Q2 2026 Seagate Technology Holdings PLC Earnings Call Transcript
Key Points
- Seagate Technology Holdings PLC (STX) achieved record-breaking financial results in the December quarter, with revenue and profitability exceeding expectations.
- The company reported a significant increase in non-GAAP gross margin, reaching over 42%, supported by a successful pricing strategy and an improved product mix.
- Seagate's HAMR technology has been solidified as a long-term enabler of mass capacity storage, with successful qualifications and ramping shipments.
- The company experienced strong demand growth in the data center market, with nearline drive capacities increasing by 22% year over year.
- Seagate reduced its gross debt by $500 million and generated over $600 million in free cash flow, marking the highest level in eight years.
- Despite strong demand, the supply-demand dynamics remain tight, which could impact future pricing and availability.
- The company faces challenges in transitioning to higher-capacity drives, which may affect the pace of exabyte supply growth.
- Seagate's reliance on long-term agreements (LTAs) means that pricing and volume for 2027 are not yet locked in, creating uncertainty.
- The company is operating in a highly competitive environment, with pressure to maintain its technological edge and cost efficiency.
- Seagate's capital expenditures are expected to remain within the 4% to 6% range of revenue, which may limit flexibility in other areas.
Welcome to the Seagate Technology fiscal second-quarter conference call.
(Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Shanye Hudson, Senior Vice President, Investor Relations. Please go ahead.
Thank you. Hello, everyone. Welcome to today's call.
Joining me are Dave Mosley, Seagate's Chair and Chief Executive Officer; and Gianluca Romano, our Chief Financial Officer.
We've posted our earnings press release and detailed supplemental information for our December-quarter results on the Investors section of our website.
During today's call, we'll refer to GAAP and non-GAAP measures. Non-GAAP figures are reconciled to GAAP figures in the earnings press release posted on our website and included on our Form 8-K. We've not reconciled certain non-GAAP outlook measures because material items that may impact these measures are out of our control and/or
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