Seagate Technology Holdings plc Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $1.45B, down from $1.6B in the prior quarter (Q4 FY23).
  • Non-GAAP Loss Per Share: $0.22, improved compared to deeper losses earlier in the cycle.
  • Market conditions remain soft due to China macro weakness and ongoing cloud inventory digestion, though U.S. cloud trends showed modest improvement.
  • HAMR (Heat-Assisted Magnetic Recording) product development is progressing on schedule, with 30TB+ drive qualifications advancing and volume shipments expected in early calendar 2024.

Business Segment Performance

  • HDD Revenue: $1.3B, down 6% sequentially.
  • Total HDD Exabyte Shipments: 90 exabytes, flat sequentially.
  • Average Capacity per Drive: Increased 17% Q/Q to 7.5TB.
  • Mass Capacity Revenue: $1B+, up 3% sequentially.
  • Nearline Shipments: 56 exabytes, slightly up Q/Q, with rising U.S. cloud demand.
  • VIA (Video & Image Applications) market saw sequential improvement but remains pressured by China macro weakness.
  • Legacy Revenue: $278M, down 31% Q/Q across mission-critical, client, and consumer markets.
  • Non-HDD Revenue: $159M, down from $218M prior quarter due to muted enterprise systems spending.

Margins & Profitability

  • Non-GAAP Gross Margin: 19.8% (up ~30bps Q/Q) due to pricing adjustments and restructuring benefits.

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Operator: Welcome to the Seagate Technology Fiscal First Quarter 2024 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Shanye Hudson, Senior Vice President of Investor Relations. Please go ahead. Shanye Hudson: Thank you. Good morning, 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 earnings press release and detailed supplemental information for our September quarter 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. 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. Before we begin, 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 and should not be relied upon as of any subsequent date. Act

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