Seagate Technology Holdings plc Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Seagate delivered a strong start to fiscal 2026, with significant year-over-year revenue growth and record profitability metrics.
  • The company continues to benefit from surging AI-driven data storage demand, rapid growth in video content, and increased adoption of its HAMR-based Mozaic drives.
  • Long-term agreements with major cloud service providers (CSPs) provide visibility into demand through calendar 2027.

Financial Performance Highlights (Compared to Prior Periods)

  • Revenue: $2.63 billion, up 8% sequentially and up 21% year-over-year.
  • Non-GAAP Gross Margin: 40.1%, a company record; up 220 bps sequentially.
  • Non-GAAP Operating Margin: 29%, up 280 bps sequentially; highest since fiscal 2012.
  • Non-GAAP EPS: $2.61, above guidance; up sharply from the previous year.
  • Exabyte Shipments: 182 EB, up 32% year-over-year.
  • Free Cash Flow: $427 million, flat sequentially but expected to rise next quarter.
  • Dividend: Increased 3% to $0.74 per share.

Business Segment Highlights

  • Data Center Market:
    • Represents 80% of total revenue ($2.1 billion), up 13% sequentially and 34% year-over-year.
    • Strongest demand from global cloud CSPs; enterprise OEM also improved.

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Operator: Welcome to the Seagate Technology Fiscal First Quarter 2026 Conference Call. [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 Chair and 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 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. Actual results may differ materially from those contained in or implied by these forward-looking statements and are subject to risks and uncer

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