Workflow
Seagate Gears Up to Report Q3 Earnings: Here's What to Expect
STXSeagate(STX) ZACKS·2025-04-25 14:55

Core Viewpoint - Seagate Technology Holdings plc is set to report its third-quarter fiscal 2025 earnings, with expectations of revenue growth driven by mass capacity demand, particularly from cloud customers and AI applications [1][2][3]. Financial Estimates - The Zacks Consensus Estimate for earnings is 1.75pershare,unchangedoverthepast30days,comparedtonon−GAAPearningsof33centspershareinthesamequarterlastyear[1].−Managementanticipatesrevenuesofapproximately1.75 per share, unchanged over the past 30 days, compared to non-GAAP earnings of 33 cents per share in the same quarter last year [1]. - Management anticipates revenues of approximately 2.1 billion, with non-GAAP earnings expected to be 1.70pershare[2].−RevenueestimatesfortheHDDsegmentareprojectedat1.70 per share [2]. - Revenue estimates for the HDD segment are projected at 1.989 billion, reflecting a 34.7% increase year-over-year, while non-HDD segment revenues are expected to decline by 15.6% to 150.2million[8].MarketDynamics−SeagateexpectscontinuedimprovementsinmasscapacityduetorisingnearlinedemandfromglobalcloudcustomersandenhancementsinenterpriseandOEMmarkets[2].−Thecompanyhasincreasedproductionofits24−28terabytePMRdrives,whicharenowitstop−sellingproductline[4].−ThedemandforHDDsisanticipatedtoriseascloudserviceprovidersfocusonAIapplicationdevelopmentandinfrastructure[3].RevenueandMarginExpectations−Masscapacityrevenuesareexpectedtoincreaseby50.1150.2 million [8]. Market Dynamics - Seagate expects continued improvements in mass capacity due to rising nearline demand from global cloud customers and enhancements in enterprise and OEM markets [2]. - The company has increased production of its 24-28 terabyte PMR drives, which are now its top-selling product line [4]. - The demand for HDDs is anticipated to rise as cloud service providers focus on AI application development and infrastructure [3]. Revenue and Margin Expectations - Mass capacity revenues are expected to increase by 50.1% year-over-year to 1.77 billion in the fiscal third quarter [7]. - Non-GAAP gross margin is projected to be 35.8%, up from 26.1% in the prior-year quarter, benefiting from strong demand for new nearline products and pricing actions [9]. Supply Chain and Operational Challenges - Supply chain issues are expected to impact revenues by approximately 200million,althoughthecompanyplanstomeetbuild−to−ordercommitments[2].−Non−GAAPoperatingexpensesforthefiscalthirdquarterareestimatedat200 million, although the company plans to meet build-to-order commitments [2]. - Non-GAAP operating expenses for the fiscal third quarter are estimated at 290 million [9]. Earnings Prediction - Current models do not predict an earnings beat for Seagate, with an Earnings ESP of -1.28% and a Zacks Rank of 5 (Strong Sell) [10].