Western Digital Corporation

Good afternoon and thank you for standing by. Welcome to Western Digital's second quarter fiscal 2026 conference call. Presently, all participants are in listen-only mode. Later, we will conduct a question and answer session. At that time, if you would like to ask a question, you may press star then 1 on your phone. As a reminder, this call is being recorded. Now I will turn the call over to Mr. Ambresh Srivastava, Vice President, Investor Relations. You may begin.

Thank you and good afternoon, everyone. Joining me today are Irving Tan, Western Digital's Chief Executive Officer, and Chris Senesal, Western Digital's Chief Financial Officer. Before we begin, please note that today's discussion will contain forward-looking statements based on management's current assumptions and expectations, which are subject to various risks and uncertainties. These forward-looking statements include expectations for our product portfolio, our business plans and performance, ongoing market trends, and our future financial results. We assume no obligation to update these statements. Please refer to our most recent annual report on Form 10-K and our other filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ materially from expectations. In our prepared remarks, our comments will be related to non-GAAP results on a continuing operations basis, unless stated otherwise. Reconciliations between the non-GAAP and comparable GAAP financial measures are included in the press release and other materials that are being posted in the investor relations section of our website at investor.wdc.com. Lastly, I want to note that when we refer to we, us, are, four similar terms, we are referring only to Western Digital as a company and not speaking on behalf of the industry. With that, I will now turn the call over to Irving for introductory remarks. Irving?

Thanks, Ambrish. And good afternoon, everyone. And thank you for joining us today. The growth and impact of AI continues to accelerate across numerous industries. As generative AI models become the norm, energetic AI scales to drive business productivity, it is clear that AI is becoming a true strategic enabler of business transformation. AI inference has also begun to take hold, in many ways becoming the true AI workload, with deployment to chatbots and virtual assistants and customer relationship management tools. Further innovations in physical AI are also accelerating quickly, generating increasingly larger multimodal models propelled by advancements in autonomous vehicles and robotics. In all cases, it is data that is needed to fuel the entire AI process, from training to inference, to enable stronger models and sharper inference results. And as more data is generated and the value of data increases, the demand to store it is expanding at a rapid rate. As AI capabilities expand, cloud continues to grow as well, and both are driving the surge in demand for higher-density storage solutions. In this new era where AI and cloud dominate, Western Digital has taken a customer-focused approach to managing this strong demand by working closely with our hyperscale customers, ensuring that we deliver reliable, high-capacity drives at scale to give them the best performance and total cost of ownership. We are doing this by continuing to focus on increasing our drive's aerial density and accelerating our HAMR and ePMR roadmaps, as well as upshifting our customers to accelerate adoption of higher capacity drives and UltraSMR technology. This last quarter, we shipped over 3.5 million units of our latest generation ePMR products, offering up to 26TB CMR and 32TB Ultra-SMR capacities, representing strong confidence and adoption by our customers. We have also started qualification of our HAMR and next-generation ePMR products, each with a different hyperscale customer. These drives will offer our customers the higher capacity and improved total cost of ownership that they are looking for. In addition, we continue to accelerate our HAMR innovation To support this, we recently acquired intellectual property, assets and talent that will help us in the development of our internal laser capabilities. Also this past quarter, in partnership with software ecosystem partners, we announced our UltraSMR-enabled JBOT platforms, expanding UltraSMR adoption to a broader customer set. These platforms deliver significantly higher storage density compared to conventional drives, giving customers hyperscale-like performance and make mass-scale data analysis more sustainable and efficient. We are truly seeing our approach resonate with our customers, and this is reflected in longer-term agreements and better visibility into their requirements. We have firm purchase orders with our top seven customers through calendar year 2026. We also have in place robust commercial agreements with three of our top five customers, two through calendar year 2027, and one through calendar year 2028. These agreements indicate a strong trust that we have built for our customers and confidence in our ability to meet their Exabyte needs. We are hosting an innovation day on February 3rd in New York next week, where we will share updated roadmaps for our Hammer and ePMR products, as well as further details on core innovations that we are developing to improve our drives, performance, energy efficiency, and throughput. We will also provide an update on our financial model. In keeping with our strategy to incubate new growth factors based on our intellectual property and core capabilities, last month we announced a strategic investment in CoLab, which combines our expertise in material science and precision manufacturing with CoLab's breakthrough approach to quantum hardware design. Working with CoLab, we aim to advance next-generation nanofabrication processes that improve qubit performance, reliability, and scalability. Looking ahead, we see our positive momentum continuing and will remain focused on supporting our customers' Exabyte storage requirements while completing qualifications and launching our next-generation Hammer and ePMR drives. I will now hand it over to Chris to share our Q2 results and outlook for Q3.