Seagate(STX) - 2025 Q1 - Quarterly Results

Revenue and Earnings Performance - Revenue increased to $2.17 billion in fiscal Q1 2025, up from $1.45 billion in fiscal Q1 2024[1][3] - GAAP diluted EPS of $1.41 and non-GAAP diluted EPS of $1.58 for fiscal Q1 2025[1][3] - Net income of $305 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 $305 million, compared to a net loss of $184 million in Q3 2023[14] - Non-GAAP net income was $337 million in Q3 2024, compared to a net loss of $46 million in Q3 2023[18] - Non-GAAP diluted EPS was $1.58 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 $723 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 $442 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 $95 million and free cash flow of $27 million in fiscal Q1 2025[1][4] - Quarterly cash dividend increased by approximately 3% to $0.72 per share[1][5] - Free cash flow was $27 million in Q3 2024, down from $57 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 (±$150 million) and non-GAAP diluted EPS of $1.85 (±$0.20)[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 $313 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 $404 million in Q2 2024 and $216 million in Q3 2023[19]