What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-08-14 compared with 2025-08-14 · 79 added, 64 removed, 106 unchanged (57% of the section changed)

1 unchanged sentence

We are a leading developer, manufacturer, and provider of data storage devices and solutions based on hard disk drive (“HDD”) 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.

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 focusing on our existing HDD business and Sandisk Corporation (“Sandisk”), formerly a wholly-owned subsidiary of the Company, holding the Flash business.

We believe the Separation better positions each business unit to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership positions, operate more efficiently with distinct capital structures, and pursue capital allocation strategies that maximize long-term shareholder value.

As global data creation continues to accelerate, particularly in the age of AI, and as the need to store and retain data also grows, we believe HDDs will continue to remain the preferred technology for storing large volumes of data as the most economical solution to the large cloud data centers for their mass storage needs.

We believe Western Digital is well positioned as a leading supplier in the industry given the depth of our industry knowledge and the breadth of our product portfolio.

We are a customer-focused organization that has developed deep relationships with industry leaders to deliver innovative solutions to help users capture, store and transform data across a boundless range of applications.

With much of the world’s data stored on Western Digital products, our innovation powers the global technology ecosystem — anchored in the cloud, and extending from consumer devices to the edge — enabling the data-driven future, including AI and emerging applications.

Our broad portfolio of technology and products addresses our customers’ storage needs through multiple end markets:

“Cloud,” “Client” and “Consumer” and is comprised of the Western Digital® and WD® brands.

Cloud represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers.

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

At Western Digital, we believe that data storage provides the strategic foundation for the AI-driven data economy.

We focus on designing and building data storage solutions that are intelligent, efficient, and reliable.

We execute on this mission through rigorous scientific research, engineering excellence, and deep customer collaboration, so that each product advancement provides value for our customers and shareholders.

With much of the world’s data stored on Western Digital products, our innovation helps drive the global storage technology ecosystem, anchored in the cloud, and extending from consumer devices to the edge.

Our broad portfolio of technology and products, sold under the Western Digital® and WD® brands, addresses our customers’ storage needs through multiple end markets:

“Cloud,” “Client” and “Consumer”.

Cloud represents our largest and fastest growing end market comprised primarily of products for public or private cloud environments and enterprise customers.

We enable cloud, Internet and social media infrastructure players to build more powerful, cost-effective and efficient data centers.

We provide the Cloud end market with an array of high-capacity enterprise HDDs and platforms.

Our capacity enterprise HDDs address growing storage demands with high reliability, easy scalability, and lower time to value for our customers — all while delivering a low total cost of ownership for cloud data center and smart video system markets.

We provide the Cloud end market with an array of high-capacity enterprise HDDs.

Our high-capacity enterprise HDDs address growing storage demands with high reliability, easy scalability, and lower time to value for our customers — all while delivering a low total cost of ownership for cloud data center and smart video system markets.

These drives are primarily for use in data storage systems, in tiered storage models and where data must be stored reliably for years.

We also provide higher value data storage platforms to the market.

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.

Our products are designed for use in devices requiring high performance, reliability and capacity with various attributes such as low cost per gigabyte, quiet acoustics, and low power consumption.

We have also built strong consumer brand recognition with tools to manage vast libraries of personal content and to push the limits of what is possible for storage.

We serve the Consumer end market with a portfolio of HDD external storage products and our vast presence around the world through our retail and channel routes to market.

We have also built strong consumer brand recognition with tools to help individuals manage vast libraries of personal content and to push the limits of what is possible for storage.

We serve the Consumer end market with a portfolio of HDD external storage products that we offer globally through our retail and channel partners.

We operate in the data storage industry.

The ability to access, store and share data from anywhere on any device is increasingly important to our customers and end users.

From the intelligent edge to the cloud, data storage is a fundamental component underpinning the global technology architecture.

Our strengths in innovation, areal density and cost leadership provide a foundation upon which we are solidifying our position as an essential building block of the digital economy.

From the intelligent edge to the cloud, data storage is not just foundational to AI, but also a fundamental component underpinning global technology architecture.

Our strengths in innovation, areal density and cost leadership provide a foundation upon which we are solidifying our position as an essential building block of the AI-driven data economy.

We believe there is tremendous market opportunity created by the rapid global adoption of technology built with cloud infrastructure, connected intelligent devices, and high-performance networks.

1 unchanged sentence

While this growth has led to the creation of several form factors for data storage and an increasing use of a tiered architecture approach, HDDs occupy a unique place in the market by providing an economical means to create, store and utilize an increasing amount of data in the age of AI.

We believe HDDs provide a sustainable total cost of ownership (TCO) advantage to our cloud customers to meet their storage needs.

We believe HDDs provide a sustainable total cost of ownership advantage to our cloud customers to meet their storage needs.

Research and Technology

7 unchanged sentences

HDD products provide non-volatile data storage by recording magnetic information on rotating disks.

We develop and manufacture substantially all of the recording heads and magnetic media used in our HDD products.

We have led the industry in innovation to drive increased areal density and high-performance attributes.

We design and manufacture substantially all of the recording head and magnetic media in our HDD products, positioning us as an industry leader in innovations that drive higher areal density and superior performance.

Our improvements in HDD capacity, which lower product costs over time, have been enabled largely through advancements in magnetic recording head and media technologies.

Our multi-year product roadmap for high-capacity HDDs, which include ePMR, OptiNAND, UltraSMR and triple stage actuators to deliver a cutting-edge portfolio of drives, in commercial volumes, at a wide variety of capacity points, puts Western Digital in a strong position to capitalize on the opportunities presented by the large and growing storage markets.

Our multi-year product roadmap for high-capacity HDDs, which include ePMR, OptiNAND, UltraSMR, heat-assisted magnetic recording (“HAMR”) and triple stage actuators to deliver a cutting-edge portfolio of drives, in commercial volumes, at a wide variety of capacity points, puts Western Digital in a strong position to capitalize on the opportunities presented by the large and growing storage markets.

We invest considerable resources in R&D, manufacturing infrastructure and capital equipment for recording head and media technology, as well as other aspects of the magnetic recording system such as HDD mechanics, controller and firmware technology, in order to secure our competitive position and cost structure.

1 unchanged sentence

This platform strategy also enables our customers to leverage their qualification efforts onto successive product models.

We believe we are well-positioned in our competitive industry with our leading product portfolio, differentiated innovation engine, global manufacturing footprint, and leadership in driving areal density and cost efficiency.

We believe we are well-positioned in a competitive industry with our leading product portfolio, differentiated innovation engine, global manufacturing footprint, and leadership in driving areal density and cost efficiency.

Nevertheless, we face strong competition from several manufacturers of storage products and storage systems and solutions, whether directly or indirectly.

4 unchanged sentences

By understanding our customers’ needs, together we can help them unlock the value and power of data that we are starting to see come to the fore, especially in this age of AI.

Our overall strategy focuses on leadership, innovation and execution, with a goal of furthering Western Digital as an industry-leading and broad-based developer, manufacturer and provider of storage devices and solutions that support the infrastructure that has enabled a proliferation of data.

Our overall strategy focuses on leadership, innovation and execution, based on our core capabilities grounded in magnetics and photonics expertise and our strength in nano-feature fabrication.

Our goal is to further WD as an industry-leading and broad-based developer, manufacturer and provider of advanced technology storage devices and solutions that support and enable the proliferation of data.

We believe this positions us well for emerging opportunities in adjacent and new technology markets.

Our strategy reflects the following foundational elements:

(1) Enhanced customer focus for driving greater customer advocacy and deeper customer engagement, (2) Product and technology leadership for realizing the best total cost of ownership through disciplined product management, (3) Rigorous financial discipline by having a clear capital allocation strategy, ambitious financial targets and prudent capital investment, (4) Operational excellence for driving best-in-class cost to achieve industry-leading margin profiles with strong execution, (5) Innovation and growth for creating new products and applications and identifying new market opportunities, and (6) High performance teams with the skill sets to meet go-forward business needs.

(1) Enhanced customer focus for driving greater customer advocacy and deeper customer engagement across our current and future addressable markets, (2) Product and technology leadership for realizing the best total cost of ownership through disciplined product management and for enabling innovation in new product categories, (3) Rigorous financial discipline by having a clear capital allocation strategy, ambitious financial targets and prudent capital investment, (4) Operational excellence for driving best-in-class cost to achieve industry-leading margin profiles with strong execution, (5) Innovation and growth for creating new products and applications and identifying new market opportunities, and (6) High performance teams with the skill sets to meet go-forward business needs.

Patents, Licenses and Proprietary Information

14 unchanged sentences

We believe that we have significant know-how, unique product manufacturing processes, test and tooling, execution skills, human resources and training to continue to be successful and to adjust our manufacturing operations as necessary.

We strive to maintain manufacturing flexibility, high manufacturing yields, reliable products and high-quality components.

We strive to maintain manufacturing flexibility, achieve high manufacturing yields, and produce reliable products and high-quality components.

The critical elements of our production are high volume and utilization, low-cost assembly and testing, strict adherence to quality metrics and maintaining close relationships with our strategic component suppliers to access best-in-class technology and manufacturing capacity.

5 unchanged sentences

We also leverage contract manufacturers when strategically advantageous.

HDD consists primarily of recording heads, magnetic media, controllers and firmware and a printed circuit board assembly.

HDD consists primarily of recording heads, magnetic media, controllers and firmware and printed circuit board assembly.

We design and manufacture substantially all of the recording heads and magnetic media required for our products.

we are more dependent upon our own development and execution efforts for these components and less reliant on recording head and magnetic media technologies developed by other manufacturers.

As a result, we are more dependent upon our own development and execution efforts for these components and less reliant on recording head and magnetic media technologies developed by other manufacturers.

We depend on an external supply base for all remaining components and materials for use in our design, manufacturing and testing.

We believe the use of our in-house manufacturing, assembly and test facilities offers the controls necessary to provide the demanding capabilities, performance and reliability our customers require.

We believe the use of our in-house manufacturing, assembly and test facilities offers the control necessary to provide the demanding capabilities, performance and reliability our customers require.

Our vertically integrated, in-house assembly and test operations are concentrated in Prachinburi and Bang Pa-In, Thailand;

2 unchanged sentences

Shenzhen, China;

and San Jose and Fremont, CA, USA.

and San Jose and Fremont, California, USA.

We generally retain multiple suppliers for our component requirements, but for business or technology reasons, we source some of our components from a limited number of sole or single source providers.

1 unchanged sentence

Sales and Distribution

We sell our products to cloud service providers, computer manufacturers and OEMs, resellers, distributors and retailers throughout the world.

We maintain sales offices in selected parts of the world including the major geographies of the Americas, Asia Pacific, Europe and the Middle East.

We focus on markets where our storage technologies deliver exceptional scale, efficiency, and economics.

By combining HDD innovation with systems, firmware, and software, we enable customers to manage and monetize data at global scale.

We sell our products to hyperscale cloud service providers, neoclouds, computer manufacturers and OEMs, resellers, distributors and retailers throughout the world, utilizing long-term agreements with certain customers.

Our sales organization blends technical depth with market expertise, enabling effective engagement with customers across diverse use cases.

Our sales engagements mostly involve sales, customer technical support engineers, and product engineers, who support pre-sales and post-sales activities, collaborating with customers to design, test, and qualify system solutions built on our technologies.

Our sales and marketing teams are strategically located across the major geographies of the Americas, Asia Pacific, Europe and the Middle East.

Our international sales, which include sales to foreign subsidiaries of U.S.

3 unchanged sentences

For a discussion of such risks, see Part I, Item 1A, Risk Factors , of this Annual Report on Form 10-K.

We perform our marketing and advertising functions both internally and through outside firms utilizing both consumer media and trade publications targeting various reseller and end-user markets.

We also maintain customer relationships through direct communication and by providing information and support through our website.

In accordance with standard storage industry practice, we provide distributors and retailers with limited price protection and programs under which we reimburse certain marketing expenditures.

We also provide distributors, resellers and OEMs with other sales incentive programs.

We perform our marketing and advertising functions through a combination of internal teams and outside firms utilizing business and consumer media as well as trade publications to engage our end-user markets.

We maintain customer relationships through direct communication and by providing information and support through our digital platforms.

In accordance with standard storage industry practice, we offer distributors and retailers limited price protection and programs under which we reimburse certain marketing expenditures.

We also offer sales incentive programs to distributors, resellers, and OEMs.

For 2026, three customers accounted for 16%, 15%, and 13%, respectively, of our net revenue.

For 2024 and 2023, no single customer accounted for 10% or more of our net revenue.

For 2025, three customers accounted for 17%, 12%, and 10%, respectively, of our net revenue.

For 2024, no single customer accounted for 10% or more of our net revenue.

Cyclicality and Seasonality

Our business is subject to variability of sales because it is largely dependent on the buying patterns of our large Cloud customers, driven by their needs for deploying our technology in their data center buildouts, as well as on their ability to procure other products that go into such buildouts.

Although much less than in the past, our business is subject to variability of sales because it is largely dependent on the buying patterns of our large Cloud customers, driven by their needs for deploying our technology in their data center buildouts, as well as on their ability to procure other products that go into such buildouts.

Our business is also impacted by cyclicality in the industry, as well as macroeconomic factors.

1 unchanged sentence

Service and Warranty

We generally warrant our newly manufactured products against defects in materials and workmanship from one to five years from the date of sale depending on the type of product, with a small number of products having a warranty ranging up to ten years or more.

We generally warrant our newly manufactured products against defects in materials and workmanship for up to five years from the date of sale depending on the type of product.

Our warranty obligation is generally limited to repair or replacement.

1 unchanged sentence

For additional information regarding our service and warranty policy, see Part II, Item 8, Note 1, Organization and Basis of Presentation, and Note 5, Supplemental Financial Statement Data, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Human Capital

Our people strategy supports our vision of unleashing the power and value of data and our mission to be the market leader in data storage, delivering solutions for now and the future.

At the end of 2026, we employed approximately 40,000 people worldwide.

Our diverse team spans 24 countries with approximately 88% of our employees in Asia Pacific, approximately 11% in the Americas and less than 1% in Europe, the Middle East and Africa.

Our global workforce spans 24 countries with approximately 88% of our employees in Asia Pacific, approximately 11% in the Americas and less than 1% in Europe, the Middle East and Africa.

Talent Growth and Engagement

We invest in developing our people to lead us into the future.

We invest in developing our people to lead us into the future, and as AI transforms work, we remain human-first, helping them grow, adapt, and thrive.

To help our employees reach their full potential, we aim to cultivate an environment that encourages learning, development and career growth.

We are providing training to our employees to help them adopt AI, become future-ready, and improve their productivity.

Our performance framework includes setting goals to establish clear expectations and receiving feedback and coaching to achieve them.

3 unchanged sentences

We continue to foster the next generation of talent through our intern and new college graduate recruitment programs, and we converted about 40% of our eligible global intern population to employees in 2025.

We have a U.S.

Department of Labor approved apprenticeship program, serving as a career pathway for veterans and other underserved populations, which helps us build a workforce that mirrors the communities that we serve.

In 2026, we became an approved employer for the U.S.

Department of Defense SkillBridge program, serving as a career pathway for veterans who are transitioning to the civilian workforce.

We believe employee engagement is key to performance and retention and that by listening to our employees we can better understand how we enable them to do their best work.

1 unchanged sentence

We strive to cultivate an inclusive environment where every individual feels valued, respected, and appreciated, thereby enabling them to contribute effectively to the organization and excel in their roles.

Our initiatives celebrate the diversity of our workforce and ensure that all voices are heard.

Our Employee Resource Groups are employee-led and foster connections based on a shared identity or background and are open to all employees who want to join.

Our initiatives celebrate the varied perspectives, talents, and backgrounds of our workforce and ensure that all voices are heard.

Our Driver Resource Groups are employee-led and foster connections based on a shared identity or background and are open to all employees who want to join.

We continued our commitment to conducting business in an ethical way around the world.

In 2025, we were named one of the World’s Most Ethical Companies by Ethisphere for the seventh consecutive year.

In 2026, we were named one of the World’s Most Ethical Companies by Ethisphere for the eighth consecutive year.

Our employees also regularly participate in philanthropy to support the communities in which they work and live.

In 2026, more than half of our employees around the world gave their time to participate in company-sponsored volunteer events.

Compensation and Benefits

We believe that recognition is crucial for retaining and motivating our employees, and we are committed to rewarding performance with competitive compensation consisting of base salary and short-term and long-term incentives.

Total Rewards

We believe that competitive compensation is crucial for retaining and motivating our employees, and we are committed to rewarding performance with competitive compensation consisting of base salary and short-term incentives and, for select roles, long-term incentives.

We also offer a global recognition program to celebrate the contributions of employees who bring to life our core values:

Customers, Results, Connection, Excellence, and Innovation.

We invest in the physical, mental and financial well-being of our people through a dynamic and differentiated Total Rewards program that aligns to our culture and values.

We invest in the physical, mental and financial well-being of our people through dynamic and differentiated benefit programs that align to our culture and values.

We provide competitive benefits (which vary by country or region), including health coverage, life and disability insurance, retirement plans, paid time off, employee assistance program, and employee stock purchase plan.

We benchmark our compensation and benefits programs annually using market data from reputable third-party consultants.

We benchmark our Total Rewards programs annually using market data from reputable third-party consultants.

We also conduct internal focus groups and employee surveys to inform programs and identify opportunities.

4 unchanged sentences

Government Regulation

Our worldwide business activities are subject to various laws, rules and regulations of the United States as well as of foreign governments.

Our worldwide business activities are subject to various laws, rules and regulations of the U.S.

as well as of foreign governments.

Compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, the environment, consumer and data protection, employee health and safety, and taxes, could have a material impact on our capital expenditures, earnings, competitive position and overall business.

See Part I, Item 1A, Risk Factors for a discussion of these potential impacts.

See Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K for a discussion of these potential impacts.

Corporate Responsibility and Sustainability

At Western Digital, sustainability is about innovating with technology to positively impact our future.

We believe that sustainability can create value for everyone in our value chain and serves as a competitive differentiator, while minimizing our environmental footprint, influencing our ecosystem, empowering and connecting our stakeholders and embedding sustainability in our decision-making processes.

Our sustainability strategy is reflected through sustainability-focused initiatives as well as day-to-day activities, including our adoption of sustainability-focused policies and procedures, fostering an inclusive workplace, our constant drive toward more efficient use of materials and energy, our careful and active management of our supply chain, our community-focused volunteerism programs and philanthropic initiatives and our impactful, globally-integrated ethics and compliance program.

• We work to minimize our impact on the environment by reducing emissions, water withdrawal and waste to landfills, and by evaluating and enhancing our climate resiliency.

• We strive to innovate in ways that reduce the energy used by our products, the energy used to manufacture them and the amount of new materials required to manufacture them.

• We actively collaborate with customers, suppliers, industry associations, governments, academics, standards organizations and industry partners to generate value, reduce emissions across the ecosystem, and increase circularity to reduce raw materials extraction.

• We seek to foster a workplace of inclusion by hiring and developing team members with different experiences and creating opportunities for connections across the company through our Employee Resource Groups.

• We are guided by our global pillars centered on hunger relief, environmental quality and STEM (science, technology, engineering and math) education and activate employees locally to have an impact on their community.

• We seek to protect the human rights and civil liberties of our employees through policies, procedures and programs that avoid risks of compulsory and child labor, both within our company and throughout our supply chain.

• We educate our employees annually on relevant ethics and compliance topics, publish accessible guidance on ethical issues and related company resources in our Global Code of Conduct and encourage reporting of ethical concerns through any of several global and local reporting channels.

• We set new environmental goals post-Separation to expand our focus to include carbon-free energy alternatives, add an upstream direct emissions reduction goal and goals for increasing recycled content in products and packaging for our enterprise HDD portfolio.

At WD, we incorporate sustainability into our business strategy and operations to support long-term value creation.

Through environmental stewardship, stakeholder empowerment, and responsible business practices, we drive sustainable data storage technologies that deliver meaningful progress toward a responsible AI infrastructure.

Environmental Stewardship:

We help protect the planet and the environment by setting and delivering robust environmental targets and driving innovation, accountability, and partnerships for systemic impact.

• We work to reduce energy consumption, greenhouse gas emissions, water withdrawal, and waste to landfills, and innovate to enhance the energy and material efficiency of our products.

In 2025, we achieved 66% carbon-free energy to power our global operations as well as reduced emissions by 31% per petabyte from customers’ use of sold products from 2020.

• We periodically assess and disclose climate-related risks and opportunities and implement measures to mitigate relevant risks and enhance climate resiliency.

• We collaborate with customers, suppliers, industry associations, governments, academics, and standards organizations to reduce emissions across our ecosystem, and increase circularity to reduce raw materials extraction, enabled by our Advanced Recovery and Rare Earth Material Capture program.

• In the latest sustainability assessments, we earned a Carbon Disclosure Project A‑ Leadership level rating for climate in 2025 and were included in the 2026 S&P Dow Jones Best‑in‑Class Index North America.

Stakeholder Empowerment:

We engage stakeholders across our value chain, including our workforce, customers, suppliers, and communities.

• We support an inclusive workplace by developing team members through a variety of experiences and creating opportunities for connections across the company through our Driver Resource Groups.

• Our corporate philanthropy strategy focuses on hunger relief, environmental stewardship and science, technology, engineering and math (“STEM”) education, and we activate employees to create positive impact on their local communities.

• We implement policies, procedures, and programs designed to uphold human rights and mitigate risks of compulsory and child labor within our operations and supply chain.

• We engage targeted suppliers for most material sustainability issues, including decarbonization, human rights, and responsible minerals.

Responsible Business:

We build trust through principled leadership, embedding accountability, integrity, and sustainability into decision-making processes.

• We establish policies and practices to support the responsible, ethical, and secure development, deployment, and usage of AI.

As AI becomes a greater part of our daily experience and product offerings, we implemented an AI policy to effectively manage and mitigate AI-related risks.

• We educate our employees annually on relevant ethics and compliance topics, publish guidance on ethical issues in our Global Code of Conduct and support the reporting of concerns through global and local reporting channels.

Available Information

1 unchanged sentence

The information on our website is not incorporated in this Annual Report on Form 10-K.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available on our website at www.westerndigital.com , free of charge, as soon as reasonably practicable after the electronic filing of these reports with, or furnishing of these reports to, the Securities and Exchange Commission (“SEC”).

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including us.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business