Seagate Technology Holdings plc Q2 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue of $1.56B, up 7% sequentially and at the midpoint of guidance.
  • Non-GAAP EPS of $0.12, beating the top end of guidance and improving $0.34 from the prior quarter (Q1 FY24 loss).
  • Non-GAAP operating income tripled sequentially to $127M; margin expanded 540 bps QoQ to 8.2%.
  • Sequential improvement largely driven by better cloud nearline demand, seasonal consumer strength and pricing discipline.
  • Management reiterated that the September 2023 quarter marked the bottom of the downcycle, with gradual recovery underway.

Key Business Drivers & Market Commentary

  • U.S. cloud customers: Inventories now near normalized levels; gradual demand recovery ongoing and expected to strengthen into 2024.
  • Enterprise OEM: Stabilizing, with modest improvements tied to IT spending recovery.
  • Non-U.S. cloud: Some positive demand momentum in December quarter.
  • China: Slower recovery due to macro constraints but potential improvement post–Lunar New Year and supportive government policy.
  • VIA (video and image applications): Expected seasonal decline in March quarter, recovery later in calendar 2024.

Mozaic HAMR Platform Launch (Major Highlight)

  • Mozaic platform launched, marking a key inflection point in areal density advancements.
  • Initial product: 3+ TB per disk, with roadmap to 5+ TB per disk capacity.

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Operator: Welcome to the Seagate Technology Fiscal Second Quarter 2024 Conference Call. [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 posted our earnings press release and the detailed supplemental information for our December 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 have 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 the 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 cont

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