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Western Digital is making more than double the profits from its shipped disk drive exabytes than Seagate.
An analyst asked a question during Western Digital’s latest earnings call asking about the revenue per exabyte and how it was increasing. That prompted us to look into our records and chart both WD’s revenue and profits (GAAP net income) per shipped exabyte of capacity;
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Profit has been ramping up in the past couple of quarters because it’s sold a much higher proportion of higher-priced and higher margin nearline UltraSMR drives than before. This then made us curious about its main competitor Seagate’s revenues and profits per shipped exabyte.
We looked into our records again and charted the last 7 quarter’s numbers against Western Digital. The result was surprising;
Seagate’s revenue per exabyte was about $2.6 million higher than WD at the start of our period – $16.58 million vs $13.9 million, but has then declined until it’s now about $870K higher – $14.87 million vs $14 million. WD’s per-EB revenue has been relatively flat over the period whilst Seagate’s has gently declined; it’s had to sell its exabytes for less and less though still maintaining a price premium over WD.
The profit-per-exabyte picture is radically different. After a poor start by WD at the start of our chart due to a financial accounting oddity, the two companies were fairly constant, with WD generally ahead ($2.9 to 3.3 million) of Seagate ($2.2 to3 million) until late last year (WD’s Q1 fy 2026) when WD roared ahead. It earned $5.8 million/EB in profit vs Seagate’s $3 million. The gap has widened even more in WD’s latest quarter (Q2 fy 2026) with it earning $8.6 million/EB vs Seagate’s $3.7 million.
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It’s a puzzle as to why WD’s profit per exabyte is so much larger than Seagate’s.
This spurred us to look at the profit-as-a-percent of revenue of the two companies over the period, and the same divergence appeared;
WD has become a far more efficient business at turning revenues into profits than Seagate.
We note that Seagate has been ramping up shipments of its new technology HAMR drives over the past couple of quarters, after quite prolonged qualification periods, with hyperscalers being the main buyers. It appears that it’s selling its HAMR capacity for less than half the profit that WD is selling its non-HAMR drives, ones using less radical ePMR technology.
