Seagate Technology Holdings plc Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Strong start to fiscal year with quarter-over-quarter growth in revenue, operating profit, EPS, and cash flow.
  • Revenue: $2.58 billion, up 9 percent from the June quarter and above guidance midpoint.
  • Non-GAAP EPS: $1.03, at the high end of guidance.
  • Exabyte shipments reached 98 exabytes, up 16 percent quarter-over-quarter.
  • Enterprise market revenue share rose to 45 percent (up from 41 percent in the June quarter).
  • Free cash flow: $309 million, up 4 percent sequentially.
  • Shareholder returns: $620 million via share repurchases and dividends; dividend increased 3 percent (first raise in four years).
  • Total debt reduced to $4.1 billion; refinanced $500 million to lower annual interest expense by $13 million.

Business Segment Performance

  • Nearline / Mass Capacity Storage:
    • Strong double-digit revenue growth driven by cloud and hyperscale demand.
    • 16-terabyte nearline drive ramp is the fastest in company history with more than a dozen customer qualifications.
    • Expected to ship over 1 million 16TB units in the December quarter.
    • 16TB to become top enterprise revenue product in fiscal Q2, and largest revenue contributor companywide in fiscal Q3—earlier than prior expectations.

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Operator: Good morning, and welcome to the Seagate Technology Fiscal First Quarter 2020 Financial Results Conference Call. My name is Denise, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. At this time, I'd like to turn the call over to Shanye Hudson, Vice President, Investor Relations. Please proceed, Shanye. Executive Shanye Hudson: Thank you. Good morning, everyone and welcome to today's call. Joining me today are Dave Mosley, Seagate's Chief Executive Officer; and Gianluca Romano, our Chief Financial Officer. We posted our earnings press release and detailed supplemental information for our September 2019 quarter on the Investors Section of our website. During today's call, we will refer to GAAP and non-GAAP measures. Non-GAAP figures are reconciled to GAAP figures in the earnings press release posted on our website and Form 8-K that was filed with the SEC. We've not reconciled certain non-GAAP outlook measures because material items that may impact these measures are out of our control and or cannot be reasonably predicted. Therefore, reconciliation to the corresponding GAAP measures is not available without unreasonable efforts. As a reminder, this call contains forward-looking statements, including our December-quarter financial outlook and expectations about our financial p

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