Seagate Technology Holdings PLC (STX, Financial), a leader in mass-capacity data storage solutions, announced its financial results for the fiscal second quarter ending December 27, 2024. The company reported substantial growth in revenue, gross margin, and non-GAAP EPS, marking a successful end to the calendar year 2024. CEO Dave Mosley highlighted the company's structural improvements and its strategic focus on capturing value in a favorable demand environment, driven by advancements in AI technology. The company also began ramping up its HAMR-based Mozaic products, targeting cloud customers with storage capacities up to 36 terabytes. Seagate is optimistic about delivering profitable growth in fiscal 2025.
Positive Highlights
- Revenue increased to $2.325 billion, up from $1.555 billion in the previous year.
- Gross margin reached a decade-high of 34.9% on a GAAP basis and 35.5% on a non-GAAP basis.
- Net income improved significantly to $336 million from a loss of $19 million in the previous year.
- Seagate declared a quarterly cash dividend of $0.72 per share.
Negative Highlights
- Operating expenses increased, impacting the overall operating margin.
- Cash and cash equivalents decreased slightly from $1.358 billion to $1.238 billion.
Financial Analyst Perspective
Seagate's fiscal Q2 2025 results demonstrate a robust recovery and strategic positioning in the data storage market. The significant increase in revenue and gross margin indicates effective cost management and strong demand for Seagate's products, particularly in the AI and cloud sectors. The company's focus on technological advancements, such as HAMR-based products, positions it well for future growth. However, the increase in operating expenses suggests a need for continued efficiency improvements to sustain profitability.
Market Research Analyst Perspective
Seagate's performance reflects the growing demand for scalable and efficient data storage solutions, driven by the proliferation of AI and cloud computing. The company's strategic investments in technology and product innovation are paying off, as evidenced by the strong financial results. The data storage market is expected to continue expanding, and Seagate's focus on high-capacity solutions positions it as a key player in this evolving landscape. The company's ability to maintain high gross margins amidst rising costs will be crucial for its long-term success.
Frequently Asked Questions
Q: What was Seagate's revenue for fiscal Q2 2025?
A: Seagate reported a revenue of $2.325 billion for fiscal Q2 2025.
Q: How did Seagate's gross margin perform?
A: Seagate achieved a gross margin of 34.9% on a GAAP basis and 35.5% on a non-GAAP basis, marking a decade-high performance.
Q: What is Seagate's outlook for fiscal Q3 2025?
A: Seagate expects revenue of $2.10 billion, plus or minus $150 million, and non-GAAP diluted EPS of $1.70, plus or minus $0.20.
Read the original press release here.
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