WDC Profit Margins
Gross, Operating & Net Margin Analysis for Western Digital Corp
Margin Quality
Good
Current Profit Margins
Gross Margin
38.8%
$3.69B gross profit
Operating Margin
24.5%
$2.33B operating income
Net Profit Margin
19.8%
$1.89B net income
5-Year Margin Trends
What Margins Indicate About WDC
Business Quality
Moderate gross margins indicate Western Digital Corp operates in a competitive market with balanced pricing dynamics.
Operational Efficiency
Expanding operating margins show Western Digital Corp is improving operational leverage and cost management.
Profitability
Net margins above 15% demonstrate excellent profitability and suggest strong competitive positioning.
Investment Implications
Expanding margins across the board suggest improving business fundamentals, which often supports stock price appreciation.
Understanding Profit Margins
Gross Margin
(Revenue - Cost of Goods Sold) / Revenue. Measures pricing power and production efficiency before operating expenses.
Operating Margin
Operating Income / Revenue. Shows profitability from core operations after all operating expenses but before interest and taxes.
Net Profit Margin
Net Income / Revenue. The bottom line - shows how much profit the company keeps from each dollar of revenue after all expenses.
Analyze WDC Profitability
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Frequently Asked Questions
What is WDC's profit margin?
WDC (Western Digital Corp) has a net profit margin of 19.8%, meaning the company keeps $0.19842436974789915 in profit for every dollar of revenue. This represents an improvement from the previous year's net margin of 10.8%.
What is WDC's gross margin?
WDC's gross margin is 38.8%. Gross margin measures the percentage of revenue remaining after subtracting the cost of goods sold. A moderate gross margin like this reflects the competitive dynamics of the Information Technology.
What is WDC's operating margin?
WDC has an operating margin of 24.5%. Operating margin shows profitability after operating expenses but before interest and taxes. The 24.5% year-over-year improvement suggests better operational efficiency.
Are WDC's profit margins good?
WDC's margins are considered good. When evaluating margins, it's important to compare against Technology Hardware, Storage & Peripherals peers, as different sectors have structurally different margin profiles.
How do profit margins affect WDC stock?
Profit margins are a key indicator of WDC's business quality and competitive position. High margins suggest strong competitive advantages and pricing power, which typically support premium valuations. Expanding margins often lead to stock price appreciation, while contracting margins can signal competitive pressures.
What drives WDC's profit margins?
WDC's profit margins are influenced by several factors: pricing power vs competitors, operational efficiency, scale advantages, input costs (materials, labor), Technology Hardware, Storage & Peripherals-specific dynamics, and management execution. The significant expansion in gross margin suggests changes in these underlying drivers.
Disclaimer: Margin analysis is based on reported financial statements and should be compared to industry peers for context. Different sectors have structurally different margin profiles. This information is for educational purposes only and should not be considered financial advice.