01—Abstract
Summary
Summary of the 8-K filed April 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Seagate (STX) reported fiscal third quarter 2025 results (quarter ended March 28, 2025) that showed strong year-over-year improvement.
Revenue reached $2.16 billiona, up roughly 30% from $1.655 billion a year earlier. GAAP gross margin expanded to 35.2% from 25.7%, GAAP operating margin rose to 20.0% from 8.6%, and GAAP diluted EPS was $1.57 versus $0.12. Non-GAAP diluted EPS came in at $1.90, at the top of management's guidance range.
Management attributed the results to structural business model improvements and a healthy supply/demand environment for mass-capacity storage, with the HAMR product ramp supporting cloud customer demand. Cash generation was solid for the quarter, with operating cash flow of $259 millionb and free cash flow of $216 million. The company reduced debt by $536 million, ending the quarter with total debt of $5.1 billion and cash of $814 million.
Shareholder returns totaled $152 millionc via the quarterly dividend, and the Board declared a $0.72 per share dividend payable July 8, 2025. Nine-month figures show net income of $981 million versus a loss of $178 million a year earlier, though the balance sheet still carries a shareholders' deficit of $829 million. Looking ahead, management guided fiscal Q4 2025 revenue to $2.40 billion (plus or minus $150 million) and non-GAAP diluted EPS to $2.40 (plus or minus $0.20), assuming minimal impact from announced global tariff policies.
Investors should note that the guidance excludes share-based compensation of about $0.22d per share, and that GAAP-to-non-GAAP reconciliation for the outlook is not provided. Key watch items include inventory and accounts payable movements in cash flow, tariff and trade policy developments, and execution of the HAMR ramp.
02—Key points
Key Highlights
- Revenue of $2.16B in FQ3 2025, up about 30% year over year from $1.655B
- GAAP operating margin of 20.0% vs. 8.6% a year ago; non-GAAP operating margin of 23.5% vs. 11.1%
- GAAP diluted EPS of $1.57 vs. $0.12; non-GAAP diluted EPS of $1.90 vs. $0.33, at the top of guidance
- Free cash flow of $216M in the quarter; nine-month FCF of $393M vs. $284M prior year
- Debt reduced by $536M to $5.1B total; cash and equivalents of $814M at quarter end
- FQ4 2025 guidance: revenue of $2.40B (±$150M) and non-GAAP diluted EPS of $2.40 (±$0.20), assuming minimal tariff impact
- Quarterly dividend of $0.72 per share declared, payable July 8, 2025; shareholders' deficit remains at $829M
03—Questions
Frequently Asked Questions
How did Seagate perform in fiscal Q3 2025 compared with the prior year?
Revenue rose to $2.16 billion from $1.655 billion, and GAAP net income increased to $340 million from $25 million. GAAP gross margin improved to 35.2% from 25.7%, and GAAP operating margin expanded to 20.0% from 8.6%, reflecting both higher volumes and better pricing and cost structure.
What is Seagate's guidance for fiscal Q4 2025?
Seagate guided to revenue of $2.40 billion, plus or minus $150 million, and non-GAAP diluted EPS of $2.40, plus or minus $0.20. The guidance excludes estimated share-based compensation of about $0.22 per share and assumes minimal impact from global tariff policies announced as of the release date.
Is the dividend safe, and what is the payout?
The Board declared a $0.72 per share quarterly dividend, payable July 8, 2025 to holders of record on June 25, 2025. Dividends are at the Board's discretion and depend on financial position, results, cash flow, and capital needs. Nine-month dividends declared total $2.14 per share, and quarterly cash returns were $152 million, which the company covered with free cash flow of $216 million in the quarter.
How is Seagate's balance sheet and debt position?
Total debt stood at $5.1 billion after a $536 million reduction in the quarter, and cash totaled $814 million. The company still reports a shareholders' deficit of $829 million, down from $1.491 billion at fiscal year-end 2024. Long-term debt is $5.146 billion, with no current portion at quarter end.
What should investors watch out for in the results?
Working capital absorbed cash in the nine months, with accounts receivable up $193 million, inventories up $233 million, and accounts payable down $331 million. Other non-GAAP adjustments were material, including $53 million in strategic investment losses and $141 million in share-based compensation over nine months. Management also flagged tariff and trade policy uncertainty and the timing of the HAMR product ramp as factors that could affect future results.
04—Continue