Executive Vice President and Chief Financial Officer at Western Digital
Thank you, David, and good morning, everyone. As David mentioned, revenue was in line, thanks to our team's agility and resilience in managing through this dynamic environment. Total revenue for the quarter was $3.7 billion, down 17% sequentially and 26% year-over-year. Non-GAAP earnings per share was $0.20. And as David mentioned, included an approximately $0.30 impact due to the higher than forecasted tax rate. Looking at our end markets, cloud represented 49% of revenue at $1.8 billion, down 13% sequentially and 18% year-over-year. Compared to the prior quarter, continued momentum in capacity enterprise drives sold to U.S. cloud customers and an increase in smart video hard drives demand partly offset the decline in all other hard drive product channels and flash. Sequentially, nearline bit shipments were flat at 112 exabytes, driven by our success in leading the industry transition to SMR hard drives. The year-over-year decrease was due to broad-based decline across both hard drive and flash products. Clients represented 33% of total revenue at $1.2 billion, down 25% sequentially and 34% year-over-year. Sequentially, the decline was attributed to flash driven by inventory reduction at PC OEMs and lower pricing.
The year-over-year decline resulted primarily from the reduced flash pricing. Lastly, consumer represented 18% of revenue at $0.7 billion, down 15% sequentially and 30% year-over-year. On both a sequential and year-over-year basis, the revenue decline was due to flash pricing and lower retail HDD shipments. Turning now to revenue by segment. We reported HDD revenue of $2 billion, down 5% sequentially and 21% year-over-year. Compared to the prior quarter, total HDD exabyte shipments increased by 1% and average price per hard drive increased by 4% to $125. On a year-over-year basis, total HDD exabyte shipments decreased by 12% and average price per unit increased by 23%. Flash revenue was $1.7 billion, down 28% sequentially and 31% year-over-year. Sequentially, Flash ASPs were down 22% on a blended basis and 17% on a like-for-like basis. Flash bit shipments decreased 10% sequentially and 7% year-over-year. As we move to costs and expenses, please note that my comments will be related to non-GAAP results unless stated otherwise. Gross margin for the fiscal first quarter was 26.7%, down 5.6 percentage points sequentially and 7.2 percentage points year-over-year. Our HDD gross margin was 28.5%, up 30 basis points sequentially and down 2.4 percentage points year-over-year.
Our Flash gross margin was 24.5%, down 11.4 percentage points sequentially and 12.5 percentage points year-over-year. Operating expenses were $689 million, down $71 million sequentially and below our guidance range due to lower variable expenses and tighter expense management, including reduction of discretionary spending. Operating income was $307 million, representing a 56% decrease from the prior quarter and a 68% decrease year-over-year. As David mentioned, we are pleased to have delivered operating income above the midpoint implied by our guidance in a challenging market backdrop. Our tax expense was $168 million, resulting in a tax rate of 72% higher than previously forecasted. Tax expense is influenced by several factors, including the projected quarterly profitability for the rest of the year and our corporate tax structure. Earnings per share was $0.20 compared to $1.78 in the prior quarter and $2.49 in the year-ago quarter. Operating cash flow for the first quarter was $6 million, and free cash flow was an outflow of $215 million. Cash capital expenditures, which includes the purchase of property, plant, equipment, and activity related to our flash joint ventures on our cash flow statement represented a cash outflow of $221 million.
Our gross debt outstanding remained at $7.1 billion at the end of the fiscal first quarter. Our liquidity position continues to be strong. At the end of the quarter, we had $2 billion of cash and cash equivalents and revolver capacity of $2.25 billion. Our trailing 12-month adjusted EBITDA at the end of the first quarter, as defined in our credit agreement was $4.1 billion, resulting in a gross leverage ratio of 1.7 times compared to 2 times a year ago. As a reminder, our credit agreement includes $0.9 billion in depreciation add-back associated with the flash ventures. This is not reflected in the cash flow statement. Please refer to the earnings presentation on the Investor Relations website for further details. Before I go over guidance for the fiscal second quarter, I would like to discuss the business outlook for the balance of this fiscal year and the actions we are taking to align our execution plan with the changes in business environment. In Flash, we expect shipments to increase sequentially in the fiscal second quarter and the balance of the fiscal year 2023 as the market stabilizes.
In HDD, we expect our revenue to recover as our U.S. cloud customers reduce their inventories over the next two quarters. On the manufacturing front, we have sharply reduced client hard drive production capacity by approximately 40%. For the fiscal year 2023, we are reducing our gross capital expenditures to $2.7 billion. We are also aiming to reduce our cash capital expenditure by 20% versus our prior expectation. The main drivers of our lower capital expenditures are primarily the push out of BiCS6 transition in Flash and reduced investments in hard drive manufacturing. As for our operating expenses, we proactively reduced our spending by approximately $80 million in the first fiscal quarter relative to the midpoint of the guidance range. We are also taking further action to lower our ongoing operating expenses range to $650 million to $700 million as we navigate this dynamic environment. We believe these actions we are taking will allow us to continue to invest in innovation as a top priority for our company going forward. For the fiscal second quarter, our non-GAAP guidance is as follows: we expect revenue to be in the range of $2.9 billion to $3.1 billion. We expect gross margin to be between 20% and 22%. We expect operating expenses to be between $650 million and $670 million. Interest and other expenses are expected to be approximately $80 million. We expect the tax benefit between $70 million and $90 million. We expect loss per share of $0.25 to earnings per share of $0.05 in the second quarter, assuming approximately 319 million fully diluted shares outstanding.
I'll now turn the call back over to David.