Discontinued Operations

9 Months Ended

Apr. 03, 2026

Discontinued Operations and Disposal Groups [Abstract]

On February 21, 2025, the Company completed the Separation through a pro rata distribution of 80.1% of the outstanding shares of Sandisk to Western Digital stockholders. The Separation is intended to be tax-free for U.S. federal income tax purposes. To reflect the completion of the Separation, the Company recorded a decrease in shareholders’ equity for the net book value of applicable assets and liabilities derecognized in connection with the Separation, net of the Company’s retained ownership interest, which was initially 19.9% and was based on the net book value of the applicable assets and liabilities derecognized. As a result of the Separation, Sandisk became an independent public company and Western Digital no longer consolidates Sandisk into the Company’s financial results. The historical results of operations of Sandisk are now reported in the Company’s Condensed Consolidated Financial Statements as discontinued operations for all periods prior to the Separation on February 21, 2025.

The following table provides a summary of the historical results of Sandisk for the three and nine months ended March 28, 2025, which have been reflected as Net income (loss) from discontinued operations, net of taxes in the Condensed Consolidated Statements of Operations. Business separation costs represent separation and transition costs the Company incurred in connection with the Separation.


	Three Months Ended		Nine Months Ended
Net Income (Loss) from Discontinued Operations, Net of Taxes	March 28, 2025
	(in millions)
Revenue, net	$	602	$	4,361
Cost of revenue	485		2,892

Operating expenses:
Research and development	185		718
Selling, general and administrative	84		229
Gain on business divestiture	—		(113)
Business separation costs	57		144
Business realignment charges	—		3

Operating income (loss)	(209)		488




Total interest and other income (expense), net	1		(36)
Income (loss) before taxes	(208)		452
Income tax expense	44		236
Net income (loss) from discontinued operations, net of taxes	$	(252)	$	216

Cash flows related to discontinued operations have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows for all periods presented. The following table provides selected financial information related to cash flows from discontinued operations:

Nine Months Ended

Select Cash Flow Information from Discontinued Operations

March 28,
2025

(in millions)

Purchases of property, plant and equipment

139

Depreciation and amortization

117

Stock-based compensation

Consistent with the Company's original intent to monetize its retained interest in Sandisk, the Company began executing a series of strategic transactions to optimize its capital structure. In June 2025, the Company used 21.3 million shares of Sandisk common stock in a tax-free exchange to retire $800 million principal amount of the Company’s Term Loan A-3 maturing in January 2027 (the “Term Loan A-3”). In February 2026, the Company executed a series of transactions to monetize additional Sandisk shares and further reduce its outstanding debt. Initially, the Company entered into a $1.50 billion Bridge Loan (as defined below), which was utilized to fully redeem all of its Senior Notes (as defined below) and consolidate the broad creditor base to two holders to facilitate a debt-for-equity exchange. Following the redemptions of the Senior Notes, the Company retired the Bridge Loan and its existing Term Loan A-3 through a tax-free exchange for 5.8 million shares of Sandisk common stock. See Note 7, Debt, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further details. As of April 3, 2026, the Company still held 1.7 million shares of Sandisk common stock, which it expects to monetize by the end of 2026 in one or more subsequent exchanges for its outstanding common stock.

In connection with the Separation, the Company entered into a series of transition services agreements to provide transition service support for various periods of time ranging up to 15 months. The amounts involved under these agreements have not been and are not expected to be material.