Seagate's Q4 2025: Contradictions in Gross Margin Expansion, HAMR Impact, and Supply Chain Dynamics

Gross margin expansion expectations, HAMR ramp and revenue impact, supply chain and demand growth, gross margin expansion, and supply and demand management strategies are the key contradictions discussed in Seagate's latest 2025Q4 earnings call.



Strong Revenue Growth and Profitability:
- Seagate Technology reported revenue of $2.44 billion for the June quarter, up 13% sequentially and 30% year-on-year.
- The growth was driven by significant year-over-year increases in hard drive revenue, which reached $2.3 billion, and a 14% sequential increase in volume shipments to 163 exabytes.

Data Center and Cloud Demand:
- The company's data center revenue accounted for about 75% of fiscal 2025 sales, with nearline products contributing significantly to this growth.
- The increase was attributed to strong global cloud demand for nearline products and visibility into exabyte production capacity largely spoken for through the middle of the next calendar year.

HAMR Technology Advancements:
- Seagate started the high-volume ramp of its new HAMR-based platforms in fiscal '25, with major cloud customers qualified on their Mozaic products.
- This transition is poised to support improving profitability and cash generation, aligning with data growth from cloud and AI applications.

Geographic Data Trends:
- The company sees evolving trends in geographic data distribution, with specific regions like the edge requiring high-capacity storage solutions due to data sovereignty regulations.
- This is driven by trends of data replication and retention to support AI models, alongside the need for localized data storage due to evolving regulatory environments.