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Seagate Technology (STX) Q1 Earnings call transcript Oct 22, 2025

Daily EarningsMonday, Oct 28, 2024 8:28 pm ET

1min read

EFSC -- STX --

In the latest earnings call, Seagate Technology showcased a strong start to its fiscal 2025 with a near 50% revenue growth and a non-GAAP gross profit increase of over 150% compared to the prior year. This impressive performance is attributed to the company's strategic cost efficiencies, sustained supply discipline, and the growing demand for cloud and enterprise storage.

Market Trends and Competitive Positioning

Seagate's revenue was driven by a robust demand for cloud storage, particularly in the U.S., and a significant uptick in nearline demand from enterprise and OEM customers. The company's optimism is reinforced by its build-to-order model, which provides good demand visibility and positions it well for future growth. Seagate's market share has dipped to the high 30s, but the company is confident it will rebound as it ramps up its latest high-capacity products and transitions to more cost-efficient and scalable storage solutions.

Product Roadmap and Innovation

Seagate is ramping up its final PMR platform and expanding Mozaic adoption, with the aim of addressing the breadth of customers' mass capacity storage needs. The company's Mozaic-based HAMR products are expected to provide significant margin expansion opportunities and further solidify Seagate's industry-leading technology roadmap. Seagate is also well-positioned to support future demand growth, thanks to its strategic investments in research and development.

Financial Outlook and Dividend Increase

For fiscal 2025, Seagate anticipates significant revenue growth, driven by the ramp of high-capacity nearline drives and the qualification of HAMR products. The company is maintaining supply discipline and is confident in its ability to meet demand while also addressing near-term exabyte demand growth. Seagate has increased its quarterly dividend by nearly 3%, reflecting its long-term confidence in the business and its commitment to shareholder value.

Key Takeaways

Seagate's strong financial performance and strategic focus on advanced technology roadmap position it well for future growth. The company's ability to drive profitable growth amidst a healthy industry supply-demand environment is a testament to its strategic initiatives and operational efficiency. With a robust product roadmap and a focus on meeting evolving customer needs, Seagate is poised for continued success in the rapidly evolving storage market.

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