Western Digital Corp at Goldman Sachs Communacopia & Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Definitely. Okay. Maybe, start off the top level. Kris, over the past 18 months or so, industry has done a great job of pushing for higher pricing, while limiting production levels at an overall industry level. Maybe walk us through the progress that has been made; where you believe supply-demand sits today; and then, in terms of overall industry utilization.

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Even without increasing volume, if you assume that you're, like, near full utilization today?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Fair enough. Maybe talk about pricing for a moment. If you think back 6 or 12 months ago, what is the willingness of your customers to accept higher prices today, relative to back then? Can you talk about whether that's simply pricing on a per drive basis or are you also talking about

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Is that [built] sustainable even, you think?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Very good. Let's say we get ourselves into a situation where someplace down the line, where the industry is overshipped in demand and customers look to cut orders, how does your build/order strategy protect you in that situation? To what extent is there a cushion for you in the future potential downcycle?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Fair enough. I want to ask you one last thing. Just strategically, we hear a lot about every couple of years, it comes up the debate between flash and HDD, in terms of cost competitiveness. Where do you believe we stand today in terms of cost per bit delta between the two technologies and also (inaudible) between the two? Where do you think that goes in the medium term? Any reservations about a closing gap there?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Great. Let's talk about the market for a moment. Over the last several quarters, you've gained pretty meaningful near-line market share over your largest competitor. Do you feel that you can really maintain this market share level, even as you're accelerating your time to market for HAMR?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Please do.

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Okay. Well, (inaudible) answer my next few questions (inaudible), maybe. But I do want to maybe rewind for a second and just go back to ask you: relative to ePMR and Ultra SMR, you mentioned those capacity uplifts for the next-generation drives, what portion of your total shipments are coming from those two technologies, right now?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Okay. You mentioned your HAMR schedule. Going back a few quarters, I think it's fair to say that we saw your largest competitors struggle a little bit to ramp that technology with their lead CSP customer. Do you believe you have a smoother transmission with your ramp as you do that? Has the additional time and development given you more confidence in executing the technical and operational aspects of that transition?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Great. Just in terms of customers, is there any framework or size you can put on your exposure to the largest four or five hyperscalers? Is it fair to say they represent more than half your business at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 9:25PM, WDC.OQ - Western Digital Corp at Goldman Sachs Communacopia & Technology Conference

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Just to ask you briefly about your Client and Consumer businesses, what's the long-term trajectory you see for those businesses? Do you think they are a long-term state of decline? Or do you see them maintaining as a certain chunk of your revenue for a while longer?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Okay. financials. We got 25 minutes in. I didn't ask you about the financials yet. So let me do that. Starting with what you just brought up, this gross margin. One question that I get from investors most frequently is the trajectory for gross margins in your business. Can you maybe provide some perspective about how much natural room you see over the next, say, two years to expand gross margins from here? What are the drivers? Is that pricing cost, mix, otherwise?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Very good. Now, between you and your main competitor, there's a 4 percentage point difference in your target financial models. To what would you attribute that difference and can you maybe address the level of confidence you have in achieving a somewhat higher goal than you've laid out?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : A floor? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 9:25PM, WDC.OQ - Western Digital Corp at Goldman Sachs Communacopia & Technology Conference

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : I want to ask one question on your LTAs with hyperscalers customers, what portion of your business is covered by those agreements? Maybe talk about the terms under which they operate, whether that is volume commitments, pricing, revenue, and just other things that are tied into the contract.

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Okay. Very good. Last question, capital return. Maybe outline the plan at a high level. What are your thoughts on dividends and buybacks today, once you reach your net leverage target?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Great. With that, we're out of time. Kris, thank you for being here. We appreciate it.