On January 21, 2025, Seagate Technology Holdings PLC (STX, Financial) released its 8-K filing detailing its fiscal second-quarter 2025 financial results. Seagate, a leading supplier of hard disk drives for data storage, operates in a practical duopoly with Western Digital, both being vertically integrated. The company reported a revenue increase to $2.33 billion, surpassing the analyst estimate of $2,317.10 million. The GAAP diluted earnings per share (EPS) was $1.55, which fell short of the estimated EPS of $1.67. However, the non-GAAP diluted EPS was $2.03, exceeding expectations.
Financial Achievements and Industry Context
Seagate's revenue growth and improved gross margin highlight its ability to capture value in an improving demand environment. The company achieved a decade-high gross margin performance, which is crucial in the hardware industry where cost efficiency and scalability are key. The company's focus on advancing its technology roadmap, particularly with HAMR-based Mozaic products, positions it well to meet the growing demand for scalable and sustainable storage solutions.
Key Financial Metrics and Statements
Seagate's financial results for the quarter include a GAAP operating margin of 21.0% and a non-GAAP operating margin of 23.1%. The company generated $221 million in cash flow from operations and $150 million in free cash flow. A quarterly cash dividend of $0.72 per share was declared, reflecting Seagate's commitment to returning capital to shareholders.
| Metric | Q2 2025 | Q2 2024 |
|---|---|---|
| Revenue ($M) | 2,325 | 1,555 |
| GAAP Net Income (Loss) ($M) | 336 | (19) |
| Non-GAAP Net Income (Loss) ($M) | 433 | 25 |
| GAAP EPS | 1.55 | (0.09) |
| Non-GAAP EPS | 2.03 | 0.12 |
Analysis and Commentary
Seagate's performance in Q2 2025 demonstrates its resilience and strategic focus amidst industry challenges. The company's ability to exceed revenue expectations and achieve a strong non-GAAP EPS indicates effective cost management and operational efficiency. The increase in cash flow from operations and free cash flow underscores Seagate's robust financial health.
Seagate ended calendar 2024 on a strong note as we grew revenue, gross margin and non-GAAP EPS successively in each quarter of the year. Our results demonstrate structural improvements in the business and our focus on value capture in an improving demand environment, highlighted by decade-high gross margin performance exiting the December quarter," said Dave Mosley, Seagate’s chief executive officer.
Seagate's strategic initiatives, including the ramp-up of HAMR-based Mozaic products, are expected to drive future growth. The company's financial achievements and strategic direction position it well to capitalize on the increasing demand for data storage solutions, particularly in the age of AI.
Explore the complete 8-K earnings release (here) from Seagate Technology Holdings PLC for further details.
