, included in this Quarterly Report on Form 10-Q for additional information.

Indemnifications

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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 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 I, Item 1, Note 2, Recent Accounting Pronouncements, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

We have prepared the accompanying unaudited Condensed 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 Condensed Consolidated Financial Statements may be material.

53There have been no material changes in our critical accounting policies and estimates from those disclosed in our 2025 Annual Report on Form 10‑K. Please refer to Part II, Item 7 of our 2025 Annual Report on Form 10‑K for a discussion of our critical accounting policies and estimates.

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There have been no material changes in our critical accounting policies and estimates from those disclosed in our 2024 Annual Report on Form 10‑K. Please refer to Part II, Item 7 of our 2024 Annual Report on Form 10‑K for a discussion of our critical accounting policies and estimates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Except~~There ~~as disclosed below, there~~ have been no material changes to our market risk exposure during the ~~nine~~three months ended ~~March~~October 283, 2025. ~~See~~from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our ~~2024~~2025 Annual Report on Form 10-K ~~for further information about our exposure to market risk~~.

Foreign Currency Risk

We performed sensitivity analyses as of ~~March~~October 283, 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 ~~March~~October 283, 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 $6870 million at ~~March~~October 283, 2025.

Interest Rate Risk

We have generally held a balance of fixed and variable rate debt. As of ~~March~~October 283, 2025, our variable rate debt outstanding consisted of our Term Loan A-3, which is based on various index rates as discussed further in Part II, Item 8, Note 8, Debt, of the Notes to ~~Condensed~~ Consolidated Financial Statements included in ~~this~~our ~~Quarterly~~2025 Annual Report on Form 10-QK. As of ~~March~~October 283, 2025, the outstanding balance on our variable rate debt was $21.562 billion and a one percent increase in the variable rate of interest would increase our annual interest expense by $2516 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) promulgated by the Securities and Exchange Commission under 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 Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective.

Changes in Internal Controls over Financial Reporting

~~During~~There ~~the~~has ~~quarter~~been ~~ended~~no ~~March 28,~~change ~~2025,~~in weour ~~completed~~internal ~~the~~control ~~separation~~over offinancial ~~our~~reporting ~~Flash~~during ~~business (~~the ~~“Separation”).~~quarter Inended ~~connection~~October 3, ~~with the Separation~~2025, ~~certain~~that ~~controls~~has ~~within~~materially ~~our~~affected, ~~internal~~or ~~control~~is ~~over~~reasonably ~~financial~~likely ~~reporting related~~ to ~~the~~materially ~~divested~~affect, ~~operations~~our ~~were~~internal ~~removed~~control ~~from~~over ~~our~~financial ~~control environment~~reporting.

Other than the changes related to the Separation described above, there were no changes in our internal control over financial reporting during the third quarter of fiscal year 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.47

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 1614, Legal Proceedings of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for disclosures regarding certain legal proceedings, which are incorporated by reference herein.

Item 1A. Risk Factors

We have described under the heading “Risk Factors” in Part I, Item 1A of our ~~2024~~2025 Annual Report on Form 10-K a number of risks and uncertainties that could cause our actual results of operations and financial condition to vary materially from past, or from anticipated future, results of operations and financial condition. InThere light of the Separation, risks related to our joint venture with Kioxia Corporation as disclosed in Part I, Item 1A, Risk Factors, in our 2024 Annual Report on Form 10-K are no longer material. Except as set forth below, there have been no ~~other~~ material changes from these risk factors previously described in Part I, Item 1A of our ~~2024~~2025 Annual Report on Form 10-K. These risks and uncertainties are not the only risks facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also adversely affect our business, financial condition, results of operations or the market price of our common stock.

~~Changes~~Item ~~in U~~2.S. Unregistered ~~trade~~Sales ~~policy and the impact~~ of ~~tariffs~~Equity ~~may~~Securities ~~have a material adverse effect on our business~~ and ~~results~~Use of ~~operations.~~ Proceeds

~~Our~~Repurchases ~~business, financial condition and results~~ of ~~operations~~Equity may be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the United States or other governments. For example, the United States has recently announced changes to its trade policy, including increasing tariffs on imports, in some cases significantly. Several of these recent tariff actions have been followed by announcements of limited exemptions and temporary pauses. These actions are unprecedented, have caused substantial uncertainty and have also resulted in retaliatory measures on U.S. goods.Securities

~~Any~~The ~~imposition~~following oftable orprovides ~~increase~~information inabout ~~tariffs~~repurchases ~~may~~by ~~increase~~us ~~the~~of ~~cost~~shares of ~~importing~~ our ~~products~~common orstock during the ~~costs~~quarter ~~for~~ended ~~materials or components used in our products~~October 3, which would increase our costs unless we are able to implement actions to offset these costs, such as leveraging tariff exemptions where possible, taking actions to optimize our supply chain or source from alternative suppliers or increasing our prices. There can be no assurance that we will be able to successfully offset or mitigate any resulting increase in our costs. If we are unable to pass on any cost increases or if supply and demand conditions will not support price increases for our products, our revenue and gross margin would be negatively impacted. In addition, retaliatory actions by other countries in response to U.S. trade policy would increase prices for our products and could negatively affect demand for our products.2025:

Tariffs or other trade restrictions may also lead to increased costs for our customers, declining consumer confidence, significant inflation and diminished expectations for the economy, as well as ultimately reduced demand for our products. Such conditions could have a material adverse impact on our business, results of operations and cash flows. In addition, tariff actions by the United States and retaliatory actions by other countries have caused and may in the future cause significant disruption and volatility in the financial markets, which could adversely affect the availability, terms and cost of capital, including to refinance our existing debt, and which in turn could reduce our cash flows and harm our business.


(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)
June 28, 2025 - July 25, 2025	0.3	$	64.15	0.3	$	1,833
July 26, 2025 - Aug. 29, 2025	3.1	76.62		3.1	$	1,593
Aug. 30, 2025 - Oct. 3, 2025	3.0	98.16		3.0	$	1,299
Total for the quarter ended Oct. 3, 2025	6.4	$	86.14	6.4

~~Changes~~(1) Includes ~~in tariffs and trade restrictions can be announced with little or no advance notice~~commissions. The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions, or other changes in governmental policies related to tariffs, trade agreements or trade policies are difficult to predict, which makes risks difficult to anticipate and mitigate. If we are unable to navigate further changes in U.S. or international trade policy, it could have a material adverse impact on our business, financial condition and results of operations.

~~Any~~(2) On ~~decisions~~May to9, ~~reduce~~2025, orour ~~discontinue~~Board ~~paying~~of ~~cash~~Directors ~~dividends~~authorized toa ~~our~~share ~~shareholders~~repurchase ~~could~~program ~~cause~~for the ~~market~~repurchase ~~price~~of ~~for~~up to $2.0 billion of our common stock. There is no expiration date for the share repurchase program. 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. We expect share repurchases to ~~decline~~be funded principally by operating cash flows. The amount and timing of share repurchases will depend on market conditions and other corporate considerations. We may suspend or discontinue the share repurchase program at any time.

We may modify, suspend or cancel our cash dividend program in any manner and at any time. Any reduction or discontinuance by us of the payment of quarterly cash dividends could cause the market price of our common stock to decline. Moreover, in the event our payment of quarterly cash dividends is reduced or discontinued, our failure or inability to resume paying cash dividends could cause the market price of our common stock to decline.

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Item 5. Other Information

Insider Trading Arrangements

During the quarter ended ~~March~~October 283, 2025, the following ~~officer~~director ~~(as defined in Rule 16a-1(f) of the Exchange Act)~~ adopted a trading arrangement for the purchase or sale of securities of Western Digital that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (“Rule 10b5-1 Plan”):

•~~Gene~~Martin ~~Zamiska,~~I. ~~Senior Vice President~~Cole, ~~Global~~a ~~Accounting~~director ~~and Chief Accounting Officer~~ of the Company, adopted a Rule 10b5-1 Plan on ~~March~~August 61, 2025. Under this plan, up to an aggregate of 2922,~~653~~000 shares of the Company’s common stock may be sold before the plan expires on ~~September~~October 430, 2026.

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Item 6. Exhibits

The exhibits listed in the Exhibit Index below are filed or furnished with, or incorporated by reference in, this Quarterly Report on Form 10-Q, as specified in the Exhibit List. Certain agreements listed in the Exhibit Index 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.

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EXHIBIT INDEX

ExhibitNumber						Description
2.1						Separation and Distribution Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (~~Filed~~incorporated asby reference to Exhibit 2.1 toof the ~~Company’s~~ Current Report on Form 8-K ~~with~~filed by the ~~Securities~~Company ~~and Exchange Commission~~ on February 24, 2025)#
3.1						Amended and Restated Certificate of Incorporation of Western Digital Corporation, as amended to date (~~Filed~~incorporated asby reference to Exhibit 3.1 to the ~~Company’s~~ Annual Report on Form 10-K ~~with~~filed by the ~~Securities~~Company ~~and Exchange Commission~~ on August 20, 2024)
3.2						Certificate of Designations, Preferences and Rights of Series A Convertible Perpetual Preferred Stock (~~Filed~~incorporated asby reference to Exhibit 3.1 to the ~~Company’s~~ Current Report on Form 8-K ~~with~~filed by the ~~Securities~~Company ~~and Exchange Commission~~ on February 1, 2023)
3.3						Amended and Restated Bylaws of Western Digital Corporation, as amended effective as of March 13, 2025 (~~Filed~~incorporated asby reference to Exhibit 3.1 to the ~~Company’s~~ Current Report on Form 8-K ~~with~~filed by the ~~Securities~~Company ~~and Exchange Commission~~ on March 13, 2025)
10.1						Form of ~~Indemnification~~Grant ~~Agreement~~Notice for ~~Directors~~Performance ~~and~~Stock ~~Officers~~Unit ofAward under the Western Digital Corporation ~~(Filed~~2021 ~~as Exhibit 10.1 to the Company’s Current Report on Form 8~~Long-KTerm ~~with~~Incentive ~~the Securities and Exchange Commission on January 30, 2025)~~Plan†**
10.2						~~Transition Services Agreement, dated as of February 21, 2025, by and between~~ Western Digital Corporation Amended and ~~Sandisk~~Restated ~~Corporation~~2021 ~~(Filed~~Long-Term asIncentive ~~Exhibit~~Plan ~~10.1~~Non-Employee toDirector ~~the~~Restricted ~~Company’s~~Stock ~~Current~~Unit ~~Report~~Grant onProgram, ~~Form~~amended ~~8-K with the Securities~~ and ~~Exchange~~restated ~~Commission~~as onof ~~February~~August 2427, 2025)#†**
10.3						Tax Matters Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
10.4						Employee Matters Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (Filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
10.5						Intellectual Property Cross-License Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (Filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
10.6						Transitional Trademark License Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (Filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
10.7						Stockholder’s and Registration Rights Agreement, dated as of February 21, 2025, by and between Western Digital Corporation and Sandisk Corporation (Filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
10.8						Amendment No. 4 to the Amended and Restated Loan Agreement, dated as of February 20, 2025, among Western Digital Corporation, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto (Filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K with the Securities and Exchange Commission on February 24, 2025)#
10.9						Western Digital Corporation Amended and Restated Change in Control Severance Plan, amended and restated as of March 13, 2025†**
10.10						Offer Letter, dated as of February 11, 2025, to Irving Tan†**
10.11						Amended and Restated Offer Letter, dated as of April 18, 2025, to Ahmed Shinhab†**
31.1						Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
31.2						Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†
32.1						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*
32.2						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*
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.

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** 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.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q 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: ~~May~~October 230, 2025

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