Seagate Technology Holdings plc Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue of $2.73B, up 4% sequentially and above guidance midpoint (vs. $2.62B in prior quarter).
  • Non-GAAP gross margin of 27.4%, up 60 bps sequentially.
  • Non-GAAP operating margin of 15.4%, up 70 bps sequentially and within the long-term target range of 15–20%.
  • Non-GAAP EPS of $1.48, up 15% sequentially and exceeding the high end of guidance.
  • Returned $912M to shareholders via dividends and buybacks; repurchased ~12% of outstanding shares fiscal-year-to-date.
  • Record HDD shipments of 140 exabytes, up 8% sequentially and 16% year-over-year.

Business Segment Performance

Mass Capacity Storage
  • Record mass capacity revenue of $1.6B, up 8% sequentially and 5% year-over-year.
  • Mass capacity accounted for 65% of HDD revenue.
  • Mass capacity exabytes shipped reached 111 exabytes, up 21% year-over-year.
  • Nearline shipments were 95 exabytes, up 34% sequentially and 25% year-over-year.
  • 16 TB and higher drives represented ~50% of total exabyte shipments.
  • 18 TB drive ramp accelerating; sequential growth expected throughout calendar 2021.
Video and Image Applications (VIA)
  • Sequential revenue declined due to typical seasonality and lingering pandemic effects.

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Operator: Good afternoon, and welcome to the Seagate Technology Fiscal Third Quarter 2021 Financial Results Conference Call. My name is Gabriel, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. As a reminder, the conference is being recorded for replay purposes. At this time, I would like to turn the call over to Shanye Hudson, Senior Vice President, Investor Relations and Treasury. Please proceed, Shanye. 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 posted our earnings press release and detailed supplemental information for our March quarter 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 Form 8-K that was filed with the SEC. 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, reconciliation to the corresponding GAAP measures is not available without unreasonable effort. As a reminder, this call contains forward-looking statements, including our June quarter financial outlook and expectations about our financia

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