Seagate Technology 2025 Q4 Earnings Beats Expectations with Net Income Down 4.9%

Seagate Technology (STX) reported its fiscal 2025 Q4 earnings on July 29th, 2025. The results surpassed estimates with revenue at $2.44 billion against expectations of $2.42 billion, and adjusted EPS of $2.59 versus estimates of $2.43. Seagate’s guidance for the upcoming quarter suggests revenue between $2.35 billion and $2.65 billion, with EPS ranging from $2.10 to $2.50, slightly below the prior quarter. The company remains optimistic about sustained demand and profitability growth.

Revenue
Seagate Technology's revenue surged by 29.5% to reach $2.44 billion in the fourth quarter of fiscal 2025, up from $1.89 billion during the same period in the previous year.

Earnings/Net Income
Seagate Technology's EPS decreased by 5.7% to $2.30 in Q4 2025 from $2.44 in Q4 2024, with net income dropping to $488 million, a decline of 4.9% from the previous year's $513 million. The EPS reflects a challenging earnings environment despite robust revenue growth.

Price Action
The stock price of Seagate Technology edged up 0.61% on the latest trading day, climbed 4.15% during the most recent full trading week, and jumped 8.52% month-to-date.

Post-Earnings Price Action Review
The strategy of acquiring shares of Seagate Technology (STX) following a quarter-over-quarter revenue increase on the day of financial report release and holding for 30 days has yielded significant returns over the past three years. This approach delivered a total return of 200.60%, significantly outperforming the benchmark return of 87.35%, resulting in an excess return of 113.25%. With a compound annual growth rate of 24.78% and no maximum drawdown, this strategy has showcased impressive performance both in terms of returns and risk management, illustrating a lucrative opportunity for investors during periods of revenue growth.

CEO Commentary
Seagate Technology's CEO, William David Mosley, highlighted the company's strong fiscal '25 performance, noting a 30% year-over-year revenue growth and record gross margins. He emphasized the successful high-volume ramp of new nearline platforms, including the industry's first heat-assisted magnetic recording hard drive, which positions Seagate favorably amidst growing global cloud demand. Mosley expressed confidence in the company’s future, stating, "We believe our structural changes and strong product pipeline will enhance profitability and cash generation in fiscal '26." He characterized the current period as "one of the most exciting" in Seagate's history due to increasing demand for mass data storage driven by AI applications.

Guidance
Seagate anticipates September quarter revenue in the range of $2.5 billion, plus or minus $150 million, reflecting a 15% year-over-year improvement. Non-GAAP EPS is expected to be $2.30, plus or minus $0.20, based on a 16% tax rate and a diluted share count of approximately 221 million shares. The company plans capital expenditures to remain within 4% to 6% of revenue for fiscal '26 while resuming share repurchases, signaling confidence in sustained demand and profitability growth.

Additional News
Seagate Technology has announced plans to resume share repurchases, highlighting its confidence in ongoing demand and profitability growth. This move reflects a strategic approach to enhancing shareholder value, alongside a commitment to maintaining capital expenditures within 4% to 6% of revenue for fiscal 2026. Additionally, Seagate declared a quarterly cash dividend of $0.72 per share, payable on October 9th to shareholders of record as of September 30th, returning $600 million to shareholders in fiscal year 2025. These developments underline Seagate's robust financial health and continued focus on rewarding its investors amidst evolving market dynamics.