Seagate: Fiscal 1Q25 Financial Results

(in $ million)	1Q24	1Q25	Growth
Revenue	1,454	2,168	*49%*
Net income (loss)	(184)	305

1Q25 Highlights

Revenue increased to $2.17 billion
GAAP diluted earnings per share (EPS) of $1.41; non-GAAP diluted EPS of $1.58
Cash flow from operations of $95 million and free cash flow of $27 million
Increased quarterly cash dividend by approximately 3% to $0.72 per share

Seagate Technology Holdings plc reported financial results for its fiscal first quarter ended September 27, 2024.

“Seagate is off to an outstanding start to the fiscal year, highlighted by gross margin expanding to the highest level in more than a decade,” said Dave Mosley, CEO. “We executed on our plans to aggressively ramp our 28TB nearline drives and broaden the number of cloud customers entering qualification on HAMR-based Mozaic products. We are excited by the strong product momentum which positions us well to address customer demand while delivering profitable growth. Our confidence in Seagate’s future opportunities is reflected in the decision to raise the quarterly dividend as announced today.“

During the fiscal first quarter the company generated $95 million in cash flow from operations, $27 million in free cash flow and returned $147 million of capital to shareholders through its quarterly dividend. As of the end of the quarter, cash and cash equivalents totaled $1.2 billion, and there were 211 million ordinary shares issued and outstanding.

Quarterly Cash Dividend
The board of directors declared a quarterly cash dividend of $0.72 per share, which will be payable on January 6, 2025 to shareholders of record as of the close of business on December 15, 2024. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.

The company is providing the following guidance for 2FQ25:

Revenue of $2.30 billion, ±$150 million
Non-GAAP diluted EPS of $1.85, plus or minus $0.20
Guidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to estimated share-based compensation expenses of $0.22 per share.

Comments

Seagate delivered strong revenue and profitability growth for a 4th consecutive quarter. September quarter revenue was $2.17 billion, up 15% Q/Q and 49% Y/Y.

Within HDD business, exabyte shipments grew 20% sequentially to 138EB and revenue increased 16% to $2 billion. Mass capacity revenue grew for the 5th consecutive quarter, more than offsetting the expected decline in the legacy business. Mass capacity revenue was $1.7 billion, up 21% sequentially driven by continued strength in nearline cloud demand, along with a significant uptick in nearline enterprise sales. Mass capacity shipments totaled 128EB compared with 104EB in the June quarter, up 23% sequentially.

Mass capacity shipments now represent a record 93% of total HDD exabyte, reflecting the continued long-term secular growth for cost-efficient scalable storage. As planned, we began to ramp our 24 and 28-terabyte PMR which helped to boost Seagate's nearline shipment to 109EB in the quarter, up from 84EB in the prior period.

In the September quarter, revenue growth was driven by U.S. cloud providers, though we continue to see positive demand trends globally. For instance, some customers have highlighted the growing use of video content on e-commerce and social media platforms. Data indicates that video is the most effective format for engaging digital audiences.

Consistent with our plans, the company began to aggressively ramp its final PMR platform in the September quarter, which is currently up to 28TB in capacity. It has expanded customer qualifications on its 3-plus terabyte per disc Mozaic HAMR-based platform with a few customer quals already completed spanning the enterprise nearline, VIA, and mass market segments.

Sales of legacy products totaled $270 million, representing roughly 12% of total revenue. The remaining 8% of revenue was derived from our other businesses, which held steady at $164 million. The other businesses include system, SSD, and refurbished drives, a business that has grown by about 25% Y/Y, and in closed drives under firm's security programs.

HDDs from 1FQ19 to 1FQ25

Fiscal period

HDD ASP

Exabytes shipped

Average GB/drive

1Q23

$104

118.2

7,500

2Q23

$108

112.5

7,300

3Q23

$111

118.7

8,200

4Q23

$97

91.2

6,400

1Q24

$108

89.6

7,500

2Q24

$119

95.1

8,200

3Q24

$154

99.1

8,700

4Q24

$141

114.2

9,300

1Q25

137.5

10,600

FY ending in June
* in $million

Period

Revenue*

Y/Y growth

Net income*

FY18

11,184

772

FY19

10,390

-7%

2,012

FY20

10,509

1,004

FY21

10,681

1,314

FY22

11,661

1,649

FY23

7,384

-37%

(529)

1FQ24

1,484

-29%

(184)

2FQ24

1,555

-18%

(19)

3FQ24

1,655

-11%

4FQ24

1,887

18%

513

FY24

6,551

-11%

335

1FQ25

2,168

49%

305

2FQ25 (estim.)

2.30 billion ±$150 million

58%-38%