01—Abstract
Summary
Summary of the 10-K filed August 6, 2021. Cited figures are marked; the original filing is the authoritative source.
Seagate Technology Holdings plc's 10-K filing for the fiscal year ended July 2, 2021, demonstrates a company operating in a dynamic data storage market.
The report highlights Seagate's core business in Hard Disk Drives (HDDs) while also emphasizing its expansion into Solid State Drives (SSDs) and its innovative Lyve edge-to-cloud data platform. The company is strategically positioning itself to capitalize on the exponential growth of data generation, driven by trends like 5G, IoT, AI, and the increasing demand for high-capacity storage in hyperscale data centers and cloud environments. Financially, Seagate reported a revenue of $10.7 billiona and a net income of $1.3 billion for FY21.
The company maintained a gross margin of 27%, reflecting efforts to offset price erosion and increased logistics costs. Seagate continues to return value to shareholders through significant share repurchases ($2.0 billionb in FY21) and dividends ($649 million in FY21). The company's balance sheet shows a substantial debt load, but its liquidity position remains solid with significant cash and cash equivalents and an available revolving credit facility.
02—Key points
Key Highlights
- Revenue for fiscal year 2021 was $10.7 billion, with a net income of $1.3 billion, resulting in diluted EPS of $5.36. Operating cash flow was $1.6 billion.
- The company shipped 535 exabytes of HDD storage capacity in FY21, a significant increase from 442 exabytes in FY20, indicating strong demand for mass capacity storage solutions.
- Mass capacity storage now represents 60% of revenue, up from 53% in FY20, while legacy markets decreased to 32% from 39%, reflecting a strategic shift towards higher-growth areas.
- Seagate returned $2.0 billion to shareholders through share repurchases and paid $649 million in dividends during FY21, demonstrating a commitment to shareholder returns.
- The company has a robust liquidity position with $1.2 billion in cash and cash equivalents and $1.725 billion available under its senior unsecured revolving credit facility.
- Product development expenses decreased by 7% in FY21 compared to FY20, largely due to headcount reductions from restructuring efforts and reduced travel expenses.
- Seagate is investing in its Lyve portfolio, a platform designed to manage massive data volumes across distributed enterprises, signaling a move into more comprehensive data solutions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Seagate Technology Holdings plc kept $0.12.
- Revenue$10.68B100.0%
- Cost of revenue−$7.76B72.7%
- Gross profit$2.92B27.3%
- Operating costs−$1.43B13.3%
- Operating income$1.49B14.0%
- Interest, other & tax−$178.0M1.7%
- Net income$1.31B12.3%
Where FY2021 revenue went
$10.68B- Cost of revenue: $7.76B, 73% of revenue
- Net income: $1.31B, 12% of revenue
- R&D: $903.0M, 8.5% of revenue
- SG&A: $502.0M, 4.7% of revenue
- Interest, other & tax: $178.0M, 1.7% of revenue
Kept 12% as net incomeInterest, other & tax $178.0M · 1.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 6, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $10.68B$10.51B | +1.6% |
| Cost of Revenue | $7.76B$7.67B | +1.3% |
| Gross Profit | $2.92B$2.84B | +2.6% |
| R&D Expenses | $903.00M$973.00M | −7.2% |
| SG&A Expenses | $502.00M$473.00M | +6.1% |
| Operating Expenses | $9.19B$9.21B | −0.2% |
| Operating Income | $1.49B$1.30B | +14.8% |
| Interest Expense | $220.00M$201.00M | +9.5% |
| Net Income | $1.31B$1.00B | +30.9% |
| EPS (Basic) | $5.43$3.83 | +41.8% |
| EPS (Diluted) | $5.36$3.79 | +41.4% |
| Shares Outstanding (Basic) | 242.00M262.00M | −7.6% |
| Shares Outstanding (Diluted) | 245.00M265.00M | −7.5% |
05—Questions
Frequently Asked Questions
What is Seagate's primary business and how is it evolving?
Seagate's primary business is the design, manufacture, and sale of data storage technology and solutions, with Hard Disk Drives (HDDs) being its core product. However, the company is actively expanding its portfolio to include Solid State Drives (SSDs) and is developing its Lyve platform, an edge-to-cloud mass data management solution, indicating a strategic evolution towards comprehensive data storage solutions.
How did Seagate perform financially in fiscal year 2021?
In fiscal year 2021, Seagate reported revenue of $10.7 billion and a net income of $1.3 billion. The gross margin was 27%. The company generated $1.6 billion in operating cash flow and continued its practice of returning capital to shareholders through share repurchases and dividends.
What are the key market trends impacting Seagate?
Seagate is benefiting from the rapid growth in data generation, driven by factors such as 5G adoption, the Internet of Things (IoT), Artificial Intelligence (AI), and the increasing demand for high-capacity storage in hyperscale data centers and cloud environments. The company is strategically focusing on 'mass capacity storage' markets, which are growing, while legacy markets are declining.
What are the main risks facing Seagate?
Key risks identified in the filing include dependence on new product introductions and market acceptance, intense competition, reliance on key customers, potential price erosion, supply chain disruptions (including semiconductor shortages), the long and unpredictable sales cycle for certain solutions, and macroeconomic factors. The company also highlights risks related to its global operations, including currency fluctuations and the ongoing impact of global health crises like COVID-19.
06—Continue