01—Abstract
Summary
Summary of the 10-K filed August 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Seagate Technology Holdings plc's 2026 Form 10-K highlights a strong fiscal year marked by significant revenue growth, driven primarily by increased demand and favorable pricing in the data center market.
The company shipped a substantial 789 exabytes of HDD storage capacity, contributing to a reported revenue of approximately $12.2 billiona and a notable increase in gross margin to 46%. This performance was bolstered by sustained demand for high-capacity nearline drives from global cloud customers and growing enterprise edge deployments, fueled by the expansion of AI-related applications that necessitate robust data storage solutions. Financially, Seagate demonstrated robust operating cash flow of $3.7 billion, enabling a reduction in outstanding debt by $1.4 billion.
The company also returned capital to shareholders through $634 millionb in dividends and $176 million in share repurchases. While the company experienced a significant increase in income tax provision for fiscal year 2026, largely due to the implementation of Pillar Two global minimum tax, its effective tax rate remained manageable. Seagate is strategically positioned to capitalize on the ongoing growth in data creation, retention, and utilization, driven by AI and other data-intensive workloads, while navigating a dynamic macroeconomic environment with a focus on pricing strategy and supply discipline.
02—Key points
Key Highlights
- Revenue increased by 34% to $12.2 billion in fiscal year 2026, driven by higher demand and favorable pricing in the data center market, particularly for nearline products.
- Gross margin improved significantly to 46% in fiscal year 2026 from 35% in fiscal year 2025, attributed to pricing actions and a shift towards higher-capacity products.
- The company shipped 789 exabytes of HDD storage capacity, a 34% increase from the previous year, with nearline drives accounting for the majority (695 exabytes).
- Operating cash flow was strong at $3.7 billion, supporting debt reduction of $1.4 billion and capital returns to shareholders.
- Seagate reduced its outstanding debt by $1.4 billion through debt exchanges and repurchases.
- The company continues to invest in product development, with R&D expenses increasing by 4% year-over-year.
- A legal settlement resulted in a $105 million charge in fiscal year 2026, impacting operating expenses.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2026, Seagate Technology Holdings plc kept $0.22.
- Revenue$8.57B100.0%
- Cost of revenue−$4.91B57.3%
- Gross profit$3.66B42.7%
- Operating costs−$1.13B13.1%
- Operating income$2.54B29.6%
- Interest, other & tax−$645.0M7.5%
- Net income$1.89B22.1%
Where FY2026 revenue went
$8.57B- Cost of revenue: $4.91B, 57% of revenue
- Net income: $1.89B, 22% of revenue
- R&D: $567.0M, 6.6% of revenue
- SG&A: $430.0M, 5.0% of revenue
- Other operating costs: $128.0M, 1.5% of revenue
- Interest, other & tax: $645.0M, 7.5% of revenue
Kept 22% as net incomeOther operating costs $128.0M · 1.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2026filed August 4, 2026Financial Statements
FY2026 against FY2025
| Line item | FY2026FY2025 | Change |
|---|---|---|
| Revenue | $8.57B$9.10B | −5.8% |
| Cost of Revenue | $4.91B$5.90B | −16.8% |
| Gross Profit | $3.66B$3.20B | +14.4% |
| R&D Expenses | $567.00M$724.00M | −21.7% |
| SG&A Expenses | $430.00M$561.00M | −23.4% |
| Operating Expenses | $6.03B$7.21B | −16.3% |
| Operating Income | $2.54B$1.89B | +34.1% |
| Net Income | $1.89B$1.47B | +28.7% |
| EPS (Basic) | $8.71$6.93 | +25.7% |
| EPS (Diluted) | $8.29$6.77 | +22.5% |
| Shares Outstanding (Basic) | 217.00M212.00M | +2.4% |
| Shares Outstanding (Diluted) | 228.00M217.00M | +5.1% |
05—Questions
Frequently Asked Questions
What are the primary drivers of Seagate's revenue growth in fiscal year 2026?
Seagate's revenue growth in fiscal year 2026 was primarily driven by an increase in demand for its nearline HDD products and favorable pricing actions. The expanding data center market, fueled by AI-related applications and the increasing need for data storage, retention, and reuse, significantly contributed to this growth. The company shipped a greater volume of exabytes and benefited from strategic pricing adjustments.
How has Seagate's profitability improved, and what is the outlook for gross margins?
Seagate's gross margin saw a substantial improvement, increasing to 46% in fiscal year 2026 from 35% in the prior year. This enhancement is attributed to the company's successful pricing strategies and a favorable shift in product mix towards higher-capacity, higher-margin products. Management's focus on pricing discipline and supply management suggests a continued positive outlook for gross margins, provided market conditions remain supportive.
What is Seagate's approach to managing its debt and liquidity?
Seagate actively manages its debt and liquidity. In fiscal year 2026, the company reduced its outstanding debt by $1.4 billion through debt exchanges and repurchases, demonstrating a commitment to deleveraging. It also maintained a strong operating cash flow of $3.7 billion and has approximately $1.7 billion in cash and cash equivalents. Furthermore, Seagate has access to a $1.3 billion senior unsecured revolving credit facility, providing ample liquidity to meet its operational needs, capital expenditures, dividend payments, and share repurchase programs.
What are the key risks highlighted by Seagate in its 10-K filing, and how might they impact investors?
Seagate identifies several key risks, including intense competition, reliance on a few key customers, potential for product obsolescence due to rapid technological change, and supply chain disruptions. Investors should be aware that failure to innovate or maintain market share in a highly competitive environment could impact revenue and profitability. Dependence on large customers introduces concentration risk, and supply chain issues or significant technological shifts could disrupt production and sales. Macroeconomic volatility and geopolitical uncertainties also pose risks to demand and operating costs.
06—Continue