Western Digital (WDC) Financial History

The exclusive forum provisions in our Bylaws may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the company or its directors, officers or other employees, which ma…

The Delaware Exclusive Forum Provision is intended to apply to claims arising under Delaware state law and would not apply to claims brought pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange A…

Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or the federal district court in the State of Delaware if the Court of Ch…

We are subject to, and may become subject to, additional, state, federal and international laws and regulations governing our environmental, labor, trade, health and safety practices and public company reporting and d…

Moreover, from time to time, we agree to indemnify certain of our suppliers and customers for alleged IP infringement.

alleged patent infringement and notices of patents from patent holders that we receive from time to time.

We are subject to laws, rules and regulations relating to the collection, use, security and privacy of data, including data that relates to or identifies an individual person.

On February 21, 2025, we completed our planned spin-off of our Flash business unit from our remaining HDD business (which we refer to as the Separation), as a result of which Sandisk Corporation (“Sandisk”) became an…

We utilize debt financing in our capital structure.

Our incurrence of additional debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions.

We have experienced cybersecurity incidents of varying degrees on our technology infrastructure and information systems and, as a result, unauthorized parties have obtained in the past, and may obtain in the future, a…

The variety and volume of products we manufacture are based in part on accurately forecasting market and customer demand for our products, which are influenced by a wide variety of factors.

We have historically experienced variability in our sales and cyclicality in our industry, which could cause our operating results to fluctuate.

We may incur losses beyond the limits of, or outside the scope of, the coverage of our insurance policies.

We conduct our operations primarily at large, high-volume, purpose-built facilities in California and throughout Asia.

Additionally, if there is consolidation among our customer base, our customers may be able to command increased leverage in negotiating prices and other terms of sale, which could negatively impact our profitability.

While our ASPs tend to be relatively stable, we may experience periods during an industry downturn when we face adverse headwinds to our ASPs.

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…

Tariffs or other trade restrictions may also lead to negative economic impacts for our customers, declining consumer confidence, significant inflation and diminished expectations for the economy, as well as ultimately…

Our business, financial condition and results of operations may be adversely affected by uncertainty and changes in U.S.

Our revenue growth is significantly dependent on the growth of international markets, and we are subject to risks that could harm our business associated with our global manufacturing operations, global sales efforts…

Our strategic relationships are subject to additional risks that could harm our business, including, but not limited to, the following: failure by our strategic partners to comply with applicable laws or employ effect…

We have entered into and expect to continue to enter into strategic relationships with various partners for product development, manufacturing, sales growth and the supply of technologies, components, equipment and ma…

Cost saving measures, restructurings and divestitures have had and may in the future result in workforce reduction and consolidation of our facilities.

Our success depends upon the continued contributions of our talent.

Our standard warranties contain limits on damages and exclusions of liability for consequential damages and for misuse, improper installation, alteration, accident or mishandling while in the possession of someone oth…

Further, some of our competitors offer products that we do not offer, which may allow them to win sales from us.

We may also experience changes to our customer base, such as a greater portion of our business shifting to neocloud and other customers.

for our storage products could decline, and prior investments we have made in anticipation of storage demand may not generate the returns we expect.

We must also qualify our products with customers through potentially lengthy testing processes with uncertain results.

The markets for our products continuously undergo technology transitions that can impact our product roadmaps and that we must anticipate in order to adapt our existing products or develop new products effectively.

If demand declines for any reason, and/or we fail to respond to changes in demand, in Cloud or other key customers, our business could suffer.

There is significant revenue concentration in our Cloud end market and among our top customers.

Loss of revenue from Cloud or other key customers could harm our operating results.

organizational documents has been challenged in legal proceedings, and it is possible that a court could find any of our exclusive forum provisions to be inapplicable to, or unenforceable in respect of, one or more of…

our operating results.

for patent infringement are excluded from coverage under our insurance policies.

Department of the Treasury and Internal Revenue Service could change our conclusions regarding such impact.

Changes in tax laws in the United States, the European Union and around the globe have impacted and will continue to impact our effective worldwide tax rate, which may materially affect our financial position and resu…

Our ability to meet our debt service obligations, comply with our debt covenants and deleverage depends on our cash flows and financial performance, which are affected by financial, business, economic and other factors.

Our strategic relationships are subject to additional risks that could harm our business, including, but not limited to, the following: failure by our strategic partners to comply with applicable laws or employ effect…

Our control over the operations of our business ventures may be limited, and our interests could diverge from our strategic partners’ interests regarding ongoing and future activities.

We also face significant competition in the distribution channel (in which our distribution customers sell to small computer manufacturers, dealers, systems integrators and other resellers, as well as to Cloud custome…

We participate in a highly competitive industry that is subject to variations in average selling prices (“ASPs”) and demand, technological change and lengthy product qualifications, all of which can negatively impact…

We retained an equity interest in Sandisk in connection with the Separation, of which we divested a portion in June 2025 in a debt-for-equity exchange.

In connection with the Separation, we and Sandisk entered into various agreements to effect the Separation and provide for the temporary framework of the relationship between us and Sandisk following the Separation, i…

and other counterparties.

On February 21, 2025, we completed our planned spin-off of our Flash business unit from our remaining HDD business (which we refer to as the Separation), as a result of which Sandisk became an independent public company.

We are subject to risks related to the separation of Sandisk, our former Flash business, into an independent public company.

adversarial attacks, which could result in unauthorized access to or leakage of sensitive information.

customers, for an indefinite period of time.

U.S.

Further, our stakeholders, including investors, customers, employees, and regulators, may have different, and at times conflicting, expectations regarding our ESG initiatives and goals.

If we incorporate third-party technology into our products or if claims or actions are asserted against us for alleged infringement of the IP of others, we may be required to obtain a license or cross-license, modify…

notice and privacy statement requirements, as well as obligations to respond to data subject requests.

If the completed Separation of Sandisk were to fail to qualify as a transaction that is generally tax-free for U.S.

Changes in tax laws in the U.S., the European Union and around the globe have impacted and will continue to impact our effective worldwide tax rate, which may materially affect our financial position and results of op…

We also utilize convertible debt in our capital structure.

technologies.

Further, the rapid growth of AI infrastructure, including data centers that use our products, requires substantial energy consumption.

controversy due to their perceived or actual impact on society, including concerns relating to human rights, privacy, employment, or other social, economic, or political issues, we may experience reputational harm, co…

Misuse of such tools can also result in violations of applicable laws and regulations, including data protection and intellectual property laws.

In addition, the use of AI in the development of our products could potentially lead to ambiguities in intellectual property ownership, infringement or misappropriation risks, which could impact our competitive positi…

We are increasingly leveraging AI technologies, including generative AI applications and tools, to support and enhance our various operational processes.

We may be adversely affected by the risks, challenges, and evolving regulatory landscape associated with the use of AI in our operations, product development, and business practices.

customer base may also lead to reduced demand for our products, increased customer pressure on our prices, replacement of our products by the combined entity with those of our competitors and cancellations of orders,…

Our industry is subject to variations in demand, pricing and competitive factors, which can negatively impact our business.

requirements (including encryption and other technology), trade wars, tariffs and complex customs regulations; difficulties in managing international operations, including appropriate internal controls; and fluctuatio…

In addition, armed conflicts and heightened geopolitical tensions can result in sanctions, export controls, tariffs and other trade restrictions, limit or restrict our ability to access certain markets and disrupt cri…

our overall expenses as we expect, that additional costs will not offset any such reductions or consolidations or that we do not forego future business opportunities as a result of these actions.

Each agreement provides for certain remedies designed to protect us if the customer fails to perform its purchase obligations.

If a customer were to breach its purchase obligations, including by failing to meet its purchase commitments, or if a customer were to terminate the agreement due to our material breach of supply commitments, we may n…

Our ability to fulfill our obligations under these agreements depends on a number of factors, including our manufacturing capacity, production yields, supply chain performance, and the availability of raw materials an…

We have entered into long-term agreements with certain customers that commit us to deliver and our customers to purchase substantial volumes of products over multi-quarter or multi-year periods.

Long-term agreements expose us to certain execution, financial, and market risks, which could be significant.

Additionally, new technologies could impact demand for our products in unforeseen or unexpected ways.

As we compete in new product areas, the overall complexity of our business may increase and may result in increases in R&D expenses and substantial investments in manufacturing capability, technology enhancements and…