Western Digital Corporation announced a $4 billion increase to its share‑repurchase authorization, raising the total program to $8 billion. The company had $484 million remaining under the prior authorization as of February 2, 2026, and the new authorization will allow it to return capital to shareholders as cash flow permits.
In its fiscal second‑quarter 2026 earnings, Western Digital reported revenue of $3.10 billion, beating the consensus estimate of $2.92 billion by $0.18 billion (a 6.2% beat). Non‑GAAP diluted earnings per share were $2.13 versus the $1.91 forecast, a $0.22 or 11.5% beat. Free cash flow rose to $653 million, up from $599 million in the prior quarter, and the non‑GAAP gross margin expanded to 46.1% from 43.9% in Q1 FY2026. Ninety‑one percent of revenue came from the cloud and data‑center segment, underscoring the company’s exposure to AI‑driven demand.
CEO Irving Tan said the expanded buyback demonstrates confidence in Western Digital’s cash‑flow outlook and its commitment to shareholder value. He added that the company’s capital‑allocation strategy balances reinvestment, debt reduction, and returns to shareholders. CFO Kris Sennesael highlighted the guidance for a 47–48% gross margin in Q3 FY2026 and a 40% year‑over‑year revenue growth, reflecting the company’s focus on high‑margin HDDs and AI infrastructure. The company completed the spin‑off of its flash memory and SSD business, SanDisk, in February 2025, and is monetizing its remaining stake to further reduce debt.
Management guidance for fiscal third quarter 2026 projects revenue of $3.20 billion ±$100 million and a gross margin of 47–48%. The outlook reflects continued demand from hyperscalers and the company’s investment in advanced technologies such as HAMR, ePMR, and UltraSMR, which support higher‑capacity, higher‑margin products. The guidance also signals confidence in sustaining the 40% year‑over‑year revenue growth trajectory driven by AI and cloud workloads.
Investors responded positively to the buyback expansion, citing confidence in Western Digital’s strong free‑cash‑flow generation and its strategic focus on AI‑driven data‑center demand. The Q2 earnings beat reinforced the company’s execution, while the guidance for Q3 indicates continued momentum and a clear path to higher margins and revenue growth.
Western Digital’s $4 billion buyback expansion, combined with robust Q2 results and forward guidance, signals a firm commitment to returning capital to shareholders while maintaining a disciplined approach to debt reduction and investment in high‑margin storage technologies. The move positions the company to capitalize on the accelerating AI and cloud data‑center markets while preserving financial flexibility.
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