Western Digital Corporation (WDC)

Interest coverage

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 1,654,000 1,859,000 2,054,000 1,067,000 -244,000 -1,090,000 -1,819,000 -1,974,000 -1,208,000 44,000 1,011,000 2,046,000 2,660,000 2,712,000 2,425,000 1,889,000 1,184,000 722,000 646,000 512,000
Interest expense (ttm) US$ in thousands 618,000 388,000 405,000 418,000 417,000 403,000 375,000 340,000 312,000 298,000 293,000 296,000 304,000 309,000 315,000 320,000 326,000 333,000 351,000 375,000
Interest coverage 2.68 4.79 5.07 2.55 -0.59 -2.70 -4.85 -5.81 -3.87 0.15 3.45 6.91 8.75 8.78 7.70 5.90 3.63 2.17 1.84 1.37

June 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,654,000K ÷ $618,000K
= 2.68

The interest coverage ratios of Western Digital Corporation have exhibited significant fluctuations over the period provided, indicating notable changes in the company's ability to meet its interest obligations through its earnings before interest and taxes (EBIT).

From September 30, 2020, to December 31, 2021, the company's interest coverage improved markedly, rising from 1.37 to 7.70. This trend suggests a strengthening financial position, with the company generating sufficient EBIT to comfortably cover its interest expenses. The ratio peaked at 8.78 on March 31, 2022, reflecting robust earnings relative to interest obligations.

However, a downward trend commenced thereafter. By September 30, 2022, the ratio declined to 6.91, and further diminished to 3.45 by December 31, 2022, indicating a weakening in the company's capacity to cover interest costs. The deterioration continued sharply into 2023, with the ratio plummeting to 0.15 on March 31, 2023, signaling that EBIT was insufficient to cover interest expenses, and suggesting an acute financial strain.

Subsequently, the interest coverage ratio turned negative, registering at -3.87 on June 30, 2023, and further decreasing to -5.81 on September 30, 2023. Negative ratios imply that EBIT was negative, meaning the company incurred losses before interest and taxes, and thus, was unable to meet its interest obligations from operational earnings. This period reflects a critical financial distress.

In the subsequent quarters, partial recovery is observed. The ratio improved to -4.85 by December 31, 2023, and further to -2.70 by March 31, 2024. The trend turned positive again by the September 30, 2024, quarter, with a ratio of 2.55, indicating a return to EBIT levels sufficient to cover interest expenses. The upward trajectory continued into 2025, reaching 4.79 by March 31, 2025, and 2.68 by June 30, 2025, demonstrating a significant recovery in the company's ability to service interest payments.

Overall, the interest coverage ratio demonstrates a cycle of initial strengthening, subsequent decline into financial distress, and a notable recovery in recent periods. The data indicates periods of financial strain where interest expenses exceeded operational earnings, followed by improvements that suggest an ongoing effort toward stabilization and improved profitability.


Peer comparison

Jun 30, 2025

Company name
Symbol
Interest coverage
Western Digital Corporation
WDC
2.68
NetApp Inc
NTAP
16.52
Pure Storage Inc
PSTG
17.17
Seagate Technology PLC
STX
5.69

See also:

Western Digital Corporation Interest Coverage (Quarterly Data)