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Seagate(STX) - 2025 Q1 - Quarterly Results
STXSeagate(STX)2024-10-22 20:07

Revenue and Earnings Performance - Revenue increased to 2.17billioninfiscalQ12025,upfrom2.17 billion in fiscal Q1 2025, up from 1.45 billion in fiscal Q1 2024[1][3] - GAAP diluted EPS of 1.41andnon−GAAPdilutedEPSof1.41 and non-GAAP diluted EPS of 1.58 for fiscal Q1 2025[1][3] - Net income of 305millioninfiscalQ12025,comparedtoanetlossof305 million in fiscal Q1 2025, compared to a net loss of 184 million in fiscal Q1 2024[3][13] - Net income for Q3 2024 was 305million,comparedtoanetlossof305 million, compared to a net loss of 184 million in Q3 2023[14] - Non-GAAP net income was 337millioninQ32024,comparedtoanetlossof337 million in Q3 2024, compared to a net loss of 46 million in Q3 2023[18] - Non-GAAP diluted EPS was 1.58inQ32024,upfromalossof1.58 in Q3 2024, up from a loss of 0.22 per share in Q3 2023[18] Gross and Operating Margins - Gross margin expanded to 32.9% (GAAP) and 33.3% (non-GAAP), the highest level in over a decade[1][3] - Operating margin improved to 18.6% (GAAP) and 20.4% (non-GAAP) in fiscal Q1 2025, up from (8.9)% and 2.8% respectively in fiscal Q1 2024[3] - Non-GAAP gross profit increased to 723millioninQ32024from723 million in Q3 2024 from 288 million in Q3 2023, with gross margin improving to 33.3% from 19.8%[17] - Non-GAAP operating income rose to 442millioninQ32024,upfrom442 million in Q3 2024, up from 40 million in Q3 2023, with operating margin improving to 20.4% from 2.8%[17] Cash Flow and Dividends - Cash flow from operations of 95millionandfreecashflowof95 million and free cash flow of 27 million in fiscal Q1 2025[1][4] - Quarterly cash dividend increased by approximately 3% to 0.72pershare[1][5]−Freecashflowwas0.72 per share[1][5] - Free cash flow was 27 million in Q3 2024, down from 57millioninQ32023[18]−Freecashflowisdefinedasnetcashfromoperatingactivitieslessacquisitionofproperty,equipment,andleaseholdimprovements[29]GuidanceandFutureOutlook−GuidanceforfiscalQ22025:revenueof57 million in Q3 2023[18] - Free cash flow is defined as net cash from operating activities less acquisition of property, equipment, and leasehold improvements[29] Guidance and Future Outlook - Guidance for fiscal Q2 2025: revenue of 2.30 billion (±150million)andnon−GAAPdilutedEPSof150 million) and non-GAAP diluted EPS of 1.85 (±0.20)[6]−Seagateisrampingupproductionof28−terabytenearlinedrivesandexpandingqualificationofHAMR−basedMozaicproductswithcloudcustomers[2]CashandCashEquivalents−Cashandcashequivalentstotaled0.20)[6] - Seagate is ramping up production of 28-terabyte nearline drives and expanding qualification of HAMR-based Mozaic products with cloud customers[2] Cash and Cash Equivalents - Cash and cash equivalents totaled 1.2 billion as of September 27, 2024[4] Non-GAAP Adjustments and Exclusions - The company uses non-GAAP measures to exclude certain items that are not part of ongoing operations, such as accelerated depreciation and restructuring charges[15][20] - The company excludes gains, losses, and fees from early redemption of debt and termination of interest rate swaps as they are not part of normal operating performance[22] - Purchase order cancellation fees are excluded as they are inconsistent in amount and frequency and not part of normal operating expenses[23] - Restructuring and other costs, including workforce reduction and facility exits, are excluded to provide a supplemental view of operating performance[24] - Share-based compensation expenses are excluded to enhance comparability with peers and assess underlying business performance[25] - Strategic investment gains, losses, and impairment charges are excluded as they are inconsistent and not part of normal operating expenses[26] - IT transformation costs are excluded as they are inconsistent in amount and frequency[27] - Adjusted EBITDA excludes non-core expenses such as impairment charges, restructuring costs, and share-based compensation[30] Special Transactions and Gains - The company recorded a pre-tax net gain of 313millionfromthesaleofSystem−on−ChipOperationsinApril2024[21]AdjustedEBITDA−Non−GAAPadjustedEBITDAwas313 million from the sale of System-on-Chip Operations in April 2024[21] Adjusted EBITDA - Non-GAAP adjusted EBITDA was 498 million in Q3 2024, compared to 404millioninQ22024and404 million in Q2 2024 and 216 million in Q3 2023[19]