Seagate Technology Holdings plc Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Revenue of $1.89 billion, slightly above midpoint of guidance, but down from $2.8 billion in the same quarter last year (Q2 FY22).
  • Non-GAAP EPS of $0.16, above guidance midpoint but sharply lower than $2.28 in Q2 FY22.
  • Free cash flow of $172 million, up 54% quarter-over-quarter due to reduced capex and improved working capital.
  • HDD shipments of 113 exabytes, down 5% sequentially and down nearly 30% year-over-year.
  • Mass capacity revenue declined 10% sequentially due to cloud and enterprise inventory digestion and China slowdown.
  • Legacy revenue increased 8% sequentially due to seasonal consumer demand.
  • Non-HDD revenue declined 15% sequentially after a strong September quarter.
  • Underutilization costs were $79 million, pressuring gross margin to 21.4%, down from 24.5% in Q1 FY23.

Key Operational and Strategic Updates

  • Debt reduced by over $200 million; total debt now $6 billion with leverage at 3.8x.
  • Capex reduced 41% sequentially to $79 million; full-year capex expected below long‑term 4%-6% of revenue target.
  • Inventory reduced by $400 million, now at $1.2 billion; expected to remain around this level in coming quarters.
  • Restructuring actions lowered operating expenses to $294 million; OpEx expected around $300 million for FY23.

Continue Reading

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

Upgrade to Professional
Operator: Good day, and welcome to the Seagate Technology Fiscal Second Quarter 2023 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 second quarter fiscal 2023 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 easily be 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 contained in or implied those by these forwar

Continue Reading

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

Upgrade to Professional