Seagate Technology Conference Summary Company Overview - **Company**: Seagate Technology (NasdaqGS: STX) - **Event**: 2026 Conference - **Date**: March 03, 2026 Key Industry Insights - **Strong Demand**: Demand for data storage is robust, driven significantly by AI applications, particularly Video AI, which has accelerated demand beyond initial expectations [6][8] - **Data Storage Needs**: AI generates data similar to traditional applications, necessitating increased storage capacity without requiring different hard disk designs [7] - **Emerging Applications**: Besides Video AI, other applications like autonomous driving are expected to contribute to data growth, although they have not yet fully developed [11][12] Demand Visibility and Sustainability - **Order Coverage**: Nearline orders for calendar 2026 are fully covered, with purchase orders extending into the first half of calendar 2027 [13][14] - **Long-term Agreements**: Seagate has secured agreements with customers on exabyte volume for the long term, indicating strong demand visibility [13] - **Capacity Management**: The company is focused on increasing capacity per unit rather than increasing the number of units produced, aiming for a 25% CAGR in the nearline space [17][20] Pricing and Financial Metrics - **Pricing Strategy**: The pricing environment is characterized as flattish to low single-digit growth, with potential for improvement as demand remains strong [29][30] - **Cost Reduction**: The transition to higher capacity drives (e.g., from 30TB to 40TB) is expected to lead to a decline in cost per terabyte, enhancing profitability [34][61] - **Gross Margin Expectations**: Seagate anticipates continued improvement in gross margins, with expectations of 50%+ incremental margins being exceeded [62][64] Technology and Product Development - **HAMR Technology**: The transition to HAMR (Heat-Assisted Magnetic Recording) technology is critical, with successful qualifications of 40TB drives for major customers [36][42] - **Focus on Areal Density**: The company prioritizes increasing areal density over adding more disks to drives, which is seen as a more efficient way to enhance capacity [52][56] - **Production Ramp**: The ramp-up of new technologies is ongoing, with expectations of higher volumes and contributions from 40TB drives in future quarters [50][61] Capital Allocation and Financial Strategy - **Debt Management**: Seagate has reduced its convertible debt significantly, with plans to continue this trend while also returning capital to shareholders through dividends and stock buybacks [82][86] - **Free Cash Flow Utilization**: The company aims to return a significant portion of free cash flow to shareholders, with expectations of upside beyond the stated goal of 75% [87][88] Risks and Market Dynamics - **Geopolitical Risks**: The company acknowledges geopolitical risks but focuses on controllable factors such as manufacturing and pricing strategies [90] - **Industry Structure**: The current rational oligopoly structure in the HDD market is expected to remain stable, with high barriers to entry for new competitors due to technological complexities [78][80] Conclusion - **Industry Transformation**: Seagate emphasizes the shift from traditional client-based business to a focus on data centers, highlighting the strong demand for high-capacity drives and the importance of technology in driving profitability [91][92]

Fourth Quarter 2025 Results February 5, 2026 ©2026 InterDigital, Inc. All Rights Reserved. 1 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Exchange Act, including but not limited to statements related to our outlook for Q1 and full year 2026, and other financial and business goals. Forward-looking statements are based on our expectations as of the date of this presentation and are subject to a number of risks, uncertaint ...