01—Abstract
Summary
Summary of the 10-K filed August 5, 2022. Cited figures are marked; the original filing is the authoritative source.
Seagate Technology Holdings plc (STX) reported strong financial performance for the fiscal year ended June 30, 2022.
The company generated revenue of approximately $11.7 billiona, a 9% increase year-over-year, driven primarily by growth in mass capacity storage. Gross margin improved to 30% due to favorable product mix and increased mass capacity exabytes shipped, partially offset by higher component and logistics costs. Net income was $1.6 billion, with diluted EPS of $7.36.
The company continues to navigate supply chain challenges and inflationary pressures, which impacted its non-HDD business and overall costs. Despite these headwinds, Seagate demonstrated resilience by increasing revenue and improving profitability. The company remains focused on its strategic shift towards mass capacity storage, which is expected to drive future growth.
Seagate also returned significant capital to shareholders through share repurchases ($1.8 billionb) and dividends ($610 million) during the fiscal year. The company ended the year with substantial liquidity, including $615 million in cash and cash equivalents and an available revolving credit facility of $1.75 billion, positioning it well to manage ongoing macroeconomic uncertainties and pursue future opportunities.
02—Key points
Key Highlights
- Revenue increased by 9% to $11.7 billion in fiscal year 2022, primarily driven by growth in mass capacity storage.
- Gross margin improved to 30% from 27% in the prior year, attributed to product mix and higher mass capacity exabytes shipped.
- Net income reached $1.6 billion, with diluted EPS of $7.36.
- The company shipped 631 exabytes of HDD storage capacity, a significant increase from the prior year, with mass capacity storage comprising the majority of this.
- Seagate returned $2.4 billion in capital to shareholders through share repurchases ($1.8 billion) and dividends ($610 million).
- Despite supply chain disruptions and inflationary pressures, the company maintained effective internal controls over financial reporting.
- The company ended the fiscal year with $615 million in cash and cash equivalents and a $1.75 billion revolving credit facility, indicating strong liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Seagate Technology Holdings plc kept $0.14.
- Revenue$11.66B100.0%
- Cost of revenue−$8.19B70.3%
- Gross profit$3.47B29.7%
- Operating costs−$1.51B13.0%
- Operating income$1.96B16.8%
- Interest, other & tax−$306.0M2.6%
- Net income$1.65B14.1%
Where FY2022 revenue went
$11.66B- Cost of revenue: $8.19B, 70% of revenue
- Net income: $1.65B, 14% of revenue
- R&D: $941.0M, 8.1% of revenue
- SG&A: $559.0M, 4.8% of revenue
- Interest, other & tax: $306.0M, 2.6% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed August 5, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $11.66B$10.68B | +9.2% |
| Cost of Revenue | $8.19B$7.76B | +5.5% |
| Gross Profit | $3.47B$2.92B | +18.9% |
| R&D Expenses | $941.00M$903.00M | +4.2% |
| SG&A Expenses | $559.00M$502.00M | +11.4% |
| Operating Expenses | $9.71B$9.19B | +5.6% |
| Operating Income | $1.96B$1.49B | +31.0% |
| Interest Expense | $249.00M$220.00M | +13.2% |
| Net Income | $1.65B$1.31B | +25.5% |
| EPS (Basic) | $7.50$5.43 | +38.1% |
| EPS (Diluted) | $7.36$5.36 | +37.3% |
| Shares Outstanding (Basic) | 220.00M242.00M | −9.1% |
| Shares Outstanding (Diluted) | 224.00M245.00M | −8.6% |
05—Questions
Frequently Asked Questions
What were the key drivers of Seagate's revenue growth in fiscal year 2022?
Seagate's revenue grew by 9% to $11.7 billion, primarily driven by an increase in mass capacity exabytes shipped. The mass capacity storage markets represented a larger portion of the company's total revenue and exabyte shipments compared to the prior year.
How did supply chain issues and inflation impact Seagate's financial performance?
The company experienced ongoing impacts from supply chain disruptions, higher logistics, materials, and operational costs globally due to inflation and macroeconomic pressures. Constraints in certain component shortages also affected the ability to fulfill demand, particularly for non-HDD products. These factors partially offset the benefits of increased mass capacity shipments and improved product mix on gross margin.
What is Seagate's strategy regarding its product portfolio?
Seagate is continuing its strategic shift towards mass capacity storage solutions, which is expected to drive future growth. The company is seeing a trend where mass capacity storage is increasing as a percentage of its total revenue and exabyte shipments, while legacy markets are expected to see a decrease in exabyte demand.
How is Seagate managing its capital and returning value to shareholders?
In fiscal year 2022, Seagate repurchased approximately $1.8 billion of its ordinary shares and paid $610 million in dividends. The company ended the year with $615 million in cash and cash equivalents and had $2.4 billion available under its share repurchase program, indicating a strong liquidity position and a commitment to returning capital to shareholders.
06—Continue