Seagate Technology — Fiscal Q1 2027 Earnings Summary

Financial Performance:

• Revenue was $4.233 billion, a significant increase from $2.629 billion in the prior year period.
• GAAP gross margin was 57.3% compared to 39.4% in the prior year; non-GAAP gross margin was 57.8% compared to 40.1%.
• GAAP operating margin was 48.8% versus 26.4% in the prior year; non-GAAP operating margin was 50.7% versus 29.0%.
• GAAP net income was $1.761 billion compared to $549 million in the prior year; non-GAAP net income was $1.781 billion compared to $583 million.
• GAAP diluted earnings per share (EPS) were $7.59 versus $2.43 in the prior year; non-GAAP diluted EPS were $7.68 versus $2.61.
• Cash flow from operations was $1.7 billion; free cash flow was $1.5 billion.
• Gross debt was lowered to $2.4 billion after retiring $1.2 billion in principal debt during the quarter; subsequent to quarter-end, an additional $750 million was retired, bringing gross debt to $1.6 billion.
• Cash and cash equivalents totaled $1.3 billion at quarter-end.
• There were 230 million ordinary shares issued and outstanding at the end of the quarter.

Guidance and Future Outlook:

• Fiscal Q2 2027 revenue guidance is $4.8 billion, plus or minus $100 million.
• Fiscal Q2 2027 non-GAAP diluted EPS guidance is $9.20, plus or minus $0.20.
• Non-GAAP diluted EPS guidance excludes estimated share-based compensation expenses of $0.30 per share.
• Management expects a multi-year growth phase driven by compounding data creation, retention, and reuse.
• The company aims to deliver profitable growth, strong cash generation, and increased shareholder returns over the long term.

Business Segments and Product Lines:

• The company's HAMR-based technology roadmap is positioned to address growing exabyte demand through areal density gains.
• Seagate maintains supply discipline while leveraging a value-based pricing strategy.
• The company serves hyperscale cloud providers, enterprises, and consumers with mass-capacity data storage solutions.

Market and Competitive Landscape:

• Management views the demand environment as strengthening, with long-term customer demand visibility reinforcing the growth outlook.
• The company believes its strengthened balance sheet and technology roadmap position it to compete effectively in the mass-capacity storage market.

Risks and Challenges:

• Forward-looking statements are subject to risks including logistical, macroeconomic, and trade policy uncertainties, such as tariffs and trade restrictions.
• Risks include uncertainty regarding the ability to make timely quarterly payments under the settlement agreement with the U.S. Department of Commerce's Bureau of Industry and Security.
• Potential impacts from evolving global trade policy, market demand fluctuations, and technology shifts are noted.
• Actual results may differ materially due to factors such as debt transaction gains/losses, strategic investment losses, and income tax adjustments.

Management Commentary and Tone:

• Dave Mosley, Chair and CEO, stated the company delivered "another quarter of record profitability and our highest ever free cash flow."
• Management expressed confidence that Seagate can deliver profitable growth and strong cash generation over the long term.
• The tone emphasized the earnings power of the business amid a strengthening demand environment and the effectiveness of the value-based pricing strategy.

Other Key Points:

• The company returned $568 million to shareholders through dividends and share repurchases during the quarter.
• The Board declared a quarterly cash dividend of $0.76 per share, an increase of approximately 3% from the prior quarter's $0.74; payable on January 7, 2027.
• Seagate retired $1.2 billion of debt during the fiscal first quarter.
• Subsequent to the quarter-end, Seagate retired an additional $750 million of principal debt.
• Management will hold a public webcast on October 28, 2026, at 2:00 PM PT / 5:00 PM ET.