Seagate Revenue Rises About 61% in Fiscal 2027 First Quarter

Seagate Technology Holdings plc grew revenue about 61% year over year in its fiscal 2027 first quarter and projected second-quarter revenue and adjusted earnings above analyst estimates.

Revenue totaled $4.23 billion for the quarter ended Oct. 2, exceeding the $4.11 billion analysts had expected. Adjusted earnings came to $7.68 per share, above the $7.39 estimate. A pre-report estimate for Seagate’s first quarter put adjusted earnings at $7.40 per share and revenue at $4.14 billion.

For the fiscal second quarter, Seagate projected revenue of about $4.8 billion, with a range of $100 million above or below that figure. The company forecast adjusted earnings of $9.20 per share, with a 20-cent range in either direction. Analysts had expected $4.55 billion in revenue and $8.66 per share in adjusted earnings.

Profitability measures also rose from a year earlier. The GAAP gross margin increased to 57.3% from 39.4%, while the non-GAAP gross margin climbed to 57.8% from 40.1%. Seagate’s non-GAAP operating margin reached 50.7%, up from 29%. Revenue costs grew about 13% year over year.

Operating cash flow was $1.69 billion, and free cash flow reached $1.479 billion, up about 246% from a year earlier. Seagate reported record gross margin and free cash flow for the quarter. It also raised its quarterly dividend about 3%, to 76 cents per share.

AI infrastructure investment continued to support demand for Seagate’s storage products. CEO Dave Mosley said long-term customer demand supports the company’s view of a multiyear growth cycle. He also described the company’s heat-assisted magnetic recording, or HAMR, roadmap as a way to increase hard-drive areal density to meet storage demand while maintaining supply discipline.