Seagate Technology Holdings Earnings Call Transcripts
Fiscal Year 2026
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Data storage demand is surging, driven by AI and large unstructured data, with technology innovation focused on HAMR and rapid areal density gains. Financial performance is strong, with improved margin predictability, rising pricing, and disciplined capital allocation, while hard drives remain critical for data center storage tiers.
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Revenue grew 44% year-over-year to $3.1B with record margins and strong free cash flow, driven by robust cloud and AI demand. Guidance calls for continued sequential growth, with Mozaic HAMR drives ramping and capital allocation shifting toward share buybacks.
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AI and Video AI are driving stronger-than-expected storage demand, with new 40TB drives ramping up and robust customer commitments through 2027. Profitability and margins are rising, capital allocation is focused on shareholder returns, and the industry’s structure and technology leadership limit new competition.
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Nearline exabyte growth is expected to remain strong, with stable to slightly increasing pricing and all production sold out through 2026. HAMR technology is ramping, driving cost reductions and margin gains, while AI and video applications accelerate demand beyond supply.
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Record December quarter with 22% year-over-year revenue growth, record profitability, and strong demand in data center markets. HAMR technology ramp and disciplined supply strategy drive margin expansion, with 2026 fully allocated and sequential improvements expected.
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Revenue grew 21% year-over-year with record gross and operating margins, driven by strong cloud and enterprise demand. Over 1 million Mosaic HAMR drives shipped, and five global CSPs are now qualified. Outlook remains robust with continued margin expansion and strong cash flow generation.
Fiscal Year 2025
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Exabyte storage demand is surpassing expectations, driven by video, AI, and emerging applications. The transition to higher-capacity HAMR drives is underway, supporting cost reductions and profitability, while supply discipline and capital returns remain priorities.
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Storage demand continues to outpace supply, driven by AI and video applications, with a strategic focus on higher-capacity HAMR drives. Gross margins have doubled in 10 quarters, and the cost gap with NAND is expected to widen as HAMR adoption accelerates. Debt reduction and increased shareholder returns are ongoing.
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Build-to-order and pricing strategies have improved predictability and profitability, while HAMR technology is driving cost and margin advantages as it ramps with major cloud customers. Financial discipline has led to strong margins, reduced OpEx, and robust free cash flow.
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Strong demand for high-capacity storage, driven by AI and cloud, is outpacing supply, with HAMR technology enabling cost and capacity improvements. Financial discipline, low CapEx, and operational efficiency support robust free cash flow and shareholder returns.
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Fiscal 2025 saw 30% year-over-year revenue growth, record gross margins, and strong free cash flow, driven by robust cloud demand and the ramp of HAMR technology. Guidance for the September quarter points to continued revenue and margin expansion, with share repurchases set to resume.
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Exabyte and revenue growth are now closely aligned as cloud demand dominates and oversupply ends. Technology transitions to HAMR and disciplined pricing drive margin expansion, with strong visibility into 2025 and plans for share buybacks as financial targets are met.
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Strong nearline storage demand, AI-driven data growth, and disciplined CapEx are supporting a robust industry cycle. HAMR technology is ramping quickly, expected to reach 70% of nearline exabytes in two years, driving margin expansion and operational efficiency.
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Data growth driven by AI and regulation is fueling demand for high-capacity, cost-efficient storage. The transition to HAMR technology and a build-to-order model is expected to drive margin expansion, revenue growth, and strong shareholder returns, with a robust roadmap to 10 TB per disk and beyond.
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Reported 31% year-over-year revenue growth and strong margin expansion, driven by robust demand for high-capacity drives and successful HAMR technology ramp. Guidance calls for continued revenue and profit growth, with minimal expected tariff impact and ongoing focus on debt reduction.
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Revenue and gross margin for the March quarter are as expected, with supply issues resolved. Sequential growth in revenue and profitability is anticipated through 2025, driven by strong cloud demand, technology transitions, and disciplined pricing. Capital allocation focuses on debt reduction, with likely share buybacks and dividend increases.
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Strong December quarter with 7% sequential revenue growth and non-GAAP EPS above $2, driven by robust cloud demand and nearline product momentum. Supply constraints will impact March quarter revenue by $200 million, but profitability and gross margin are expected to improve as HAMR ramps.
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Revenue grew 49% year over year to $2.17B, with gross margin at a decade high and strong cloud demand driving profitability. The company is ramping new high-capacity products, expects further margin expansion, and raised its dividend, with robust demand visibility into 2025.
Fiscal Year 2024
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HAMR technology has been qualified for cloud use, with a major production ramp expected by mid-2025. Despite a temporary $200 million manufacturing impact in the March quarter, gross margins are projected to improve, driven by higher HAMR volumes and favorable product mix. AI and cloud demand continue to support robust pricing and long-term growth.
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HAMR technology has been qualified for the cloud, with volume ramping and more customer qualifications expected by mid-2025. Strong nearline demand, improved gross margins, and a stable OpEx position the company for continued profitability, with share buybacks likely to resume next fiscal year.
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HAMR drives have completed key qualifications and will begin shipping soon, supporting long-term cloud growth. Production issues will impact fiscal Q3, but supply discipline and build-to-order models are improving predictability. Financial focus remains on debt reduction and margin improvement.
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Cloud and enterprise OEM demand are driving a storage upcycle, with profitability and exabyte growth supported by a shift to higher-capacity drives and disciplined capacity management. HAMR technology is progressing, expected to ramp by mid-2025, while capital allocation focuses on debt reduction and dividends.
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Q4 revenue grew 18% year-over-year to $1.89B, with non-GAAP EPS of $1.05 and gross margin near 31%. Mass capacity shipments and cloud demand surged, while new high-capacity and HAMR drives advanced. Outlook calls for continued revenue and margin growth amid tight supply.
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GenAI is fueling explosive data growth, requiring massive, sustainable storage expansion across cloud, edge, and endpoint. Hard drive areal density breakthroughs, like the Mozaic 3+ platform, are essential for meeting these demands while optimizing cost, power, and sustainability.
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Cloud and AI-driven demand are fueling sequential exabyte growth, with China and enterprise OEMs expected to drive the next recovery phase. Consistent pricing increases and a shift to mass capacity products are boosting margins, while HAMR technology ramps up for broader adoption by mid-2025.