Western Digital earned far more in the quarter and held less cash

Western Digital, a US maker of hard drives and flash memory, reported revenue of USD 4.4bn for Q4 2026, 55.5% more than a year earlier. Operating profit reached USD 2.0bn, an operating margin of 46.7% against 28.1%. Net profit was USD 1.8bn. Cash moved the other way: it fell 35.8% to USD 1.3bn from USD 2.0bn. Kurzy.cz attributes the growth mainly to demand for high-capacity drives.

Growth usually costs cash before it brings any in. Customers pay weeks after delivery, stock is bought ahead of sales and new capacity is paid up front, while profit is booked when the sale is made. The net margin of 40.6% sits just below the 41.9% of a year ago, although the operating margin rose, so profit below the operating line did not keep pace. The equity ratio rose to 65.7% from 41.0%, so the balance sheet is stronger even with less cash. I would watch the cash line: a bigger profit has not yet become a bigger cash balance.