Summary
Seagate Technology Holdings plc (STX) reported strong financial performance for the quarter ended October 1, 2021. Revenue surged to $3.1 billion, a significant increase from the previous year, primarily driven by robust demand in the mass capacity storage market. This top-line growth translated into substantial profitability, with net income rising to $526 million ($2.28 diluted EPS), more than double the prior year's $223 million ($0.86 diluted EPS). The company demonstrated improved operational efficiency, with gross margin expanding to 31% from 26% in the comparable prior-year period, attributed to a better product mix and favorable pricing, although offset by rising component and logistics costs. From a financial health perspective, Seagate maintained a solid liquidity position, with cash and cash equivalents totaling $991 million. The company continued its commitment to returning capital to shareholders through significant share repurchases ($425 million) and dividends ($153 million). Furthermore, Seagate successfully amended its credit agreement during the quarter, securing a new $1.2 billion term loan facility and extending its revolving credit facility, enhancing its financial flexibility. Despite ongoing supply chain challenges and increased logistics costs related to the COVID-19 pandemic, Seagate's strong execution and strategic focus on high-growth areas like mass capacity storage position it well for continued performance.
Financial Highlights
55 data points| Revenue | $3.12B |
| Cost of Revenue | $2.17B |
| Gross Profit | $948.00M |
| R&D Expenses | $228.00M |
| SG&A Expenses | $136.00M |
| Operating Expenses | $2.54B |
| Operating Income | $580.00M |
| Interest Expense | $62.00M |
| Net Income | $501.00M |
| EPS (Basic) | $2.27 |
| EPS (Diluted) | $2.23 |
| Shares Outstanding (Basic) | 221.00M |
| Shares Outstanding (Diluted) | 225.00M |
Key Highlights
- 1Revenue increased significantly by 34.6% year-over-year to $3.115 billion, driven by strong demand in the mass capacity storage market.
- 2Net income more than doubled to $526 million from $223 million in the prior year's comparable quarter, reflecting improved profitability.
- 3Diluted Earnings Per Share (EPS) rose sharply to $2.28 from $0.86 year-over-year.
- 4Gross margin improved to 31% from 26% in the prior year, indicating better pricing power and product mix, despite higher component and logistics costs.
- 5Operating cash flow was strong at $496 million for the quarter.
- 6The company actively returned capital to shareholders through $425 million in share repurchases and $153 million in dividends.
- 7Seagate amended its credit agreement, securing a new $1.2 billion term loan facility and extending its revolving credit facility to enhance financial flexibility.