Seagate Technology Holdings plc Q1 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Overview
  • Seagate delivered a strong start to fiscal 2022, driven by robust mass capacity storage demand and disciplined operational execution.
  • Revenue: $3.12B, up 3% sequentially and 35% year-over-year.
  • Non-GAAP gross margin: 31%, up 140 basis points sequentially and within the long‑term target range of 30% to 33%.
  • Non-GAAP operating margin: 20.1%, the company’s highest in nearly ten years and at the top of the long‑term target range (15%–20%).
  • Non-GAAP EPS: $2.35, up 18% sequentially.
  • Board approved a 4.5% quarterly dividend increase to $0.70/share.
  • Full‑year fiscal 2022 revenue outlook raised from high single‑digit growth to low double-digit growth.
Business Segment Performance
  • HDD revenue: $2.9B, up 5% sequentially and 24% year-over-year.
  • Total HDD exabyte shipments: 159 EB, up 4% sequentially and 39% year-over-year.
  • Mass capacity storage revenue: exceeded $2B for the first time; up 8% sequentially and 51% year-over-year.
  • Mass capacity exabyte shipments: up 7% sequentially and 53% year-over-year.
  • Nearline shipments: 106 EB, up 5% sequentially and 65% year-over-year.
  • Legacy market revenue: $821M, down 3% sequentially but up 5% year-over-year.

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Operator: Good morning, and welcome to the Seagate Technology Fiscal First Quarter 2022 Financial Results Conference Call. My name is Julianne, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. At this time, I would like to turn the call over to Shanye Hudson, Senior Vice President, Investor Relations and Treasury. Please proceed, Shanye. Shanye Hudson: Thank you. Good afternoon, everyone, and welcome to today's call. Joining me are Dave Mosley, Seagate's Chief Executive Officer; and Gianluca Romano, our Chief Financial Officer. We posted our earning press release and detailed supplemental information for our September quarter fiscal 2022 on the Investors section of our website. During today's call, we'll 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 included in our 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 or cannot be reasonably predicted. Therefore, a reconciliation to the corresponding GAAP measures is not available without unreasonable effort. Before we begin, I'd like to remind you that today's call contains forward-looking statements, including our December quarter financial outlook and expectations about our financial performance, market demand, industry grow

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