Seagate Technology Holdings plc Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarterly & Full-Year Performance Highlights

  • Q4 FY22 revenue: $2.63B, down sequentially due to macro headwinds, supply chain disruptions, and weakening consumer demand.
  • Q4 non-GAAP EPS: $1.59, down quarter-over-quarter.
  • FY22 revenue up 9% year-over-year, driven by 24% growth in mass capacity products.
  • FY22 non-GAAP gross margin exceeded 30%, operating margin surpassed 18%.
  • Record FY22 non-GAAP EPS: $8.18.
  • Free cash flow: $1.3B for FY22, highest in four years.
  • Shareholder returns: $610M in dividends and 9% of shares repurchased during FY22.

Business Segment Performance

  • Mass capacity HDD revenue: $1.9B in Q4, flat sequentially and slightly up year-over-year.
  • Mass capacity accounted for 80% of HDD revenue, a historic high.
  • Nearline HDD shipments: 119 exabytes, up 1% sequentially and 17% year-over-year.
  • Total HDD exabyte shipments: 155 exabytes, up slightly from prior quarter.
  • Legacy HDD revenue dropped to $489M, down 24% sequentially and 43% year-over-year due to sharp PC and consumer spending declines.
  • Non-HDD revenue: $219M, down 8% sequentially and 21% year-over-year.

Operational & Supply Chain Notes

  • Non-HDD component shortages and lockdowns in China strained production and customer inventory flow.

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Operator: Good afternoon, everyone, and welcome to the Seagate Technology Fourth Quarter and Fiscal Year 2022 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. And at this time, I'd like to turn the conference call over to Shanye Hudson, Senior Vice President; Investor Relations and Treasury. Ma'am, 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 June quarter and fiscal year 2022 results on the Investors section of our website. During today's call, we will refer to GAAP and non-GAAP financial measures. Non-GAAP figures are reconciled to GAAP figures in the earnings press release posted on our website and included on our Form 8-K that was filed with the SEC. We've not reconciled certain non-GAAP outlook measures because the 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 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 i

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