Seagate Technology Holdings (NasdaqGS:STX) FY Conference Transcript

Seagate Technology Holdings FY Conference Summary Company Overview - Company: Seagate Technology Holdings (NasdaqGS: STX) - Date of Conference: December 09, 2025 Key Industry Insights - Demand Trends: There has been a noticeable demand inflection in the last few months, with a strong growth in nearline storage applications, particularly driven by video and AI workloads [4][5][6] - Future Applications: Emerging applications such as autonomous driving and robotics are expected to significantly increase storage demand in the near future [6] Core Financial Insights - Revenue Growth: The company previously projected a 25% growth in exabyte revenue in the nearline space, which has since been revised to indicate even stronger demand [5] - CapEx Allocation: Seagate's revenue is tied to the capital expenditures (CapEx) of its customers, which are expected to grow, thereby increasing the portion allocated to storage [11] Supply Chain and Production - Supply Discipline: Seagate has maintained strict supply discipline since the last down cycle, with no immediate plans to expand unit supply despite strong demand [12][13] - Product Roadmap: The company is focused on the second generation of HAMR (Heat-Assisted Magnetic Recording) technology, which will significantly increase storage capacity per disk [15][16] - Future Capacity: The transition to higher capacity drives (40TB and beyond) is expected to enhance exabyte production and profitability [15][26] Pricing Strategy - Price Stability: The price per terabyte has remained relatively flat, with expectations for slight increases in the future due to supply-demand dynamics [30][41] - Cost Reduction: The second generation of HAMR technology is anticipated to lower the cost per terabyte, enhancing profitability [27][32] Competitive Landscape - Competitive Advantage: Seagate's HAMR technology provides a competitive edge in terms of cost per terabyte, especially as demand for higher capacity drives increases [32][35] - SSD Disruption Risk: The company believes that the gap between HDD and NAND pricing will continue to favor HDDs for storage applications, despite advancements in SSD technology [36] Capital Allocation Strategy - Shareholder Returns: Seagate aims to return at least 75% of its free cash flow to shareholders, with a focus on reducing debt and increasing dividends [45] - Debt Management: The company has successfully reduced its debt from over $6 billion to $4.5 billion and plans to continue this trend while also restarting share buybacks [45] Additional Considerations - Long-Term Agreements (LTAs): Seagate has established LTAs with customers extending into 2027 and beyond, indicating strong future demand [18][20] - Visibility and Order Management: The company emphasizes the importance of firm orders for production planning, aiming to align manufacturing with actual demand rather than building excess inventory [20][23] This summary encapsulates the key points discussed during the Seagate Technology Holdings FY Conference, highlighting the company's strategic focus on demand growth, supply management, pricing strategy, and capital allocation.