Seagate (STX) 2025 Conference Summary Company Overview - **Company**: Seagate Technology Holdings PLC (STX) - **Industry**: Data Storage Solutions Key Points and Arguments Financial Performance - Seagate reported a strong quarter with sequential revenue and profitability growth expected for Q3, following increases in Q1 and Q2 [8][12][30] - The company anticipates demand growth in the nearline segment to be around mid-20s percentage, with a notable 90% growth in the last four quarters [12][30] Product Development and Demand - Seagate has achieved qualification for its MR product with four major cloud customers, aiming to complete qualifications for all top seven customers by June [3][4] - The focus is on increasing exabyte volume through higher capacity drives, moving customers from 24 terabyte EMR to 32 terabyte HAMR drives [9][10] - The company has started qualification for a 40 terabyte HAMR drive, indicating progress in meeting demand [10][63] Customer Relationships and Order Visibility - Seagate emphasizes the importance of build-to-order partnerships, requiring three to four quarters of visibility for orders to ensure production aligns with customer needs [14][16][21] - The company is cautious about longer-term visibility due to the complexity of customer plans and the number of clients involved [20][21] Market Dynamics and Competitive Landscape - Seagate is currently under shipping demand, with a focus on maintaining a balance between supply and demand to support pricing and mitigate the impact of potential market cycles [51][52] - The company does not prioritize market share but rather focuses on producing and selling exabytes efficiently [64] Technological Advancements - The transition from PMR to HAMR technology is expected to significantly reduce costs per terabyte, enhancing profitability as capacity increases without a proportional increase in materials [70][74] - Seagate believes that the gap in cost between HDDs and NAND will widen in the coming years, favoring HDDs for large-scale storage needs [76][79] AI and Future Demand - AI is driving increased data retention and generation, leading to higher storage demands. Seagate sees this as a significant growth opportunity [32][35] - The company acknowledges that innovation will continue to create new applications for data storage, further increasing demand [38][39] Capital Expenditure and Financial Strategy - Seagate's CapEx is projected to be 4% to 6% of revenue, indicating a low capital intensity compared to other sectors [80][82] - The company is initiating share buybacks and maintaining dividends, reflecting confidence in cash flow generation and financial health [97][99] Operational Efficiency - Transitioning to HEMR technology has allowed Seagate to streamline operations and reduce operational expenses, contributing to improved margins [86][88] Investor Considerations - Seagate encourages investors to recognize the strong demand dynamics in the cloud space and the potential for future growth driven by AI and other innovations [102][103] Additional Important Insights - The company is prepared to manage cyclical fluctuations in demand while focusing on long-term growth strategies [36][104] - Seagate's operational model is designed to generate strong free cash flow, which supports shareholder returns and strategic investments [82][100]

Investment Rating - The report maintains a constructive outlook on shares of Amphenol Corp (APH), Dell Technologies (DELL), Corning Inc (GLW), Hewlett Packard Enterprise (HPE), and the memory/disk drive sector including Seagate Technology (STX), Western Digital Corp (WDC), and SanDisk Corp (SNDK) [4]. Core Insights - The upcoming Citi's 33rd annual Global Technology Conference will feature over 240 technology companies, focusing on updates regarding customer and enterprise demand dynamics, as well as supply chain conditions [1]. - Key investor questions include the impact of Generative AI on infrastructure spending, enterprise spending intentions, consumer spending trends, margin impacts from rising component costs, and capital allocation strategies [2][3]. Company Summaries - **Amphenol Corp (APH)**: Current price at $109.36 with a market cap of $133.52 billion. The target price is set at $125.00 with an expected share price return of 14.3% [7]. - **CDW Corp (CDW)**: Current price at $167.00 with a market cap of $21.89 billion. The target price is $200.00 with an expected share price return of 19.8% [7]. - **Corning Inc (GLW)**: Current price at $65.77 with a market cap of $56.34 billion. The target price is $72.00 with an expected share price return of 9.5% [7]. - **Dell Technologies (DELL)**: Current price at $130.84 with a market cap of $88.50 billion. The target price is $160.00 with an expected share price return of 22.3% [7]. - **Hewlett Packard Enterprise (HPE)**: Current price at $22.45 with a market cap of $29.46 billion. The target price is $25.00 with an expected share price return of 11.4% [7]. - **SanDisk Corp (SNDK)**: Current price at $46.37 with a market cap of $6.76 billion. The target price is $57.00 with an expected share price return of 22.9% [7]. - **Seagate Technology (STX)**: Current price at $159.19 with a market cap of $33.86 billion. The target price is $167.00 with an expected share price return of 4.9% [7]. - **Western Digital Corp (WDC)**: Current price at $76.97 with a market cap of $26.70 billion. The target price is $88.00 with an expected share price return of 14.3% [7].

Core Insights - Seagate Technology is experiencing significant demand growth driven by cloud, AI, and edge computing, with nearline hard drives being essential for hyperscale cloud storage [1][2] - The company's build-to-order contracts provide revenue visibility into mid-2026, ensuring predictable supply for cloud service providers [1] - Seagate's mass-capacity revenues increased by 40% year-over-year to $2 billion in Q4, with nearline drives making up 91% of mass-capacity exabytes shipped [2][9] Revenue and Profitability - The adoption of Heat-Assisted Magnetic Recording (HAMR) technology and the Mozaic 3+ platform is expected to enhance storage economics and profitability [3] - Seagate's Q4 non-GAAP gross margin reached 37.9%, a 170 basis point sequential increase and nearly 700 basis points year-over-year, driven by high-capacity nearline drives and pricing discipline [5][9] - Non-GAAP operating income nearly doubled to $640 million, resulting in an operating margin increase to 26.2% [5] Future Outlook - For Q1 of fiscal 2026, Seagate anticipates revenues of approximately $2.5 billion, reflecting a 15% year-over-year growth at the midpoint, with non-GAAP earnings projected at $2.30 per share [6] - Management expects continued gross margin expansion into the mid-to-high 20% range of revenues [6] Competitive Landscape - Seagate faces competition from HDD and SSD manufacturers like Western Digital and Pure Storage, which are also capitalizing on rising cloud demand [7][8] - Western Digital reported a non-GAAP gross margin of 41.3% in Q4, while Pure Storage's non-GAAP gross margin was 70.9% in Q1 of fiscal 2025 [8][10] Market Performance - Seagate's shares have increased by 66.4% over the past year, outperforming the Zacks Computer Integrated Systems industry's growth of 20.2% [11] - The forward price/earnings ratio for Seagate is 17.01X, lower than the industry's 19.97X [12] - The Zacks Consensus Estimate for Seagate's earnings for fiscal 2026 has been revised up by 4.2% to $10.30 [13]

Core Insights - Seagate Technology Holdings plc (STX) has seen its shares increase by 81.8% year-to-date, significantly outperforming the Zacks Computer-Integrated Systems industry's growth of 6.4% and the S&P 500's growth of 9.6% [1][8] Company Performance - Seagate has outperformed competitors in the storage sector, such as Western Digital Corporation (WDC), Pure Storage (PSTG), and NetApp, Inc. (NTAP), with WDC gaining 27.3% while PSTG and NTAP have declined by 5% and 6.1% respectively [2] - The company reported a 40% year-over-year increase in revenues from mass capacity devices, reaching $2 billion, driven by strong nearline cloud demand [5][8] - Nearline drives constituted 91% of total mass capacity exabytes shipped in the last quarter [5][8] Market Trends - The demand for mass capacity storage is increasing, aligning with cloud investment cycles and the expansion of AI-ready data center infrastructure [9][10] - Cloud service providers (CSPs) are focusing on AI applications and expanding their cloud infrastructure, which is expected to drive further demand for HDDs [10] - Seagate anticipates that enterprise edge storage will follow cloud trends, with AI investments driving long-term demand [11] Technological Advancements - Seagate is ramping up its HAMR technology to meet increasing demand, with Mozaic drives being the only products in the industry offering 3 terabytes per disk [12] - The company is progressing towards a 4+ terabyte per disk platform, with expectations for a 44TB capacity by 2026 and 5TB per disk technology aimed for early 2028 [13][14] Financial Metrics - Seagate's gross margin reached a record 37.9%, an improvement of approximately 700 basis points year-over-year [15] - The company expects fiscal first-quarter revenues to be around $2.5 billion, representing a roughly 15% year-over-year growth at the midpoint [11] Estimate Revisions - Earnings estimates for fiscal 2026 have increased by 2.3% to $10.12, while estimates for fiscal 2027 have risen by 4.9% to $12.61 [19] Valuation Metrics - From a valuation perspective, STX is trading at a price/earnings ratio of 14.77, which is lower than the industry average of 20.61 but above its historical mean of 11.84 [20] Strategic Outlook - Seagate's structural business model changes and robust product pipeline position the company for stronger profitability and cash generation in fiscal 2026 [21]

Core Insights - Seagate (NASDAQ: STX) is experiencing a resurgence in customer demand, with quarterly revenue increasing by 30% [1] - The company's profit margins have reached a historic high, indicating strong operational efficiency [1] - Seagate's shares are currently trading at approximately 15 times profit, which is significantly lower than their historical average [1] Financial Performance - Revenue for the quarter rose by 30% compared to previous periods [1] - Margins have achieved a historic high, reflecting improved profitability [1] - Current share trading multiples are around 15x profit, suggesting potential undervaluation [1]

[Part I](index=3&type=section&id=Part%20I) [Business](index=3&type=section&id=Item%201.%20Business) Seagate is a leading provider of data storage technology, primarily Hard Disk Drives (HDDs), serving markets driven by AI, cloud computing, and IoT - Seagate's primary business is providing data storage technology and solutions, with **Hard Disk Drives (HDDs)** as its main product, also offering Solid State Drives (SSDs), storage subsystems, and the Lyve™ edge-to-cloud platform[15](index=15&type=chunk) - The company's product portfolio is divided into **Mass Capacity Storage** (for cloud, enterprise, video, and NAS) and **Legacy Markets** (consumer, client, and mission-critical applications)[17](index=17&type=chunk)[21](index=21&type=chunk)[25](index=25&type=chunk) - Seagate utilizes a vertically integrated model, designing and manufacturing key HDD components like read/write heads and media, including advanced **Heat-Assisted Magnetic Recording (HAMR)** technology in its Mozaic™ platform[39](index=39&type=chunk)[44](index=44&type=chunk)[78](index=78&type=chunk) - The company's main customers are **OEMs** (including large hyperscale data centers and CSPs), distributors, and retailers, with longer-term demand commitments now required from key OEM customers in fiscal year 2024 to improve supply predictability[67](index=67&type=chunk)[68](index=68&type=chunk) - As of June 27, 2025, the company employed approximately **30,000 full-time employees**, with about **25,000 located in Asia**[86](index=86&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks including product innovation, intense competition, supply chain disruptions, macroeconomic volatility, significant debt, and regulatory compliance - Business risks include failure to introduce new products in a timely manner, intense price competition, and reliance on key customers like large hyperscale data center companies and CSPs[110](index=110&type=chunk)[116](index=116&type=chunk)[129](index=129&type=chunk) - Supply chain risks include shortages of critical components, reliance on single-source suppliers, and potential costs from canceling purchase commitments if demand falls, which led to factory underutilization charges in fiscal years 2024 and 2023[111](index=111&type=chunk)[133](index=133&type=chunk)[150](index=150&type=chunk) - The company is subject to export control laws and highlights the April 2023 Settlement Agreement with the U.S. Department of Commerce's Bureau of Industry and Security (BIS) regarding sales to Huawei[179](index=179&type=chunk) - Tax-related risks are significant, with potential impacts from global tax law changes, such as the OECD's Pillar Two framework, which is expected to materially increase the level of income tax starting in fiscal year 2026[189](index=189&type=chunk) - Cybersecurity is a major risk, with threats of cyber-attacks, ransomware, and other breaches that could disrupt operations and lead to significant liability, noting that threat actors are using increasingly advanced tools, including AI-augmented attacks[200](index=200&type=chunk)[202](index=202&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - There are no unresolved staff comments[214](index=214&type=chunk) [Cybersecurity](index=35&type=section&id=Item%201C.%20Cybersecurity) Seagate has implemented a cybersecurity risk management program with Board oversight, employee training, and incident response exercises - The Board of Directors has delegated oversight of cybersecurity risk to the Audit and Finance Committee, which receives regular reports (at least quarterly) from the Chief Information Security Officer (CISO) and Chief Information Officer (CIO)[221](index=221&type=chunk)[222](index=222&type=chunk) - The company's cybersecurity program includes mandatory annual awareness training for all employees, enterprise tabletop exercises, and periodic assessments by independent security firms[216](index=216&type=chunk)[217](index=217&type=chunk) - As of the report date, Seagate has not identified any cybersecurity threats that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[220](index=220&type=chunk) [Properties](index=37&type=section&id=Item%202.%20Properties) Seagate's principal executive offices are in Singapore, with approximately 9.7 million square feet of owned or leased space globally for manufacturing and product development Principal Facilities | Location | Primary Use | | :--- | :--- | | **Northern Ireland** | Manufacture of recording heads | | **California** | Product development, marketing, admin | | **Colorado** | Product development, admin | | **Minnesota** | Manufacture of recording heads, product development | | **Wuxi, China** | Manufacture of drives and subassemblies | | **Johor, Malaysia** | Manufacture of substrates | | **Singapore** | Manufacture of media, product development, admin | | **Korat & Teparuk, Thailand** | Manufacture of drives and subassemblies | - As of June 27, 2025, the company owned or leased a total of approximately **9.7 million square feet** of space globally[228](index=228&type=chunk) [Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, notably a $300 million settlement with BIS related to Huawei sales - The company is defending against multiple patent infringement and securities class action lawsuits[460](index=460&type=chunk)[462](index=462&type=chunk)[463](index=463&type=chunk) - On April 18, 2023, Seagate entered into a Settlement Agreement with BIS to resolve allegations regarding HDD sales to Huawei, agreeing to pay a **$300 million penalty** in quarterly installments of **$15 million** over five years[464](index=464&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[229](index=229&type=chunk) [Part II](index=38&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Seagate's ordinary shares trade on NASDAQ, with a share repurchase program paused through fiscal year 2025 but expected to resume in Q1 FY2026 - The company's ordinary shares are traded on the NASDAQ Global Select Market under the symbol **"STX"**[232](index=232&type=chunk) - The Board of Directors increased the share repurchase authorization to **$5 billion** on May 21, 2025, with **$5.0 billion** remaining available for repurchase as of June 27, 2025[240](index=240&type=chunk) - The share repurchase program was paused in the December 2022 quarter and remained paused through the end of fiscal year 2025, with an expectation to resume in **Q1 FY2026**[213](index=213&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2025, Seagate's revenue increased 39% to $9.1 billion, driven by strong demand for high-capacity drives and improved gross margin Financial Performance Summary | Fiscal Year | Revenue | Gross Margin | Net Income | Operating Cash Flow | | :--- | :--- | :--- | :--- | :--- | | **2025** | $9.1 billion | 35% | $1.5 billion | $1.1 billion | | **2024** | $6.6 billion | 23% | $0.3 billion | $0.9 billion | - Revenue growth in FY2025 was primarily due to a significant increase in demand for **high-capacity nearline drives** from cloud customers and favorable pricing actions[245](index=245&type=chunk)[250](index=250&type=chunk) - Gross margin improvement was driven by favorable product mix, pricing, and the non-recurrence of **$160 million** in factory underutilization charges and a **$96 million** decrease in supply-related purchase order cancellation fees that impacted FY2024[251](index=251&type=chunk) - As of June 27, 2025, the company had unconditional purchase obligations of approximately **$1.3 billion**, primarily for inventory components, with **$1.2 billion** expected to be paid within one year[279](index=279&type=chunk) - Critical accounting policies involve significant estimates for Revenue (sales program accruals) and Income Taxes (deferred tax asset valuation allowances)[289](index=289&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Seagate manages market risks from interest rates, foreign currency exchange rates, and equity markets through hedging strategies - The company's primary market risks are related to interest rates on its investment portfolio and debt, foreign currency exchange rates, and equity market fluctuations[296](index=296&type=chunk) - As of June 27, 2025, the company had foreign currency forward exchange contracts with a total notional value of **$280 million** to hedge against balance sheet exposures in currencies like the British Pound, Chinese Renminbi, Singapore Dollar, and Thai Baht[300](index=300&type=chunk)[302](index=302&type=chunk) - The company uses a **Total Return Swap (TRS)** to manage equity market risks associated with its non-qualified deferred compensation plan liabilities[304](index=304&type=chunk) [Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements for FY2025 show total assets of $8.0 billion, total liabilities of $8.5 billion, and net income of $1.5 billion Consolidated Balance Sheet (in millions) | | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $3,653 | $3,332 | | **Total Assets** | $8,023 | $7,739 | | **Total Current Liabilities** | $2,648 | $3,099 | | **Total Liabilities** | $8,476 | $9,230 | | **Total Shareholders' Deficit** | ($453) | ($1,491) | Consolidated Statement of Operations (in millions) | | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | **Revenue** | $9,097 | $6,551 | $7,384 | | **Income (loss) from operations** | $1,890 | $452 | ($342) | | **Net income (loss)** | $1,469 | $335 | ($529) | | **Diluted EPS** | $6.77 | $1.58 | ($2.56) | - In FY2024, the company sold its System-on-Chip (SoC) operations to a subsidiary of Broadcom Inc. for **$600 million**, resulting in a pre-tax net gain of **$313 million**[480](index=480&type=chunk)[482](index=482&type=chunk) - As of June 27, 2025, total debt was approximately **$5.0 billion**, with the company repaying its 2025 and 2027 notes and issuing new 2030 notes during the year[379](index=379&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) - The independent auditor's report from Ernst & Young LLP identified two Critical Audit Matters: (1) Revenue recognition related to sales incentive program rebates and discounts, and (2) the realizability of deferred income taxes[488](index=488&type=chunk)[489](index=489&type=chunk)[493](index=493&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=87&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[505](index=505&type=chunk) [Controls and Procedures](index=87&type=section&id=Item%209A.%20Controls%20and%20Procedures) The company's disclosure controls and internal control over financial reporting were deemed effective as of June 27, 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 27, 2025[506](index=506&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 27, 2025, based on the COSO framework, with this assessment audited and affirmed by Ernst & Young LLP[508](index=508&type=chunk) [Other Information](index=88&type=section&id=Item%209B.%20Other%20Information) An executive officer adopted a Rule 10b5-1 trading plan during the fiscal quarter - Dr. John C. Morris, SVP and CTO, adopted a Rule 10b5-1 trading plan on June 1, 2025, to sell an aggregate of **18,581 ordinary shares**[513](index=513&type=chunk) [Part III](index=89&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=89&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the forthcoming proxy statement - Detailed information for this item is incorporated by reference from the company's forthcoming Proxy Statement[517](index=517&type=chunk) - The company has a Code of Ethics for senior financial officers available on its website and will post any amendments or waivers there[518](index=518&type=chunk) [Executive Compensation](index=89&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement - Detailed information for this item is incorporated by reference from the company's forthcoming Proxy Statement[519](index=519&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=89&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the company's definitive proxy statement - Detailed information for this item is incorporated by reference from the company's forthcoming Proxy Statement[520](index=520&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=89&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's definitive proxy statement - Detailed information for this item is incorporated by reference from the company's forthcoming Proxy Statement[521](index=521&type=chunk) [Principal Accountant Fees and Services](index=89&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding fees paid to the principal accountant, Ernst & Young LLP, is incorporated by reference from the company's definitive proxy statement - Detailed information for this item is incorporated by reference from the company's forthcoming Proxy Statement[522](index=522&type=chunk) [Part IV](index=90&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=90&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, including governance documents and debt indentures - This section contains the list of all financial statements and exhibits filed with the Form 10-K[524](index=524&type=chunk)[525](index=525&type=chunk) - Key exhibits include the company's Constitution, various debt indentures for its senior notes, the Credit Agreement, equity incentive plans, and CEO/CFO certifications[528](index=528&type=chunk)[529](index=529&type=chunk)[530](index=530&type=chunk)

Higher mass capacity revenues were driven by stronger nearline cloud demand. Mass capacity revenues surged 40% year over year to $2 billion. In the June quarter, nearline drives accounted for 91% of the total mass capacity exabytes shipped. Nearline shipments to cloud and edge data centers comprised most of the mass capacity volume. In addition to strong demand from cloud providers, nearline sales to enterprise and OEM customers saw slight quarter-over- quarter growth, and demand is expected to remain stead ...

每经AI快讯，7月30日，数据储存提供商希捷科技(STX)股价在盘前交易中下跌约7%，此前该公司发布 的一季度收入及盈利低于预期。 ...

数据储存提供商希捷科技(STX)股价在盘前交易中下跌约7%，此前该公司季度收入及盈利低于预期。 ...

智通财经7月30日电，数据储存提供商希捷科技（STX）股价在盘前交易中下跌约7%，此前该公司发布 的一季度收入及盈利低于预期。 ...