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- **Record Q2 Performance**: $2.83B revenue (22% YoY), 42.2% gross margin, $3.11 EPS beat expectations.
- **HAMR Momentum**: 1.5M HAMR units shipped, Mozaic 3 qualified with all U.S. CSPs, Mozaic 4 ramping Q1 2026.
- **AI-Driven Growth**: Exabyte shipments +26% YoY, nearline capacity fully allocated through 2026.
- **Financial Strength**: $607M free cash flow, $500M debt retired, Q3 EPS guidance $3.40.
- **2027 Outlook**: Flat to up pricing possible, HAMR 4TB/drive to drive cost efficiency improvements.

**【CEO Summary Section】**
- Seagate achieved record Q2 revenue of $2.83 billion, up 22% YoY, driven by strong data center demand and HAMR technology adoption.
- Non-GAAP gross margin expanded to 42.2%, supported by higher capacity drives (average nearline capacity up 22% YoY) and pricing strategy execution.
- HAMR shipments ramped to 1.5M units Q2, with Mozaic 3 qualified across all major U.S. CSPs and Mozaic 4 expected to begin ramp in Q1 2026.
- Nearline capacity fully allocated through 2026, with visibility into 2027 orders and discussions for 2028 demand growth.
- AI-driven video and agentic AI applications are fueling sustained demand for mass capacity storage, with exabyte shipments up 26% YoY.

**【CFO Financial Commentary】**
- Q2 non-GAAP EPS of $3.11, up 19% QoQ, with operating margin expanding to 31.9% due to cost control and mix improvement.
- Free cash flow of $607 million, highest in 8 years, supporting debt reduction ($500M senior notes retired) and shareholder returns ($154M dividends).
- Q3 guidance: Revenue $2.9B (±$100M), non-GAAP EPS $3.40 (±$0.20), with operating margin expected to approach mid-30% range.
- Capital expenditures maintained at 4% of revenue, supporting HAMR transition while preserving cash flow generation.

**【Q&A Key Highlights】**
- **Gross Margin Outlook**: Flat to slightly up pricing possible in 2027 as HAMR 4TB/drive ramps, with cost per terabyte improving 10-15% YoY.
- **HAMR Adoption**: Mozaic 4 qualification progressing well, with CSPs expecting to begin ordering in Q1 2026.
- **Demand Visibility**: 2026 nearline capacity fully allocated, with 2027 orders beginning in Q2 2026 and 2028 demand discussions underway.
- **AI Impact**: Agentic AI applications require persistent access to historic data, driving need for mass capacity storage at the edge.
- **LTAs**: Pricing for 2027 volumes to be negotiated in H2 2026, with customers prioritizing supply assurance over price sensitivity.


Seagate Technology Holdings plc (STX) Q2 2026 Earnings Call Transcript

- **Record Financials**: Q1 revenue $2.63B (+21% YoY), non-GAAPAAP EPS $2.61 beats guidance, 40.1% gross margin record.
- **HAMR Dominance**: 1M+ Mozaic drives shipped, 50% exabyte crossover by H2 2026. 5 CSPs qualified on 3+ TB/drive platforms.
- **AI-Driven Growth**: 50x YoY inferencing token growth, 275M AI-generated videos highlight unstructured data demand.
- **Profitability Expansion**: Q1 incremental margin 70%, Q2 operating margin target 30%, 50%+ exabyte YoY growth.
- **Sustainability**: 75%+ free cash flow return via dividend ($0.74/share) and buybacks, net leverage 1.5x.

**【CEO Summary Section】**
- Fiscal Q1 2026 revenue reached $2.63 billion, up 21% year-over-year and 8% sequentially, driven by strong demand for high-capacity nearline HAMR drives.
- Non-GAAP gross margin set a record at 40.1%, up 220 basis points sequentially, while operating margin expanded to 29%, the highest since FY2012.
- Non-GAAP EPS of $2.61 exceeded guidance, reflecting improved profitability and cost control.
- Data center revenue accounted for 80% of total, with cloud service providers leading demand for 24+ TB drives, up 32% YoY in exabyte volume.
- 1 million Mozaic HAMR drives shipped in Q1, with 50% exabyte crossover expected in H2 2026. 5 global CSPs qualified on 3+ TB/drive platforms, with remaining 3 to qualify by mid-2026.
- AI inferencing growth (50x YoY in token consumption) driving demand for unstructured data storage, particularly video content (e.g., 275M AI-generated videos on Google Veo).
- Strategic focus on HAMR-based Mozaic platforms (up to 44 TB/drive) to maintain TCO advantage over alternatives.

**【CFO Financial Commentary】**
- GAAP net income: $427 million (free cash flow), up 19% YoY. Non-GAAP operating expenses: $291 million, flat sequentially.
- Exabyte shipments: 182 EB (+32% YoY), with 159 EB to data centers (+23% QoQ). Nearline average drive capacity increased 26% YoY.
- Capital expenditures: $105 million (4% of revenue), with FY26 capex expected within 4-6% target range.
- Dividend increased 3% to $0.74/share. Share buybacks: $29 million at $187/share, with plans to continue opportunistic repurchases.
- Cash balance: $2.4 billion. Net leverage: 1.5x, down from 1.8x prior quarter.
- Q2 2026 guidance: Revenue $2.7 billion ±$100M, non-GAAP EPS $2.75 ±$0.20.

**【Q&A Highlights】**
- **Supply/Demand Balance**: Build-to-order contracts lock in 80%+ of nearline production through 2026. CSPs have visibility through 2027. No unit capacity additions; focus on exabyte growth via HAMR transitions.
- **Incremental Margins**: Q1 incremental margin ~70%, higher than Analyst Day 50% target. Sustained due to HAMR mix shift and pricing strategy. Q2 margin expansion to ~30%.
- **Cost Reduction**: Mid-teens cost per terabyte decline expected in 2026, driven by HAMR qualification ramp (2 CSPs on 40+ TB drives).
- **AI Impact**: Video content (e.g., AI-generated videos 20,000x larger than text) driving 80%+ of exabyte growth. CSPs report 50x YoY inferencing token growth.
- **HAMR Adoption**: 50% exabyte crossover in H2 2026. 5 CSPs qualified on 3+ TB/drive, with remaining 3 to qualify by mid-2026. 1M+ Mozaic drives shipped in Q1.
- **Seasonality**: Edge IoT revenue seasonal dip expected in Q3, but data center dominance (80% of revenue) mitigates impact.

Seagate Technology Holdings plc (STX) Q1 2026 Earnings Call Transcript

- **Record Financial Performance**: FY2025 revenue up 39% to $9.1B, non-GAAP EPS $8.10, with Q4 gross margin hitting 37.9%.
- **HAMR Momentum**: Mozaic 3+ qualified with three CSPs, 4+ terabyte per disk ramp starting Q1 2026. HAMR drives 44% of nearline exabytes in Q4.
- **AI-Driven Growth**: Nearline exabyte shipments up 52% YoY, supported by video, analytics, and edge AI workloads. Edge data centers adopting HAMR for TCO efficiency.
- **Free Cash Flow & Returns**: $425M Q4 free cash flow, $1.3B FY2025 total, with 75% returned to shareholders. Share buybacks resuming Q4 2025.
- **Tax & Margin Outlook**: 14% tax rate in FY2026, but gross margin expansion to 40%+ expected by mid-2026 as HAMR crossover occurs.

**【CEO Summary Section】**
- Fiscal 2025 revenue grew 39% YoY to $9.1B, with non-GAAP EPS reaching $8.10, driven by nearline cloud demand and HAMR adoption.
- June quarter revenue: $2.44B (30% YoY growth), gross margin expanded to 37.9%, and non-GAAP EPS hit $2.59.
- HAMR-based Mozaic 3+ products qualified with three major CSPs, with 4+ terabyte per disk ramp starting Q1 2026.
- Edge data center demand growing due to AI workloads, with enterprise solutions integrating HAMR for TCO efficiency.
- Resumed share repurchases in Q4 2025, targeting 4-6% of revenue for FY26 capital expenditures.

**【CFO Financial Commentary】**
- June quarter free cash flow: $425M (nearly double Q1), with $153M returned to shareholders via dividends.
- Fiscal 2025 free cash flow: $1.3B, with 75% returned to shareholders.
- Debt reduced to $5B (net leverage 1.8x), targeting further reduction with expanding profits.
- September quarter guidance: $2.5B ±$150M revenue (15% YoY growth), non-GAAP EPS $2.30 ±$0.20.
- Global minimum tax rate of 14% expected to impact FY26 EPS, partially offset by share buybacks.

**【Q&A Key Highlights】**
- **Gross Margin Expansion**: HAMR drives lower cost per terabyte, with Mozaic 3+ accreting to margins. September quarter gross margin expected to expand beyond 38%.
- **AI Demand**: Nearline exabyte shipments up 52% YoY, driven by video, analytics, and edge AI workloads. CSPs using tiered storage solutions with HAMR for cost savings.
- **HAMR Ramp**: 4+ terabyte per disk platform qualified with a global CSP, targeting volume ramp Q1 2026. Three CSPs qualified on Mozaic 3+, with additional qualifications progressing.
- **Tax Impact**: 14% tax rate for FY26, partially offsetting EPS growth. Convertible notes dilution expected to be mitigated by buybacks.
- **Supply Chain**: Build-to-order contracts provide visibility through mid-2026, with minimal tariff impact expected.


Seagate Technology Holdings plc (STX) Q4 2025 Earnings Call Transcript

- **Record Profitability**: 31% YoY revenue growth ($2.16B) with non-GAAP EPS of $1.90, driven by nearline cloud demand and HAMR technology.
- **Gross Margin Expansion**: 36.2% gross margin (up 70bps) and 23.5% operating margin, highest in company history.
- **HAMR Breakthrough**: 3TB-per-disk Mozaic drives ramping to hyperscale customers, with shipments set to surge in H2 2025.
- **Demand Visibility**: Build-to-order agreements extend into 2026, supported by hyperscale and edge data center growth.
- **Financial Strength**: $216M free cash flow, $5.1B debt (2.1x net leverage), and $2.1B liquidity for strategic investments.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 revenue reached $2.16 billion, up 31% year-over-year, driven by nearline cloud demand and high-capacity PMR/HAMR products. Non-GAAP EPS of $1.90 hit the top of guidance.
- **Profitability Expansion**: Gross margin expanded 70bps to 36.2%, operating margin rose to 23.5%, marking the third-highest in company history. Free cash flow increased to $216 million.
- **HAMR Momentum**: HAMR-based Mozaic drives (3TB per disk) are ramping to qualified customers, with shipments expected to accelerate in H2 2025. Nearline exabytes up 55% YoY to 120 exabytes.
- **Demand Visibility**: Build-to-order agreements extend into H1 2026, with hyperscale and edge data centers driving demand. Tariffs expected to have minimal direct impact in Q4.

**【CFO Financial Commentary】**
- **Revenue Mix**: Mass capacity revenue ($1.7B) up 48% YoY, nearline exabytes (+55% YoY) dominate at 90% of mass capacity. Legacy products down 8% sequentially due to seasonal trends.
- **Cost Control**: Operating expenses down 5% QoQ to $274M, benefiting from R&D timing and one-off savings. Free cash flow guidance for H2 2025 remains strong.
- **Balance Sheet**: Debt reduced by $536M to $5.1B, net leverage 2.1x. Liquidity remains robust at $2.1B. Share buybacks to resume post-debt reduction.
- **Tariff Impact**: June quarter outlook ($2.4B ±$150M) assumes minimal direct impact, but monitoring secondary demand effects.

**【Q&A Key Themes】**
1. **Supply Constraints**: Q3 undersupply resolved, Q4 guidance reflects improved execution. HAMR ramp contributed to upside vs. prior guidance.
2. **HAMR Adoption**: Second major CSP qualification nearing completion, positive feedback from other cloud customers. HAMR shipments to accelerate in coming quarters.
3. **Tariff Strategy**: Evaluating geographic supply chain shifts, but prioritizing current build-to-order model. Cost pass-through last resort.
4. **AI Storage Trends**: Hard drives critical for AI training data storage, model checkpoints, and content generation. disaggregated storage architectures favor HDD scalability.
5. **Financial Discipline**: Maintaining 20-25% operating margin target. Capital allocation focused on debt reduction, dividends, and strategic investments.


Seagate Technology (STX)-29 Apr 25-2025 Q3 Earnings call transcript

- **Record Q2 Performance**: $2.33B revenue, $2.03 EPS, 35.5% gross margin – all metrics at multi-year highs.
- **HAMR Breakthrough**: 36TB Mosaic sampling begins, with CSP qualification and volume ramp starting H2 CY25.
- **AI-Driven Growth**: HDDs critical for Gen AI data storage, with video analytics and edge computing driving 170x data growth by 2028.
- **Q3 Caution**: $200M revenue impact from supply constraints, but gross margin trends up and build-to-order commitments intact.
- **Long-Term Confidence**: 50%+ exabyte growth in 2024, hyperscale CapEx expansion, and HAMR-enabled capital efficiency.


**【CEO Summary Section】**
- **Revenue Growth**: Q2 FY25 revenue of $2.33B, up 7% sequentially, driven by nearline cloud demand. Non-GAAP EPS of $2.03, highest in 12 quarters.
- **Gross Margin Expansion**: Non-GAAP gross margin improved 220bps to 35.5%, benefiting from high-capacity PMR and HAMR products.
- **HAMR Momentum**: Sampling 36TB Mosaic drives, with initial CSP qualification underway. Expect significant volume ramp in H2 CY25.
- **AI & Data Growth**: HDDs critical for Gen AI data lakes, with video analytics and edge storage driving exabyte growth.

**【CFO Financial Commentary】**
- **Cash Flow**: Free cash flow of $150M in Q2, up from $27M prior quarter. FY25 capex expected at low end of 4-6% of revenue range.
- **Debt Reduction**: Retired $479M of notes, reducing net leverage to 2.5x. No debt maturities until FY27.
- **Q3 Outlook**: Revenue $2.1B (±$150M), non-GAAP EPS $1.70 (±$0.20). Supply constraints limit upside, but gross margin trends positive.

**【Q&A Key Themes】**
- **Supply Constraint Impact**: $200M revenue impact in Q3 due to production issue, resolved but limiting in-quarter upside. No demand pull-forward expected.
- **HAMR Margin Contribution**: HAMR drives accretive to gross margin, with ramp accelerating in H2 CY25. 36TB sampling to multiple customers.
- **Cycle Sustainability**: Build-to-order model provides 6+ months visibility. Exabyte shipments up 50% in 2024, hyperscale CapEx growth to continue.


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