Seagate Technology Holdings plc Q3 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Revenue of $3.1B, up 10% sequentially and 44% year-over-year.
  • Non-GAAP gross margin reached a record 47%, up from 42.2% in the prior quarter.
  • Non-GAAP operating margin expanded to 37.5%, up 560 bps sequentially.
  • Non-GAAP EPS of $4.10, up 32% quarter-over-quarter and 115% year-over-year.
  • Free cash flow of $953M (31% margin), the highest level in over a decade.
  • Shipped 199 exabytes, up 39% year-over-year; 88% of exabytes went to data center markets.
  • Cloud demand marked its 10th consecutive period of growth.
  • Retired $641M in debt; net leverage down to 0.7x. Fitch upgraded Seagate to investment grade.

Business & Market Commentary

  • AI applications are driving a substantial acceleration in data creation, retention, and long-term storage needs.
  • Seagate sees structural growth ahead due to:
    • Sustained and rising storage demand from AI and cloud CapEx cycles.
    • HAMR-based Mozaic platform adoption increasing rapidly.
    • Strong visibility supported by multi-year exabyte-scale supply agreements with major CSPs.
  • Nearline capacity is almost fully allocated through calendar 2027, with build-to-order contracts being finalized through fiscal 2027.

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Operator: Good afternoon, and welcome to the Seagate Technology Fiscal Third 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 of 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 March 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'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 as they are subject

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