The company is actively pursuing a plan to separate its HDD and Flash business units to create two independent public companies. The soft-spin phase, involving testing critical processes and systems, has commenced, with the separation expected after the second quarter of fiscal 2025.

Western Digital completed the sale of 80% equity interest in its Flash manufacturing subsidiary (SDSS) to JCET, a contract manufacturing company. This transaction is expected to reduce operating expenses and capital expenditures, while a 5-year supply agreement with JCET ensures continued wafer supply.

Cloud revenue increased by 153% year-over-year, driven by a 140% increase in exabytes sold and a 7% increase in average selling prices. This growth reflects strong demand from new data center builds and improved pricing in the Flash market.

Management's efforts to reduce operating expenses and proactively manage supply and inventory have contributed to improved profitability. Actions such as scaling back capital expenditures and consolidating production lines have helped align supply with demand.

The company proactively managed the supply-demand imbalance by reducing operating expenses and scaling back production. These measures resulted in incremental charges in the first quarter of 2024 but positioned the company for improved profitability as market conditions recover.

The company made payments aggregating $153 million for tax and interest related to years 2008-2015, reducing the remaining liability to $10 million. This demonstrates progress in resolving long-standing tax matters with the IRS.

The company acknowledges that macroeconomic factors such as inflation, interest rates, and recession concerns have softened demand for its products. These conditions have contributed to a supply-demand imbalance and negatively impacted pricing.

The company is involved in ongoing legal proceedings, including intellectual property litigation, which could result in significant financial liabilities. For example, the company recognized a $384 million liability related to the MR Technologies litigation.

The company's top 10 customers accounted for 51% of its net revenue, and one customer accounted for 14%. This concentration exposes the company to potential risks associated with the financial health and purchasing decisions of these key customers.

The company is seeing an improvement in the supply and demand dynamic, leading to improved revenues. The increase in demand resulted in increased revenue and gross margin across our segments in the first quarter of 2025 from the comparable period in the prior year.

The company is leveraging its expertise and innovation in both HDD and Flash technologies to capitalize on improved market conditions. The increase in average selling prices per gigabyte was primarily due to improved pricing in Flash as the supply-demand balance improved.

The company is seeing higher shipments of its high-capacity enterprise HDD products stemming from new data center builds. This strategic focus on high-capacity drives is helping to drive revenue growth in the Cloud segment.

The company is seeing an improvement in the supply and demand dynamic, leading to improved revenues. The increase in demand resulted in increased revenue and gross margin across our segments in the first quarter of 2025 from the comparable period in the prior year.

The company proactively managed the supply-demand imbalance by reducing operating expenses and scaling back production. These measures resulted in incremental charges in the first quarter of 2024 but positioned the company for improved profitability as market conditions recover.

The sale of 80% equity interest in its Flash manufacturing subsidiary (SDSS) to JCET, a contract manufacturing company, is expected to reduce operating expenses and capital expenditures.

Research and development (“R&D”) expense increased by $88 million for the three months ended September 27, 2024 from the comparable period in the prior year. The increase was driven by a $56 million increase in compensation and benefits due to higher variable compensation and increased headcount, a $10 million increase in material purchases, and modest increases in spending for R&D projects as we continue to invest in innovation.

The company is a leading developer, manufacturer, and provider of data storage devices based on both hard disk drive and NAND flash technologies. With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful HDD and Flash storage solutions.

The company has facility agreements with Kioxia related to the construction and operation of Kioxia's “K1” 300-millimeter wafer fabrication facility in Kitakami, Japan, a wafer fabrication facility in Yokkaichi, Japan, referred to as “Y7”, and a wafer fabrication facility in Kitakami, Japan, referred to as “K2”.

In 2024, we reduced our expenditures for property, plant and equipment and our portion of the Flash Ventures' capital expenditures for its operations to approximately $825 million from approximately $2.22 billion in 2023.

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.

During the three months ended September 27, 2024, net cash used in financing activities primarily consisted of $188 million for repayment of amounts borrowed under the revolving credit facility and scheduled repayments on the Term Loan A-2, and $64 million for taxes paid on vested stock awards under employee stock plans, partially offset by $150 million of proceeds from drawing on the revolving credit facility.

The provided 10-Q filing does not contain specific information regarding ESG initiatives, environmental commitments, social responsibility initiatives, or governance practices.

We are now seeing an improvement in the supply and demand dynamic, leading to improved revenues. The increase in demand resulted in increased revenue and gross margin across our segments in the first quarter of 2025 from the comparable period in the prior year.

We anticipate that digital transformation, including the AI data-cycle, will continue to drive improved market conditions in the near- and long-term for data storage, encompassing HDD and Flash technologies.

Macroeconomic factors such as inflation, changes in interest rates, and recession concerns softened demand for our products during 2023 and the first half of 2024.