Seagate Technology Holdings plc (NASDAQ: STX) (the “Company” or “Seagate”), a leading innovator of mass-capacity data storage, today reported financial results for its fiscal fourth quarter an...
Fiscal Q4 2024 Highlights
Fiscal Year 2024 Highlights
FREMONT, Calif.: Seagate Technology Holdings plc (NASDAQ: STX) (the “Company” or “Seagate”), a leading innovator of mass-capacity data storage, today reported financial results for its fiscal fourth quarter and fiscal year ended June 28, 2024.
“Seagate delivered robust financial performance for the June quarter amid an improving cloud demand environment, capping off a fiscal year of strong execution against our financial goals. Q4 revenue grew 18% year-over-year, non-GAAP gross margin expanded to nearly 31%, and non-GAAP EPS exceeded the high end of our guidance range,” said Dave Mosley, Seagate’s chief executive officer.
“In fiscal 2025, we are remaining focused on driving profitability and maintaining supply discipline while continuing to execute our mass capacity product roadmap, anchored by our HAMR technology. Our data storage solutions offer our cloud and enterprise customers with cost, power and space advantages that support their investments in critical AI and other data-driven initiatives,” Mosley concluded.
Quarterly Financial Results
| GAAP |
| Non-GAAP | ||||||||||||
| FQ4 2024 |
| FQ4 2023 |
| FQ4 2024 |
| FQ4 2023 | ||||||||
Revenue ($M) | $ | 1,887 |
|
| $ | 1,602 |
|
| $ | 1,887 |
|
| $ | 1,602 |
|
Gross Margin |
| 31.8 | % |
| 19.0 | % |
|
| 30.9 | % |
|
| 19.5 | % | |
Operating Margin |
| 16.6 | % |
| 1.6 | % |
|
| 17.3 | % |
|
| 3.4 | % | |
Net Income (Loss) ($M) | $ | 513 |
|
| $ | (92 | ) |
| $ | 222 |
|
| $ | (37 | ) |
Diluted Earnings (Loss) Per Share | $ | 2.39 |
|
| $ | (0.44 | ) |
| $ | 1.05 |
|
| $ | (0.18 | ) |
Annual Financial Results
| GAAP |
| Non-GAAP | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||||
Revenue ($M) | $ | 6,551 |
|
| $ | 7,384 |
|
| $ | 6,551 |
|
| $ | 7,384 |
|
Gross Margin |
| 23.4 | % |
|
| 18.3 | % |
|
| 25.5 | % |
|
| 21.1 | % |
Operating Margin |
| 6.9 | % |
|
| (4.6 | %) |
|
| 10.3 | % |
|
| 5.6 | % |
Net Income (Loss) ($M) | $ | 335 |
|
| $ | (529 | ) |
| $ | 272 |
|
| $ | 40 |
|
Diluted Earnings (Loss) Per Share | $ | 1.58 |
|
| $ | (2.56 | ) |
| $ | 1.29 |
|
| $ | 0.19 |
|
For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.
During the fiscal fourth quarter the Company generated $434 million in cash flow from operations, $380 million in free cash flow, and returned $147 million of capital to shareholders through its quarterly dividend. Additionally, the Company sold the System-on-Chip Operations for $600 million during the fiscal fourth quarter, which included cash proceeds of $560 million. The remaining $40 million is expected to be received by the end of fiscal year 2026. Of the $560 million cash proceeds, $326 million was recorded as an investing inflow and $226 million, net of transaction costs, was recorded in both cash flow from operations and in free cash flow. For fiscal year 2024, the Company generated $918 million in cash flow from operations, $664 million in free cash flow, and paid cash dividends of $585 million. As of the end of the fiscal year, cash and cash equivalents totaled approximately $1.4 billion, and there were approximately 210 million ordinary shares issued and outstanding. Additionally, during the fiscal year, the Company issued $1.5 billion of convertible notes to primarily retire its term loans in the fiscal first quarter.
Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investor Relations website at investors.seagate.com.
Quarterly Cash Dividend
The Board of Directors of the Company (the “Board”) declared a quarterly cash dividend of $0.70 per share, which will be payable on October 7, 2024 to shareholders of record as of the close of business on September 23, 2024. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.
Business Outlook
The business outlook for the fiscal first quarter 2025 is based on our current assumptions and expectations; actual results may differ materially as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release.
The Company is providing the following guidance for its fiscal first quarter 2025:
Guidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to estimated share-based compensation expenses of $0.16 per share.
We have not reconciled our non-GAAP diluted EPS guidance for fiscal first quarter 2025 to the most directly comparable GAAP measure, other than estimated share-based compensation expenses, because material items that may impact these measures are out of our control and/or cannot be reasonably predicted, including, but not limited to, accelerated depreciation, impairment and other charges related to cost saving efforts, net (gain) loss recognized from early redemption of debt, purchase order cancellation fees, strategic investment losses (gains) or impairment charges, income tax adjustments on these measures, and other charges or benefits that may arise. The amounts of these measures are not currently available but may be material to future results. A reconciliation of the non-GAAP diluted EPS guidance for fiscal first quarter 2025 to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release.
Investor Communications
Seagate management will hold a public webcast today at 2:00 PM PT / 5:00 PM ET that can be accessed on its Investor Relations website at investors.seagate.com.
An archived audio webcast of this event will be available on Seagate’s Investor Relations website at investors.seagate.com shortly following the event conclusion.
About Seagate
Seagate Technology is a leading innovator of mass-capacity data storage. We create breakthrough technology so you can confidently store your data and easily unlock its value. Founded over 45 years ago, Seagate has shipped over four billion terabytes of data capacity and offers a full portfolio of storage devices, systems, and services from edge to cloud. To learn more about how Seagate leads storage innovation, visit www.seagate.com and our blog, or follow us on X, Facebook, LinkedIn, and YouTube.
© 2024 Seagate Technology LLC. All rights reserved. Seagate, Seagate Technology, and the Spiral logo are registered trademarks of Seagate Technology LLC in the United States and/or other countries.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical fact. Forward-looking statements include, among other things, statements about the Company’s plans, programs, strategies, prospects, and opportunities; financial outlook for future periods, including the fiscal first quarter 2025; expectations regarding our ability to service debt and continue to generate free cash flow; expectations regarding our ability to make timely quarterly payments under the settlement agreement with the U.S. Department of Commerce’s Bureau of Industry and Security; expectations regarding logistical, macroeconomic, or other factors affecting the Company; expectations regarding market demand for the Company’s products, our visibility into such demand and our ability to optimize our level of production and meet market and industry expectations and the effects of these future trends on Company’s financial and operational performance; anticipated shifts in technology and storage industry trends, and anticipated demand and performance of new storage product introductions, including HAMR-based products; and expectations regarding the Company’s business strategy and performance, as well as dividend issuance plans for the fiscal quarter ending September 27, 2024 and beyond. Forward-looking statements generally can be identified by words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “should,” “may,” “will,” “will continue,” “can,” “could” or the negative of these words, variations of these words and comparable terminology, in each case, intended to refer to future events or circumstances. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Forward-looking statements are subject to various uncertainties and risks that could cause our actual results to differ materially from historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s latest periodic report on Form 10-Q or Form 10-K filed with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on, and which speak only as of, the date hereof. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, unless required by applicable law.
The inclusion of Seagate’s website addresses in this press release are provided for convenience only. The information contained in, or that can be accessed through, Seagate’s websites and social media channels are not part of this press release.
SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) | |||||||
| June 28, |
| June 30, | ||||
ASSETS |
|
|
| ||||
Current assets: |
|
|
| ||||
Cash and cash equivalents | $ | 1,358 |
|
| $ | 786 |
|
Accounts receivable, net |
| 429 |
|
|
| 621 |
|
Inventories, net |
| 1,239 |
|
|
| 1,140 |
|
Other current assets |
| 306 |
|
|
| 358 |
|
Total current assets |
| 3,332 |
|
|
| 2,905 |
|
Property, equipment and leasehold improvements, net |
| 1,614 |
|
|
| 1,706 |
|
Goodwill |
| 1,219 |
|
|
| 1,237 |
|
Deferred income taxes |
| 1,037 |
|
|
| 1,117 |
|
Other assets, net |
| 537 |
|
|
| 591 |
|
Total Assets | $ | 7,739 |
|
| $ | 7,556 |
|
LIABILITIES AND SHAREHOLDER’S DEFICIT |
|
|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable | $ | 1,786 |
|
| $ | 1,603 |
|
Accrued employee compensation |
| 106 |
|
|
| 100 |
|
Accrued warranty |
| 74 |
|
|
| 78 |
|
Current portion of long-term debt |
| 479 |
|
|
| 63 |
|
Accrued expenses |
| 654 |
|
|
| 748 |
|
Total current liabilities |
| 3,099 |
|
|
| 2,592 |
|
Long-term accrued warranty |
| 75 |
|
|
| 90 |
|
Other non-current liabilities |
| 861 |
|
|
| 685 |
|
Long-term debt, less current portion |
| 5,195 |
|
|
| 5,388 |
|
Total Liabilities |
| 9,230 |
|
|
| 8,755 |
|
Total Shareholders’ Deficit |
| (1,491 | ) |
|
| (1,199 | ) |
Total Liabilities and Shareholders’ Deficit | $ | 7,739 |
|
| $ | 7,556 |
|
SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) | |||||||||||||||
| For the Three Months Ended |
| For the Fiscal Years Ended | ||||||||||||
| June 28, |
| June 30, |
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