Seagate Technology Holdings plc Q1 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue of $2.17B, up 15% sequentially and 49% year-over-year, driven by strong mass capacity demand.
  • Non-GAAP EPS of $1.58, above guidance and significantly improved from the prior-year period.
  • Non-GAAP gross margin reached 33.3%, the highest in over a decade and up 240bps sequentially.
  • Non-GAAP operating income increased 35% sequentially to $442M.
  • Adjusted EBITDA rose 23% sequentially to $498M.
  • Free cash flow was $27M; expected to rise through the remainder of fiscal 2025.
  • Quarterly dividend increased nearly 3% to $0.72/share, reflecting management confidence.

Business Drivers and Market Dynamics

  • Mass capacity revenue grew 21% sequentially to $1.7B, the fifth consecutive quarterly increase.
  • Mass capacity shipments rose to 128 exabytes, up from 104 exabytes in the prior quarter (+23%).
  • Nearline cloud demand remains strong, with U.S. CSPs driving growth.
  • Enterprise and OEM markets showed their first meaningful uptick in nearline demand after multiple quarters of stability.
  • Video-centric applications (e-commerce, social media, personalization) are increasing demand for storage, supporting HDD shipment growth.
  • HDDs still comprise ~90% of bytes stored in public cloud, a ratio expected to hold long term.

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Operator: Welcome to the Seagate Technology Fiscal First Quarter 2025 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, Investor Relations. Please go ahead. Shanye Hudson: Thank you. Hello, 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 September quarter results 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 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 effort. 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, should not be relied upon as of any subsequent date. Actual re

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