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WDC, Western Digital Corporation

Technology Hardware consumer brand Cyclical

We are a leading developer, manufacturer, and provider of data storage devices and solutions based on hard disk drive technology.

HDDs are critical components in the worldwide data infrastructure market, powering the digital economy.

HDDs provide reliable, cost-effective, high-capacity storage needs for a wide range of applications, ranging from cloud data centers, enterprise storage systems, edge computing, and video surveillance to client and consumer devices.

Latest annual: FY2025 10-K

WDC · Western Digital Corporation

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$9.5B

+50.7% YoY · −11% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $11.8B 5-yr avg $11.6B

Gross margin 45% 5-yr avg 29%

Operating margin 30.3% 5-yr avg 5.9%

ROIC 16% 5-yr avg 8%

Owner-earnings margin 25% 5-yr avg −2%

Free cash flow margin 25% 5-yr avg −2%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 28% and operating margin about 7.2% through the cycle, a spread the cycle sets more than the company does. The margin is cyclical, swinging between −8.8% and 25% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Inventory runs near 19% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 6%, above 15% in 1 of 8 years). By owner earnings: roughly 4% of revenue reaches owners as cash, though it swings. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

55% of revenue comes from outside the United States.

Revenue by geography, FY2025

United States45%$4.3B
China16%$1.5B
EMEA16%$1.5B
Hong Kong SAR China11%$1.1B
Rest of Asia8%$792M
Other3%$264M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMApr 2026
										Income statement
$19.1B	$20.6B	$16.6B	$16.7B	$16.9B	$18.8B	$6.3B	$6.3B	$9.5B	$11.8B	RevenueRevenue
32%	37%	23%	23%	27%	31%	22%	28%	39%	45%	Gross marginGross mgn
8%	7%	8%	7%	7%	6%	13%	11%	6%	5%	SG&A / revenueSG&A/rev
13%	12%	13%	14%	13%	12%	16%	15%	10%	10%	R&D / revenueR&D/rev
$2.0B	$3.6B	$87M	$335M	$1.2B	$2.4B	($548M)	($403M)	$2.3B	$3.6B	Operating incomeOp. inc.
10.2%	17.5%	0.5%	2.0%	7.2%	12.7%	−8.8%	−6.4%	24.5%	30.3%	Operating marginOp. mgn
$397M	$675M	($754M)	($250M)	$821M	$1.5B	($1.7B)	($798M)	$1.9B	$6.5B	Net incomeNet inc.
48%	—	—	—	11%	29%	—	—	—	7%	Effective tax rateTax rate
										Cash flow & returns
$3.4B	$4.2B	$1.5B	$824M	$1.9B	$1.9B	($408M)	($294M)	$1.7B	$3.3B	Operating cash flowOp. cash
$2.1B	$2.1B	$1.8B	$1.6B	$1.2B	$929M	$828M	$568M	$451M	$362M	DepreciationDeprec.
$518M	$1.1B	$183M	($800M)	($453M)	($921M)	$130M	($359M)	($914M)	($3.8B)	Working capital & otherWC & other
$578M	$835M	$876M	$647M	$1.1B	$1.1B	$821M	$487M	$412M	$381M	CapexCapex
3.0%	4.0%	5.3%	3.9%	6.8%	6.0%	13.1%	7.7%	4.3%	3.2%	Capex / revenueCapex/rev
$2.9B	$3.4B	$671M	$177M	$752M	$758M	($1.2B)	($781M)	$1.3B	$2.9B	Owner earningsOwner earn.
15.0%	16.3%	4.0%	1.1%	4.4%	4.0%	−19.6%	−12.4%	13.4%	24.7%	Owner earnings marginOE mgn
$2.9B	$3.4B	$671M	$177M	$752M	$758M	($1.2B)	($781M)	$1.3B	$2.9B	Free cash flowFCF
15.0%	16.3%	4.0%	1.1%	4.4%	4.0%	−19.6%	−12.4%	13.4%	24.7%	Free cash flow marginFCF mgn
$0	$100M	$0	$22M	$0	$0	—	—	—	$0	AcquisitionsAcquis.
$574M	$593M	$147M	$595M	$0	$0	$0	$0	$44M	$44M	Dividends paidDiv. paid
$0	$591M	$563M	$0	$0	—	$0	$0	$149M	—	BuybacksBuybacks
5%	10%	—	2%	7%	10%	-3%	-2%	30%	16%	ROICROIC
3%	6%	-8%	-3%	8%	13%	-15%	-7%	36%	67%	Return on equityROE
−2%	1%	−9%	−9%	8%	13%	−15%	−7%	35%	67%	Retained to equityRetained/eq
										Balance sheet
$6.5B	$5.1B	$3.5B	$3.0B	$3.4B	$2.3B	$2.0B	$1.6B	$2.1B	$2.2B	Cash & investmentsCash+inv
$1.9B	$2.2B	$1.2B	$2.4B	$2.3B	$2.8B	$1.6B	$1.2B	$1.5B	$1.9B	ReceivablesReceiv.
$2.3B	$2.9B	$3.3B	$3.1B	$3.6B	$3.6B	$3.7B	$1.4B	$1.3B	$1.4B	InventoryInvent.
$2.1B	$2.3B	$1.6B	$1.9B	$1.9B	$1.9B	—	$1.1B	$1.3B	$1.6B	Accounts payablePayables
$2.1B	$2.9B	$2.9B	$3.5B	$3.9B	$4.5B	$5.3B	$1.6B	$1.5B	$1.7B	Operating working capitalOper. WC
$11.1B	$10.6B	$8.5B	$9.0B	$9.8B	$9.5B	$7.9B	$8.1B	$5.9B	$6.9B	Current assetsCur. assets
$4.3B	$4.5B	$3.8B	$4.4B	$4.9B	$5.2B	$5.4B	$6.1B	$5.4B	$4.6B	Current liabilitiesCur. liab.
2.5×	2.4×	2.2×	2.1×	2.0×	1.8×	1.5×	1.3×	1.1×	1.5×	Current ratioCurr. ratio
$10.0B	$10.1B	$10.1B	$10.1B	$10.1B	$10.0B	$10.0B	$4.3B	$4.3B	$4.3B	GoodwillGoodwill
$29.9B	$29.2B	$26.4B	$25.7B	$26.1B	$26.3B	$24.5B	$24.2B	$14.0B	$15.0B	Total assetsAssets
$13.4B	$11.2B	$10.5B	$9.6B	$8.7B	$7.0B	$7.1B	$7.4B	$4.7B	$13.4B	Total debtDebt
$6.9B	$6.1B	$7.1B	$6.5B	$5.4B	$4.7B	$5.0B	$5.9B	$2.6B	$11.2B	Net debt / (cash)Net debt
2.3×	5.4×	0.2×	0.8×	3.7×	7.9×	-1.8×	-1.0×	6.5×	15.9×	Interest coverageInt. cov.
$11.4B	$11.5B	$10.0B	$9.6B	$10.8B	$12.3B	$11.0B	$10.8B	$5.3B	$9.7B	Shareholders’ equityEquity
2.1%	1.8%	1.8%	1.8%	1.9%	1.7%	5.1%	4.7%	2.8%	1.7%	Stock comp / revenueSBC/rev
										Per share
296M	307M	292M	298M	309M	316M	318M	326M	359M	381M	Shares out (diluted)Shares
$64.50	$67.25	$56.74	$56.16	$54.76	$59.47	$19.67	$19.38	$26.52	$30.91	Revenue / shareRev/sh
$1.34	$2.20	$-2.58	$-0.84	$2.66	$4.89	$-5.30	$-2.45	$5.26	$17.09	EPS (diluted)EPS
$9.66	$10.98	$2.30	$0.59	$2.43	$2.40	$-3.86	$-2.40	$3.56	$7.62	Owner earnings / shareOE/sh
$9.66	$10.98	$2.30	$0.59	$2.43	$2.40	$-3.86	$-2.40	$3.56	$7.62	Free cash flow / shareFCF/sh
$1.94	$1.93	$0.50	$2.00	$0.00	$0.00	$0.00	$0.00	$0.12	$0.12	Dividends / shareDiv/sh
$1.95	$2.72	$3.00	$2.17	$3.71	$3.55	$2.58	$1.49	$1.15	$1.00	Cap. spending / shareCapex/sh
$38.57	$37.56	$34.13	$32.05	$34.95	$39.00	$34.48	$33.18	$14.79	$25.41	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	−10.5%/yr	−13.9%/yr
Owner earnings / share	−11.7%/yr	+43.1%/yr
EPS	+18.6%/yr	—
Dividends / share	−29.2%/yr	−42.8%/yr
Capital spending / share	−6.4%/yr	−12.0%/yr
Book value / share	−11.3%/yr	−14.3%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Cloud+65.1%
“Cloud revenue increased by 65% in 2025 compared to 2024, primarily driven by a 36% increase in units sold and a 20% increase in average selling price per unit.”
✓ figure matches the filed record
Consumer-9.4%
“Consumer revenue decreased by 9% in 2025 compared to 2024, primarily driven by a 14% decrease in units sold, reflecting lower demand in the market, partially offset by a 5% increase in average selling price per unit as a result of a shift in product mix to higher capacity drives.”
✓ figure matches the filed record
Client-3.6%
“Client revenue decreased by 4% in 2025 compared to 2024, primarily driven by a 16% decrease in units sold, reflecting lower demand in the market, partially offset by a 14% increase in average selling price per unit as a result of a shift in product mix to higher capacity drives.”
✓ figure matches the filed record

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked.

Share count

359Mpeak FY2025

ROIC

30%low FY2023

Gross margin

39%low FY2023

Net debt ÷ owner earnings

2.0×peak FY2020

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.3Bowner earningsvs.$1.9Bnet incomelow FY2023

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $1.9B of profit but $1.3B of owner earnings: $610M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$1.9B

Owner earnings$1.3B · 13% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.9B	($798M)	($1.7B)	$1.5B	$821M
Depreciation & amortizationnon-cash charge added back	+$451M	+$568M	+$828M	+$929M	+$1.2B
Stock-based compensationreal costnon-cash, but a real cost	+$265M	+$295M	+$318M	+$326M	+$318M
Working capital & othertiming of cash in and out, other non-cash items	−$914M	−$359M	+$130M	−$921M	−$453M
Cash from operations	$1.7B	($294M)	($408M)	$1.9B	$1.9B
Capital expenditurecash put back in to keep running and to grow	−$412M	−$487M	−$821M	−$1.1B	−$1.1B
Owner earnings	$1.3B	($781M)	($1.2B)	$758M	$752M
Owner-earnings marginowner earnings ÷ revenue	13%	-12%	-20%	4%	4%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $265M), owner earnings is nearer $1.0B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 6.5×

Comfortable

Operating income $2.3B ÷ interest expense $357M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $11.2B · 4.8× operating profit

Heavy net debt

Cash $2.1B + ST investments $23M − debt $13.4B

What this means
Netting $2.1B of cash and short-term investments against $13.4B of debt leaves $11.2B owed, about 4.8× a year's operating profit (5.7× on the gross debt, before the cash). It also holds $93M in longer-dated marketable securities; counting those, it sits at $11.1B of net debt. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 59d

Tight

DSO 57 + DIO 81 − DPO 79 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 5%

Below average through the cycle

8-yr median, range -3%–30%; 14% latest = NOPAT $2.3B ÷ invested capital $16.6B

Industry peers: median 10%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 8 years (it ran 14% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 4%

Thin through the cycle

9-yr median margin, range -20%–16%; latest $1.3B = operating cash $1.7B − maintenance capex $412M

Industry peers: median 20%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 13% of revenue this year, a 4% median across 9 years. Treating stock comp as the real expense it is (less $265M of SBC) leaves $1.0B.
Are earnings backed by cash? 0.90×

Mostly cash-backed

Cash from ops $1.7B ÷ net income $1.9B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 15%

Reinvests most of it

Dividends + buybacks $193M ÷ Owner Earnings $1.3B

What this means
Of $1.3B Owner Earnings, $193M (15%) went back to shareholders, $44M dividends, $149M buybacks. But the buybacks barely exceed stock issued to employees ($265M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.91×

Maintaining

Capex $412M ÷ depreciation $451M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $9.5B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.08×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $13.4B vs $438M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (9-yr record) · 4 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 5 of 9 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −286%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.57/share (latest year $5.48), the averaged base the calculator's gate runs on, and book value is $15.41/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 5 of 9

What this means
Lost money in 4 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 1 of 9 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 9% → 3% (3-yr avg ends)

In the filing’s words The margin has held, but the filing names price competition — the pressure is present even where the margin has absorbed it so far.

What this means
The recent-years average (3%) sits below the early years (9%), but the latest year (25%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is 7% — read it across the cycle, not on the dip.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth −27%/yr

What this means
Owner earnings shrank about 27% a year over the record.
Worst year 2023 · −8.8% op. margin

What this means
Operations went underwater in 2023, understand why before trusting the good years.
Share count +2.4%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.
Dividend record paid

What this means
Paid a dividend in 5 of the years on record.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

“Demand for and prices of our products are influenced by, among other factors, the actual and projected growth of data to be stored, the spending plans of our large hyperscale customers, the balance between supply and demand in the storage market, macroeconomic factors (such as tariffs and actual or perceived threat of …”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 3, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$6.9B

Cash & short-term investments$2.1B
Receivables$1.9B
Inventory$1.4B
Other current assets$1.6B

Current liabilities$4.6B

Debt due within a year$1.6B
Accounts payable$1.6B
Other current liabilities$1.5B

Current ratio1.49×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.20×stricter: inventory excluded

Cash ratio0.45×strictest: cash alone against what's due

Working capital$2.3Bthe cushion left after near-term bills

Debt due this year vs. cash$1.6B due · $2.1B cash covered by cash on hand, no refinancing forced · both figures from the Apr 3, 2026 balance sheet

Revenue, latest quarter vs. a year ago+45.5%the freshest read on whether the business is still growing

Current ratio, recent quarters1.3× → 1.5×

Deeper floors

Tangible book value$5.3Bequity stripped of goodwill & intangibles

Net current asset value$1.5BGraham's net-net: current assets less all liabilities

Debt incl. operating leases$1.7B$143M of it operating leases

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$2.2B

'27$1.5B

'28$0

'29$500M

'30$0

Bars scaled to the largest single year.

Due in the next 12 months$2.2Bthe first rung: what must be repaid or rolled over within the year

Within two years$3.7Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$2.2Bin 2026the lumpiest maturity, where a refinancing, if needed, is largest

Due over the next five years$4.2Bthe near slice; the balance sheet carries $13.4B of debt in all

Against what the business has and earns

Cash & short-term investments, Apr 3, 2026$2.1B

One year of owner earnings (FY2025)$1.3B

Together, against $2.2B due next year1.5×

Cash on hand as of Apr 3, 2026 plus a year’s owner earnings comes to $3.4B against the $2.2B due in the twelve months after the Jun 27, 2025 schedule: 1.5 times it.

Maturity schedule extracted from the company’s Jun 27, 2025 annual report and reconciled to the balance-sheet debt.

How the cash was used, 2017–2025

Over the record, the business generated $14.8B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$6.9B · 47%
Dividends$2.0B · 13%
Buybacks$1.3B · 9%
Retained (debt / cash)$4.6B · 31%

Returned to owners$3.3B
41% of the owner earnings the business produced over the span, $2.0B as dividends and $1.3B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $0 and cash and short-term investments fell $4.3B.
Average price paid for buybacks$74.75
Across the years where the filing reports a share count, 10M shares were bought for $740M, about $74.75 each.
Net change in share count28.7%
The diluted count rose from 296M to 381M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$0.12/sh
Paid in 5 of the years on record, the per-share dividend shrinking about 29% a year. It was cut at least once along the way.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 9-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$4.4B31% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity81%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$122Mover 9 years buying other businesses, against $6.9B of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 9-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2021	$17.1M	$55.0M	$752M
2022	$32.1M	−$9.1M	$758M
2023	$11.0M	−$3.3M	($1.2B)
2024	$17.7M	$55.0M	($781M)
2025	$24.9M	$42.5M	$1.3B
2025	$11.5M	$15.5M	$1.3B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio1,321:1
What the chief earns for every dollar the median employee makes, per the 2025 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$265M
The slice of the business handed to employees in shares this year, 3% of revenue, equal to 11% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Western Digital Corporation is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

1 of the 6 tests turned up something to look into; the other 5 came back clean.

Look hereDid the share count rise anyway?28.7%
Diluted shares grew 28.7% over 2017–2025, even as the company spent $1.3B on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Inventory, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Technology Hardware

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
WDCWestern Digital Corporation	$9.5B	28%	7.2%	6%	4%
PANWPalo Alto Networks Inc.	$9.2B	72%	-4.0%	-10%	38%
STXSeagate Technology Holdings PLC	$9.1B	28%	13.2%	29%	11%
ANETArista Networks Inc.	$9.0B	64%	32.4%	33%	33%
SNDKSandisk Corporation	$7.4B	16%	-18.7%	-11%	-7%
NTAPNetApp Inc.	$6.9B	67%	18.8%	70%	20%
FTNTFortinet Inc.	$6.8B	77%	20.5%	—	36%
PEverpure Inc.	$3.7B	69%	-8.1%	-12%	12%
Group median	—	65%	10.2%	6%	16%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Western Digital Corporation has delivered.

Today’s price $

Base Normalize · through-cycle (($244M)) Net of stock comp (−$204M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−24%/yr

Owner-earnings growth · ’17→’25−27%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $2.9B on 345M shares outstanding, per the 10-Q cover, as of 2026-04-23; net debt $11.2B. The if-converted diluted count is 381M, 11% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh WDC against another business →

The owners of WDC: the meeting and the votes →

Cite: Owner Scorecard, "Western Digital Corporation (WDC), the owner's record," https://ownerscorecard.com/c/WDC, data as of 2026-07-09.

Manual order: ← WDAY its page in the Manual WDFC →

Industry order: ← VYX the Technology Hardware chapter XRX →