01—Abstract
Summary
Summary of the 8-K filed July 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Seagate Technology Holdings plc reported fiscal fourth quarter and full-year 2025 results (quarter ended June 27, 2025) with strong top-line and margin momentum.
Q4 revenue was $2.44 billiona, up roughly 30% year over year from $1.89 billion, with GAAP gross margin of 37.4% (versus 31.8%) and non-GAAP gross margin of 37.9%. GAAP diluted EPS was $2.24 and non-GAAP diluted EPS was $2.59, at the top of prior guidance. For fiscal 2025, revenue reached $9.10 billion, GAAP diluted EPS was $6.77 (versus $1.58), and non-GAAP diluted EPS was $8.10 (versus $1.29).
Note that the fiscal 2025 GAAP results benefited from a $313 millionb divestiture gain recorded in the prior year period rather than this one; the year-over-year comparison is therefore flattered by a weak FY2024 base. Cash generation and balance sheet deleveraging were notable. Fiscal 2025 operating cash flow was $1.08 billion and free cash flow was $818 million, while the company returned $600 million through dividends and reduced total debt by $684 million to $5.0 billion.
Shareholders' deficit narrowed to $(453) million from $(1,491) million. The Board declared a quarterly dividend of $0.72c per share, payable October 9, 2025, unchanged from the prior quarter's level in the sense of being the Q4 declared rate, and up from $0.70 a year earlier. Looking ahead, management guided fiscal Q1 2026 revenue to $2.50 billion (plus or minus $150 million) and non-GAAP diluted EPS to $2.30 (plus or minus $0.20).
Guidance includes the impact of the Pillar Two global minimum tax, the estimated dilution from the 2028 exchangeable notes, and minimal expected tariff impact, and excludes about $0.23d per share of share-based compensation. Management highlighted HAMR qualification and ramp plans as the key driver of future demand for mass-capacity storage. Investors should watch the gap between GAAP and non-GAAP earnings, the cash cost of debt reduction, and execution on HAMR ramps.
02—Key points
Key Highlights
- Q4 FY2025 revenue of $2.44B, up about 30% year over year from $1.89B, with GAAP gross margin of 37.4% (up from 31.8%), a record level per management
- Q4 non-GAAP diluted EPS of $2.59 versus $1.05 a year ago, at the top of guidance; GAAP diluted EPS of $2.24
- FY2025 revenue of $9.10B; GAAP diluted EPS of $6.77 (vs. $1.58) and non-GAAP diluted EPS of $8.10 (vs. $1.29), with the prior-year base depressed by lower margins
- FY2025 free cash flow of $818M on operating cash flow of $1.08B; Q4 free cash flow of $425M
- Debt reduced by $684M in FY2025 to $5.0B total; shareholders' deficit improved to $(453)M from $(1,491)M
- Quarterly dividend declared at $0.72 per share (up from $0.70), payable October 9, 2025; $600M returned in FY2025
- FQ1 2026 guidance: revenue of $2.50B (±$150M) and non-GAAP diluted EPS of $2.30 (±$0.20), excluding about $0.23 per share of share-based compensation
03—Questions
Frequently Asked Questions
How did Seagate perform in the fiscal fourth quarter of 2025?
Revenue was $2.44 billion, up about 30% from $1.89 billion a year earlier. GAAP gross margin rose to 37.4% from 31.8%, and GAAP operating margin to 23.2% from 16.6%. GAAP diluted EPS was $2.24 and non-GAAP diluted EPS was $2.59, compared with $1.05 a year earlier. Management described the non-GAAP EPS as reaching the top of its guidance range.
What drove the large year-over-year improvement in earnings?
Management attributed the gains to structural changes in the business and sustained demand from cloud customers for high-capacity drives. The prior-year quarter also included a $313 million pre-tax gain from the sale of the System-on-Chip business, which was excluded from non-GAAP results, and the prior year's margins were low. Much of the year-over-year comparison therefore reflects a weak base.
What is Seagate guiding for fiscal Q1 2026?
The company guided to revenue of $2.50 billion, plus or minus $150 million, and non-GAAP diluted EPS of $2.30, plus or minus $0.20. Guidance includes the Pillar Two global minimum tax impact starting in fiscal 2026, estimated dilution from the 2028 exchangeable notes, and minimal expected impact from announced tariff policies. It excludes about $0.23 per share of share-based compensation expense. Seagate did not reconcile non-GAAP guidance to GAAP because items such as debt transaction gains or losses and strategic investment impairments cannot be reliably predicted.
Is Seagate's balance sheet and dividend under control?
Total debt fell to $5.0 billion at fiscal year-end after a $684 million reduction during fiscal 2025, and cash was $891 million. The shareholders' deficit narrowed to $(453) million. Fiscal 2025 free cash flow of $818 million covered the $600 million of dividends paid, though with limited cushion after debt repayment. The Board declared a $0.72 quarterly dividend, and future payments remain at the Board's discretion.
What should investors watch going forward?
Key items include whether HAMR (heat-assisted magnetic recording) product qualifications and ramps proceed on schedule, since management tied future demand growth to them; whether margins hold near record levels; the gap between GAAP and non-GAAP earnings, which includes recurring share-based compensation and restructuring charges; and whether free cash flow keeps pace with debt reduction and dividends. The company also flagged its ongoing obligations under its settlement agreement with the U.S. Department of Commerce's Bureau of Industry and Security.
04—Continue