Seagate fiscal first-quarter revenue rises 61% to $4.23 billion; guides to $4.8 billion

Seagate Technology (Nasdaq: STX) reported fiscal first-quarter revenue of $4.2 billion, up 61% from a year earlier, and forecast $4.8 billion for the fiscal second quarter, according to its results release filed with the SEC on October 27.

What happened

Revenue for the quarter ended October 2 was $4,233 million, compared with $2,629 million a year earlier and $3,629 million in the fiscal fourth quarter that ended July 3. That is 61.0% above the year-earlier quarter and 16.6% above the previous quarter (both computed from the company's figures).

The company said GAAP gross margin was 57.3%, up from 39.4% a year earlier, and non-GAAP gross margin was 57.8%, up from 40.1%. GAAP net income was $1,761 million, or $7.59 a diluted share, compared with $549 million, or $2.43, a year earlier. Non-GAAP diluted earnings per share were $7.68, up from $2.61. Non-GAAP results exclude items such as share-based compensation charges, restructuring costs and losses on debt transactions.

Seagate said it generated $1.7 billion of cash flow from operations and $1.5 billion of free cash flow in the quarter. It retired about $1.2 billion of debt, lowering gross debt to $2.4 billion, and retired a further $750 million after the quarter ended, bringing gross debt to $1.6 billion. The company said it returned $568 million to shareholders through dividends and share repurchases.

The board raised the quarterly cash dividend by about 3% to $0.76 a share, payable on January 7, 2027, to shareholders of record on December 23, 2026.

Guidance

For the fiscal second quarter, Seagate guided to revenue of $4.8 billion, plus or minus $100 million, and non-GAAP diluted earnings per share of $9.20, plus or minus $0.20. The midpoint of the revenue range is 13.4% above the fiscal first-quarter figure (computed).

The quarter came in above the guidance the company gave three months earlier. In its July results release, Seagate had guided to fiscal first-quarter revenue of $4.1 billion, plus or minus $100 million, and non-GAAP diluted earnings per share of $7.30, plus or minus $0.20. Reported revenue was 3.2% above the midpoint, and non-GAAP earnings per share were $0.38 above it (both computed).

What the company said

Chair and Chief Executive Officer Dave Mosley said in the release that "data creation, retention and reuse continue to compound storage demand with long term customer demand visibility reinforcing our view of a multi-year growth phase." He said the company's roadmap based on heat-assisted magnetic recording, known as HAMR, lets it address growing exabyte demand "through areal density gains while maintaining supply discipline."

In July, Mosley tied the demand to artificial intelligence, saying that "as AI accelerates data generation and its value, we see durable long-term demand for mass capacity storage." The company said in July that its performance was being driven by robust cloud data center demand and that it had grown annual revenue 34% in fiscal 2026, to $12.2 billion.

What to watch

Seagate scheduled a public webcast for 5:00 p.m. ET on Tuesday, October 27, to discuss the results. The next quarterly results will cover the fiscal second quarter, for which the company's own range is $4.7 billion to $4.9 billion in revenue and $9.00 to $9.40 in non-GAAP earnings per share. The company said actual results may differ materially from its assumptions.