What are your expectations for this report. You have a buy rating on the stock, $76 price target. That's about a 5% increase from where it's trading this morning.What does that say to you about uh what should that say about this earnings report and your expectations. >> We're in the middle of an infrastructure cycle. You've seen the results of Arista few days ago.They raised the guidance. You've seen the orders of Sienna. Same thing.Cisco last quarter their orders from cloud doubled 600 million from 350 the ...

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, the company reported revenue of $2.6 billion, a 30% year-over-year increase, and non-GAAP earnings per share of $1.66, which was above the high end of the guidance range [11][15] - Non-GAAP gross margin was 41.3%, improving by 60 basis points year-over-year, reflecting a shift towards higher capacity drives and effective cost control [16][17] - Free cash flow for the quarter was $675 million, with operating cash flow at $746 million and capital expenditures of $71 million [19] Business Line Data and Key Metrics Changes - The cloud segment represented 90% of total revenue at $2.3 billion, up 36% year-over-year, driven by strong demand for higher capacity nearline products [16] - Client revenue accounted for 5% of total revenue at $140 million, up 2% year-over-year, while consumer revenue also represented 5% at $136 million, down 12% year-over-year [16] Market Data and Key Metrics Changes - Shipments of the latest generation ePMR drives with capacities up to 26 terabytes CMR and 32 terabytes Ultra SMR more than doubled quarter-over-quarter, exceeding 1.7 million units [8][11] - The company has firm purchase orders or long-term agreements with all top five hyperscale customers for the entire fiscal year 2026, indicating strong demand [11][12] Company Strategy and Development Direction - The company is focusing on operational execution, capital return programs, and leveraging AI-driven data growth to enhance storage solutions [6][10] - The transition to higher capacity drives and the development of HAMR technology are central to the company's strategy, with expectations for continued revenue growth driven by data center demand [9][20] Management's Comments on Operating Environment and Future Outlook - Management noted that while the broader environment remains uncertain due to tariffs, strong demand driven by AI is expected to continue [11][12] - For fiscal year 2026, the company anticipates revenue growth of approximately 22% year-over-year, with gross margin expected between 41% and 42% [20][21] Other Important Information - The company initiated a quarterly cash dividend program and authorized a $2 billion share repurchase program, repurchasing nearly $150 million worth of shares in the fourth quarter [11][19] - The balance sheet was strengthened with a reduction of $2.6 billion in debt, achieving a net leverage target of 1 to 1.5 times [11][18] Q&A Session Summary Question: Can you help us understand the gross margin guidance for September? - Management indicated that gross margin expansion is expected to slow due to various factors, including pricing stability and a favorable mix shift towards higher capacity drives [26][30] Question: How should investors think about share repurchase activity going forward? - Management expressed confidence in continuing to return cash to shareholders through dividends and share repurchases, with room for growth in the dividend program [34][37] Question: What is the ASP per terabyte for the last quarter? - Management noted that ASP per terabyte was down in low single digits, primarily due to mix, while ASPs per drive continue to rise with higher capacity drives [39][70] Question: How does the extra week in the quarter affect revenue and OpEx? - Management clarified that the extra week would add approximately $15 million in OpEx, but revenue impact would be minimal as customers operate on quarterly forecasts [75][76] Question: What is the outlook for AI's impact on growth? - Management highlighted that AI is expected to provide a significant uplift in exabyte growth, potentially increasing revenue growth from mid to high single digits to mid-teens [78][80]

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, the company reported revenue of $2.6 billion, a 30% increase year-over-year, and non-GAAP earnings per share of $1.66, which was above the high end of the guidance range [11][15] - Non-GAAP gross margin was 41.3%, improving by 60 basis points year-over-year, reflecting a shift towards higher capacity drives and effective cost control [17][18] - Free cash flow for the quarter was $675 million, with operating cash flow at $746 million and capital expenditures of $71 million [20] Business Line Data and Key Metrics Changes - Cloud business represented 90% of total revenue at $2.3 billion, up 36% year-over-year, driven by strong demand for higher capacity nearline products [16] - Client business accounted for 5% of total revenue at $140 million, up 2% year-over-year, while consumer revenue also represented 5% at $136 million, down 12% year-over-year [17] Market Data and Key Metrics Changes - Shipments of the latest generation ePMR drives with capacities up to 26 terabytes CMR and 32 terabytes Ultra SMR more than doubled quarter-over-quarter, exceeding 1.7 million units [7][10] - The company has secured firm purchase orders or long-term agreements with all top five hyperscale customers for the entire fiscal year 2026, indicating strong demand [12][45] Company Strategy and Development Direction - The company is focusing on operational execution, capital return programs, and leveraging AI-driven data growth to enhance storage solutions [5][15] - The transition to next-generation HAMR technology is on track, with expectations for ramp-up in 2027, while the next generation of ePMR drives will complete qualification in 2026 [9][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth driven by data center demand and improved profitability from high-capacity drives [12][21] - The company anticipates revenue for fiscal year 2026 to be approximately $2.7 billion, reflecting a year-over-year growth of about 22% [21] Other Important Information - The company initiated a quarterly cash dividend program and authorized a $2 billion share repurchase program, repurchasing nearly $150 million worth of shares in the fourth quarter [12][20] - The effective tax rate for the quarter was 9.3%, and diluted share count was approximately 362 million shares [18] Q&A Session Summary Question: Gross margin guidance for September - Management indicated that gross margin expansion is expected to slow due to various factors, including pricing stability and a favorable mix shift towards higher capacity drives [28][31] Question: Share repurchase activity and cash management - The company plans to continue returning cash to shareholders through dividends and share repurchases, with strong free cash flow generation supporting these initiatives [34][36] Question: ASP and non-HDD revenue - ASP per terabyte was down in low single digits, primarily due to mix, while the overall pricing environment remains stable [38][72] Question: Seasonality in the business - Management noted that traditional seasonality may not apply anymore due to the structural changes in the business, with strong demand from hyperscale customers driving revenue [42][46] Question: Adoption of Ultra SMR technology - The company has completed qualifications for Ultra SMR with multiple hyperscale customers, indicating a positive adoption curve [57] Question: Impact of tariffs and enterprise demand - Management has not seen material impacts from tariffs and noted that any potential softness in enterprise demand would be offset by cloud demand [66][68] Question: Hard drive ASPs and market capacity - The company emphasized that their ability to produce higher capacity drives at scale differentiates them in the market, and they do not foresee needing incremental investments into capacity [75]

Seagate (STX) 2025 Investor Day Summary Company Overview - Seagate has been in the hard drive industry for 45 years, focusing on data storage solutions for devices and cloud services [16][14][12] - The company shipped 550 exabytes of data in the past year, which is approximately half a zettabyte, enough to store two-thirds of the data on the world's cell phones [16][12] Industry Insights - The growth of data is a central theme, with projections indicating a mid-twenties compound annual growth rate (CAGR) for data centers over the next decade [23][12] - The world is expected to generate 72 zettabytes of data annually by 2020, with most data not being stored or utilized [21][22] - Nearline storage in data centers is projected to require 7.2 zettabytes of new data over the next four years, surpassing the storage capacity needed in the last decade [24][23] Technology Developments - Seagate is transitioning from perpendicular magnetic recording (PMR) to heat-assisted magnetic recording (HAMR) technology, which will significantly increase storage capacity [46][81] - The introduction of HAMR allows for a jump from 30 terabyte drives to 50 terabyte drives, with expectations to ship 50 terabyte drives by 2028 [47][46] - The company is currently in volume production of Mosaic three technology, which supports three terabytes per disk, and is preparing for Mosaic four, which will support four terabytes per disk [78][95] Financial Performance - Seagate has achieved a 10% uplift in gross margin since the last Analyst Day and has generated $4 billion in free cash flow [69][70] - The company has returned $7 billion in value to shareholders through dividends and share buybacks, including an 11% increase in dividends [69][70] - Seagate has authorized an additional $5 billion for share buybacks, reflecting confidence in long-term growth [70][71] Market Positioning - The company maintains a build-to-order model for 70% of its data center volume, ensuring a disciplined approach to supply and demand [66][67] - Seagate is focusing on both cloud and edge data storage solutions, recognizing the importance of data sovereignty and local data centers [36][37][38] Customer Insights - Customers emphasize the total cost of ownership (TCO) benefits of hard drives compared to solid-state drives (SSDs), with hard drives being six to seven times more cost-effective [74][75] - The demand for higher capacity hard drives is driven by the need for efficient data storage solutions in data centers [75] Future Outlook - Seagate anticipates continued growth in data storage needs driven by emerging applications, particularly in AI and video content [30][31][32] - The company is confident in its ability to innovate and meet future storage demands, with plans for further advancements in technology and capacity [70][71][106]