Released

FY2026 Q3

Earnings Review

STX

BEAT

Seagate Technology Holdings

Seagate Technology Holdings · Data Storage (HDD)

Tue, April 28, 2026·After Market Close

SeagateHDDData StorageAI InfrastructureHAMRMozaicEarnings

01Wall Street Consensus

EPS$3.50

Revenue$3.0B

02Earnings Results

EPS$4.10+17.1%

Revenue$3.11B+3.7%

After-Hours Reaction+13%

Key Takeaways

Q3 revenue $3.11B — beats $3.0B consensus, +44% YoY
Non-GAAP EPS $4.10 — +17% over $3.50 consensus, +116% YoY
Non-GAAP gross margin 47.0% — beats 44.6% consensus, record territory
Free cash flow $953M — close to $1B in a single quarter
Operating margin 37.5% — margin expansion cycle continuing
Debt paydown $641M; cash and equivalents $1.1B
Shareholder returns $191M (dividends + buybacks); $0.74 quarterly dividend declared (payable Jul 7, record Jun 24)
FY26 Q4 guide: revenue $3.5B / EPS $5.00 — both well above consensus
CEO Dave Mosley: 'As AI applications amplify data creation and underpin durable storage demand, Seagate is entering a new era of structural growth'

Key Checkpoints

01AI data center nearline HDD shipments — pace of Mozaic 3+ adoption
02HAMR (heat-assisted magnetic recording) ramp — 32TB / 36TB into mass production
03Non-GAAP gross margin near 47% — pricing and product mix leadership
04FCF generation — quarterly ~$900M+ funds buybacks and debt paydown
05FY26 Q4 guide — AI cycle continuation suggests revenue $3.5B+
06Hyperscaler long-term capacity contracts expansion

Upside Catalysts

AI training/inference creating data explosion — nearline HDD TAM expansion
HAMR Mozaic platform — 32TB/36TB mass production drives ASP and margin
Hyperscaler multi-year contracts — best-ever revenue visibility on price and volume
Duopoly with WDC — disciplined capacity management and pricing
Triple-track shareholder returns — dividends + buybacks + debt paydown

Risk Factors

HDD cycle peak concerns — soft landing of 2024-25 price/volume recovery
SSD penetration acceleration — NAND price drop could threaten HDD
China revenue exposure — additional export control risk
Iran conflict-driven macro slowdown could hit enterprise IT capex
Adding capacity into a tight market risks future price erosion

Detail

EEPS History (Last 2 Quarters)

Actual EPS vs Consensus — Green Beat · Red Miss

Beat2

Miss0

Beat rate100%

1Final Verdict

Seagate is a first-order beneficiary of AI-era cold/warm data explosion. Consensus EPS $3.50, revenue $3.0B. The HAMR-based Mozaic 3+ platform delivers 32TB and 36TB ASP leadership, positioning Seagate as the lowest-cost infrastructure to store the explosive volumes generated by AI training and inference workloads.

The HDD duopoly with WDC has produced disciplined capacity behavior, supporting multi-year price uptrend. Hyperscaler long-term capacity contracts have lifted revenue visibility to record levels. Structural risks: SSD penetration acceleration and concerns over an HDD cycle peak.

2HAMR & Mozaic Platform

Mozaic 3+ Platform:

Gen 1: 30TB → Gen 2: 32TB → Gen 3: 36TB entering production
Built on HAMR (Heat-Assisted Magnetic Recording)
ASP advantage — even at +20% per-TB premium, total TCO crushes SSD

AI Data Center Adoption:

AWS, Microsoft, Meta, and Google have all qualified the platform
Cold/warm storage — AI training data, logs, backups
Inference output accumulation → data explosion → direct HDD demand pull

Competitive Landscape:

WDC duopoly — rational capacity management
Toshiba lags in share — limited premium-segment influence
Pricing discipline: a multi-year up-cycle has been established (2024-26)

3AI Cycle & Financials

AI Data Explosion Mechanics:

Training: bigger models → exponentially larger datasets
Inference: multimodal and long-context → output data accumulation
Logs/telemetry: real-time data growing geometrically
HDDs are the most cost-efficient option — ~1/4 the per-TB cost of SSD

Financial Profile:

Non-GAAP gross margin: ~47% (record territory)
FCF: ~$900M+ per quarter — strong cash generation
Capital allocation: simultaneous dividends, buybacks, and debt paydown
Gradual deleveraging → potential credit rating upside

FY26 Q4 Guide Expectations:

Revenue $3.5B+ achievable — AI capacity contracts kicking in
EPS $5.00+ — margin expansion cycle continuing
Material upside potential to street consensus

Detail

SEPS 서프라이즈 히스토리

Beat2Miss0Beat률 100%

분기별 EPS 컨센서스 대비 서프라이즈(%) — 막대: EPS, 점선: 매출

컨센서스 대비 실제 EPS/매출 서프라이즈 (%)

Comments

Earnings

02Earnings Results

EPS$4.10+17.1%

Revenue$3.11B+3.7%

After-Hours Reaction+13%

Key Takeaways

Q3 revenue $3.11B — beats $3.0B consensus, +44% YoY
Non-GAAP EPS $4.10 — +17% over $3.50 consensus, +116% YoY
Non-GAAP gross margin 47.0% — beats 44.6% consensus, record territory
Free cash flow $953M — close to $1B in a single quarter
Operating margin 37.5% — margin expansion cycle continuing
Debt paydown $641M; cash and equivalents $1.1B
Shareholder returns $191M (dividends + buybacks); $0.74 quarterly dividend declared (payable Jul 7, record Jun 24)
FY26 Q4 guide: revenue $3.5B / EPS $5.00 — both well above consensus
CEO Dave Mosley: 'As AI applications amplify data creation and underpin durable storage demand, Seagate is entering a new era of structural growth'

Key Checkpoints

01AI data center nearline HDD shipments — pace of Mozaic 3+ adoption

02HAMR (heat-assisted magnetic recording) ramp — 32TB / 36TB into mass production

03Non-GAAP gross margin near 47% — pricing and product mix leadership

04FCF generation — quarterly ~$900M+ funds buybacks and debt paydown

05FY26 Q4 guide — AI cycle continuation suggests revenue $3.5B+

06Hyperscaler long-term capacity contracts expansion

Upside Catalysts

AI training/inference creating data explosion — nearline HDD TAM expansion

HAMR Mozaic platform — 32TB/36TB mass production drives ASP and margin

Hyperscaler multi-year contracts — best-ever revenue visibility on price and volume

Duopoly with WDC — disciplined capacity management and pricing

Triple-track shareholder returns — dividends + buybacks + debt paydown

Risk Factors

HDD cycle peak concerns — soft landing of 2024-25 price/volume recovery

SSD penetration acceleration — NAND price drop could threaten HDD

China revenue exposure — additional export control risk

Iran conflict-driven macro slowdown could hit enterprise IT capex

Adding capacity into a tight market risks future price erosion

1Final Verdict

2HAMR & Mozaic Platform

Mozaic 3+ Platform:

Gen 1: 30TB → Gen 2: 32TB → Gen 3: 36TB entering production
Built on HAMR (Heat-Assisted Magnetic Recording)
ASP advantage — even at +20% per-TB premium, total TCO crushes SSD

AI Data Center Adoption:

AWS, Microsoft, Meta, and Google have all qualified the platform
Cold/warm storage — AI training data, logs, backups
Inference output accumulation → data explosion → direct HDD demand pull

Competitive Landscape:

WDC duopoly — rational capacity management
Toshiba lags in share — limited premium-segment influence
Pricing discipline: a multi-year up-cycle has been established (2024-26)

3AI Cycle & Financials

AI Data Explosion Mechanics:

Training: bigger models → exponentially larger datasets
Inference: multimodal and long-context → output data accumulation
Logs/telemetry: real-time data growing geometrically
HDDs are the most cost-efficient option — ~1/4 the per-TB cost of SSD

Financial Profile:

Non-GAAP gross margin: ~47% (record territory)
FCF: ~$900M+ per quarter — strong cash generation
Capital allocation: simultaneous dividends, buybacks, and debt paydown
Gradual deleveraging → potential credit rating upside

FY26 Q4 Guide Expectations:

Revenue $3.5B+ achievable — AI capacity contracts kicking in
EPS $5.00+ — margin expansion cycle continuing
Material upside potential to street consensus