Seagate Technology Holdings plc Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview (September Quarter)

  • Revenue was 2.31 billion dollars, beating the midpoint of guidance, but down 8 percent sequentially. Revenue was supported by cloud demand and strong recovery in video and image applications (VIA), partially offset by weaker enterprise spending.
  • Non-GAAP earnings per share were 0.93 dollars, above expectations.
  • Mass capacity storage represented 58 percent of total revenue, unchanged from the prior quarter, but up from 47 percent in the year-ago quarter. Mass capacity continues to be the company’s main growth engine.
  • Total hard drive capacity shipped was 114 exabytes, down 2 percent sequentially but strongly ahead of last year. Mass capacity shipments were 87 exabytes compared to 91 exabytes last quarter, but well above 64 exabytes a year ago.
  • Nearline shipments were 64 exabytes, down from record levels in June but up 36 percent year over year.
  • Gross margin was 26.5 percent, including a COVID-related cost impact of 110 basis points.
  • Operating income was 294 million dollars, with an operating margin near 13 percent, the low end of the long-term target range (13 to 16 percent).
  • Free cash flow was 186 million dollars, expected to normalize over coming quarters as restructuring costs roll off and demand improves.

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Operator: Good afternoon, and welcome to the Seagate Technology Fiscal First Quarter 2021 Results Conference Call. My name is Jason 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, this 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 September 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’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, reconciliation to the corresponding GAAP measures is not available without unreasonable effort. As a reminder, this call contains forward-looking statements, including our December quarter financial outlook and expectations about our financial perfo

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