Seagate Technology Holdings plc Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $2.04 billion (down from prior quarter and within revised guidance).
  • Non-GAAP EPS: $0.48 (well below expectations due to gross margin pressure and factory underutilization).
  • Non-GAAP operating margin: 9%, down sequentially due to lower volumes, mix shift, and higher underutilization.
  • Hard Drive Shipments: 118 exabytes total (down 24% sequentially and 26% year-over-year).
  • Mass Capacity Shipments: 104 exabytes (down 25% sequentially and 21% year-over-year), representing 88% of total exabytes.
  • Average capacity per drive rose to 11.8TB (up 3 percentage points sequentially) driven by strong 20+TB demand.

Key Drivers of Underperformance

  • Customer inventory corrections (particularly in U.S. cloud and China).
  • Deteriorating macroeconomic conditions (inflation, rates, continued China lockdowns).
  • Weak consumer spending and soft enterprise spending globally.
  • Factory underutilization from production cuts (over $50M in underutilization charges; expected to rise next quarter).

Business Segment Performance

  • Nearline:
    • Shipments down 28% sequentially due to cloud and enterprise OEM inventory digestion.
    • Recovery now expected during calendar 2023 (delayed from prior expectations of December quarter recovery).

Continue Reading

Unlock the full AI-powered summary with key highlights, financial performance, and analyst Q&A.

Upgrade to Professional
Operator: Good morning, and welcome to the Seagate Technology Fiscal First Quarter 2023 Earnings Conference Call [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Shanye Hudson, Senior Vice President, Investor Relations and Treasury. Please go ahead. 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've posted our earnings press release and detailed supplemental information for our fiscal first quarter 2023 results 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 and/or cannot be reasonably predicted. Therefore a reconciliation to the corresponding GAAP measures is not available without unreasonable efforts. I'd like to remind you that today's call contains forward-looking statements that reflect management's current views and assumptions, based on information available to us as of today, should not be relied upon as of any subsequent date. Actual results may differ materially from those contained in, or implied by these fo

Continue Reading

Unlock the full earnings call transcript with speaker labels and formatted dialogue.

Upgrade to Professional