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Western Digital (NASDAQ: WDC)
Q3 2024 Earnings Name
Apr 25, 2024, 4:30 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Contributors
Ready Remarks:
Operator
Good afternoon, everybody, and thanks for standing by. Welcome to Western Digital’s third quarter fiscal 2024 convention name. Presently, all members are in a listen-only mode. Later, we’ll conduct a question-and-answer session.
[Operator instructions] As a reminder, this occasion is being recorded. Now, I’ll flip the decision over to Mr. Peter Andrew, vice chairman, monetary planning and evaluation and investor relations. You could start.
Peter Andrew — Vice President, Monetary Planning and Evaluation and Investor Relations
Thanks, and good afternoon, everybody. Becoming a member of me at the moment are David Goeckeler, chief government officer; and Wissam Jabre, chief monetary officer. Earlier than we start, let me remind everybody that at the moment’s dialogue comprises forward-looking statements based mostly upon administration’s present assumptions and expectations, and as such, does embody dangers and uncertainties. These forward-looking statements embody expectations for our product portfolio, our marketing strategy and efficiency, the separation of our Flash and HDD companies, ongoing market developments, and our future monetary outcomes.
We assume no obligation to replace these statements. Please check with our most up-to-date monetary report on Type 10-Okay and our different filings with the SEC for extra info on the dangers and uncertainties that would trigger precise outcomes to vary materially from expectations. We may even make references to non-GAAP monetary measures at the moment. Reconciliations between the non-GAAP and comparable GAAP monetary measures are included within the press launch and different supplies which might be being posted within the Investor Relations part of our web site.
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With that, I am going to now flip the decision over to David.
David Goeckeler — Chief Govt Officer
Thanks, Peter. Good afternoon, everybody, and thanks for becoming a member of the decision to debate our third quarter of fiscal yr 2024 efficiency. Western Digital delivered glorious ends in the quarter with income of $3.5 billion non-GAAP gross margin of 29.3% and non-GAAP earnings per share of $0.63, all of which exceeded expectations. Our technique of creating a diversified portfolio of industry-leading merchandise throughout a broad vary of finish markets, coupled with structural adjustments we have now made to each of our companies is unlocking our true earnings potential and permitting us to proceed bettering through-cycle profitability and dampening enterprise cycles.
This technique permits us to generate increased earnings per share even in a constrained provide surroundings. As well as, our dedication to reaching operational effectivity and enhancing our agility has allowed us to run our Flash and HDD companies extra effectively and additional drive innovation to take alternatives. Specifically, because the expertise panorama continues to evolve, the demand for AI options is changing into more and more obvious throughout our finish markets. The uptick in AI adoption is highlighting the unbelievable worth of knowledge and can drive elevated storage demand throughout each HDD and Flash on the edge and within the core, offering better long-term progress and margin growth alternatives for Western Digital.
We’re within the early innings of unlocking the total potential of this firm, and our workforce stays centered on bettering the profitability of our enterprise to drive long-term margin growth and shareholder worth as these new demand alternatives current themselves. Earlier than I dive additional into the demand surroundings, I wish to briefly touch upon the standing of the separation of our Flash and HDD companies. I’m pleased with the workforce’s ongoing efforts as we drive towards completion of the separation within the second half of the calendar yr. We stay centered on reaching the separation as quickly as doable, and we’ll proceed to supply additional updates on our progress as applicable.
Shifting on to finish market commentary. I’m happy to report that throughout the quarter, income in all of our main finish markets returned to year-over-year progress. In cloud, we skilled 29% progress in income from a yr in the past, highlighting the unbelievable success of our industry-leading HDD product line. As well as, we started to expertise a rise in demand for our flash-based options, signaling a long-awaited restoration on this finish market.
In shopper, 20% income progress from a yr in the past was pushed by elevated bit demand for our flash-based options, coupled with a rise in ASPs. In client, we skilled 17% income progress from a yr in the past, highlighting the ability of the SanDisk premium model. Larger flash bit gross sales, mixed with a greater pricing surroundings greater than offset the continued decline in client HDD demand. I am going to now flip to enterprise updates, beginning with Flash.
Our sequential income progress within the quarter displays the persevering with dedication to disciplined capital spending and thoroughly optimizing bit shipments into our most worthwhile finish markets to reap the benefits of the improved pricing surroundings. This method, mixed with the energy of our product portfolio has enabled us to drive considerably increased profitability whereas strategically managing our stock. On the expertise entrance, we achieved a major milestone by initiating mass manufacturing of our QLC-based shopper SSD, leveraging BiCS6 expertise. That is one more vital milestone demonstrating our continued dedication to innovation and market management.
These developments pave the way in which to spearhead the market’s transition to QLC-based flash options in calendar yr 2024. Moreover, our progress with BiCS8 is on monitor. Whereas this expertise is able to be productized as market circumstances warrant, our modern choices will stay on the forefront of the market, additional strengthening our aggressive place and bolstering our progress prospects. As famous earlier, within the third quarter, we started to expertise a rise in demand for our enterprise SSD options.
We’re seeing demand returning for NVMe SSDs that we certified earlier than the downturn. We’re additionally experiencing vital curiosity in offering these merchandise in dramatically increased capacities for AI-related purposes, which we count on to ship within the second half of the yr. As well as, we’re additionally sampling our latest high-performance PCI Gen 5, BiCS6-based enterprise SSD. We’re getting ready for qualification at a hyperscaler and the product is producing vital curiosity within the enterprise market.
We count on to ramp within the second half of the calendar yr. Turning to HDD. The sequential income improve was pushed by improved nearline demand and better pricing as we centered on optimizing profitability per exabyte bought. Specifically, nearline income reached a set quarter excessive, reflecting the profitable technique we put in place to convey probably the most modern, high-capacity, and high-performance drives to market.
We’ve the proper merchandise on the proper value construction, that are mirrored in our monetary efficiency. Our cloud prospects proceed to transition to SMR with our 26-terabyte and 28-terabyte UltraSMR drives, shortly changing into a good portion of our capability enterprise exabyte shipments. SMR-based drives represented roughly 50% of nearline exabyte shipments within the quarter. Our portfolio technique to commercialize ePMR, OptiNAND, and UltraSMR applied sciences upfront of our transition to HAMR, has confirmed to be the successful technique and permits us to ship to prospects the {industry}’s highest capability and main TCO drives, all of which may be produced at scale with managed prices.
We’re assured that our product technique, which mixes UltraSMR expertise with upcoming developments in nearline drives is enabling Western Digital to ship best-in-class gross margin in HDDs all at a time when AI is rising as one other progress engine for the {industry}. As we transfer towards a brand new provide and demand surroundings, characterised by increased demand, provide tightness, and product shortages, we’re leveraging our confirmed expertise we have already launched to the market to satisfy the calls for of our prospects with the proper portfolio on the proper time, whereas additionally working with a lean value construction for continued profitability enchancment in our HDD enterprise. Though the actions we’re taking have improved profitability, we stay centered on driving increased margins to appropriately worth the unbelievable quantity of innovation and TCO enhancements we proceed to ship to our prospects. Earlier than I flip it over to Wissam, I needed to share some views on our outlook.
Inside Flash, along with progress alternatives on the edge, which is Western Digital energy, we’re inspired by the returning demand inside the enterprise SSD market and count on progress all through this calendar yr. AI-related workloads are driving rising demand for enterprise SSDs, and our portfolio is well-positioned to help these use instances. Trying forward, we anticipate bit shipments to stay flat into the fiscal fourth quarter and look to Flash ASP will increase to be the first income progress driver, led by our concentrate on allocating bits to probably the most high-value finish markets amid the tightening provide surroundings. Whereas we’re happy to see pricing developments transferring in a optimistic course, it is essential to acknowledge the significance of sustaining capital self-discipline and solely reinvesting capital again into the enterprise as soon as profitability improves additional, and we see sustained demand.
Total, our continued concentrate on bettering profitability by way of our innovation street map, disciplined capital spending, and strategic pricing initiatives place us nicely for continued success in calendar yr 2024 and into 2025 by providing probably the most capital and cost-efficient bits within the {industry}. In HDD, the success of our portfolio of main capability enterprise merchandise, mixed with the restructuring efforts we have applied lately are yielding improved unit economics and better visibility. As cloud demand is recovering, we anticipate continued progress pushed by increased nearline demand and higher pricing as we at the moment are in a provide constrained surroundings. We’re optimistic about aligning the pricing of our merchandise to higher mirror the innovation we’re integrating into them, supporting long-term margin growth in our HDD enterprise.
As we reap the rewards of the innovation and operational efficiencies that we have applied, we’ll search for alternatives to reinvest within the enterprise when the circumstances are ripe for growth. We’ll method each capital allocation resolution with a concentrate on self-discipline. Let me now flip the decision over to Wissam, who will talk about our monetary third-quarter outcomes.
Wissam Jabre — Chief Monetary Officer
Thanks, and good afternoon, everybody. Following on David’s feedback, Western Digital return to profitability and free money circulation technology and delivered nice ends in the quarter, which exceeded expectations. Whole income for the quarter was $3.5 billion, up 14% sequentially and 23% yr over yr. Non-GAAP earnings per share was $0.63.
finish markets, cloud represented 45% of complete income at $1.6 billion, up 45% sequentially and 29% yr over yr. The expansion was primarily attributed to increased nearline shipments and improved nearline per unit pricing with Flash income up each sequentially and yr over yr. Nearline bit shipments of 108 exabytes had been up 60% sequentially. Shopper represented 34% of complete income at $1.2 billion, up 5% sequentially and 20% yr over yr.
Sequentially, the rise in Flash ASP greater than offset a decline in flash bit shipments, whereas HDD income decreased. Yr over yr, the rise was pushed by progress in each Flash and HDD ASPs and flash bit shipments. Client represented 21% of complete income at $0.7 billion, down 13% sequentially and up 7% yr over yr. Sequentially, each Flash and HDD had been down at roughly related charges and in step with seasonality.
On a year-over-year foundation, the rise was pushed by progress in flash bit shipments and ASP. Turning now to income by enterprise phase for the fiscal third quarter. Flash income was $1.7 billion, up 2% sequentially as ASP elevated 18% on each blended and like-for-like foundation. Bit shipments decreased 15% from final quarter as we proactively centered our flash bit placement to maximise profitability.
Flash income grew 30% from fiscal third quarter of 2023 on increased bits and ASP. HDD income was $1.8 billion, up 28% from final quarter, as exabyte shipments elevated 41% and common value per unit elevated 19% to $145. In comparison with the fiscal third quarter of 2023, HDD income grew 17%, whereas complete exabyte shipments and common value per unit had been up 25% and 33%, respectively. Shifting to gross margin and bills.
Please observe, my feedback will probably be associated to non-GAAP outcomes until acknowledged in any other case. Gross margin was 29.3%, nicely above the steerage vary. Gross margin improved 13.8 proportion factors sequentially and 18.7 proportion factors yr on yr on account of higher pricing, our continued concentrate on value discount, and decrease underutilization prices. Flash gross margin was increased than anticipated at 27.4%, up 19.5 proportion factors sequentially and 32.4 proportion factors yr over yr.
There have been no underutilization prices within the quarter. HDD gross margin was 31.1%, up 6.3 proportion factors sequentially and 6.8 proportion factors yr over yr. This contains underutilization prices of $17 million or one-percentage-point headwind. HDD gross margin is inside our long-term goal vary, together with underutilization prices.
This underscores the workforce’s concentrate on value discount and profitability as beforehand, this stage of gross margin was achieved with increased income. Working bills had been $632 million for the quarter, up 13% sequentially and 5% yr over yr. The sequential improve was primarily pushed by increased variable compensation related to better-than-expected monetary outcomes. Working revenue was $380 million, which included HDD underutilization prices of $17 million.
Tax bills within the quarter was $51 million, reflecting the improved monetary outlook for the fiscal yr. Fiscal third-quarter earnings per share was $0.63. Working money circulation was $58 million and free money circulation was $91 million. Money capital expenditures, which embody the acquisition of property, plant, and tools and exercise associated to Flash joint ventures on the money circulation assertion represented a money influx of $33 million.
Third-quarter stock was flat from the prior quarter at $3.2 billion, with days of stock rising 4 days to 119 days. A decline in HDD stock offset a rise in flash stock. Gross debt excellent was $7.8 billion on the finish of the fiscal third quarter. Money and money equivalents had been $1.9 billion, and complete liquidity was $4.1 billion, together with revolver capability of $2.2 billion.
For the fiscal fourth quarter, our non-GAAP steerage is as follows. We count on income to be within the vary of $3.6 billion to $3.8 billion and undertaking sequential income progress in each HDD and Flash. In HDD, we count on continued momentum with our industry-leading SMR product portfolio aimed on the cloud. In Flash, we anticipate bits will probably be flat and ASP is up as we proceed optimizing our bit placement to maximise profitability.
Gross margin is predicted to be between 32% and 34%. We count on working bills to be between $670 million and $690 million with the rise primarily associated to sure project-driven investments, coupled with increased variable compensation because the monetary outlook has continued to strengthen. Curiosity and different bills are anticipated to be roughly $105 million. We count on revenue tax expense to be between $30 million and $40 million for the fiscal fourth quarter and $130 million to $140 million for fiscal yr 2024 because the monetary outlook improved.
We count on earnings per share to be $1.05, plus or minus $0.15, based mostly on roughly 342 million shares excellent. The monetary outlook has strengthened, and we’ll stay disciplined in executing the enterprise, controlling our capital spending, and bettering our profitability. I’ll now flip the decision again over to David.
David Goeckeler — Chief Govt Officer
Thanks, Wissam. Let me wrap up, after which we’ll open up for questions. I am happy with the workforce’s efficiency in creating a diversified portfolio of industry-leading merchandise throughout a broad vary of finish markets. As {industry} provide and demand dynamics proceed to enhance, we’ll stay disciplined round our capital spending and centered on driving innovation and effectivity throughout our enterprise.
Coupled with the structural adjustments we have now made to our companies, we’re assured in our potential to drive better through-cycle profitability and dampen enterprise cycles. As we transfer ahead, we stay uniquely positioned to capitalize on the promising progress prospects that lie forward, solidifying our management place within the {industry}, notably as AI continues to drive new storage answer alternatives and progress. OK. Peter, let’s begin the Q&A.
Questions & Solutions:
Operator
Girls and gents, at the moment we’ll start the question-and-answer session. [Operator instructions] One second for the primary query. Our first query at the moment comes from C.J. Muse from Cantor Fitzgerald.
Please go forward along with your query.
C.J. Muse — Cantor Fitzgerald — Analyst
Yeah, good afternoon. Thanks for taking the query. I suppose first query on the HDD facet, the gross margins are spectacular. And if we take out the underutilization you are north of 32%.
So, curious from right here as you consider ongoing tightness, ongoing progress in demand led by the cloud, and a pricing technique the place I believe you and your important competitor are being terribly rational. How do you suppose the development for that a part of your online business will look by way of the rest of calendar ’24 and into ’25?
David Goeckeler — Chief Govt Officer
Hey, C.J., thanks for the query. Yeah, we’re — the HDD enterprise, we’re actually pleased with the place the portfolio is at. I believe that is the place it begins, bringing nice merchandise to market that ship the best capability factors and the very best TCO for our prospects. And after we’re ready to try this, we will share in additional of that TCO benefit we’re bringing to market.
I believe that is been the technique for fairly a while, and we’re actually pleased with the place the portfolio is and it is actually resonating with prospects. However the different facet of that’s ensuring we actually management the fee facet of it. So, we’re actually centered on ensuring we convey the lowest-cost product as nicely, and that results in the margin growth. After which we — after all, we have a returning demand surroundings as we get the cyclical restoration in HDD spending coming off of the lows that all of us actually perceive.
However going ahead, we talked about a bit of bit within the ready remarks. We count on to proceed to convey nice merchandise to market. We count on to proceed to drive higher TCO for our prospects. And we’re in an surroundings now the place we have now provide demand steadiness and vital restructuring of our enterprise throughout the downturn.
We have taken capability — we have set our capability of what we predict the market wants as we emerge into this demand surroundings. We do see higher provide demand alignment. We see tightness available in the market. that is resulting in what you’d count on as prospects giving us extra visibility into what their ordering appears like going ahead.
So, we’re optimistic about with the ability to proceed to drive profitability of this enterprise increased.
C.J. Muse — Cantor Fitzgerald — Analyst
Very useful. And as a fast follow-up, on the NAND facet, I believe you guided final type of high-teens bit progress. And I am simply curious, is that also a quantity in play? Or given your prioritization of highest worthwhile areas of NAND, ought to we be interested by a unique quantity? And right here not speaking about manufacturing however precise income bits.
David Goeckeler — Chief Govt Officer
You imply for our — for what time interval? Simply to ensure I perceive your query.
C.J. Muse — Cantor Fitzgerald — Analyst
My apologies, for calendar ’24.
David Goeckeler — Chief Govt Officer
Oh, calendar ’24. Look, we see — sure, we nonetheless see demand within the mid to — name it, the mid- to excessive teenagers for the market. We see provide like about 8% of bits in manufacturing. So, we nonetheless see an undersupplied market.
For us, we had bits down this quarter. We forecast them down double digits. We had been proper about that, possibly a bit of bit extra flat going into subsequent quarter as we type of optimize our provide all year long the place we will suppose we will get the very best profitability.
C.J. Muse — Cantor Fitzgerald — Analyst
Thanks.
David Goeckeler — Chief Govt Officer
Thanks, C.J.
Operator
Our subsequent query comes from Joe Moore from Morgan Stanley. Please go forward along with your query.
Joe Moore — Morgan Stanley — Analyst
Nice. Thanks, and congratulations on the outcomes. By way of the outlook, searching for 4 factors of gross margin enchancment. It looks like the like-for-like pricing, actually in NAND is loads higher than that.
HDD appears fairly good as nicely. What are the offsets that you simply solely would see kind of 4 factors of gross margin growth given the advance that we’re seeing in absolute pricing?
Wissam Jabre — Chief Monetary Officer
Hey, Joe, thanks for the query. Look, our information comprehends a balanced view of what we have now by way of info at the moment with the outlook. Sure, we see enchancment in margins in each of the companies. So, on the Flash facet, we nonetheless anticipate enchancment in pricing that can assist gross margin transfer a bit increased from right here.
And on the HDD facet, as David talked about, we proceed to concentrate on, clearly, the good expertise that we ship but in addition the fee self-discipline and pricing of the merchandise. So, all of those are comprehended in our information.
Joe Moore — Morgan Stanley — Analyst
Nice. After which as a follow-up, you kind of talked about these higher-density SSDs within the second half of the calendar yr for AI functions. Are you able to discuss what has to occur to kind of get these drives out? Like is it you want new capability factors that you do not at the moment serve, after which are you able to speak typically, it looks like AI is having some optimistic results on either side of your guys’ enterprise. Are you able to discuss that a bit of bit?
David Goeckeler — Chief Govt Officer
Yeah. So, what I might say concerning the AI demand because it’s coming into focus. I do not suppose it is a lot within the outcomes simply but, however we’re seeing the place it’ll influence each companies. And clearly, one among them you simply outlined, which is we’re seeing enterprise SSD demand return, we noticed some improve within the final quarter.
We count on some improve on this quarter. However actually, as we glance to the second half. We’ve prospects coming to us wanting the type of SSDs we constructed and certified earlier than the downturn. They only need them in a lot greater capability factors, 30- and 60-terabyte capability factors.
So, it is the identical product simply taking it and rising capability and going by way of a qualification on that. So, we’re in that course of with prospects. We additionally launched a brand new SSD that is extra compute-focused, which is PCIe Gen 5 product based mostly on BiCS6, very excessive efficiency that performs a bit of bit totally different function within the AI coaching stack, and we’re getting superb suggestions on that product. It is being certified by our beginning qualification.
We have sampled — we’re type of eliminating the qualification of the hyperscaler, and we’re seeing good demand within the enterprise market as nicely. So, we really feel just like the portfolio arrange nicely as we go into the second half, and we’re seeing lots of demand present up for those who are very constructing great amount of infrastructure for mannequin coaching.
Joe Moore — Morgan Stanley — Analyst
Nice. Thanks.
David Goeckeler — Chief Govt Officer
Thanks, Joe.
Operator
Our subsequent query comes from Aaron Rakers from Wells Fargo. Please go forward along with your query.
Aaron Rakers — Wells Fargo Securities — Analyst
Yeah. Thanks for taking the query. I’ve bought two as nicely. The primary query, I simply wish to return to type of just like the gross margin dynamics with regard to the [Inaudible] enterprise.
David, in the event you look again a few years, proper, you peaked at like 150, 155 exabytes of capability shifts. As we hear concerning the {industry} being constrained, the place do you — the place would you characterize your capability footprint at the moment? And is it honest to imagine that you must see gross margin at and even above the excessive finish of the 31% to 34% goal mannequin that you’ve got laid out to type of come again in and add capability?
David Goeckeler — Chief Govt Officer
Yeah. I imply, that is how we’re interested by it. I imply, this can be a — I’ve talked about this fairly a bit. And that is an {industry} that I believe has been oversupplied with this client-to-cloud transition that is been happening for 15 years.
I believe the downturn was in time after we noticed a major change in demand, to say the least, that we simply determined to take away capability to get provide and demand higher steadiness. So, as we — we’re simply rising into that market, Aaron. I imply, I believe as we begin to see this market play out and dynamics get to the type of enterprise mannequin and get extra visibility into what the longer term is. We are able to trust in making investments if that is what we have to do to increase capability.
I believe as all of that comes into focus, and it is beginning to occur. We’re beginning to see that. We’re getting extra visibility. We’re attending to take part extra within the TCO benefits that we’re bringing to the market.
We’re seeing higher dynamics. And as that continues, and we get extra confidence, we’re not there but, then we might take into consideration how can we convey extra capability into the market. However we’re simply on the — we’re type of attending to the beginning line is, I suppose, what I might say.
Aaron Rakers — Wells Fargo Securities — Analyst
Yeah. That is useful. After which as a fast follow-up, simply on the enterprise SSD matter. I believe previous to the downturn, you had talked about, I wish to say it was two or three cloud OEMs that you simply had designed in with the NVMe drive.
Are you able to simply speak concerning the breadth of what you are anticipating? It simply sounds such as you’re type of getting again into the market, optimizing displacement there. So, how can we take into consideration the breadth of the shopper base in that enterprise SSD area?
David Goeckeler — Chief Govt Officer
Yeah, you bought it. I imply, it is the — what we’re seeing now’s when the market is coming again, we’re seeing these prospects now come again as much as a really lengthy digestion interval. And that is one thing we have been ready for, for fairly a while. Like each market from client to PC to nearline on the HDD facet has gone by way of this massive digestion part.
And I believe enterprise SSD was the one we had been ready to see when we will come out of that. And that is what we’re beginning to see. So, we’re seeing a few dynamics in that market. We’re seeing these enterprise SSDs that we had certified, the exact same merchandise now we’re getting orders for as that digestion part ends and so they get — they begin to ramp ordering again.
After which we’re seeing the type of AI influence on totally different capability factors use for mannequin coaching, we’re beginning to see that demand come available in the market. So, we’re seeing each of these issues occur. We predict the portfolio is well-positioned for these markets. We count on that to play out by way of the remainder of the yr, and we’re enthusiastic about it.
Aaron Rakers — Wells Fargo Securities — Analyst
Thanks.
David Goeckeler — Chief Govt Officer
Thanks.
Operator
Our subsequent query comes from Wamsi Mohan from Financial institution of America. Please go forward along with your query.
Wamsi Mohan — Financial institution of America Merrill Lynch — Analyst
Thanks a lot. On the HDD facet, you had a really outsized exabyte quarter-on-quarter progress within the quarter relative to your nearest competitor. How are you interested by the continued trajectory right here by way of exabyte progress maybe each quarter-on-quarter foundation but in addition possibly calendar ’24 versus calendar ’23?
David Goeckeler — Chief Govt Officer
Yeah. We’re seeing — I imply, massive image, we’re seeing a return in demand. Clearly, I believe it was the biggest sequential exabyte progress we have seen in a really very long time. I hesitate to say ever as a result of that is — enterprise has been round a really very long time.
However to return so far as we might look, it was the largest sequential improve we had seen. And it is — as I stated earlier, that begins with having merchandise that basically resonate with our prospects. We actually imagine very strongly within the expertise street map we have constructed round ePMR and UltraSMR is resonating very strongly with prospects. Practically 50% of exabytes shipped this quarter was SMR, and we’re arrange nicely for what we talked about final time the place we count on over half of our exabytes in FY ’25 to be SMR-based.
So, like we stated, coming into the fiscal yr that we anticipated sequential progress all through the fiscal yr, final quarter, we prolonged that to the calendar yr, and we nonetheless see that. So, we nonetheless see sequential exabyte progress going ahead all through this calendar yr.
Wamsi Mohan — Financial institution of America Merrill Lynch — Analyst
OK. Thanks for that. And as a follow-up, on kind of reinvesting on capability facet, proper, on the HDD facet? I believe you stated when circumstances are ripe for reinvesting, and I do know to Aaron’s query earlier, you commented on sure gross margin ranges. However this cycle, your gross margin is far increased at decrease income ranges than previous cycles.
So, clearly, it feels as if, no less than the potential to drive peak margins a lot increased than your established long-term vary. So, why ought to 33% be possibly the extent at which you reinvest? Why would not it’s 34%, 35%, or increased than that?
David Goeckeler — Chief Govt Officer
Effectively, we’ve not actually set a bogey for that, proper? We wish to take a look at the holistic advertising and marketing. Once more, that — I perceive this query everyone is searching for after we would reinvest. However that is actually not what we’re even interested by proper now. We’re interested by getting a market that is balanced on provide and demand, delivering nice merchandise to our prospects that may meet the wants of the expansion of the cloud.
And I believe that — to your level, I believe the enterprise is rising what we deliberate for and lots of laborious work that went in during the last couple of years, which is to return again in a a lot more healthy place with the flexibility to drive better profitability. So, we’re simply getting again to the underside of the vary that we set a few years in the past. It is not as if we’re declaring victory in that in any respect, to your level, like I stated, I really feel like we’re simply getting again to the beginning line of the place we have to drive the enterprise to, however we really feel superb about to have the ability to drive elevated profitability in it. Look, it begins with delivering nice merchandise to your prospects.
Like we have now to proceed to convey higher TCO. And I believe we have now bought an amazing structure to try this whereas controlling our value to construct the product. We’ve to work keep centered on either side of this equation. We bought to have the bottom value after which the very best TCO that permits us to drive pricing, which drives margin growth.
So, we’re working throughout that complete equation. And I believe the technique is working fairly nicely. And that is why we noticed — after we noticed some — we noticed the demand return, we noticed the margins pop up. However to your level, we imagine we will — we’re simply getting began on this.
Operator
Our subsequent query comes from Karl Ackerman from BNP Paribas. Please go forward along with your query.
Karl Ackerman — Exane BNP Paribas — Analyst
Sure, thanks. I am curious your ideas on the choice to prioritize the transition to BiCS6 for the cell market relatively than SSDs as a result of AI demand seems concentrated in high-capacity enterprise SSDs. And I suppose as you tackle that query, might you talk about your alternative to supply QLC enterprise SSD to deal with these inference purposes that seem like supporting 30- and 60-terabyte items? Thanks.
David Goeckeler — Chief Govt Officer
Yeah. Thanks, Karl. So, have not actually stated the place BiCS6 goes to go. That is in our future.
That is one factor we really feel actually good about is the expertise is there, and we’ll convey it to market after we see it is the proper time to try this after we bought the proper profitability, the proper provide demand traits to spend money on productizing that node, the expertise is in nice form. However we’ve not actually outlined precisely which merchandise are going to go there first or second or third. So, that is nonetheless in our future. So far as your level on QLC, that is — we’re now beginning to transition to BiCS6.
And so, we talked a few couple — plenty of merchandise right here which might be BiCS6 based mostly, which first, the shopper SSD, you did not — I am going to discuss enterprise SSD as nicely, however we — our shopper SSD has been extraordinarily nicely obtained. The efficiency of it’s excellent. We’ve our personal inside controller workforce. They’ve executed an incredible job of constructing a extremely, actually high-performance QLC shopper SSD.
We count on that to steer the market and lead that transition in that a part of the market. After which we’re bringing BiCS6 into our enterprise SSDs as nicely, proper? In order that will probably be lever we have now to drive BiCS6, which provides us extra capability, higher efficiency. And so, we be ok with that. Transition is now beginning, and the merchandise are beginning to present up.
They’re in prospects’ arms, and so they’ve been very, very nicely obtained.
Karl Ackerman — Exane BNP Paribas — Analyst
Thanks.
David Goeckeler — Chief Govt Officer
Thanks, Karl.
Operator
Our subsequent query comes from Amit Daryanani from Evercore. Please go forward along with your query.
Amit Daryanani — Evercore ISI — Analyst
Thanks loads. Good afternoon. I’ve two questions as nicely, I suppose. First, on the HDD facet, I am questioning, do you suppose given a few of the challenges on HAMR {qualifications} that Seagate’s having, in the event you doubtlessly noticed an even bigger uplift in market on the nearline facet, and also you suppose that market share might doubtlessly maintain or does a few of that type of circulation again as these {qualifications} get executed.
So, I might love to know if the share positive aspects you suppose you are seeing are sustainable or not. After which on the Flash facet, I might love to only possibly get your perspective. I do know you people are speaking about bit progress being flat in June. However as a few of these {qualifications} ramp up within the again half, how do you consider bit progress ramping up into the again half of this calendar yr? Thanks.
David Goeckeler — Chief Govt Officer
Yeah. So, on the primary query, the enterprise with our prospects is deliberate fairly far upfront. So, there would not be a state of affairs the place one thing would occur intra-quarter and that will drive an enormous share shift. The truth is we have nice merchandise, and so they’re very a lot resonating with our prospects, and we will ship them at scale.
They usually have convey best-in-class TCO. And clearly, prospects are adopting these at a major price. Like is it sustainable? We proceed to convey nice merchandise to market. That is what we plan to do.
We’re very assured in our street map on HDD, and we’ll proceed to convey the very best TCO options to our prospects. On bit progress, we do count on flat bit progress into the calendar Q2, however we’ll see a pickup in bit progress within the second half of the yr.
Amit Daryanani — Evercore ISI — Analyst
Acquired it. Thanks.
David Goeckeler — Chief Govt Officer
Thanks.
Operator
Our subsequent query comes from Harlan Sur from JPMorgan. Please go forward along with your query.
Harlan Sur — JPMorgan Chase and Firm — Analyst
Yeah, good afternoon. Good job on the quarterly execution. One other query on enterprise SSD. So, you guys have been actually sensible on how you might be allocating flash bits, proper, with a powerful concentrate on profitability.
So, as you reallocate extra bits towards eSSD within the second half, is the profitability profile of enterprise SSD portfolio anticipated to be accretive to the general Flash enterprise and your shares peaked beforehand kind of in that kind of excessive single-digit proportion vary in enterprise? Simply given a extra aggressive portfolio, like what sort of share is the workforce concentrating on type of mid- to long run?
David Goeckeler — Chief Govt Officer
OK. Thanks, Harlan. Your questions are very associated. So, we noticed a pickup in enterprise SSD within the March quarter.
It is nonetheless — fairly actually, it is nonetheless comparatively small numbers, nevertheless it’s rising fairly nicely. So, it is — we would not have equipped these bits if it wasn’t the proper factor to do from a portfolio technique viewpoint. We’ll see after we get to the second half, what pricing appears like, that versus different choices we have now, after which we’ll determine how a lot provide we put into these merchandise. And also you’re actually stepping into core of our portfolio technique, which is to have lots of optionality.
We’ve lots of optionality throughout shopper SSD, throughout gaming, now throughout enterprise SSD, throughout cell, throughout client, clearly, which is an enormous enterprise for us. After which based mostly on what we see going into the quarter. After which very importantly, what occurs throughout the quarter? How can we allocate our provide to get the very best return? And clearly, we’re in an surroundings proper now the place issues bought higher all through the quarter. So, as we undergo the quarter, we discover extra alternative to combine and get extra profitability, and that is what occurred within the March quarter, and also you noticed the outcomes of getting that agility into the enterprise.
So, I actually do not wish to name a share quantity or something like that as a result of it tends to distort, what we wish to do is maximize profitability, not maximize share in any specific market. We wish to maximize the place we get probably the most return for our provide.
Harlan Sur — JPMorgan Chase and Firm — Analyst
I admire that. After which possibly a query on BiCS8. I do know you are not calling out any timing but, however you may have had it kind of in preproduction for fairly a while. How are the early yields on this expertise? And I suppose, extra importantly, like can the workforce nonetheless drive mid-teens proportion annualized sort value down with the brand new bonded-to-array expertise?
David Goeckeler — Chief Govt Officer
Yeah. So, what I am going to say about yields is we’re very assured within the expertise. I imply, we really feel very, superb about it. It is a main development within the structure of NAND from an {industry} perspective to the CBA structure.
And it is — the event has gone nicely. We really feel superb about it. We are able to productize it after we want it. Once more, this will get into a bigger dialog concerning the dynamics of the market and when is the provision wanted, and we will be very, very disciplined about going by way of any transition or placing any capex to the market till we see the profitability that we wish to get.
So, we really feel superb about BiCS8. There was a second a part of the query.
Harlan Sur — JPMorgan Chase and Firm — Analyst
On the fee downs.
David Goeckeler — Chief Govt Officer
Oh, cost-downs.
Wissam Jabre — Chief Monetary Officer
Sure, possibly I am going to take that, Harlan. Sure. On the fee down, we’re nonetheless anticipating the mid-teens proportion year-on-year value downs. So, there is not any change there.
Harlan Sur — JPMorgan Chase and Firm — Analyst
Excellent. Thanks.
David Goeckeler — Chief Govt Officer
Thanks, Harlan.
Operator
Our subsequent query comes from Carlos Colorado from UBS. Please go forward along with your query.
Carlos Colorado — UBS — Analyst
Hello. Thanks for taking my query. So, I’ve — the primary one is about nearline. You’re going outperforming your competitors by loads.
So, what are the underlying causes in your opinion for this? And do we have now to count on this to normalize over time? And do you suppose this may be sustained? And I’ve a follow-up. Thanks.
David Goeckeler — Chief Govt Officer
Yeah. The efficiency of the HDD enterprise is pushed by the product, proper? It is fairly easy. Merchandise are — they’re nice merchandise. This structure that we constructed on ePMR, OptiNAND, UltraSMR, prospects are actually dedicated to SMR.
They ship the very best TCO available in the market. We are able to produce them at scale and that is what results in the efficiency.
Carlos Colorado — UBS — Analyst
OK. Thanks. And the follow-up is you talked about that AI’s revenues are of SSD gross sales. You will have an ideal vantage level to see if AI is driving purposes that historically the place HDD is that now being transferred to SSD a few of these purposes, or is the traditional query on cannibalization from one to the opposite.
Is that — is AI altering that situation? Thanks.
David Goeckeler — Chief Govt Officer
We don’t see any cannibalization. Clearly, HDD performs an enormous function within the AI storage life cycle in addition to the entire ingest part, as a result of all the massive knowledge lakes and all the uncooked knowledge units, these are all going to be saved on HDD. It is simply the economics of the place you retailer that knowledge, and the way do you entry that knowledge. It is all that a part of the AI pipeline, if you’ll, goes to be HDD.
Now, you may have all of those different new use instances round coaching and inference, and people are all going to be SSDs. So, it is actually about progress versus substitution. And that is what’s so thrilling about this. And clearly, when you get the fashions educated, then the fashions are going to end up extra knowledge, which goes to be saved on HDD.
So, you bought this virtuous cycle going. So, it is type of actually rising tide lifts all boats. It is not a substitution sport. Clearly, there’s lots of new use instances being developed round AI, like the entire coaching infrastructures which might be being constructed, that is what’s driving these very high-capacity storage-based enterprise SSDs that we’re seeing demand for.
So, hopefully, that helps.
Operator
Our subsequent query comes from Krish Sankar from TD Cowen. Please go forward along with your query.
Krish Sankar — TD Cowen — Analyst
Yeah. Hello. Thanks for taking my query. I’ve two of them.
First one on Flash for Dave. You spoke concerning the BiCS6 hyperscaler qualifying it. My understanding was a BiCS6 was type of extra like a sub-node and BiCS8 goes to be the larger one. I am simply type of curious to get to your enterprise SSD market share goal.
Do you really want BiCS8, or are you able to obtain it with BiCS6? After which I’ve a follow-up.
David Goeckeler — Chief Govt Officer
You are proper. BiCS6 is after we say stub node, it is we’re not going to take the entire portfolio to BiCS6. So, we have now an enormous portfolio, and we’re selecting which merchandise to take the BiCS6. And clearly, we’re taking the merchandise that require QLC and the type of belongings you’re speaking about.
So, we be ok with our nodal plan within the Fab with the ability to provide what we’d like in these markets.
Krish Sankar — TD Cowen — Analyst
Acquired it. Acquired it. After which, Dave, on the laborious drive facet, I believe you stated previously you can get to 40 terabytes of the ePMR expertise. I am simply type of curious with clearly a competitor like making an attempt to ramp up HAMR, and it took them some time like just a few years to even get the three terabytes per disc in R&D to fall.
Are you able to give us an replace in your HAMR street map or the standing of your HAMR expertise, how we take into consideration 30, 40 terabytes-plus?
David Goeckeler — Chief Govt Officer
So, we have been engaged on HAMR for fairly a while. We perceive HAMR extraordinarily nicely. We perceive all the problems with HAMR, and what it takes to get it certified. Clearly, we’re doing that each one behind the scenes, as a result of we have now a product portfolio with the very best TCO we will provide available in the market at the moment, and we will do that each one the way in which as much as 40 terabytes.
And 40 terabytes is the place the economics flip over and also you get the 4 terabyte per platter or 40 per unit, the place basically the capability improve will cancel out the rise in prices you must put within the unit to get the economics to work on margin, proper? That is type of a sophisticated — loads to say in a single sentence. However our portfolio may be very centered on the proper product with the proper value on the proper time. The precise time for HAMR is at 40 terabytes. And we have lots of improvement happening that product.
We’ve for a very long time. We, fairly frankly, need not do it in public as a result of we have now one other portfolio that is promoting extraordinarily nicely, which we have talked about all through this course of. However have lots of confidence in our HAMR improvement. And fairly frankly, our prospects know precisely what we’re doing, and the place we’re at, and what our plans are, and so they’re comfy with that as nicely.
Krish Sankar — TD Cowen — Analyst
Yeah. Thanks, Dave.
Operator
And our subsequent query comes from Tom O’ Malley from Barclays. Please go forward along with your query.
Tom O’Malley — Barclays — Analyst
Hey, guys, thanks for taking my query. I will do one on the CFO facet actual fast on opex. So, massive step up within the June quarter, and also you’re speaking about some particular tasks. How ought to we take into consideration that progressing? Is that investments which might be going to stay round for the following couple of quarters? Or ought to that reset again to type of the decrease base you have been working out? You’ve got simply seen opex transfer from type of the $550 million to $660 million over the previous yr, clearly, income rising as nicely, however any coloration there on what that funding is for and in the event you see a step down after that?
Wissam Jabre — Chief Monetary Officer
Yeah. Positive, Tom. So, let me first begin by saying that the way in which we consider opex is we do not see opex rising sooner than income. So, we’re nonetheless very centered on that value self-discipline and opex self-discipline.
Relating to this quarter, we’re anticipating some improve. The rise is sort of 50-50, pushed by variable comp because the monetary outlook has improved a lot sooner than anticipated. So, there is a little bit of improve there. But in addition, as you talked about, there’s some project-specific R&D investments that additionally — that we have now kind of a direct correlation and line of sight to income.
I might say for the following couple of quarters, the vary that we have guided for This fall is an inexpensive vary. I do know it is too early to speak about fiscal yr ’25. However for modeling functions, we will use the identical sort of numbers for now.
Tom O’Malley — Barclays — Analyst
Useful. And if I take a look at your value steerage for the yr, a pair type of with what you are for June of ’24, once I’m gross margins, it looks like you must have a reasonably vital step-up in HDD gross margins. Are you planning for all of that the underutilization to return out of the mannequin within the June quarter? And if any stays, are you able to tell us how a lot you are anticipating?
Wissam Jabre — Chief Monetary Officer
So, for this most up-to-date — for Q3, we had a bit of bit — and we disclosed, we talked about these. However as you possibly can see, the numbers have gotten much less and fewer vital. And so, for the June quarter, there’s nonetheless a bit of bit, nevertheless it’s not likely very vital for us to speak about on this name.
Tom O’Malley — Barclays — Analyst
Thanks.
Wissam Jabre — Chief Monetary Officer
Thanks, Tom.
Operator
Our subsequent query comes from Vijay Rakesh from Mizuho. Please go forward along with your query.
Vijay Rakesh — Mizuho Securities — Analyst
Yeah. Hello, David and Wissam. Only a fast query on the Flash facet. Dave, whenever you take a look at the profitability, as you talked about, how does the BiCS6 evaluate to — in the event you take a look at a few of the aggressive NAND on the market, both by way of die measurement or value per gig versus a few of the friends?
Wissam Jabre — Chief Monetary Officer
So, that is a really sophisticated query. I imply, we will go into it intimately offline. We clearly do tons of labor, and I admire your query that it is a multifaceted problem. It is die measurement.
It is reminiscence gap density, it is every kind of very sophisticated factor goes into producing a NAND product. Look, we predict the product compares extraordinarily favorable. We predict it leads the market. Once more, for the final — wanting again a few years, we have now been capable of produce bits at a 3rd much less capex than the {industry} common, and we count on BiCS8 to proceed that management available in the market.
So, we really feel very, superb concerning the product, about its efficiency. Once more, whenever you construct, that is like type of one of many magic of wafer bonding. You’ll be able to construct the CMOS individually from the NAND stack after which the CMOS is type of pristine. So, the interfaces are actually, actually quick.
So, there’s numerous good issues about that structure that results in a extremely, actually market-leading product, and we be ok with it. And we have that each one able to go when the market circumstances will help that stage of funding.
Operator
Our subsequent query comes from Mehdi Hosseini from SIG. Please go forward along with your query.
Mehdi Hosseini — Susquehanna Worldwide Group — Analyst
Sure. A lot of the good questions have been requested. However David, I simply have a longer-term query, and I believe it would assist many buyers. For example, costs had been to go sideways in ’25, and also you’re simply specializing in that 15% value down and better mixture of higher-value eSSD merchandise.
Are you able to assist us perceive how your Flash margins would evolve from right here? After which I am not making an attempt to ask you for pricing. However I am simply questioning how we might gauge your execution first on the product combine and be on the fee down and the way they each would manifest into increased margins.
Wissam Jabre — Chief Monetary Officer
Yeah. Let me first begin with — I am going to take a stab on the reply, Mehdi. So, look, our goal mannequin hasn’t modified. We’re nonetheless concentrating on by way of cycle for the Flash enterprise to be 35%, gross margin to be between 35% to 37%.
And so, meaning, clearly, as — from the place we’re at the moment, we nonetheless have some methods to go to get to that by way of cycle margin. And the way in which we obtain these gross margins is what we have been speaking about on this name. We concentrate on the product portfolio, the bit placement in addition to on the fee facet, which we nonetheless anticipate the same sort of ranges by way of value downs.
Mehdi Hosseini — Susquehanna Worldwide Group — Analyst
OK. That is affordable. Let me simply transfer on to the second query. And that is one thing I all the time ask, specializing in HDD.
Is there any replace the way you see exabyte cargo evolving like over the following couple of years? Is the goal now 25% to 30% or much less or extra?
David Goeckeler — Chief Govt Officer
We’re not — we’re nonetheless within the 20% to 25% camp, possibly round 25%. That is — we’re clearly in a cyclical restoration right here, getting again to that type of through-cycle quantity. I believe the type of the query inside your query is, how a lot does AI add on to that? And I believe it is nonetheless a bit of early to inform. We undoubtedly see — as I talked about earlier, we see the worth of knowledge going up, you wish to retailer extra knowledge to coach extra fashions.
These fashions are going to end up extra knowledge. So, we predict that the bias is increased. I am not ready but to name precisely how a lot it adjustments the slope of that line. So, that is one thing we will keep very centered on as we go ahead right here over the following a number of quarters, keep near our prospects as these fashions get deployed and AI will get extra broadly deployed and adopted in order that we will dial in what we count on that influence to be on HDD storage demand.
However we really feel good that it is — and we have that secular tailwind to the enterprise that can emerge.
Operator
Our subsequent query comes from Steven Fox from Fox Advisors. Please go forward along with your query.
Steven Fox — Fox Advisors — Analyst
Hello. Two fast ones for me. To start with, on the HDD facet, your giant opponents talked about having to kind of help the provision chain going ahead. I used to be questioning what — the way you take a look at that possibility or want to try this? After which secondly, since money flows turned optimistic once more, I used to be questioning in the event you might kind of give us a bit of little bit of assistance on how one can suppose money circulation tracks possibly versus internet revenue or EBITDA over the following few quarters? Thanks.
David Goeckeler — Chief Govt Officer
I am going to simply say one thing about provide chain. Look, we keep — we have stayed very near our suppliers all through the whole downturn and keep very near them as we’re planning the enterprise going ahead. So, we predict we all the time help our provide chain, and Irving Tan, who leads operations, relies in Singapore, lots of our suppliers are there, and he personally can keep very, very near them. So, we have stayed — we have been very shut and have supported our provide chain all through this complete downturn.
And now as issues are getting higher, that is a superb state of affairs for all of us. You wish to speak concerning the money circulation?
Wissam Jabre — Chief Monetary Officer
Yeah. Let me take that. So, on the money circulation, sure, thanks. Clearly, we returned to free money circulation optimistic in Q3.
And because the income and the enterprise continues to get well, we’re utterly centered on profitability and money circulation technology. So, we must always count on that to enhance from right here.
Operator
Our subsequent query comes from Ananda Baruah from Loop Capital. Please go forward along with your query.
Ananda Baruah — Loop Capital Markets — Analyst
Yeah. Thanks, guys, for taking the query. Only one for me. David, actually, I believe, piggybacking off the a part of Mehdi’s query.
So, only a TAM query on either side of the enterprise, HDD and Flash, is basically the spirit of it that you simply see some near-term demand from AI coming and TBD on the influence to the TAM over time and in addition TBD on influence to the normalized progress price off of no matter the brand new TAM appears like? And that is actually the query. And TBD is the financing, however I simply needed to ensure we get all your present opinion there. Thanks.
David Goeckeler — Chief Govt Officer
I believe that is a good solution to say it. I believe it is coming into focus as to the place it’ll present up on either side of the enterprise, nevertheless it’s — to your level, we’re not able to name what it does to the TAM, in addition to, we imagine, it is a tailwind to each TAMs. So, clearly, on the NAND enterprise, there’s very particular use instances on mannequin coaching which might be developing considerably. I imply, clearly, you are seeing that throughout the entire expertise panorama.
And possibly that is a bit of bit simpler to see we’re really seeing demand for these type of merchandise within the second half. And for HDD, we see it as all the information that is going to feed that course of goes to take a seat on HDDs. And clearly, as soon as these fashions get educated, they will end up knowledge that is 85% plus of that’s going to be saved on HDD. So, we see a really, superb setup, however we’re staying near our prospects in these markets.
It is nonetheless a bit of bit early to truly put a quantity on it of what it does to the expansion price or the TAM measurement.
Operator
And our subsequent query comes from Tristan Gerra from Baird. Please go forward along with your query.
Tristan Gerra — Robert W. Baird and Firm — Analyst
Hello. Good afternoon. A fast follow-up on this, which is how essential is it to have U.S. manufacturing for SSDs in relation to AI? And the way do you take a look at partnership with hyperscalers versus extra type of a general-purpose enterprise?
David Goeckeler — Chief Govt Officer
You imply U.S. manufacturing of the NAND itself or the SSD, which — nicely, our NAND is manufactured in Japan. So, we do not see that as — we really feel actually good about our manufacturing footprint, by the way in which. So, the JV, we’ve not talked in any respect on this name concerning the JV, however that places us in a terrific place from a scale perspective and offers us — is the large underlying a part of that lowest value bids, low capital effectivity and nice product street map, as a result of we — all of that’s executed in tandem with Kioxia, and so we’re capable of make investments as the biggest provider available in the market, which is a good place to be in.
However we’ve not — the way in which our footprint is ready up for a producing viewpoint, we’ve not seen something that impairs us potential to serve the whole market. And so far as partnership with hyperscalers, like, look, we keep very near the hyperscalers. Clearly, they’re massive prospects of ours. We’re massive suppliers of theirs on either side of the enterprise.
So, we’re very, very near them and staying near what are totally different use instances, how do they need the merchandise constructed particularly within the enterprise SSD market, each — there’s not only one enterprise SSD. Everyone makes use of barely totally different interfaces and there is other ways, their structure of their knowledge facilities are constructed. So, we keep near them to ensure we construct the proper product for what we’re — what the markets we wish to serve.
Operator
And at the moment, we’ll conclude at the moment’s question-and-answer session. I might like to show the ground again over to David for any closing remarks.
David Goeckeler — Chief Govt Officer
All proper. Thanks, everybody. We admire all the questions, and we look ahead to speaking to everyone all through the quarter. Thanks once more.
Operator
[Operator signoff]
Period: 0 minutes
Name members:
Peter Andrew — Vice President, Monetary Planning and Evaluation and Investor Relations
David Goeckeler — Chief Govt Officer
Wissam Jabre — Chief Monetary Officer
C.J. Muse — Cantor Fitzgerald — Analyst
Joe Moore — Morgan Stanley — Analyst
Aaron Rakers — Wells Fargo Securities — Analyst
Wamsi Mohan — Financial institution of America Merrill Lynch — Analyst
Karl Ackerman — Exane BNP Paribas — Analyst
Amit Daryanani — Evercore ISI — Analyst
Harlan Sur — JPMorgan Chase and Firm — Analyst
Carlos Colorado — UBS — Analyst
Krish Sankar — TD Cowen — Analyst
Tom O’Malley — Barclays — Analyst
Vijay Rakesh — Mizuho Securities — Analyst
Mehdi Hosseini — Susquehanna Worldwide Group — Analyst
Steven Fox — Fox Advisors — Analyst
Ananda Baruah — Loop Capital Markets — Analyst
Tristan Gerra — Robert W. Baird and Firm — Analyst
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