Seagate Technology Holdings PLC (STX) Earnings & Analysis

Latest quarter

Seagate reported Q4 FY2026 revenue of $3.6 billion, which was 48.5% above Q4 FY2025 and 3.85% above the consensus revenue estimate of $3.5 billion. The company reported adjusted EPS, as the consensus counts it, of $5.71, versus the consensus estimate of $5.10, or 12.0% above consensus; diluted EPS was $5.58, up 149.1% from $2.24 a year earlier. Seagate attributed fiscal 2026 growth to higher nearline exabytes shipped, higher demand for nearline products and favorable pricing actions. The company reported Q4 gross margin of 52.3%, compared with 37.4% a year earlier, and operating margin of 43.0%, compared with 23.2%; it also reported fourth-quarter non-GAAP gross margin of 52.7%. Seagate generated $1.1 billion of free cash flow in Q4 FY2026, compared with $425.0 million a year earlier, while data center revenue was $2.9 billion.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On the Q3 FY2026 call, Chief Executive Officer Dave Mosley said data-center demand was rising as AI-enhanced applications increased data creation, retention and use of historical data. Mosley said nearline capacity was almost fully allocated through calendar 2027 and that Seagate was finalizing bill-to-order contracts with cloud and hyperscale customers through fiscal 2027, setting configurations and pricing.

Mosley said the company’s technology strategy prioritized increasing aerial density rather than unit volumes, and he said Mosaic 4 was expected to become a majority of HAMR exabyte shipments exiting calendar 2026. He also said Mosaic 5 development was on plan for 50-terabyte capacity products, with qualification shipments targeted for late calendar 2027. Chief Financial Officer Gianluca Romano said capital expenditure for fiscal 2026 was expected within 4% to 6% of revenue, directed toward the transition and ramp of HAMR-based products.

Romano said the company’s pricing strategy had not changed and attributed expected profitability improvement to pricing, mix and the cost profile of 40-terabyte HAMR drives. Asked about pricing and demand, Mosley said Seagate sought customer predictability while testing demand with incremental production. Romano said fiscal 2027 build-to-order arrangements had been finalized and gave the company an opportunity for sequential revenue and profit growth in each quarter of the year.

Analysts also asked about lower-capacity applications for higher-density technology. Mosley said strong public-cloud demand limited the volumes available for that strategy, while Romano said the company could address it later. Mosley said total unit volumes were not increasing and that Seagate did not know the ultimate level of demand. Romano said the company did not currently expect the Middle East conflict to have a material impact after its teams mitigated supply and logistics disruption.

Guidance

Seagate’s July 28, 2026 results release guided for Q1 FY2027 revenue of $4.1 billion, plus or minus $100 million, and non-GAAP diluted EPS of $7.30, plus or minus $0.20. The company also guided for an adjusted operating margin of around 50.0% for Q1 FY2027. On its Q3 FY2026 call, Seagate said it expected 70.0% of Nearline exabytes to be built on HAMR drives by the end of FY2027 and targeted annual revenue growth of at least 20.0% over the next few years.