FREMONT, Calif.--(BUSINESS WIRE)--Seagate Technology plc (NASDAQ: STX), the leading innovator of mass-capacity storage solutions, today announced the launch of its new e-commerce website in the United States. Seagate’s industry-leading storage products can now be purchased directly from www.seagate.com with access to exclusive promotions, support, live chat customer support, and peace of mind with genuine Seagate products. "We are excited to launch our new e-commerce website in the U.S., which will provi ...

It has been about a month since the last earnings report for Seagate (STX) . Shares have lost about 3.3% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Seagate due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Seagate Q2 Earnings Beat EstimatesSeagate reported seco ...

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for moment ...

Group 1 - OORT collaborates with Seagate Technology to enhance its decentralized cloud platform by integrating Seagate Lyve services, aimed at improving infrastructure for AI-focused services [1][2] - The integration of Seagate Lyve Cloud significantly boosts OORT's storage capabilities, addressing the high data demands of AI applications and optimizing costs for competitive pricing [1][2] - This partnership is crucial for OORT's global expansion and the development of new strategic alliances, reinforcing its commitment to providing AI solutions [1][2] Group 2 - Sean Yang, CTO of OORT, emphasizes that the collaboration with Seagate is a major advancement in enhancing decentralized cloud services, focusing on privacy and operational efficiency [2] - Melyssa Banda, VP of Seagate storage solutions, highlights the importance of optimized mass data storage for scaling organizations, showcasing Seagate's expertise in mass-capacity data storage management [2] - The collaboration represents a significant milestone for OORT in its mission to revolutionize the decentralized cloud industry with high-quality, practical solutions [2]

Seagate (STX) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.Analysts' growing optimism on the earnings prospects of this electronic storage maker is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term s ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three and six months ended December 29, 2023 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Dec 29, 2023 (In millions) | June 30, 2023 (In millions) | | :--- | :--- | :--- | | **Total Assets** | **$7,149** | **$7,556** | | Cash and cash equivalents | $787 | $786 | | Inventories | $1,053 | $1,140 | | **Total Liabilities** | **$8,963** | **$8,755** | | Long-term debt, less current portion | $5,669 | $5,388 | | **Total Shareholders' Deficit** | **$(1,814)** | **$(1,199)** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Dec 29, 2023 (In millions) | Three Months Ended Dec 30, 2022 (In millions) | | :--- | :--- | :--- | | Revenue | $1,555 | $1,887 | | Gross Profit | $362 | $246 | | Income (loss) from operations | $124 | $(160) | | Net loss | $(19) | $(33) | | Diluted net loss per share | $(0.09) | $(0.16) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric | Six Months Ended Dec 29, 2023 (In millions) | Six Months Ended Dec 30, 2022 (In millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $296 | $496 | | Net cash used in investing activities | $(105) | $(210) | | Net cash used in financing activities | $(191) | $(131) | [Note 1. Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) The company outlines its primary data storage products and a change in the estimated useful lives of manufacturing equipment - The company's principal products are hard disk drives (HDDs), complemented by a range of data storage products including solid state drives (SSDs), storage subsystems, and a scalable edge-to-cloud mass data platform (Lyve)[26](index=26&type=chunk) - Effective from the first quarter of fiscal year 2024, the company extended the useful lives of certain manufacturing equipment, which increased net income by approximately **$30 million** for the three months and **$40 million** for the six months ended December 29, 2023[37](index=37&type=chunk) [Note 2. Balance Sheet Information](index=11&type=section&id=Note%202.%20Balance%20Sheet%20Information) This note details balance sheet components, including a decrease in total inventories and the sale of trade receivables Inventories Breakdown | Category | Dec 29, 2023 (In millions) | June 30, 2023 (In millions) | | :--- | :--- | :--- | | Raw materials and components | $214 | $241 | | Work-in-process | $627 | $682 | | Finished goods | $212 | $217 | | **Total inventories** | **$1,053** | **$1,140** | - During the three months ended December 29, 2023, the company sold trade receivables without recourse for cash proceeds of **$290 million**[46](index=46&type=chunk) [Note 3. Debt](index=14&type=section&id=Note%203.%20Debt) The company details its total debt, the issuance of new Exchangeable Senior Notes, and the subsequent repayment of Term Loans - On September 13, 2023, the company issued **$1.5 billion** in 3.50% Exchangeable Senior Notes due 2028[56](index=56&type=chunk) - Proceeds from the 2028 Notes were used to repay the entire outstanding principal amount of Term Loans A1, A2, and A3, resulting in a net loss on debt extinguishment of **$29 million**[57](index=57&type=chunk) - In connection with the 2028 Notes issuance, the company purchased capped call transactions for **$95 million** to reduce potential dilution, with an initial cap price of **$107.848** per share[61](index=61&type=chunk) [Note 5. Restructuring and Other, net](index=16&type=section&id=Note%205.%20Restructuring%20and%20Other%2C%20net) This note outlines a net benefit from restructuring activities, primarily driven by a gain on a property sale and leaseback - The company recorded a net benefit of **$31 million** for the three months ended December 29, 2023, mainly from a **$30 million** net gain on a property sale and leaseback transaction[69](index=69&type=chunk) Restructuring Accrual Activity (Six Months Ended Dec 29, 2023) | Description | Amount (In millions) | | :--- | :--- | | Accrual balance at June 30, 2023 | $119 | | Restructuring charges | $3 | | Cash payments | $(110) | | Adjustments | $(2) | | **Accrual balance at Dec 29, 2023** | **$10** | [Note 6. Derivative Financial Instruments](index=17&type=section&id=Note%206.%20Derivative%20Financial%20Instruments) The company discusses its use of derivatives to manage risk, including the termination of interest rate swaps for a significant gain - On September 13, 2023, the company terminated its interest rate swap agreements due to the repayment of its Term Loans, resulting in a realized net gain of **$104 million**[76](index=76&type=chunk) Notional Value of Foreign Currency Forward Contracts (as of Dec 29, 2023) | Currency | Designated as Hedges (In millions) | Not Designated as Hedges (In millions) | | :--- | :--- | :--- | | Singapore Dollar | $126 | $102 | | Thai Baht | $95 | $16 | | Chinese Renminbi | $40 | $19 | | British Pound Sterling | $38 | $7 | | **Total** | **$299** | **$144** | [Note 9. Revenue](index=24&type=section&id=Note%209.%20Revenue) This note provides a disaggregation of revenue by sales channel and geography, with OEMs and the Asia Pacific region being the largest segments Revenue by Channel (Three Months Ended) | Channel | Dec 29, 2023 (In millions) | Dec 30, 2022 (In millions) | | :--- | :--- | :--- | | OEMs | $1,140 | $1,365 | | Distributors | $218 | $297 | | Retailers | $197 | $225 | | **Total** | **$1,555** | **$1,887** | Revenue by Geography (Three Months Ended) | Geography | Dec 29, 2023 (In millions) | Dec 30, 2022 (In millions) | | :--- | :--- | :--- | | Asia Pacific | $777 | $760 | | Americas | $544 | $853 | | EMEA | $234 | $274 | | **Total** | **$1,555** | **$1,887** | [Note 12. Legal, Environmental and Other Contingencies](index=26&type=section&id=Note%2012.%20Legal%2C%20Environmental%20and%20Other%20Contingencies) The company details its legal proceedings, including a significant settlement with the U.S. Bureau of Industry and Security (BIS) - In April 2023, Seagate entered into a settlement agreement with the U.S. Bureau of Industry and Security (BIS) regarding sales to Huawei, agreeing to pay a **$300 million** penalty[114](index=114&type=chunk) - The BIS settlement is payable in quarterly installments of **$15 million** over five years; as of December 29, 2023, **$285 million** remains payable[114](index=114&type=chunk)[116](index=116&type=chunk) - A securities class action lawsuit was filed against the company and certain officers in July 2023, which the company believes is without merit and intends to defend vigorously[108](index=108&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, noting a gradual market recovery amidst macroeconomic headwinds while focusing on cost discipline [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Quarterly revenue increased sequentially to $1.6 billion, with gross margin improving significantly due to non-recurring charges in the prior quarter Quarterly Revenue and Margin Comparison | Metric | Dec 2023 Quarter | Sep 2023 Quarter | Dec 2022 Quarter | | :--- | :--- | :--- | :--- | | Revenue (in millions) | $1,555 | $1,454 | $1,887 | | Gross Margin | 23% | 10% | 13% | | Operating Margin | 8% | (9)% | (9)% | - Revenue increased sequentially due to a rise in mass capacity and legacy storage exabytes shipped, reflecting a gradual recovery in the U.S. cloud market and positive consumer seasonality[130](index=130&type=chunk) - The sequential increase in gross margin was primarily driven by the non-recurrence of **$118 million** in order cancellation fees from the September quarter, reduced factory underutilization charges, and lower depreciation expense[134](index=134&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained stable cash reserves and believes its liquidity sources are sufficient for the next 12 months - Primary liquidity sources as of December 29, 2023, consist of **$787 million** in cash, expected cash from operations, and **$1.5 billion** available under a revolving credit facility[156](index=156&type=chunk) - During the six months ended December 29, 2023, the company used **$1.3 billion** to redeem term loans and paid **$291 million** in dividends[154](index=154&type=chunk)[162](index=162&type=chunk) - As of December 29, 2023, the company had unconditional long-term purchase obligations of approximately **$2.6 billion**, primarily for inventory components[118](index=118&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates and foreign currency exchange rates, which it manages through derivatives - The company's primary market risks are related to interest rates on its cash portfolio and foreign currency exchange rates on its international operations[173](index=173&type=chunk) - On September 13, 2023, the company terminated its interest rate swap agreements after repaying its variable-rate Term Loans, eliminating that source of interest rate variability[176](index=176&type=chunk) Foreign Currency Forward Exchange Contracts (as of Dec 29, 2023) | Currency | Notional Amount (In millions) | Estimated Fair Value (In millions) | | :--- | :--- | :--- | | Singapore Dollar | $228 | $2 | | Thai Baht | $111 | $2 | | Chinese Renminbi | $59 | $(1) | | British Pound Sterling | $45 | $2 | | **Total** | **$443** | **$5** | [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes in internal controls - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of December 29, 2023[183](index=183&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or were reasonably likely to materially affect, internal controls[184](index=184&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 of the financial statements for a detailed discussion of the company's legal proceedings - For a discussion of legal proceedings, see "Part I, Item 1. Financial Statements—Note 12. Legal, Environmental and Other Contingencies"[186](index=186&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section outlines principal risks including dependence on new products, key customers, supply chain vulnerabilities, and macroeconomic headwinds - The company's ability to increase revenue depends on **successfully introducing new products** in a timely manner to keep pace with rapid technological change[197](index=197&type=chunk) - The business has been adversely affected by **reduced or canceled purchases from key customers**, including large hyperscale data center companies and CSPs[207](index=207&type=chunk) - The company relies on **single-source or limited suppliers** for critical components like read/write heads, substrates, and NAND flash memory, creating supply chain risks[229](index=229&type=chunk)[230](index=230&type=chunk) - Changes in the **macroeconomic environment**, including inflation and reduced spending, have negatively impacted and may continue to impact results of operations[239](index=239&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares during the quarter, with $1.9 billion remaining under its repurchase authorization - As of December 29, 2023, **$1.9 billion** remained available for repurchase under the company's existing share repurchase authorization[284](index=284&type=chunk) - **No shares were repurchased** under the publicly announced plan during the quarter ended December 29, 2023[285](index=285&type=chunk)

About this content About William Farrington William kickstarted his career as a researcher and reporter for a global legal publication, covering everything from public law to M&A. Before moving to Proactive Investors, he worked as a reporter for a major fintech company with a focus on cryptocurrency and blockchain technology. Harking from Queensland, Australia, William obtained first-class honours in journalism and media from Birkbeck University before going on to complete an MA in creative and critical ...

Core Viewpoint - Seagate Technology Holdings plc reported better-than-expected non-GAAP earnings for Q2 fiscal 2024, despite a decline in revenues year-over-year, indicating a mixed performance with some signs of recovery in demand [1][9]. Financial Performance - Non-GAAP earnings for Q2 fiscal 2024 were 12 cents per share, surpassing the Zacks Consensus Estimate of a loss of 7 cents per share, but down from 16 cents in the same quarter last year [1]. - Non-GAAP revenues were $1.555 billion, missing the Zacks Consensus Estimate by 0.3% and declining 18% year-over-year, although they improved 7% sequentially [1]. - Management projected revenues for Q2 fiscal 2024 to be around $1.55 billion (+/- $150 million) [1]. Exabyte Shipments - Seagate shipped 95.1 exabytes of HDD storage in the reported quarter, down 15% year-over-year but up 6% sequentially [3]. - Average mass capacity increased to 8.2 TB, reflecting a 12% year-over-year and 11% sequential increase [3]. - In the mass-capacity storage market, 83.2 exabytes were shipped, down 14% year-over-year but up 5% sequentially [3]. Revenue Breakdown - HDD revenues, which account for 89% of total revenues, fell 17% year-over-year to $1.384 billion, but increased 7% sequentially [5]. - The Systems, SSD & Other segment, contributing 11% of revenues, reported $171 million, down 24% year-over-year but up 8% sequentially [6]. Margin and Expenses - Non-GAAP gross margin improved to 23.6% from 21.4% in the prior-year quarter [7]. - Non-GAAP operating expenses decreased by 18% year-over-year to $240 million, while non-GAAP income from operations rose to $127 million from $109 million a year ago [7]. Balance Sheet and Cash Flow - As of December 29, 2023, cash and cash equivalents were $787 million, slightly down from $795 million as of September 29, 2023 [8]. - Long-term debt remained stable at $5.669 billion [8]. - Cash flow from operations was $169 million, down from $251 million in the previous quarter, with free cash flow at $99 million compared to $172 million [8]. Future Outlook - Management anticipates Q3 fiscal 2024 revenues to be around $1.65 billion (+/- $150 million) and expects a non-GAAP loss of 25 cents per share [9]. - Incremental improvements in mass capacity demand from cloud and enterprise clients are expected to offset seasonal declines in other markets [9].

Financial Data and Key Metrics - Revenue for Q2 2024 was $1.56 billion, up 7% quarter-over-quarter, driven by improved cloud near-line demand and seasonal consumer drive sales [7][20] - Non-GAAP operating income tripled sequentially to $127 million, with non-GAAP operating margin expanding to 8.2% of revenue, up 540 basis points quarter-over-quarter [19][20] - Non-GAAP EPS was $0.12, exceeding the high end of the guidance range, reflecting improved demand trends and profitability focus [19][20] - Exabyte shipments grew 6% sequentially to 95 exabytes, with mass capacity shipments totaling 83 exabytes, up from 79 exabytes in the prior quarter [20][21] Business Line Performance - Mass capacity revenue increased 4% sequentially to $1.1 billion, driven by strong nearline cloud demand, offsetting declines in the VIA market [20] - Nearline product shipments grew to 65 exabytes, up from 56 exabytes in the prior quarter, reflecting improved demand among U.S. and China cloud customers [21] - Legacy product revenue rose to $324 million, driven by seasonal consumer demand, but is expected to decline in the March quarter post-holiday season [22] - Non-HDD business revenue increased to $171 million, primarily due to improved SSD demand [22] Market Performance - U.S. cloud market demand showed gradual recovery, with enterprise OEM demand stabilizing, while China's recovery is expected to be slower due to economic challenges [9][10] - Incremental demand was observed among non-U.S. cloud and enterprise customers in the December quarter, with expectations for VIA market recovery post-Lunar New Year [10] Strategic Direction and Industry Competition - The company launched the Mozaic platform, a breakthrough in mass capacity storage, leveraging HAMR technology to achieve higher aerial density and lower TCO for data center operators [6][13] - Mozaic is expected to drive significant TCO and sustainability benefits, with the first HAMR-based product nearing qualification completion and volume ramp starting in the March quarter [12][13] - The company is vertically integrating laser manufacturing to enhance supply flexibility and reduce production costs, supporting long-term profitability [16] Management Commentary on Operating Environment and Future Outlook - Management expects the September 2023 quarter to mark the bottom of the down cycle, with gradual recovery in demand and improved profitability [8][9] - The company is confident in achieving a 30% non-GAAP gross margin benchmark at quarterly revenues 20% below prior cyclical peaks [9] - Demand recovery is expected to continue, with nearline demand improving in the March quarter and beyond, supported by normalized inventory levels among CSP customers [21] Other Important Information - The company generated $100 million in free cash flow and returned $146 million to shareholders through dividends, maintaining strong liquidity with $2.3 billion available [25] - Capital expenditures were flat at $70 million, with fiscal 2024 CapEx expected to be significantly lower than fiscal 2023 [25] Q&A Session Summary Question: Outlook for HAMR units in H2 2024 and 2025 [30] - The company is focused on ramping HAMR aggressively in 2024, with expectations to drive significant exabyte growth in 2025 [31][32] Question: Margin ramp and underutilization charges [33] - Margins are expected to improve sequentially through 2024, driven by cost actions, pricing adjustments, and the ramp of HAMR products [35][36] Question: Hyperscaler inventory dynamics and pricing actions [38] - Hyperscaler inventory levels have improved, with demand expected to accelerate, particularly as AI applications drive data center investments [39][40] Question: OpEx trajectory and capital structure [43] - OpEx is expected to remain around $240 million for the next few quarters, with free cash flow improving as revenue and profitability increase [44][45] Question: Customer value of HAMR drives [46] - HAMR drives offer TCO benefits, with price per terabyte expected to be nominally lower, incentivizing transitions from lower-capacity drives [47] Question: HAMR transition timeline [48] - The HAMR transition is expected to be slower than the PMR transition due to longer cycle times, but the company aims to accelerate as yields improve [50] Question: Qualification to revenue recognition timeline [51] - Qualification timelines vary by customer, with some hyperscalers expected to complete qualifications in 2024, driving revenue recognition [52] Question: Gross margin trajectory [53] - The company expects to achieve 30% gross margins at lower revenue levels than previously anticipated, driven by HAMR ramp and demand recovery [54] Question: Pricing actions and margin improvement [55] - Pricing actions and mix improvements are contributing to margin recovery, with further improvements expected as demand strengthens [56][57] Question: Build-to-order program update [59] - The build-to-order program is active, providing better visibility and predictability for the supply chain, with progress improving each quarter [60] Question: Vertical integration of laser technology [61] - Vertical integration aims to enhance supply chain control and reduce costs over time, supporting the ramp of Mozaic products [62] Question: Gross margin drivers [64] - HAMR ramp and demand recovery are key drivers of gross margin improvement, with sequential improvements expected through 2024 [65][67] Question: Back-end testing capacity [68] - The company has sufficient back-end testing capacity to support the HAMR ramp, despite longer test cycles for higher-capacity drives [69][71] Question: Book-to-bill trends [72] - The company is seeing improved visibility and predictability in orders, supporting the build-to-order framework and supply chain stability [73] Question: Enterprise HDD revenue outlook [74] - The company expects sequential improvement in enterprise HDD revenue but does not provide specific guidance beyond the March quarter [75] Question: AI-related opportunities [85] - AI-related opportunities are still in early stages, with potential for increased demand as data center architectures evolve to support AI workloads [86][87]

For the quarter ended December 2023, Seagate (STX) reported revenue of $1.56 billion, down 17.6% over the same period last year. EPS came in at $0.12, compared to $0.16 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.56 billion, representing a surprise of -0.29%. The company delivered an EPS surprise of +271.43%, with the consensus EPS estimate being -$0.07.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how ...