WESTERN DIGITAL CORPORATION

Red flags

• The top three customers contributed 17%, 12%, and 10% of revenue, and the top 10 contributed 68%, creating material bargaining-power and volume-concentration risk.
• Debt fell by $2.78 billion in fiscal 2025, but $2.226 billion is current and the remaining Term Loan A-3 is payable at maturity on January 7, 2027; the loan carried a 5.918% all-in rate at year-end.
• Fiscal 2025 net income included a $772 million loss on the retained Sandisk interest and a $100 million loss on debt extinguishment, reducing comparability of the headline earnings rebound.
• The company relies on a limited number of qualified and sometimes sole-source suppliers for critical technologies, controllers, memory, components, equipment, and outsourced assembly and testing.