UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

____________________________

FORM 10-Q

___________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 29, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission File Number 001-31560

_______________________________________

SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

_______________________________________


Ireland						98-1597419
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification Number)

38/39 Fitzwilliam Square

Dublin 2, Ireland

(Address of principal executive offices)

D02 NX53

(Zip Code)

Telephone: (353) (1) 234-3136

(Registrant’s telephone number, including area code)

_______________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary Shares, par value $0.00001 per share

STX

The NASDAQ Global Select Market

_______________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April 24,~~October 23, 2023, ~~207,082,374~~209,183,986 of the registrant’s ordinary shares, par value $0.00001 per share, were issued and outstanding.

INDEX

SEAGATE TECHNOLOGY HOLDINGS PLC


		PAGE NO.

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets - September 29 ~~March~~, 2023 (Unaudited) and Ju 3 1ne 30 , 202 3 ~~(Unaudited) and July 1, 2022~~	4
	Condensed Consolidated Statements of Operations - Three ~~and~~ ~~Nine~~Months Ended ~~March 31, 202~~3 September 29, 2023 and ~~April1, 202~~2 ~~(Unaudited)~~September 30, 2022(Unaudited)	5
	Condensed Consolidated Statements of Comprehensive (Loss) Income - Three ~~and~~ ~~Nine~~Months Ended ~~March~~ 3 1 ~~, 202~~3 September 29, 2023 and ~~April1, 202~~2 September 30, 2022 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~March~~September 29, 2023 and September 30, 2022 3 1 ~~, 202~~3 ~~and~~ ~~April1, 202~~2 (Unaudited)	7
	Condensed Consolidated Statements of Shareholders’ ~~(Deficit) Equity~~Deficit - Three ~~and~~ ~~Nine~~Months Ended ~~March~~ 3 1 ~~, 202~~3 September 29, 2023 and A ~~pril1, 202~~2 September 30, 2022 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	109
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3028
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3935
Item 4.	Controls and Procedures	4037
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	4137
Item 1A.	Risk Factors	4137
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5856
Item 3.	Defaults Upon Senior Securities	5856
Item 4.	Mine Safety Disclosures	5856
Item 5.	Other Information	5856
Item 6.	Exhibits	5957
	SIGNATURES	6059

Table of Contents

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


Table of Contents		Page
Condensed Consolidated Balance Sheets		4
Condensed Consolidated Statements of Operations		5
Condensed Consolidated Statements of Comprehensive (Loss) Income		6
Condensed Consolidated Statements of Cash Flows		7
Condensed Consolidated Statements of Shareholders’ ~~(Deficit) Equity~~Deficit		8
Notes to Condensed Consolidated Financial Statements		109
	Note 1. Basis of Presentation and Summary of Significant Accounting Policies	109
	Note 2. Balance Sheet Information	1110
	Note 3. Debt	1413
	Note 4. Income Taxes	1615
	Note 5. Restructuring and Exit Costs	1615
	Note 6. Derivative Financial Instruments	1716
	Note 7. Fair Value	2019
	Note 8. Shareholders’ Deficit	2422
	Note 9. Revenue	2523
	Note 10. Guarantees	2523
	Note 11. (Loss) Earnings Per Share	2624
	Note 12. Legal, Environmental and Other Contingencies	2725
	Note 13. Commitments	2927
	Note 14. Subsequent Events	2927

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

March 31,
2023 July 1,
2022
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 766 $ 615
Accounts receivable, net 994 1,532
Inventories 1,200 1,565
Other current assets 637 321
Total current assets 3,597 4,033
Property, equipment and leasehold improvements, net 1,753 2,239
Goodwill 1,237 1,237
Other intangible assets, net 1 9
Deferred income taxes 1,127 1,132
Other assets, net 252 294
Total Assets $ 7,967 $ 8,944
LIABILITIES AND (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 1,697 $ 2,058
Accrued employee compensation 84 252
Accrued warranty 73 65
Current portion of long-term debt 1,118 584
Accrued expenses 667 596
Total current liabilities 3,639 3,555
Long-term accrued warranty 88 83
Other non-current liabilities 404 135
Long-term debt, less current portion 4,840 5,062
Total Liabilities 8,971 8,835
Commitments and contingencies (See Notes 10, 12 and 13)
Shareholders’ (Deficit) Equity:
Ordinary shares and additional paid-in capital 7,342 7,190
Accumulated other comprehensive income 84 36
Accumulated deficit (8,430) (7,117)
Total Shareholders’ (Deficit) Equity (1,004) 109
Total Liabilities and Shareholders’ (Deficit) Equity $ 7,967 $ 8,944


	September 29, 2023		June 30, 2023
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	795	$	786

Accounts receivable, net	521		621
Inventories	1,052		1,140
Other current assets	268		358
Total current assets	2,636		2,905
Property, equipment and leasehold improvements, net	1,652		1,706

Goodwill	1,237		1,237

Deferred income taxes	1,087		1,117
Other assets, net	584		591
Total Assets	$	7,196	$	7,556
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:

Accounts payable	$	1,511	$	1,603
Accrued employee compensation	88		100
Accrued warranty	84		78
Current portion of long-term debt	—		63
Accrued expenses	790		748

Total current liabilities	2,473		2,592
Long-term accrued warranty	92		90

Other non-current liabilities	667		685
Long-term debt, less current portion	5,666		5,388
Total Liabilities	8,898		8,755
Commitments and contingencies (See Notes 10, 12 and 13)

Shareholders’ Deficit:
Ordinary shares and additional paid-in capital	7,338		7,373
Accumulated other comprehensive (loss) income	(15)		98
Accumulated deficit	(9,025)		(8,670)


Total Shareholders’ Deficit	(1,702)		(1,199)
Total Liabilities and Shareholders’ Deficit	$	7,196	$	7,556

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)


		For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended
		March 31, 2023		April 1, 2022		March 31, 2023		April 1, 2022			September 29, 2023		September 30, 2022
Revenue	Revenue	$	1,860	$	2,802	$	5,782	$	9,033	Revenue	$	1,454	$	2,035

Cost of revenue	Cost of revenue	1,541		1,996		4,735		6,323		Cost of revenue	1,305		1,553
Product development	Product development	191		233		625		694		Product development	171		234
Marketing and administrative	Marketing and administrative	123		141		377		410		Marketing and administrative	105		129
Amortization of intangibles	Amortization of intangibles	—		3		3		9		Amortization of intangibles	—		3
BIS settlement penalty		300		—		300		—

Restructuring and other, net	Restructuring and other, net	20		—		110		2		Restructuring and other, net	2		9
Total operating expenses	Total operating expenses	2,175		2,373		6,150		7,438		Total operating expenses	1,583		1,928

(Loss) income from operations	(Loss) income from operations	(315)		429		(368)		1,595		(Loss) income from operations	(129)		107

Interest income	Interest income	2		—		4		1		Interest income	2		1
Interest expense	Interest expense	(81)		(63)		(229)		(184)		Interest expense	(84)		(71)
Net gain recognized from early redemption of debt		3		—		207		—
Net gain recognized from termination of interest rate swap										Net gain recognized from termination of interest rate swap	104		—
Net loss recognized from early redemption of debt										Net loss recognized from early redemption of debt	(29)		—
Other, net	Other, net	(9)		(15)		(25)		(14)		Other, net	(11)		(10)
Other expense, net	Other expense, net	(85)		(78)		(43)		(197)		Other expense, net	(18)		(80)

(Loss) income before income taxes	(Loss) income before income taxes	(400)		351		(411)		1,398		(Loss) income before income taxes	(147)		27
Provision for income taxes		33		5		26		25
Provision for (benefit from) income taxes										Provision for (benefit from) income taxes	37		(2)
Net (loss) income	Net (loss) income	$	(433)	$	346	$	(437)	$	1,373	Net (loss) income	$	(184)	$	29

Net (loss) income per share:	Net (loss) income per share:									Net (loss) income per share:
Basic	Basic	$	(2.09)	$	1.59	$	(2.11)	$	6.18	Basic	$	(0.88)	$	0.14
Diluted	Diluted	$	(2.09)	$	1.56	$	(2.11)	$	6.08	Diluted	$	(0.88)	$	0.14
Number of shares used in per share calculations:	Number of shares used in per share calculations:									Number of shares used in per share calculations:
Basic	Basic	207		218		207		222		Basic	208		208
Diluted	Diluted	207		222		207		226		Diluted	208		210

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In millions)

(Unaudited)
For the Three Months Ended For the Nine Months Ended
March 31,
2023 April 1,
2022 March 31,
2023 April 1,
2022
Net (loss) income $ (433) $ 346 $ (437) $ 1,373
Other comprehensive income (loss), net of tax:
Change in net unrealized (losses) gains on cash flow hedges:
Net unrealized (losses) gains arising during the period (6) 56 45 58
(Gains) losses reclassified into earnings (9) 6 2 18
Net change (15) 62 47 76
Change in unrealized components of post-retirement plans:
Net unrealized gains arising during the period — — — 1
Losses reclassified into earnings — — 1 1
Net change — — 1 2
Total other comprehensive (loss) income, net of tax (15) 62 48 78
Comprehensive (loss) income $ (448) $ 408 $ (389) $ 1,451


	For the Three Months Ended
	September 29, 2023		September 30, 2022
Net (loss) income	$	(184)	$	29
Other comprehensive income (loss), net of tax:
Change in net unrealized (losses) gains on cash flow hedges:
Net unrealized (losses) gains arising during the period	(22)		32
(Gains) losses reclassified into earnings	(92)		5
Net change	(114)		37




Change in unrealized components of post-retirement plans:
Net unrealized gains arising during the period	—		1

Net change	—		1
Foreign currency translation adjustments	1		(1)
Total other comprehensive (loss) income, net of tax	(113)		37
Comprehensive (loss) income	$	(297)	$	66

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


		For the Nine Months Ended					For the Three Months Ended
		March 31, 2023		April 1, 2022			September 29, 2023		September 30, 2022
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net (loss) income	Net (loss) income	$	(437)	$	1,373	Net (loss) income	$	(184)	$	29
Adjustments to reconcile net (loss) income to net cash provided by operating activities:	Adjustments to reconcile net (loss) income to net cash provided by operating activities:					Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	409		324		Depreciation and amortization	76		135
Share-based compensation	Share-based compensation	93		106		Share-based compensation	25		29

Deferred income taxes	Deferred income taxes	4		2		Deferred income taxes	28		(5)

Net gain on redemption and repurchase of debt		(207)		—
Net loss on redemption and repurchase of debt						Net loss on redemption and repurchase of debt	7		—
Other non-cash operating activities, net	Other non-cash operating activities, net	15		46		Other non-cash operating activities, net	(50)		13
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable, net	Accounts receivable, net	538		(186)		Accounts receivable, net	100		434
Inventories	Inventories	365		(275)		Inventories	88		(41)
Accounts payable	Accounts payable	(327)		209		Accounts payable	(70)		(300)
Accrued employee compensation	Accrued employee compensation	(168)		(88)		Accrued employee compensation	(12)		(146)
Accrued expenses, income taxes and warranty	Accrued expenses, income taxes and warranty	69		19		Accrued expenses, income taxes and warranty	54		4
Other assets and liabilities	Other assets and liabilities	370		(53)		Other assets and liabilities	65		93
Net cash provided by operating activities	Net cash provided by operating activities	724		1,477		Net cash provided by operating activities	127		245
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements	Acquisition of property, equipment and leasehold improvements	(266)		(309)		Acquisition of property, equipment and leasehold improvements	(70)		(133)
Proceeds from the sale of assets	Proceeds from the sale of assets	15		—		Proceeds from the sale of assets	—		1
Purchases of investments	Purchases of investments	(1)		(18)		Purchases of investments	—		(1)
Proceeds from sale of investments		—		34

Net cash used in investing activities	Net cash used in investing activities	(252)		(293)		Net cash used in investing activities	(70)		(133)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Redemption and repurchase of debt	Redemption and repurchase of debt	(71)		(701)		Redemption and repurchase of debt	(1,288)		—
Dividends to shareholders	Dividends to shareholders	(437)		(458)		Dividends to shareholders	(145)		(147)
Repurchases of ordinary shares	Repurchases of ordinary shares	(408)		(1,313)		Repurchases of ordinary shares	—		(408)
Taxes paid related to net share settlement of equity awards	Taxes paid related to net share settlement of equity awards	(41)		(45)		Taxes paid related to net share settlement of equity awards	(25)		(39)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	600		1,200		Proceeds from issuance of long-term debt	1,500		600
Proceeds from issuance of ordinary shares under employee stock plans	Proceeds from issuance of ordinary shares under employee stock plans	59		68		Proceeds from issuance of ordinary shares under employee stock plans	35		29
Other financing activities, net	Other financing activities, net	(23)		(6)		Other financing activities, net	(126)		(1)
Net cash used in financing activities		(321)		(1,255)

Increase (decrease) in cash, cash equivalents and restricted cash		151		(71)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(49)		34
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash						Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash	1		—
Increase in cash, cash equivalents and restricted cash						Increase in cash, cash equivalents and restricted cash	9		146
Cash, cash equivalents and restricted cash at the beginning of the period	Cash, cash equivalents and restricted cash at the beginning of the period	617		1,211		Cash, cash equivalents and restricted cash at the beginning of the period	788		617
Cash, cash equivalents and restricted cash at the end of the period	Cash, cash equivalents and restricted cash at the end of the period	$	768	$	1,140	Cash, cash equivalents and restricted cash at the end of the period	$	797	$	763

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ ~~(DEFICIT) EQUITY~~DEFICIT

For the Three Months Ended ~~March 31,~~September 29, 2023 and ~~April 1,~~September 30, 2022

(In millions)

(Unaudited)


		Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total			Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total
Balance at December 30, 2022		206	$	—	$	7,281	$	99	$	(7,850)	$	(470)
Balance at June 30, 2023													Balance at June 30, 2023	207	$	—	$	7,373	$	98	$	(8,670)	$	(1,199)

Net loss	Net loss								(433)		(433)		Net loss								(184)		(184)
Other comprehensive loss	Other comprehensive loss						(15)				(15)		Other comprehensive loss						(113)				(113)
Issuance of ordinary shares under employee share plans	Issuance of ordinary shares under employee share plans	1			30						30		Issuance of ordinary shares under employee share plans	2			35						35

Capped calls related to the issuance of convertible notes													Capped calls related to the issuance of convertible notes				(95)						(95)

Tax withholding related to vesting of restricted share units	Tax withholding related to vesting of restricted share units	—							(2)		(2)		Tax withholding related to vesting of restricted share units	—							(25)		(25)
Dividends to shareholders ($0.70 per ordinary share)	Dividends to shareholders ($0.70 per ordinary share)								(145)		(145)		Dividends to shareholders ($0.70 per ordinary share)								(146)		(146)
Share-based compensation	Share-based compensation				31						31		Share-based compensation				25						25
Balance at March 31, 2023		207	$	—	$	7,342	$	84	$	(8,430)	$	(1,004)
Balance at September 29, 2023													Balance at September 29, 2023	209	$	—	$	7,338	$	(15)	$	(9,025)	$	(1,702)

Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total
Balance at December 31, 2021 219 $ — $ 7,084 $ (25) $ (6,533) $ 526
Net income 346 346
Other comprehensive income 62 62
Issuance of ordinary shares under employee share plans 1 31 31
Repurchases of ordinary shares (4) (428) (428)
Dividends to shareholders ($0.70 per ordinary share) (152) (152)
Share-based compensation 36 36
Balance at April 1, 2022 216 $ — $ 7,151 $ 37 $ (6,767) $ 421


	Number of Ordinary Shares	Par Value of Shares		Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total
Balance at July 1, 2022	210	$	—	$	7,190	$	36	$	(7,117)	$	109
Net income								29		29
Other comprehensive income						37				37
Issuance of ordinary shares under employee share plans	2			29						29
Repurchases of ordinary shares	(5)							(400)		(400)
Tax withholding related to vesting of restricted share units	(1)							(39)		(39)
Dividends to shareholders ($0.70 per ordinary share)								(145)		(145)
Share-based compensation				29						29
Balance at September 30, 2022	206	$	—	$	7,248	$	73	$	(7,672)	$	(351)

See Notes to Condensed Consolidated Financial Statements.

~~Table of Contents~~

~~SEAGATE TECHNOLOGY HOLDINGS PLC~~

~~CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ (DEFICIT) EQUITY~~

~~For the Nine Months EndedMarch 31, 2023 and April 1, 2022~~

~~(In millions)~~

~~(Unaudited)~~
Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total
Balance at July 1, 2022 210 $ — $ 7,190 $ 36 $ (7,117) $ 109
Net loss (437) (437)
Other comprehensive income 48 48
Issuance of ordinary shares under employee share plans 3 59 59
Repurchases of ordinary shares (5) (400) (400)
Tax withholding related to vesting of restricted share units (1) (41) (41)
Dividends to shareholders ($2.10 per ordinary share) (435) (435)
Share-based compensation 93 93
Balance at March 31, 2023 207 $ — $ 7,342 $ 84 $ (8,430) $ (1,004)

Number of Ordinary Shares Par Value of Shares Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total
Balance at July 2, 2021 227 $ — $ 6,977 $ (41) $ (6,305) $ 631
Net income 1,373 1,373
Other comprehensive income 78 78
Issuance of ordinary shares under employee share plans 4 68 68
Repurchases of ordinary shares (14) (1,333) (1,333)
Tax withholding related to vesting of restricted share units (1) (45) (45)
Dividends to shareholders ($2.07 per ordinary share) (457) (457)
Share-based compensation 106 106
Balance at April 1, 2022 216 $ — $ 7,151 $ 37 $ (6,767) $ 421

~~See Notes to Condensed Consolidated Financial Statements.~~

Table of Contents

SEAGATE TECHNOLOGY HOLDINGS PLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Basis of Presentation and Summary of Significant Accounting Policies

Organization

Seagate Technology Holdings plc (“STX”) and its subsidiaries (collectively, unless the context otherwise indicates, the “Company”) is a leading provider of data storage technology and infrastructure solutions. Its principal products are hard disk drives, commonly referred to as disk drives, hard drives or HDDs. In addition to HDDs, the Company produces a broad range of data storage products including solid state drives (“SSDs”)~~, solid state hybrid drives (“SSHDs”),~~ and storage subsystems ~~as well~~and offers storage solutions such as a scalable edge-to-cloud mass data platform that includes data transfer shuttles and a storage-as-a-service cloud.

HDDs are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. HDDs continue to be the primary medium of mass data storage due to their performance attributes, reliability, high capacities, superior quality and cost effectiveness. Complementing ~~existing~~HDD storage architectures, SSDs use NAND flash memory integrated circuit assemblies ~~as memory~~ to store data, and most SSDs use NAND flash memory. In contrast to HDDs and SSDs, SSHDs combine the features of SSDs and HDDs in the same unit, containing a high-capacity HDD and a smaller SSD acting as a cache to improve performance.data.

The Company’s HDD products are designed for mass capacity storage and legacy markets. Mass capacity storage involves well-established use ~~cases—~~cases, such as hyperscale data centers and public clouds as well as emerging use cases. Legacy markets ~~include markets~~are those that the Company continues to sell to but ~~that it~~ does not plan to invest in significantly. The Company’s HDD and SSD product portfolio includes Serial Advanced Technology Attachment (“SATA”), Serial Attached SCSI (“SAS”) and Non-Volatile Memory Express (“NVMe”) based designs to support a wide variety of mass capacity and legacy applications.

The Company’s systems portfolio includes storage subsystems for enterprises, cloud service providers (“CSPs”), scale-out storage servers and original equipment manufacturers (“OEMs”). Engineered for modularity, mobility, capacity and performance, these solutions include the Company’s enterprise HDDs and SSDs, enabling customers to integrate powerful, scalable storage within existing environments or create new ecosystems from the ground up in a secure, cost-effective manner.

The Company’s Lyve portfolio provides a simple, cost-efficient and secure way to manage massive volumes of data across the distributed enterprise. The Lyve platform includes a shuttle solution that enables enterprises to transfer massive amounts of data from endpoints to the core cloud and a storage-as-a-service cloud offering that provides frictionless mass capacity storage at the metro edge.

Basis of Presentation and Consolidation

The unaudited Condensed Consolidated Financial Statements of the Company and the accompanying notes were prepared in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”). The Company’s unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements include the accounts of the Company and all its wholly-owned and majority-owned subsidiaries, after elimination of intercompany transactions and balances.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements and accompanying notes. ~~These estimates and assumptions include the impact of the COVID-19 pandemic.~~ Actual results could differ materially from those estimates. The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

The Company’s ~~consolidated financial statements~~Consolidated Financial Statements for the fiscal year ended ~~July 1, 2022~~June 30, 2023 are included in its Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”) on August ~~5, 2022.~~4, 2023. The Company believes that the disclosures included in these unaudited ~~condensed consolidated financial statements,~~Condensed Consolidated Financial Statements, when read in conjunction with its ~~consolidated financial statements~~Consolidated Financial Statements as of ~~July 1, 2022,~~June 30, 2023, and the notes thereto, are adequate to make the information presented not misleading. The results of operations for the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023 are not necessarily indicative of the results to be expected for any subsequent interim period or for the Company’s fiscal year ending June ~~30, 2023.~~

~~Table of Contents~~

28, 2024.

Fiscal Year

The Company operates and reports financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. In fiscal years with 53 weeks, the first quarter consists of 14 weeks and the remaining quarters consist of 13 weeks each. Both the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023 and ~~the three and nine months ended April 1,~~September 30, 2022 consisted of 13 ~~and 39 weeks, respectively.~~weeks. Fiscal years ~~2023~~2024 and ~~2022~~2023 both comprise of 52 weeks and end on June 28, 2024 and June 30, 2023, ~~and July 1, 2022,~~ respectively. The fiscal quarters ended ~~March 31,~~September 29, 2023, ~~December~~June 30, ~~2022~~2023 and ~~April 1,~~September 30, 2022, are also referred to herein as the ~~“March~~“September 2023 quarter”, the ~~“December 2022~~“June 2023 quarter” and the ~~“March~~“September 2022 quarter”, respectively.

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Summary of Significant Accounting Policies

~~There~~Except for the change in the Company’s other long-lived assets policies described below, there have been no material changes to the Company’s significant accounting policies disclosed in Note 1. Basis of Presentation and Summary of Significant Accounting Policies of “Financial Statements and Supplementary Data” contained in Part II, Item 8. of the Company’s Annual Report on Form 10-K for the fiscal year ended ~~July 1, 2022,~~June 30, 2023, as filed with the SEC on August ~~5, 2022.~~4, 2023.

Other Long-Lived Assets

In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. Effective from the first quarter of fiscal year 2024, the Company changed the useful lives of certain manufacturing equipment from a range of three to seven years to a range of three to ten years based on its review of technology product roadmap. The effect of this change in estimate increased the net income and diluted earnings per share by approximately $10 million and $0.05, respectively, for the three months ended September 29, 2023.

Recently Adopted ~~Accounting Pronouncements~~

~~In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 (ASC Topic 848),~~ ~~Reference Rate Reform.~~ This ASU provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. In December 2022, FASB issued ASU 2022-06 (ASC Topic 848) and deferred the sunset date from December 31, 2022 to December 31, 2024. The Company adopted the guidance in the quarter ended September 30, 2022 on a prospective basis and is transitioning from an interest rate based on London Interbank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”). The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

~~In November 2021, the FASB issued ASU 2021-10 (ASC Topic 832),~~ ~~Disclosures by Business Entities about Government Assistance~~. This ASU requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the type of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity’s financial statements. The Company adopted the guidance in the quarter ended September 30, 2022.

~~Recently Issued~~ Accounting Pronouncements

In September 2022, the FASB issued ASU 2022-04 (ASC Subtopic 405-50), Disclosure of Supplier Finance Program Obligations. This ASU requires disclosure of key terms of the outstanding supplier finance programs and a ~~rollforward~~roll forward of the related obligations. The Company ~~is required to adopt~~adopted this guidance in the ~~first~~ quarter ~~of fiscal year 2024. Early adoption is permitted.~~ended September 29, 2023. The ~~Company is in the process of assessing the impact of this ASU on its condensed consolidated financial statements.~~

~~In June 2022, the FASB issued ASU 2022-03 (ASC Topic 820),~~ ~~Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions~~. This ASU clarifies that a contractual restriction on the sale of equity security is not considered when measuring its fair value and requires new disclosures for equity securities subject to contractual sale restriction. The Company is required to adopt this guidance in the first quarter of fiscal year 2025. The Company does not expect the adoption of this ASU todid not have a material impact on ~~its condensed consolidated financial statements.~~the Company’s Condensed Consolidated Financial Statements.

2.Balance Sheet Information

Available-for-sale Debt Securities

The following table summarizes, by major type, the fair value and amortized cost of the Company’s available-for-sale debt investments as of ~~March 31,~~September 29, 2023 and ~~July 1, 2022:~~June 30, 2023:


	September 29, 2023						June 30, 2023
(Dollars in millions)	Amortized Cost		Unrealized Gain/(Loss)		Fair Value		Amortized Cost		Unrealized Gain/(Loss)		Fair Value
Available-for-sale debt securities:
Money market funds	$	121	$	—	$	121	$	73	$	—	$	73

Time deposits and certificates of deposit	1		—		1		1		—		1



Other debt securities	15		—		15		16		—		16
Total	$	137	$	—	$	137	$	90	$	—	$	90




Included in Cash and cash equivalents					$	120					$	72

Included in Other current assets					2						2
Included in Other assets, net					15						16
Total					$	137					$	90

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March 31,
2023 July 1,
2022
(Dollars in millions) Amortized Cost Unrealized Gain/(Loss) Fair Value Amortized Cost Unrealized Gain/(Loss) Fair Value
Available-for-sale debt securities:
Money market funds $ 235 $ — $ 235 $ 60 $ — $ 60
Time deposits and certificates of deposit 1 — 1 1 — 1
Other debt securities 16 — 16 23 — 23
Total $ 252 $ — $ 252 $ 84 $ — $ 84
Included in Cash and cash equivalents $ 234 $ 59
Included in Other current assets 2 2
Included in Other assets, net 16 23
Total $ 252 $ 84

As of ~~March 31,~~September 29, 2023 and ~~July 1, 2022,~~June 30, 2023, the Company’s Other current assets included $2 million in restricted cash equivalents held as collateral at banks for various performance obligations.

As of ~~March 31,~~September 29, 2023 and ~~July 1, 2022,~~June 30, 2023, the ~~Company~~Company had no available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. The Company determined no impairment related to credit losses for available-for-sale debt securities as of ~~March 31,~~September 29, 2023.

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The fair value and amortized cost of the Company’s investments classified as available-for-sale debt securities as of ~~March 31,~~September 29, 2023, by remaining contractual maturity were as follows:


(Dollars in millions)	(Dollars in millions)	Amortized Cost		Fair Value		(Dollars in millions)	Amortized Cost		Fair Value
Due in less than 1 year	Due in less than 1 year	$	236	$	236	Due in less than 1 year	$	122	$	122
Due in 1 to 5 years	Due in 1 to 5 years	15		15		Due in 1 to 5 years	15		15
Due in 6 to 10 years	Due in 6 to 10 years	—		—		Due in 6 to 10 years	—		—
Thereafter	Thereafter	1		1		Thereafter	—		—
Total	Total	$	252	$	252	Total	$	137	$	137

Cash, Cash Equivalents and Restricted Cash

The following table provides a summary of cash, cash equivalents and restricted cash reported within the Company’s Condensed Consolidated Balance Sheets that reconciles to the corresponding amount in the Company’s Condensed Consolidated Statements of Cash Flows:


(Dollars in millions)	(Dollars in millions)	March 31, 2023		July 1, 2022		April 1, 2022		July 2, 2021		(Dollars in millions)	September 29, 2023		June 30, 2023		September 30, 2022		July 1, 2022
Cash and cash equivalents	Cash and cash equivalents	$	766	$	615	$	1,138	$	1,209	Cash and cash equivalents	$	795	$	786	$	761	$	615
Restricted cash included in Other current assets	Restricted cash included in Other current assets	2		2		2		2		Restricted cash included in Other current assets	2		2		2		2
Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows	Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows	$	768	$	617	$	1,140	$	1,211	Total cash, cash equivalents and restricted cash shown in the Statements of Cash Flows	$	797	$	788	$	763	$	617

Accounts receivable, net

In connection with the ~~Company’s~~Company’s factoring agreements, from time to time the Company sells trade receivables to a third party for cash proceeds less a discount. During the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023, the Company sold trade receivables without recourse for cash proceeds of ~~$261 million and $672 million, respectively.~~$292 million. As of ~~March 31,~~September 29, 2023, the total amount that remained subject to servicing by the Company was ~~$226 million.~~$363 million. During the three ~~and nine~~ months ended ~~April 1,~~September 30, 2022, the Company sold trade receivables without recourse for cash proceeds of ~~$75 million, all~~$200 million. As of ~~which~~September 30, 2022, the total amount that remained subject to servicing by the Company ~~as of April 1, 2022.~~was $237 million. The discounts on receivables sold were not material for the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023 and ~~April 1, 2022.~~

September 30, 2022, respectively.

~~Table of Contents~~

Inventories

The following table provides details of the inventory balance ~~sheet~~sheets item:


(Dollars in millions)	(Dollars in millions)	March 31, 2023		July 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023
Raw materials and components	Raw materials and components	$	633	$	601	Raw materials and components	$	243	$	241
Work-in-process	Work-in-process	302		414		Work-in-process	657		682
Finished goods	Finished goods	265		550		Finished goods	152		217
Total inventories	Total inventories	$	1,200	$	1,565	Total inventories	$	1,052	$	1,140

Other Current Assets

The following table provides details of the other current assets balance sheets item:


(Dollars in millions)	September 29, 2023		June 30, 2023
Vendor receivables	$	109	$	167
Other current assets	159		191
Total	$	268	$	358

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Property, Equipment and Leasehold Improvements, net

The components of property, equipment and leasehold improvements, net, were as follows:


(Dollars in millions)	(Dollars in millions)	March 31, 2023		July 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023
Property, equipment and leasehold improvements	Property, equipment and leasehold improvements	$	10,267	$	10,659	Property, equipment and leasehold improvements	$	10,260	$	10,267
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(8,514)		(8,420)		Accumulated depreciation and amortization	(8,608)		(8,561)
Property, equipment and leasehold improvements, net	Property, equipment and leasehold improvements, net	$	1,753	$	2,239	Property, equipment and leasehold improvements, net	$	1,652	$	1,706

During the ~~March~~September 2023 quarter, the Company ~~recorded $355~~recognized a charge of $13 million for the accelerated depreciation of ~~held for sale land and buildings (collectively, the “properties”)~~certain fixed assets, which was ~~included~~recorded to Cost of revenue in ~~Other current assets on its~~the Condensed Consolidated ~~Balance Sheet. Of~~Statements of Operations. During the September 2022 quarter, the Company recognized a charge of $22 million for the accelerated depreciation of certain fixed assets, ~~held for sale balance as of March 31, 2023, $243 million and $112 million are located~~which was recorded to Operating expense in the ~~Americas and in Asia, respectively. Depreciation related to the properties ceased as~~Condensed Consolidated Statements of the date these were determined to be held for sale. The sales of the properties are expected to be completed within one year, subject to customary closing conditions. As of July 1, 2022, the assets held for sale balance was not material.Operations.

Accrued Expenses

The following table provides details of the accrued expenses balance ~~sheet~~sheets item:


(Dollars in millions)	(Dollars in millions)	March 31, 2023		July 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023

Dividends payable	Dividends payable	$	145	$	147	Dividends payable	$	146	$	145
Other accrued expenses	Other accrued expenses	522		449		Other accrued expenses	644		603
Total	Total	$	667	$	596	Total	$	790	$	748

Accumulated Other Comprehensive Income (“AOCI”)

The components of AOCI, net of tax, were as follows:


(Dollars in millions)	(Dollars in millions)	Unrealized Gains/(Losses) on Cash Flow Hedges		Unrealized Gains/(Losses) on Post-Retirement Plans		Foreign Currency Translation Adjustments		Total		(Dollars in millions)	Unrealized Gains/(Losses) on Cash Flow Hedges		Unrealized Gains/(Losses) on Post-Retirement Plans		Foreign Currency Translation Adjustments		Total
Balance at June 30, 2023										Balance at June 30, 2023	$	103	$	(4)	$	(1)	$	98
Other comprehensive income before reclassifications										Other comprehensive income before reclassifications	(22)		—		—		(22)
Amounts reclassified from AOCI										Amounts reclassified from AOCI	(92)		—		1		(91)
Other comprehensive loss										Other comprehensive loss	(114)		—		1		(113)
Balance at September 29, 2023										Balance at September 29, 2023	$	(11)	$	(4)	$	—	$	(15)

Balance at July 1, 2022	Balance at July 1, 2022	$	51	$	(14)	$	(1)	$	36	Balance at July 1, 2022	$	51	$	(14)	$	(1)	$	36
Other comprehensive income before reclassifications	Other comprehensive income before reclassifications	45		—		—		45		Other comprehensive income before reclassifications	32		1		—		33
Amounts reclassified from AOCI	Amounts reclassified from AOCI	2		1		—		3		Amounts reclassified from AOCI	5		—		(1)		4
Other comprehensive income	Other comprehensive income	47		1		—		48		Other comprehensive income	37		1		(1)		37
Balance at March 31, 2023		$	98	$	(13)	$	(1)	$	84

Balance at July 2, 2021		$	(18)	$	(22)	$	(1)	$	(41)
Other comprehensive income before reclassifications		58		1		—		59
Amounts reclassified from AOCI		18		1		—		19
Other comprehensive income		76		2		—		78
Balance at April 1, 2022		$	58	$	(20)	$	(1)	$	37
Balance at September 30, 2022										Balance at September 30, 2022	$	88	$	(13)	$	(2)	$	73

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3.Debt

The following table provides details of the Company’s debt as of ~~March 31,~~September 29, 2023 and ~~July 1, 2022:~~June 30, 2023:


(Dollars in millions)	(Dollars in millions)	March 31, 2023		July 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023
Unsecured Senior Notes(1)	Unsecured Senior Notes(1)					Unsecured Senior Notes(1)
$1,000 issued on May 22, 2013 at 4.75% due June 1, 2023 (the “2023 Notes”), interest payable semi-annually on June 1 and December 1 of each year.		$	540	$	540
$500 issued on February 3, 2017 at 4.875% due March 1, 2024 (the “2024 Notes”), interest payable semi-annually on March 1 and September 1 of each year.		500		499

$1,000 issued on May 28, 2014 at 4.75% due January 1, 2025 (the “2025 Notes”), interest payable semi-annually on January 1 and July 1 of each year.	$1,000 issued on May 28, 2014 at 4.75% due January 1, 2025 (the “2025 Notes”), interest payable semi-annually on January 1 and July 1 of each year.	479		479		$1,000 issued on May 28, 2014 at 4.75% due January 1, 2025 (the “2025 Notes”), interest payable semi-annually on January 1 and July 1 of each year.	$	479	$	479
$700 issued on May 14, 2015 at 4.875% due June 1, 2027 (the “2027 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	$700 issued on May 14, 2015 at 4.875% due June 1, 2027 (the “2027 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	504		504		$700 issued on May 14, 2015 at 4.875% due June 1, 2027 (the “2027 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	504		504
$500 issued on June 18, 2020 at 4.091% due June 1, 2029 (the “June 2029 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	$500 issued on June 18, 2020 at 4.091% due June 1, 2029 (the “June 2029 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	465		466		$500 issued on June 18, 2020 at 4.091% due June 1, 2029 (the “June 2029 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	467		465
$500 issued on December 8, 2020 at 3.125% due July 15, 2029 (the “July 2029 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	$500 issued on December 8, 2020 at 3.125% due July 15, 2029 (the “July 2029 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	163		500		$500 issued on December 8, 2020 at 3.125% due July 15, 2029 (the “July 2029 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	163		163
$500 issued on May 30, 2023 at 8.25% due December 15, 2029 (the “December 2029 Notes”), interest payable semi-annually on June 15 and December 15 of each year.						$500 issued on May 30, 2023 at 8.25% due December 15, 2029 (the “December 2029 Notes”), interest payable semi-annually on June 15 and December 15 of each year.	500		500
$500 issued on June 10, 2020 at 4.125% due January 15, 2031 (the “January 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	$500 issued on June 10, 2020 at 4.125% due January 15, 2031 (the “January 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	275		500		$500 issued on June 10, 2020 at 4.125% due January 15, 2031 (the “January 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	275		275
$500 issued on December 8, 2020 at 3.375% due July 15, 2031 (the “July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	$500 issued on December 8, 2020 at 3.375% due July 15, 2031 (the “July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	72		500		$500 issued on December 8, 2020 at 3.375% due July 15, 2031 (the “July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	72		72
$500 issued on May 30, 2023 at 8.50% due July 15, 2031 (the “8.50% July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.						$500 issued on May 30, 2023 at 8.50% due July 15, 2031 (the “8.50% July 2031 Notes”), interest payable semi-annually on January 15 and July 15 of each year.	500		500
$750 issued on November 30, 2022 at 9.625% due December 1, 2032 (the “2032 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	$750 issued on November 30, 2022 at 9.625% due December 1, 2032 (the “2032 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	750		—		$750 issued on November 30, 2022 at 9.625% due December 1, 2032 (the “2032 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	750		750
$500 issued on December 2, 2014 at 5.75% due December 1, 2034 (the “2034 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	$500 issued on December 2, 2014 at 5.75% due December 1, 2034 (the “2034 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	489		489		$500 issued on December 2, 2014 at 5.75% due December 1, 2034 (the “2034 Notes”), interest payable semi-annually on June 1 and December 1 of each year.	489		489

Convertible Senior Notes(1)						Convertible Senior Notes(1)
$1,500 issued on September 13, 2023 at 3.50% due June 1, 2028 (the “2028 Notes”), interest payable semi-annually on March 1 and September 1 of each year.						$1,500 issued on September 13, 2023 at 3.50% due June 1, 2028 (the “2028 Notes”), interest payable semi-annually on March 1 and September 1 of each year.	1,500		—
Term Loans	Term Loans					Term Loans
$600 borrowed on October 14, 2021 at SOFR plus a variable margin ranging from 1.125% to 2.375%, (the “Term Loan A1”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of September 16, 2025.	$600 borrowed on October 14, 2021 at SOFR plus a variable margin ranging from 1.125% to 2.375%, (the “Term Loan A1”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of September 16, 2025.	585		600		$600 borrowed on October 14, 2021 at SOFR plus a variable margin ranging from 1.125% to 2.375%, (the “Term Loan A1”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of September 16, 2025.	—		430
$600 borrowed on October 14, 2021 at SOFR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A2”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	$600 borrowed on October 14, 2021 at SOFR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A2”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	585		600		$600 borrowed on October 14, 2021 at SOFR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A2”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	—		430
$600 borrowed on August 18, 2022 at SOFR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A3”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	$600 borrowed on August 18, 2022 at SOFR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A3”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	585		—		$600 borrowed on August 18, 2022 at SOFR plus a variable margin ranging from 1.25% to 2.5%, (the “Term Loan A3”), repayable in quarterly installments beginning on December 31, 2022, with a final maturity date of July 30, 2027.	—		430
		5,992		5,677			5,699		5,487
Less: unamortized debt issuance costs	Less: unamortized debt issuance costs	(34)		(31)		Less: unamortized debt issuance costs	(33)		(36)
Debt, net of debt issuance costs	Debt, net of debt issuance costs	5,958		5,646		Debt, net of debt issuance costs	5,666		5,451
Less: current portion of long-term debt	Less: current portion of long-term debt	(1,118)		(584)		Less: current portion of long-term debt	—		(63)
Long-term debt, less current portion	Long-term debt, less current portion	$	4,840	$	5,062	Long-term debt, less current portion	$	5,666	$	5,388

~~______________________________~~_____________________________

(1) All unsecured senior notes and convertible senior notes are issued by Seagate HDD Cayman (“Seagate HDD”), and the obligations under these notes are fully and unconditionally guaranteed, on a senior unsecured basis, by Seagate Technology Unlimited Company (“STUC”) and STX.

~~Debt Exchange~~

~~2032 Notes.~~ On November 30, 2022, Seagate HDD issued, in a private placement, $750 million in aggregate principal amount of 9.625% Senior Notes due on December 1, 2032, in connection with Seagate HDD’s exchange offers to certain eligible holders of Seagate HDD’s outstanding existing senior notes as set forth below:

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(Dollars in millions)
Existing Notes Principal Amount Outstanding
as of July 1, 2022 Principal Amount Exchanged
July 2031 Notes $ 500 $ 423
July 2029 Notes 500 336
January 2031 Notes 500 205
Total $ 1,500 $ 964
2028 Convertible Senior Notes and related Capped Call Transactions

2028 Notes. On September 13, 2023, Seagate HDD, in a private placement, issued $1.5 billion in aggregate principal amount of 3.50% Convertible Senior Notes due 2028 (the “2028 Notes”), which includes $200 million aggregate principal amount pursuant to the over-allotment option of the initial purchasers to purchase additional notes. The 2028 Notes will mature on June 1, 2028, with interest payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2024.

The entire outstanding principal amount of Term Loans A1, A2 and A3 were repaid from the proceeds of the 2028 Notes issuance. The exchange was accounted for as a debt extinguishment and the Company recorded a net ~~gain~~loss of ~~$204~~$29 million, which was included in the Net ~~gain~~loss recognized from early redemption of debt in the Company’s Condensed Consolidated Statements of Operations for the first quarter of fiscal year 2024. In connection with the repayment of Term Loans, the Company terminated its interest rate swap agreements. Refer to “Note 6. Derivative Financial Instruments” for more details.

Prior to March 1, 2028, the 2028 Notes are convertible at the option of the holders only under certain circumstances as set forth in the indenture with respect to the 2028 Notes. On or after March 1, 2028, the 2028 Notes are convertible at any time at the option of the holders until the close of business on the second scheduled trading day immediately preceding the maturity date, unless the 2028 Notes have been previously redeemed or repurchased by Seagate HDD. Upon exchange of the 2028 Notes, Seagate HDD will pay cash up to the aggregate principal amount of 2028 Notes to be exchanged and will pay or cause to be delivered, as the case may be, cash, ordinary shares of the Company or a combination of cash and ordinary shares of the Company, at Seagate HDD’s election, in respect of any remainder of the exchange obligation in excess of such principal amount. The initial exchange rate for the ~~nine months ended March 31, 2023.~~2028 Notes is 12.1253 ordinary shares per $1,000 principal amount of 2028 Notes.

~~At any time prior to December 1, 2027,~~ Seagate HDD may redeem the ~~2032~~2028 Notes at its option, in whole but not in part, if Seagate HDD or the Guarantors have, or on the next interest payment date would, become obligated to pay to the holder of any Note additional amounts as a result of certain tax-related events at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date; provided that Seagate HDD may only redeem the Notes if: (x) Seagate HDD or the relevant Guarantor cannot avoid these obligations by taking commercially reasonable measures available to Seagate HDD or such Guarantor; and (y) Seagate HDD delivers to the Trustee an opinion of outside legal counsel of recognized standing in the relevant taxing jurisdiction attesting to such tax-related event and obligation to pay additional amounts.

Seagate HDD also may redeem the 2028 Notes at its option on or after September 8, 2026, in whole or in part, if the last reported sale price of ordinary shares of the Company has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which Seagate HDD provides notice of redemption, during any ~~time~~30 consecutive trading day period ending on, and ~~from time to time,~~including, the trading day immediately preceding the date on which Seagate HDD provides notice of redemption at a ~~“make-whole” redemption price. The “make-whole”~~ redemption price ~~will be~~ equal to the greater of: (1) (a) the sum of the present values at such redemption date of the redemption price of the 2032 Notes that would apply if the new 2032 Notes were redeemed on December 1, 2027 plus the remaining scheduled payments of interest thereon to and including December 1, 2027 discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 50 basis points less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the ~~2032~~ Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. At any time on or after December 1, 2027, Seagate HDD may redeem some or all of the 2032 Notes at the prices specified in the Indenture, plus accrued and unpaid interest to, but excluding, the redemption date. ~~In addition,~~If Seagate HDD ~~may redeem with~~redeems less than all the ~~net cash proceeds from one or more equity offerings up to 40% of the 2032~~outstanding 2028 Notes, ~~before December 1, 2025,~~ at ~~a redemption price of 109.625% plus accrued and unpaid interest to, but excluding, the redemption date.~~

~~Debt Repurchases~~

~~During the March 2023 quarter, $20~~least $150 million aggregate principal amount of ~~the January 2031~~2028 Notes ~~$5 million principal amount~~must be outstanding and not subject to redemption as of the ~~June 2029~~relevant notice of redemption date.

In connection with the 2028 Notes, the Company and ~~$5 million principal amount~~Seagate HDD entered into privately negotiated capped call transactions with certain financial institutions. The cap price of the ~~July 2031 Notes were repurchased for cash at~~capped call transactions will initially be $107.848 per share, which represents a ~~discount~~premium of approximately 70% over the last reported sale price of the ordinary shares of $63.44 per share on the Nasdaq Global Market on September 7, 2023. The cost of the capped call transactions was $95 million, which met certain accounting criteria to ~~their principal amounts, plus accrued~~be accounted under Additional Paid-in Capital as part of the Shareholders’ Deficit and ~~unpaid interest. The Company recorded a gain of $3 million on these repurchases during the March 2023 quarter, which was included in Net gain recognized from early redemption of debt~~are not accounted as derivatives in the Company’s Condensed Consolidated ~~Statements~~Balance Sheets as of ~~Operations.~~September 29, 2023.

Credit Agreement

On ~~August 18, 2022,~~September 27, 2023, Seagate Technology Holdings plc and Seagate HDD ~~(the “Borrower”)~~ entered into an amendment to its ~~Credit Agreement~~credit agreement, dated September 20, 2019 (the ~~“Sixth~~“Tenth Amendment”)~~, which provided for a new term loan facility in~~. Under the ~~aggregate principal amount of $600 million (“Term Loan A3”). Term Loan A3 was borrowed in full at the closing of the Sixth Amendment. The Sixth~~Tenth Amendment, to the Credit Agreement also replaced the LIBOR interest rates plus variable margin for the Term Loans A1 and A2 with the SOFR interest rates plus a variable margin that will be determined based on the corporate credit rating of the Borrower or one of its parent entities. The Sixth Amendment also permits the Borrower to increase the revolving loan commitments or obtain new term loans of up to $100 million in aggregate (the “Incremental facility”), subject to the satisfaction of certain terms and conditions.

~~On November 8, 2022, Seagate Technology Holdings plc and the Borrower entered into an amendment to its Credit Agreement (the “Seventh Amendment”), to increase~~ the maximum permitted total leverage ratio the Company must comply with during the covenant relief period that ends on June 28, 2024 and prohibit the Company from pursuing the use of the Incremental Facility during the covenant relief period. The maximum permitted totalnet leverage ratio is ~~5.0~~6.75 to ~~1.0 from the fiscal quarters ending December 30, 2022 to June 30, 2023. For~~1.00 for the fiscal quarter ending September 29, ~~2023, the maximum permitted total leverage ratio is 4.75 to 1.0 and then steps down to 4.5 to 1.0 from~~2023. For the fiscal quarters ending December 29, 2023 toand March 29, 2024, the total net leverage ratio covenant will not apply. For the fiscal quarters ending June 28, ~~2024.~~2024 until the end of the covenant relief period, which terminates on June 27, 2025, the maximum permitted total net leverage ratio is 6.75 to 1.00, and applies only to the extent that the aggregate outstanding amount of revolving loans, swing line loans and the aggregate face amount of certain letters of credit exceeds 25% of the then outstanding revolving commitments in effect (the “Testing Condition”) as of the last day of the fiscal quarter. The maximum permitted total leverage ratio ~~will return to 4.0 to 1.0~~ for ~~any~~each fiscal quarter ending after June ~~28, 2024.~~27, 2025 is 4.00 to 1.00.

Table of Contents

The ~~Credit Agreement provides a term loan facility in an aggregate principal amount of $1.8 billion~~minimum interest coverage ratio is 2.25 to 1.00 for the fiscal quarter ending September 29, 2023. For the fiscal quarters ending December 29, 2023 and March 29, 2024, the minimum interest coverage ratio covenant will not apply. For the fiscal quarters ending June 28, 2024 until June 27, 2025, the minimum interest coverage ratio is 2.25 to 1.00, and applies only to the extent that the Testing Condition is extended in three tranches of $600 million each for Term Loans A1, A2 and A3 (the “Term Loans”), and a $1.75 billion senior unsecured revolving credit facility (“Revolving Credit Facility”). During the March 2023 quarter the Company repaid $45 million principal amountsatisfied as of the ~~Term Loans.~~last day of the fiscal quarter. The minimum interest coverage ratio is 3.25 to 1.00 for each fiscal quarter ending after June 27, 2025.

The Tenth Amendment also removed the minimum liquidity covenant of $700 million. As of ~~March 31,~~September 29, 2023, ~~no borrowings (including swingline loans) were outstanding and no commitments were utilized for letters of credit issued under~~ the ~~Revolving Credit Facility. STX and certain of its material subsidiaries, including STUC, fully and unconditionally guarantee both the Revolving Credit Facility and the Term Loans. The Credit Agreement~~Tenth Amendment includes ~~three~~two financial covenants: (1) interest coverage ratio and (2) total net leverage ~~ratio and (3) a minimum liquidity amount.~~ratio. The Company was in compliance with the covenants as of ~~March 31,~~September 29, 2023.

~~Table of Contents~~

Future Principal Payments on Long-term Debt

At ~~March 31,~~September 29, 2023, future principal payments on long-term debt were as follows (in millions):
Fiscal Year Amount
Remainder of 2023 $ 563
2024 586
2025 617
2026 667
2027 649
Thereafter 2,943
Total $ 6,025


Fiscal Year	Principal Amount
Remainder of 2024	$	—
2025	479
2026	—
2027	505
2028	1,500

Thereafter	3,245
Total	$	5,729

4.Income Taxes

The Company recorded an income tax ~~provisions~~provision of ~~$33 million and $26~~$37 million for the three ~~and nine~~ months ended ~~March 31, 2023, respectively.~~September 29, 2023. The ~~discrete items in the~~ income tax provision ~~were not material~~included approximately $33 million of net discrete expense, primarily associated with an increase in the Company’s valuation allowance to account for the ~~three~~impacts of new tax guidance which clarifies the treatment of specified research and ~~nine~~experimental expenditures issued by the U.S. Treasury Department under Internal Revenue Code Section 174 during the September 2023 quarter, partially offset by excess tax benefits related to share-based compensation expense. The Company will have income taxes payable based on profits generated in various jurisdictions.

During the three months ended ~~March 31, 2023.~~

~~During the nine months ended March 31,~~September 29, 2023,, the Company’s unrecognized tax benefits excluding interest and penalties ~~increased~~decreased by approximately $1$9 million to ~~$115~~$107 million,, substantially all of which would impact the effective tax rate, if recognized, subject to certain future valuation allowance reversals. The Company is not expecting material changes to its unrecognized tax benefits in the next twelve months beginning ~~April 1,~~September 30, 2023.

The ~~Company recorded~~Company’s income tax ~~provisions~~benefit of $5$2 million ~~and $25 million for the three and nine months ended April 1, 2022, respectively.The income tax provision~~ for the three months ended ~~April 1,~~September 30, 2022 included approximately $6$7 million of net discrete tax benefit, primarily associated with a change in the applicable tax rate within its non-U.S. operations. The income tax provision for the nine months ended April 1, 2022 included approximately $15 million of net discrete tax benefit, primarily associated with net excess tax benefits related to share-based compensation expense.

The Company’s income tax provision recorded for the three ~~and nine~~ months ended~~March 31,~~ September 29, 2023 and ~~the~~ ~~three and nine months endedApril 1,~~September 30, 2022 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) ~~current year generation of research credits.~~increase in valuation allowance.

5.Restructuring and Exit Costs

The Company recorded restructuring and other, net of ~~$20~~$2 million and ~~$110~~$9 million, for the three ~~and nine~~ months ended ~~March 31, 2023. For~~September 29, 2023 and September 30, 2022, respectively on the ~~nine months ended April 1, 2022, the Company recorded restructuring and other, net~~Company’s Condensed Consolidated Statements of ~~$2 million.~~Operations. The Company’s restructuring plans are comprised primarily of charges related to workforce reduction costs, including severance and other one-time termination benefits, ~~and~~ facilities and other exit costs. ~~All~~The Company’s significant restructuring ~~charges~~plans are ~~reported in Restructuring and other, net on the Company’s Condensed Consolidated Statements~~described below.

Table of ~~Operations.~~Contents

October 2022 Plan - On October 24, 2022, the Company committed to an October 2022 restructuring plan (the “October 2022 Plan”) to reduce its cost structure to better align the Company’s operational needs to current economic conditions while continuing to support the long-term business strategy. On March 29, 2023, in light of further deteriorating economic conditions, the Company committed to an expansion of the October 2022 Plan to further reduce its global headcount by approximately 480 employees to a total reduction of approximately 3,480 employees. This expanded plan ~~includes~~included aligning its business plan to near-term market conditions, along with other cost saving measures. The October 2022 Plan ~~is expected to be~~was substantially completed by the end of ~~the~~ fiscal year 2023.

~~Table of Contents~~

~~The following table summarizes the Company’s restructuring activities under its active restructuring plans:~~

October 2022 Plan Other Plans
(Dollars in millions) Workforce Reduction Costs Facilities and Other Exit Costs Workforce Reduction Costs Facilities and Other Exit Costs Total
Accrual balances at July 1, 2022 $ — $ — $ — $ 5 $ 5
Restructuring charges 104 7 10 — 121
Cash payments (76) (1) (10) (1) (88)
Accrual balances at March 31, 2023 $ 28 $ 6 $ — $ 4 $ 38
Total costs incurred inception to date as of March 31, 2023 $ 104 $ 7 $ 73 $ 24 $ 208
Total expected charges to be incurred as of March 31, 2023 $ — $ — $ — $ — $ —

~~Of the accrued restructuring balance of $38 million at March 31,~~April 2023 $35 million was included in Accrued expenses and $3 million was included in Other non-current liabilities in the Company’s Condensed Consolidated Balance Sheet. The accrued restructuring balance of $5 million at July 1, 2022 was included in Accrued expenses in the Company’s Condensed Consolidated Balance Sheet.

During the three and nine months ended March 31, 2023, the Company sold certain assets and recognized a gain of $11 million. The gain was included in Restructuring and other, net in the Company’s Condensed Consolidated Statements of Operations.

Plan - On April 20, 2023, the Company committed to an April 2023 restructuring plan (the “April 2023 Plan”) to further reduce its cost structure in response to changes in macroeconomic and business conditions. The April 2023 Plan iswas intended to align the Company’s operational needs with the near-term demand environment while continuing to support the long-term business strategy.

The April 2023 Plan ~~is expected to be~~was substantially completed by the end of ~~the~~ fiscal year 2023.

The following table summarizes the Company’s restructuring activities under its active restructuring plans:


	April 2023 Plan				October 2022 Plan				Other Plans
(Dollars in millions)	Workforce Reduction Costs		Facilities and Other Exit Costs		Workforce Reduction Costs		Facilities and Other Exit Costs		Workforce Reduction Costs		Facilities and Other Exit Costs		Total
Accrual balances at June 30, 2023	$	108	$	—	$	1	$	5	$	1	$	4	$	119
Restructuring charges	—		—		—		—		3		—		3
Cash payments	(87)		—		(1)		—		(1)		—		(89)
Adjustments	(1)		—		—		—		—		—		(1)
Accrual balances at September 29, 2023	$	20	$	—	$	—	$	5	$	3	$	4	$	32
Total costs incurred inception to date as of September 29, 2023	$	144	$	3	$	104	$	7	$	66	$	13	$	337
Total expected charges to be incurred as of September 29, 2023	$	—	$	—	$	—	$	—	$	—	$	1	$	1

Of the accrued restructuring balance of $32 million at September 29, 2023, ~~with estimated total pre-tax charges~~$30 million was included in Accrued expenses and $2 million was included in Other non-current liabilities in the Company’s Condensed Consolidated Balance Sheets. Of the accrued restructuring balance of ~~approximately $150 million. These charges are expected to be primarily cash-based~~$119 million at June 30, 2023, $117 million was included in Accrued expenses and ~~consist of employee severance and other one-time termination benefits.~~$2 million was included in Other non-current liabilities in the Company’s Condensed Consolidated Balance Sheets.

6.Derivative Financial Instruments

The Company is exposed to foreign currency exchange rate, interest rate, and to a lesser extent, equity market risks relating to its ongoing business operations. From time to time, the Company enters into cash flow hedges in the form of foreign currency forward exchange contracts in order to manage the foreign currency exchange rate risk on forecasted expenses and investments denominated in foreign currencies.

The Company ~~enters~~entered into certain interest rate swap agreements to convert the variable interest rate on its Term Loans to fixed interest rates. The objective of the interest rate swap agreements iswas to eliminate the variability of interest payment cash flows associated with the variable interest rate under the Term Loans. The Company ~~designates~~designated the interest rate swaps as cash flow hedges. On September ~~26, 2022,~~13, 2023, the Company terminated its then existing interest rate swap agreements relating to Term Loans A1, A2 and A2A3 and received cash proceeds of ~~$110~~$25 million from the counterparty. The cash proceeds are reported within Net cash provided by operating activities in the Company’s Condensed Consolidated ~~Statement~~Statements of Cash ~~Flows.~~Flows during the three months ended September 29, 2023. The Company discontinued the related hedge accounting prospectively and asrealized a ~~result the realized~~net gain of ~~$110~~$104 million ~~was accounted and reported~~ in ~~AOCI and is amortized to Interest expense~~Net gain recognized from termination of interest rate swap in the Condensed Consolidated ~~Statement~~Statements of Operations ~~over the remaining period of the Term Loans A1 and A2. During~~during the three ~~and nine~~ months ended ~~March 31, 2023, $7 million and $15~~September 29, 2023. Additionally, $6 million of the gains were amortized to Interest expense prior to the termination of interest ~~expense~~rate swap in the Company’s Condensed Consolidated Statements of Operations. Refer to “Note 3. Debt” for more details.

OnAs of September ~~26, 2022,~~29, 2023, the Company ~~entered into new interest swap agreements with a notional amount of $1.6 billion, to convert the variable~~does not have any interest rate ~~on certain principal amounts of the Term Loans drawn under its Credit Agreement. As of March 31, 2023, the aggregate notional amount of the Company’s interest-rate~~ swap ~~contracts was $1.6 billion, of which $600 million will mature through September 2025 and $1.0 billion will mature through July 2027.~~contracts.

1716

Table of Contents

The Company’s accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company records all derivatives on its Condensed Consolidated Balance Sheets at fair value. The changes in the fair value of highly effective designated cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments or are not assessed to be highly effective are adjusted to fair value through earnings. ~~There was no~~The amount of net unrealized ~~gain or~~ loss on cash flow hedges was $14 million as of ~~March 31,~~September 29, 2023 and the amount of net unrealized gain on cash flow hedges was ~~$51~~$12 million as of ~~July 1, 2022.~~June 30, 2023. As of ~~March 31,~~September 29, 2023, the amount of existing net ~~gains~~losses related to cash flow hedges recorded in AOCI included a net ~~gain~~loss of ~~$49~~$14 million that is expected to be reclassified to earnings within twelve months.

The Company de-designates its cash flow hedges when the forecasted hedged transactions affect earnings or it is probable the forecasted hedged transactions will not occur in the initially identified time period. At such time, the associated gains and losses deferred in AOCI on the Company’s Condensed Consolidated Balance Sheets are reclassified into earnings and any subsequent changes in the fair value of such derivative instruments are immediately reflected in earnings.

The ~~Company recognized a net loss~~following tables show the effect of ~~$1 million~~the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and athe Condensed Consolidated Statements of Operations for the three months ended September 29, 2023:

(Dollars in millions)

Derivatives Not Designated as Hedging Instruments

Location of Gain/(Loss) Recognized in Income on Derivatives

Amount of Gain/(Loss) Recognized in Income on Derivatives

Foreign currency forward exchange contracts

Other, net

(6)

Total return swap

Operating expenses

(3)


(Dollars in millions) Derivatives Designated as Hedging Instruments	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)(1)	Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency forward exchange contracts	$	(7)	Cost of revenue	$	(1)	Other, net	$	—
Interest rate swap	(15)		Interest expense	11		Net gain recognized from termination of interest rate swap	104

_____________________________

(1)The net gain recognized into earnings as a result of ~~$10 million in~~ ~~Cost~~the discontinuance of ~~revenue~~ ~~and~~ ~~Interest expense, respectively, related to the de-designation on discontinued cash flow hedges~~interest rate swap during the three months ended ~~March 31, 2023. The Company recognized a net loss of $20 million and a net gain of $18 million in~~ ~~Cost of revenue~~ ~~and~~ ~~Interest expense, respectively, related to the de-designation on discontinued cash flow hedges during the nine months ended March 31,~~September 29, 2023.

The ~~Company recognized a net loss~~following tables show the effect of ~~$2 million~~the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and ~~$4 million in~~ ~~Cost~~the Condensed Consolidated Statements of ~~revenue~~ ~~and~~ ~~Interest expense, respectively, related to the loss of hedge designation on discontinued cash flow hedges during~~Operations for the three months ended ~~April 1, 2022. The Company recognized a net loss~~September 30, 2022:

(Dollars in millions)

Derivatives Not Designated as Hedging Instruments

Location of Gain/(Loss) Recognized in Income on Derivatives

Amount of Gain/(Loss) Recognized in Income on Derivatives

Foreign currency forward exchange contracts

Other, net

(10)

Total return swap

Operating expenses

(8)

Table of ~~$10 million and $8 million in~~ ~~Cost of revenue~~Contents ~~and~~ ~~Interest expense, respectively, related to the loss of hedge designation on discontinued cash flow hedges during the nine months ended April 1, 2022.~~


(Dollars in millions) Derivatives Designated as Hedging Instruments	Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency forward exchange contracts	$	(20)	Cost of revenue	$	(7)	Other, net	$	(1)
Interest rate swap	52		Interest expense	2		Interest expense	—

Other derivatives not designated as hedging instruments consist of foreign currency forward exchange contracts that the Company uses to hedge the foreign currency exposure on forecasted expenditures denominated in currencies other than the U.S. dollar. The Company also enters into foreign currency forward contracts with contractual maturities of less than one month, which are designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities. The Company recognizes gains and losses on these contracts, as well as the related costs, in Other, net on its Condensed Consolidated Statements of Operations.

The following tables show the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of ~~March 31,~~September 29, 2023 and ~~July 1, 2022.~~June 30, 2023. All of the foreign currency forward exchange contracts mature within 12 months.


		As of March 31, 2023					As of September 29, 2023
(Dollars in millions)	(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges		(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges
Singapore Dollar	Singapore Dollar	$	210	$	44	Singapore Dollar	$	154	$	154
Thai Baht	Thai Baht	123		25		Thai Baht	112		19
Chinese Renminbi	Chinese Renminbi	68		16		Chinese Renminbi	53		13
British Pound Sterling	British Pound Sterling	63		11		British Pound Sterling	43		20

Total	Total	$	464	$	96	Total	$	362	$	206

As of July 1, 2022
(Dollars in millions) Contracts Designated as Hedges Contracts Not Designated as Hedges
Singapore Dollar $ 178 $ 52
Thai Baht 133 35
Chinese Renminbi 92 24
British Pound Sterling 64 15
Total $ 467 $ 126

~~Table of Contents~~


	As of June 30, 2023
(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges
Singapore Dollar	$	195	$	161
Thai Baht	129		16
Chinese Renminbi	64		12
British Pound Sterling	57		8
Total	$	445	$	197

The Company is subject to equity market risks due to changes in the fair value of the notional investments selected by its employees as part of its non-qualified deferred compensation plan: the Seagate Deferred Compensation Plan (the “SDCP”). In fiscal year 2014, the Company entered into a Total Return Swap (“TRS”) in order to manage the equity market risks associated with the SDCP’s liabilities. The Company pays a floating rate, based on SOFR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP’s liabilities due to changes in the value of the investment options made by employees. As of ~~March 31,~~September 29, 2023, the notional investments underlying the TRS amounted to ~~$105~~$101 million and the contract term is through January 2024, settled on a monthly basis, limiting counterparty performance risk. The Company did not designate the TRS as a hedge. Rather, the Company records all changes in the fair value of the TRS to earnings to offset the market value changes of the SDCP’s liabilities.

Table of Contents

The following tables show the Company’s derivative instruments measured at gross fair value as reflected in the Condensed Consolidated Balance Sheets as of ~~March 31,~~September 29, 2023 and ~~July 1, 2022:~~

As of March 31, 2023
Derivative Assets Derivative Liabilities
(Dollars in millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives designated as hedging instruments:
Foreign currency forward exchange contracts Other current assets $ 6 Accrued expenses $ —
Interest rate swap Other current assets 4 Accrued expenses (10)
Derivatives not designated as hedging instruments:
Foreign currency forward exchange contracts Other current assets 2 Accrued expenses —
Total return swap Other current assets 3 Accrued expenses —
Total derivatives $ 15 $ (10)

As of July 1, 2022
Derivative Assets Derivative Liabilities
(Dollars in millions) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives designated as hedging instruments:
Foreign currency forward exchange contracts Other current assets $ — Accrued expenses $ (14)
Interest rate swap Other current assets 65 Accrued expenses —
Derivatives not designated as hedging instruments:
Foreign currency forward exchange contracts Other current assets — Accrued expenses (5)
Total return swap Other current assets — Accrued expenses (4)
Total derivatives $ 65 $ (23)

~~Table of Contents~~

The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Operations for the three and nine months ended March 31,June 30, 2023:

As of September 29, 2023

~~Amount of Gain/(Loss) Recognized in Income on Derivatives~~Derivative Assets

Derivative Liabilities

(Dollars in millions)

~~Derivatives Not Designated as Hedging Instruments~~

~~Location of Gain/(Loss) Recognized in Income on Derivatives~~

~~For the Three Months~~Balance Sheet Location

~~For the Nine Months~~Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Foreign currency forward exchange contracts

Other ~~net~~current assets

—

~~(6)~~

~~Total return swap~~

~~Operating~~Accrued expenses

8 $

— (14)

Derivatives not designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

—

Accrued expenses

(4)

Total derivatives

—

(18)

(Dollars in millions)
Derivatives Designated as Hedging Instruments
Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
For the Three Months For the Nine Months For the Three Months For the Nine Months For the Three Months For the Nine Months
Foreign currency forward exchange contracts $ 5 $ 4 Cost of revenue $ (1) $ (20) Other, net $ (2) $ (3)
Interest rate swap (11) 41 Interest expense 10 18 Interest expense — —

(Dollars in millions)
Derivatives Not Designated as Hedging Instruments
Location of Gain/(Loss) Recognized in Income on Derivatives Amount of Gain/(Loss) Recognized in Income on Derivatives
For the Three Months For the Nine Months
Foreign currency forward exchange contracts Other, net $ 1 $ (1)
Total return swap Operating expenses (7) (1)

(Dollars in millions)

Derivatives Designated as Hedging Instruments

Amount of Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)

Location of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)

Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)

Location of Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)

Amount of Gain/(Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)

For the Three Months

For the Nine Months

For the Three Months

For the Nine Months

For the Three Months

For the Nine Months

As of June 30, 2023

Derivative Assets

Derivative Liabilities

(Dollars in millions)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Foreign currency forward exchange contracts

(1)

(6)

Cost of revenue

(2)

(10)

Other, net

—

Foreign currency forward exchange contracts

Other current assets

Accrued expenses

(10)

Interest rate swap

Interest expense

(4)

(8)

Interest expense

—

Interest rate swap

Other current assets

Accrued expenses

—

Derivatives not designated as hedging instruments:

Foreign currency forward exchange contracts

Other current assets

—

Accrued expenses

(1)

Total return swap

Other current assets

Accrued expenses

—

Total derivatives

(11)

7.Fair Value

Measurement of Fair Value

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

~~Table of Contents~~

Fair Value Hierarchy

A fair value hierarchy is based on whether the market participant assumptions used in determining fair value are obtained from independent sources (observable inputs) or reflect the Company’s own assumptions of market participant valuation (unobservable inputs). A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are:

Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices for identical assets and liabilities in markets that are inactive; quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; or

Level 3 — Prices or valuations that require inputs that are both unobservable and significant to the fair value measurement.

The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis and views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, the Company’s or the counterparty’s non-performance risk is considered in determining the fair values of liabilities and assets, respectively.

Table of Contents

Items Measured at Fair Value on a Recurring Basis

The following tables present the Company’s assets and liabilities, by financial instrument type and balance sheet line item, that are measured at fair value on a recurring basis, excluding accrued interest components, as of:


		March 31, 2023								July 1, 2022									September 29, 2023								June 30, 2023
		Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using
(Dollars in millions)	(Dollars in millions)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance		(Dollars in millions)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance
Assets:	Assets:																	Assets:
Money market funds	Money market funds	$	234	$	—	$	—	$	234	$	59	$	—	$	—	$	59	Money market funds	$	120	$	—	$	—	$	120	$	72	$	—	$	—	$	72

Total cash equivalents	Total cash equivalents	234		—		—		234		59		—		—		59		Total cash equivalents	120		—		—		120		72		—		—		72
Restricted cash and investments:	Restricted cash and investments:																	Restricted cash and investments:
Money market funds	Money market funds	1		—		—		1		1		—		—		1		Money market funds	1		—		—		1		1		—		—		1
Time deposits and certificates of deposit	Time deposits and certificates of deposit	—		1		—		1		—		1		—		1		Time deposits and certificates of deposit	—		1		—		1		—		1		—		1
Other debt securities	Other debt securities	—		—		16		16		—		—		23		23		Other debt securities	—		—		15		15		—		—		16		16
Derivative assets	Derivative assets	—		15		—		15		—		65		—		65		Derivative assets	—		—		—		—		—		23		—		23
Total assets	Total assets	$	235	$	16	$	16	$	267	$	60	$	66	$	23	$	149	Total assets	$	121	$	1	$	15	$	137	$	73	$	24	$	16	$	113
Liabilities:	Liabilities:																	Liabilities:
Derivative liabilities	Derivative liabilities	$	—	$	10	$	—	$	10	$	—	$	23	$	—	$	23	Derivative liabilities	$	—	$	18	$	—	$	18	$	—	$	11	$	—	$	11

Total liabilities	Total liabilities	$	—	$	10	$	—	$	10	$	—	$	23	$	—	$	23	Total liabilities	$	—	$	18	$	—	$	18	$	—	$	11	$	—	$	11


		March 31, 2023								July 1, 2022									September 29, 2023								June 30, 2023
		Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using
(Dollars in millions)	(Dollars in millions)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance		(Dollars in millions)	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Balance
Assets:	Assets:																	Assets:
Cash and cash equivalents	Cash and cash equivalents	$	234	$	—	$	—	$	234	$	59	$	—	$	—	$	59	Cash and cash equivalents	$	120	$	—	$	—	$	120	$	72	$	—	$	—	$	72

Other current assets	Other current assets	1		16		—		17		1		66		—		67		Other current assets	1		1		—		2		1		24		—		25
Other assets, net	Other assets, net	—		—		16		16		—		—		23		23		Other assets, net	—		—		15		15		—		—		16		16
Total assets	Total assets	$	235	$	16	$	16	$	267	$	60	$	66	$	23	$	149	Total assets	$	121	$	1	$	15	$	137	$	73	$	24	$	16	$	113
Liabilities:	Liabilities:																	Liabilities:
Accrued expenses	Accrued expenses	$	—	$	10	$	—	$	10	$	—	$	23	$	—	$	23	Accrued expenses	$	—	$	18	$	—	$	18	$	—	$	11	$	—	$	11
Total liabilities	Total liabilities	$	—	$	10	$	—	$	10	$	—	$	23	$	—	$	23	Total liabilities	$	—	$	18	$	—	$	18	$	—	$	11	$	—	$	11

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The Company classifies items in Level 1 if the financial assets consist of securities for which quoted prices are available in an active market.

The Company classifies items in Level 2 if the financial asset or liability is valued using observable inputs. The Company uses observable inputs including quoted prices in active markets for similar assets or liabilities. Level 2 assets include: agency bonds, corporate bonds, commercial paper, municipal bonds, U.S. Treasuries, time deposits and certificates of deposit. These debt investments are priced using observable inputs and valuation models which vary by asset class. The Company uses a pricing service to assist in determining the fair value of all of its cash equivalents. For the cash equivalents in the Company’s portfolio, multiple pricing sources are generally available. The pricing service uses inputs from multiple industry-standard data providers or other third-party sources and various methodologies, such as weighting and models, to determine the appropriate price at the measurement date. The Company corroborates the prices obtained from the pricing service against other independent sources and, as of ~~March 31,~~September 29, 2023, has not found it necessary to make any adjustments to the prices obtained. The Company’s derivative financial instruments are also classified within Level 2. The Company’s derivative financial instruments consist of foreign currency forward exchange contracts, interest rate swaps and the TRS. The Company recognizes derivative financial instruments in its ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements at fair value. The Company determines the fair value of these instruments by considering the estimated amount it would pay or receive to terminate these agreements at the reporting date.

Items Measured at Fair Value on a Non-Recurring Basis

From time to time, the Company enters into certain strategic investments for the promotion of business and strategic objectives, which are accounted for either under the equity method or the measurement alternative. Investments under the measurement alternative are recorded at cost, less impairment and adjusted for qualifying observable price changes on a prospective basis. If measured at fair value in the Condensed Consolidated Balance Sheets, these investments would generally be classified in Level 3 of the fair value hierarchy.

For the investments that are accounted for under the equity method, the Company recorded an immaterial loss for the three months ended September 29, 2023 and a net loss of ~~$1 million and $4~~$3 million for the three ~~and nine~~ months ended ~~March 31, 2023, respectively. The Company recorded a net gain of $2 million and $5 million for the three and nine months ended April 1, 2022, respectively.~~September 30, 2022. The adjusted carrying value of the investments accounted for under the equity method amounted to ~~$56~~$55 million and ~~$61~~$55 million as of ~~March 31,~~September 29, 2023 and ~~July 1, 2022,~~June 30, 2023, respectively.

For the investments that are accounted for under the measurement alternative, there was no adjustment for the three months ended September 29, 2023. The Company recordeda net gain of $3 million for the ~~nine~~three months ended ~~March 31, 2023,~~September 30, 2022, which remained unrealized as of September 30, 2022, related to upward adjustments due to observable price changes.~~The Company recorded a net gain of $4 million for the nine months ended April 1, 2022.~~As of ~~March 31,~~September 29, 2023 and ~~July 1, 2022,~~June 30, 2023, the carrying value of the Company’s strategic investments under the measurement alternative was ~~$99~~$89 million and $88 million, respectively.

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Other Fair Value Disclosures

The Company’s debt is carried at amortized cost. The estimated fair value of the Company’s debt is derived using the closing price of the same debt instruments as of the date of valuation, which takes into account the yield curve, interest rates and other observable inputs. Accordingly, these fair value measurements are categorized as Level 2. The following table presents the fair value and amortized cost of the Company’s debt in order of maturity:

March 31, 2023 July 1, 2022
(Dollars in millions) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value
4.750% Senior Notes due June 2023 $ 540 $ 539 $ 540 $ 538
4.875% Senior Notes due March 2024 500 495 499 494
4.750% Senior Notes due January 2025 479 470 479 471
4.875% Senior Notes due June 2027 504 487 504 483
4.091% Senior Notes due June 2029 465 443 466 427
3.125% Senior Notes due July 2029 163 130 500 396
4.125% Senior Notes due January 2031 275 235 500 410
3.375% Senior Notes due July 2031 72 56 500 393
9.625% Senior Notes due December 2032 750 852 — —
5.750% Senior Notes due December 2034 489 449 489 433
SOFR Based Term Loan A1 due September 2025 (1)
585 574 600 588
SOFR Based Term Loan A2 due July 2027 (1)
585 562 600 586
SOFR Based Term Loan A3 due July 2027 585 568 — —
$ 5,992 $ 5,860 $ 5,677 $ 5,219
Less: unamortized debt issuance costs (34) — (31) —
Debt, net of debt issuance costs $ 5,958 $ 5,860 $ 5,646 $ 5,219
Less: current portion of debt, net of debt issuance costs (1,118) (1,110) (584) (582)
Long-term debt, less current portion, net of debt issuance costs $ 4,840 $ 4,750 $ 5,062 $ 4,637

~~(1)~~ On August 18, 2022, the Company amended the Credit Agreement and replaced the LIBOR interest rates plus variable margin of Term Loans A1 and A2 with the SOFR interest rates plus a variable margin. Refer to “~~Note 3. Debt” for more details.~~


	September 29, 2023				June 30, 2023
(Dollars in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value



4.75% Senior Notes due January 2025	$	479	$	468	$	479	$	472
4.875% Senior Notes due June 2027	504		477		504		484
3.50% Senior Notes due June 2028	1,500		1,550		—		—
4.091% Senior Notes due June 2029	467		426		465		436
3.125% Senior Notes due July 2029	163		126		163		126
8.25% Senior Notes due December 2029	500		514		500		522
4.125% Senior Notes due January 2031	275		220		275		227
3.375% Senior Notes due July 2031	72		51		72		53
8.50% Senior Notes due July 2031	500		513		500		524
9.625% Senior Notes due December 2032	750		808		750		830
5.75% Senior Notes due December 2034	489		411		489		438
SOFR Based Term Loan A1 due September 2025	—		—		430		426
SOFR Based Term Loan A2 due July 2027	—		—		430		420
SOFR Based Term Loan A3 due July 2027	—		—		430		413
	$	5,699	$	5,564	$	5,487	$	5,371
Less: unamortized debt issuance costs	(33)		—		(36)		—
Debt, net of debt issuance costs	$	5,666	$	5,564	$	5,451	$	5,371
Less: current portion of debt, net of debt issuance costs	—		—		(63)		(62)
Long-term debt, less current portion, net of debt issuance costs	$	5,666	$	5,564	$	5,388	$	5,309

8.Shareholders’ Deficit

Share Capital

The Company’s authorized share ~~capital i~~capitsal is $13,500 and consists of 1,250,000,000 ordinary shares, par value $0.00001, of which ~~207,053,113~~209,181,031 shares were outstanding as of ~~March 31,~~September 29, 2023, and 100,000,000 preferred shares, par value $0.00001, of which none were issued or outstanding as of ~~March 31,~~September 29, 2023.

Ordinary shares - Holders of ordinary shares are entitled to receive dividends when and as declared by the Company’s board of directors (the “Board of Directors”). Upon any liquidation, dissolution, or winding up of the Company, after required payments are made to holders of preferred shares, any remaining assets of the Company will be distributed ratably to holders of the preferred and ordinary shares. Holders of shares are entitled to one vote per share on all matters upon which the ordinary shares are entitled to vote, including the election of directors.

Preferred shares - The Company may issue preferred shares in one or more series, up to the authorized amount, without shareholder approval. The Board of Directors is authorized to establish from time to time the number of shares to be included in each series, and to fix the rights, preferences and privileges of the shares of each wholly unissued series and any of its qualifications, limitations or restrictions. The Board of Directors can also increase or decrease the number of shares of a series, but not below the number of shares of that series then outstanding, without any further vote or action by the shareholders.

The Board of Directors may authorize the issuance of preferred shares with voting or conversion rights that could harm the voting power or other rights of the holders of the ordinary shares. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of the Company and might harm the market price of its ordinary shares and the voting and other rights of the holders of ordinary shares.

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Repurchases of Equity Securities

All repurchases are effected as redemptions in accordance with the Company’s Constitution.

As of ~~March 31,~~September 29, 2023, $1.9 billion remained available for repurchase under the existing repurchase authorization limit approved by the Board of Directors. The following table sets ~~forth~~forth information with respect to repurchases of the Company’s ordinary shares during the ~~nine~~three months ended ~~March 31,~~September 29, 2023:

(In millions) Number of Shares Repurchased Dollar Value of Shares Repurchased
Repurchases of ordinary shares (1)
5 $ 400
Tax withholding related to vesting of equity awards 1 41
Total 6 $ 441
~~_________________________________~~

~~(1)~~ ~~These amounts differ from the repurchases of ordinary shares amounts in the condensed consolidated statements of cash flows due to timing differences between repurchases and cash settlement thereof.~~



(In millions)	Number of Shares Repurchased	Dollar Value of Shares Repurchased

Tax withholding related to vesting of equity awards	—	25
Total	—	$	25

9.Revenue

The following table provides information about disaggregated revenue by sales channel and geographical region for the Company’s single reportable segment:


		For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023		April 1, 2022		March 31, 2023		April 1, 2022		(Dollars in millions)	September 29, 2023		September 30, 2022
Revenues by Channel	Revenues by Channel									Revenues by Channel
OEMs	OEMs	$	1,358	$	2,149	$	4,268	$	6,615	OEMs	$	1,032	$	1,545
Distributors	Distributors	294		349		890		1,418		Distributors	266		299
Retailers	Retailers	208		304		624		1,000		Retailers	156		191
Total	Total	$	1,860	$	2,802	$	5,782	$	9,033	Total	$	1,454	$	2,035
Revenues by Geography (1)	Revenues by Geography (1)									Revenues by Geography(1)
Asia Pacific	Asia Pacific	$	774	$	1,292	$	2,335	$	4,308	Asia Pacific	$	811	$	801
Americas	Americas	799		1,171		2,588		3,436		Americas	455		936
EMEA	EMEA	287		339		859		1,289		EMEA	188		298
Total	Total	$	1,860	$	2,802	$	5,782	$	9,033	Total	$	1,454	$	2,035

_____________________________

(1) Revenue is attributed to geography based on bill from locations.

10.Guarantees

Indemnification Obligations

The Company from time to time enters into agreements with customers, suppliers, partners and others in the ordinary course of business that provide indemnification for certain matters including, but not limited to, intellectual property infringement claims, environmental claims and breach of agreement claims. The nature of the Company’s indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any significant indemnification payments under such agreements ~~and~~and no amount has been accrued in the Company’s ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements with respect to these indemnification obligations.

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Product Warranty

The Company estimates probable product warranty costs at the time revenue is recognized. The Company generally warrants its products for a period of 1 to 5 years. The Company uses estimated repair or replacement costs and uses statistical modeling to estimate product warranty return rates in order to determine its warranty obligation. Changes in the Company’s product warranty liability during the ~~nine~~three months ended ~~March 31,~~September 29, 2023 and ~~April 1,~~September 30, 2022 were as follows:


		For the Nine Months Ended					For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023		April 1, 2022		(Dollars in millions)	September 29, 2023		September 30, 2022
Balance, beginning of period	Balance, beginning of period	$	148	$	136	Balance, beginning of period	$	168	$	148
Warranties issued	Warranties issued	42		62		Warranties issued	13		13
Repairs and replacements	Repairs and replacements	(71)		(65)		Repairs and replacements	(18)		(24)
Changes in liability for pre-existing warranties, including expirations	Changes in liability for pre-existing warranties, including expirations	42		15		Changes in liability for pre-existing warranties, including expirations	13		12
Balance, end of period	Balance, end of period	$	161	$	148	Balance, end of period	$	176	$	149

11.(Loss) Earnings Per Share

Basic (loss) earnings per share is computed by dividing income available to shareholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing income available to shareholders by the weighted-average number of shares outstanding during the period and the number of additional shares that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding options, unvested restricted share units and performance-based share units and shares to be purchased under the Employee Stock Purchase Plan. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in fair market value of the Company’s share price can result in a greater dilutive effect from potentially dilutive securities. The following table sets forth the computation of basic and diluted net (loss) income per share attributable to the shareholders of the Company:


		For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended
(In millions, except per share data)	(In millions, except per share data)	March 31, 2023		April 1, 2022		March 31, 2023		April 1, 2022		(In millions, except per share data)	September 29, 2023		September 30, 2022
Numerator:	Numerator:									Numerator:
Net (loss) income	Net (loss) income	$	(433)	$	346	$	(437)	$	1,373	Net (loss) income	$	(184)	$	29
Number of shares used in per share calculations:	Number of shares used in per share calculations:									Number of shares used in per share calculations:
Total shares for purposes of calculating basic net (loss) income per share	Total shares for purposes of calculating basic net (loss) income per share	207		218		207		222		Total shares for purposes of calculating basic net (loss) income per share	208		208
Weighted-average effect of dilutive securities:	Weighted-average effect of dilutive securities:									Weighted-average effect of dilutive securities:
Employee equity award plans	Employee equity award plans	—		4		—		4		Employee equity award plans	—		2
Total shares for purposes of calculating diluted net (loss) income per share	Total shares for purposes of calculating diluted net (loss) income per share	207		222		207		226		Total shares for purposes of calculating diluted net (loss) income per share	208		210
Net (loss) income per share:	Net (loss) income per share:									Net (loss) income per share:
Basic	Basic	$	(2.09)	$	1.59	$	(2.11)	$	6.18	Basic	$	(0.88)	$	0.14
Diluted	Diluted	$	(2.09)	$	1.56	$	(2.11)	$	6.08	Diluted	$	(0.88)	$	0.14

For the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023, the Company recorded a net loss, and as such, all potentially dilutive securities related to the employee equity award plans have been excluded for those periods as including them would be anti-dilutive. The weighted average anti-dilutive shares that were excluded from the computation of diluted net (loss) income per share were 76 million for ~~both~~ the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023, and were not material for the three ~~and nine~~ months ended ~~April 1,~~September 30, 2022.

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12.Legal, Environmental and Other Contingencies

The Company assesses the probability of an unfavorable outcome of all its material litigation, claims or assessments to determine whether a liability had been incurred and whether it is probable that one or more future events will occur confirming the fact of the loss. In the event that an unfavorable outcome is determined to be probable and the amount of the loss can be reasonably estimated, the Company establishes an accrual for the litigation, claim or assessment. In addition, in the event an unfavorable outcome is determined to be less than probable, but reasonably possible, the Company will disclose an estimate of the possible loss or range of such loss; however, when a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Litigation is inherently uncertain and may result in adverse rulings or decisions. Additionally, the Company may enter into settlements or be subject to judgments that may, individually or in the aggregate, have a material adverse effect on its results of operations. Accordingly, actual results could differ materially.

Litigation

Lambeth Magnetic Structures LLC v. Seagate Technology (US) Holdings, Inc., et al. On April 29, 2016, Lambeth Magnetic Structures LLC filed a complaint against Seagate Technology (US) Holdings, Inc. and Seagate Technology LLC in the U.S. District Court for the Western District of Pennsylvania, alleging infringement of U.S. Patent No. 7,128,988, “Magnetic Material Structures, Devices and Methods,” seeking damages as well as additional relief. The district court entered judgement in favor of Seagate on April 19, 2022. The parties filed post-trial motions with the district court in May 2022. On November 22, 2022, the court denied all pending post-trial motions. Lambeth Magnetic Structures LLC filed a notice of appeal to the Federal Circuit on December 20, 2022. A hearing date has not been set. The Company believes the asserted claims are without merit and intends to vigorously defend this case.

Seagate Technology LLC, et al. v. Headway Technologies, Inc., et al. On February 18, 2020, Seagate Technology LLC, Seagate Technology (Thailand) Ltd., Seagate Singapore International Headquarters Pte. Ltd. and Seagate Technology International (collectively, the “Seagate Entities”) filed a complaint in the U.S. District Court for the Northern District of California against defendant suppliers of HDD suspension assemblies. Defendants include NHK Spring Co. Ltd., TDK Corporation, Hutchinson Technology Inc. and several of their subsidiaries and affiliates. The complaint includes federal and state antitrust law claims, as well as a breach of contract claim. The complaint alleges that defendants and their co-conspirators knowingly conspired for more than twelve years not to compete in the supply of suspension assemblies; that ~~defendants~~defendant misused confidential information that the Seagate Entities had provided pursuant to nondisclosure agreements, in breach of their contractual obligations; and that the Seagate Entities paid artificially high prices on purchases of suspension assemblies. The Seagate Entities seek to recover the overcharges they paid for suspension assemblies, as well as additional relief permitted by law. On March 22, 2022, the Seagate Entities dismissed with prejudice all claims being asserted against Defendants TDK Corporation, Hutchinson Technology Inc. and their subsidiaries and affiliates (collectively “TDK”) relating to the antitrust law claims, the breach of contract claim and other matters described in the complaint. On April 8, 2022, the court entered an Amended Stipulation and Order of Dismissal with Prejudice to dismiss all claims against TDK. On August 2, 2022, NHK Spring Co. Ltd. filed a motion for Partial Summary Judgment Regarding Foreign Commerce and on October 14, 2022, the Seagate ~~Entities’~~Entities filed their corresponding opposition. On May 15, 2023, the court issued a ruling that Seagate’s antitrust claims can proceed as to suspension assemblies that enter the United States but not as to suspension assembles that do not enter the United States. On July 28, 2023, the judge initiated a reconsideration of this ruling and requested further briefing. A trial date has not been set.

In re Seagate Technology Holdings plc Securities Litigation. A putative class action lawsuit alleging violations of the federal securities laws, UA Local 38 Defined Contribution Pension Plan, et al. v. Seagate Technology Holdings PLC, et al., was filed on July 10, 2023, in the U.S. District Court for the Northern District of California against Seagate Technology Holdings plc, Dr. William D. Mosley, and Gianluca Romano. The complaint alleges that it is a securities class action on behalf of all purchasers of Seagate common stock between September 15, 2020 and October 25, 2022, inclusive, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b5-1. The complaint seeks unspecified monetary damages and other relief. A second action, Public Employees’ Retirement System of Mississippi v. Seagate Technology Holdings plc, William David Mosley, and Gianluca Romano, was filed on July 26, 2023, asserting similar claims. The cases were consolidated on September 25, 2023. An amended complaint was filed on October 19, 2023. The Company believes that the asserted claims are without merit and intends to vigorously defend these cases.

Environmental Matters

The Company’s operations are subject to U.S. and foreign laws and regulations relating to the protection of the environment, including those governing discharges of pollutants into the air and water, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. Some of the Company’s operations require environmental permits and controls to prevent and reduce air and water pollution, and these permits are subject to modification, renewal and revocation by issuing authorities.

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The Company has established environmental management systems and continually updates its environmental policies and standard operating procedures for its operations worldwide. The Company believes that its operations are in material compliance with applicable environmental laws, regulations and permits. The Company budgets for operating and capital costs on an ongoing basis to comply with environmental laws. If additional or more stringent requirements are imposed on the Company in the future, it could incur additional operating costs and capital expenditures.

~~Table of Contents~~

Some environmental laws, such as the Comprehensive Environmental Response Compensation and Liability Act of 1980 (as amended, the “Superfund” law) and its state equivalents, can impose liability for the cost of cleanup of contaminated sites upon any of the current or former site owners or operators or upon parties who sent waste to these sites, regardless of whether the owner or operator owned the site at the time of the release of hazardous substances or the lawfulness of the original disposal activity. The Company has been identified as a responsible or potentially responsible party at several sites. At each of these sites, the Company has an assigned portion of the financial liability based on the type and amount of hazardous substances disposed of by each party at the site and the number of financially viable parties. The Company has fulfilled its responsibilities at some of these sites and remains involved in only a few at this time.

While the Company’s ultimate costs in connection with these sites is difficult to predict with complete accuracy, based on its current estimates of cleanup costs and its expected allocation of these costs, the Company does not expect costs in connection with these sites to be material.

The Company may be subject to various state, federal and international laws and regulations governing the environment, including those restricting the presence of certain substances in electronic products. For example, the European Union (“EU”) enacted the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (2011/65/EU), which prohibits the use of certain substances, including lead, in certain products, including disk drives and server storage products, put on the market after July 1, 2006. Similar legislation has been or may be enacted in other jurisdictions, including in the ~~U.S.,~~United States, Canada, Mexico, Taiwan, China, Japan and others. The EU REACH Directive (Registration, Evaluation, Authorization, and Restriction of Chemicals, EC 1907/2006) also restricts substances of very high concern in products. If the Company or its suppliers ~~fails~~fail to comply with the substance restrictions, recycle requirements or other environmental requirements as they are enacted worldwide, it could have a materially adverse effect on the Company’s business.

BIS Settlement

On April 18, 2023, the Company’s subsidiaries Seagate Technology LLC and Seagate Singapore International Headquarters Pte. Ltd (collectively, “Seagate”), entered into a settlement agreement (the “Settlement Agreement”) with the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) that resolves BIS’ allegations regarding Seagate’s sales of hard disk drives to Huawei between August 17, 2020 and September 29, 2021. Under the terms of the Settlement Agreement, Seagate has agreed to pay $300 million to ~~the~~ BIS in quarterly installments of $15 million over the course of five years beginning October 31, 2023. Seagate has also agreed to complete three audits of its compliance with the license requirements of Section 734.9 of the U.S. Export Administration Regulations (“EAR”), including one audit by an unaffiliated third-party consultant chosen by Seagate with expertise in U.S. export control laws and two internal audits. The Settlement Agreement also includes a denial order that is suspended and will be waived five years after the date of the order issued under the Settlement Agreement, provided that Seagate has made full and timely payments under the Settlement Agreement and timely completed the audit requirements. While Seagate is in compliance with and upon successful compliance in full with the terms of the Settlement Agreement,BIS has agreed it will not initiate any further administrative proceedings against Seagate in connection with any violation of the EAR arising out of the transactions detailed in the Settlement Agreement.

While Seagate believed that it complied with all relevant export control laws at the time it made the hard disk drive sales at issue, Seagate determined that engaging with BIS and settling this matter was in the best interest of the Company, its customers, and its shareholders. In determining to engage with BIS and resolve this matter through a settlement agreement, the Company considered a number of factors, including the risks and cost of protracted litigation involving the U.S. government, as well as the size of the potential penalty and the Company’s desire to focus on current business challenges and long-term business strategy. The Settlement Agreement includes a finding that the Company incorrectly interpreted the regulation at issue to require evaluation of only the last stage of Seagate’s hard disk drive manufacturing process rather than the entire process. As part of this settlement, Seagate has agreed not to contest BIS’ determination that the sales in question did not comply with the U.S. EAR.

The Company accrued a charge of $300 million ~~for the March~~during fiscal year 2023, ~~quarter,~~of which ~~is reflected under BIS settlement penalty on its Condensed Consolidated Statements of Operations. As of March 31, 2023, $30~~$60 million and ~~$270~~$240 million were included in Accrued expense and Other non-current liabilities, respectively, on its Condensed Consolidated Balance ~~Sheet.~~Sheets as of September 29, 2023.

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Other Matters

From time to time, arising in the normal course of business, the Company is involved in a number of other judicial, regulatory or administrative proceedings and investigations incidental to its business, and the Company expects to be involved in such proceedings and investigations arising in the normal course of its business in the future. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on its financial position or results of operations.

~~Table of Contents~~

13.Commitments

Unconditional Long-Term Purchase Obligations. As of ~~March 31,~~September 29, 2023, the Company had unconditional long-term purchase obligations of approximately ~~$3.2~~$2.6 billion, primarily related to purchases of inventory components. The Company expects the commitment to ~~total $849~~total $184 million, ~~$641~~$223 million, ~~$649 million, $684 million~~$1.5 billion and ~~$356~~$739 million for fiscal years ~~2024,~~ 2025, 2026, 2027, and ~~thereafter, respectively.~~2028, respectively.

During the ~~nine~~three months ended ~~March 31,~~September 29, 2023, the Company recorded order cancellation fees of ~~$108~~$118 million to terminate certain purchase commitments related to the purchase of inventory components and ~~equipment,~~equipment, which ~~was~~were reflected under Cost of revenue on its Condensed Consolidated Statements of Operations. As of ~~March 31,~~September 29, 2023, ~~$68~~cumulative unpaid order cancellation fees on the Condensed Consolidated Balance Sheet were $151 million, ~~remained unpaid~~with $133 million in Accrued expenses and $18 million in Accounts payable, all of which is expected to be paid within one year.

14.Subsequent Events

Dividend Declared

O~~n April 20,~~On October 26, 2023, the ~~Company’s~~Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share, which will be payable on ~~July 5, 2023~~January 9, 2024 to shareholders of record as of the close of business on ~~June~~December 21, ~~2023~~.

~~Restructuring Plan~~

~~On April 20, 2023, the Company committed to the April 2023 plan to further reduce its cost structure in response to changes in macroeconomic and business conditions.~~ ~~See “Note 5. Restructuring and Exit Costs” for more information.~~

~~Subsequent Regulatory Settlement~~

On April 18, 2023, the Company entered into the Settlement Agreement with BIS that resolves BIS’ allegations regarding its sales of hard disk drives to Huawei between August 17, 2020 and September 29, 2021. See “~~Note 12. Legal, Environmental and Other Contingencies” for more information.~~

2023.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition, changes in financial condition and results of operations for our fiscal quarters ended ~~March 31,~~September 29, 2023, ~~December~~June 30, ~~2022~~2023 and ~~April 1,~~September 30, 2022, referred to herein as the ~~“March~~“September 2023 ~~quarter,”~~quarter”, the ~~“December 2022 quarter,”~~“June 2023 quarter” and the ~~“March~~“September 2022 ~~quarter,”~~quarter”, respectively. We operate and report financial results on a fiscal year of 52 or 53 weeks ending on the Friday closest to June 30. The ~~March~~September 2023 quarter, ~~the December 2022~~June 2023 quarter and ~~the March~~September 2022 quarter were each 13 weeks.

You should read this discussion in conjunction with financial information and related notes included ~~elsewhere~~ in this ~~report.~~Quarterly Report on Form 10-Q. Unless the context indicates otherwise, as used herein, the terms “we,” “us,” “Seagate,” the “Company” and “our” refer collectively to Seagate Technology Holdings plc, an Irish public limited company, and its subsidiaries. References to “$” or “dollars” are to United States dollars.

This Quarterly Report on Form 10-Q 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. These statements ~~may~~ include, among other things, statements about our plans, programs, strategies and prospects; ~~beliefs~~anticipated shifts in technology and ~~assumptions~~storage industry trends, and anticipated demand for and performance of ~~our management; anticipated~~new storage product introductions; expectations regarding market demand for our ~~products; shifts in technology; estimates~~products and technologies and our ability to optimize our level of production and meet market and industry ~~growth; anticipated economic conditions worldwide; statements regarding~~expectations and the effects of these future trends on our ~~settlement with BIS;~~performance; financial outlook for future periods; expectations regarding our ability to ~~effectively manage our~~service debt, meet debt and credit agreement covenants and continue to generate free cash ~~liquidity position and debt obligations, and comply with the covenants in our credit facilities; projections~~flow; expectations regarding our ability to make timely quarterly payments under the settlement agreement with BIS; the impact of macroeconomic headwinds and customer inventory adjustments on our business and operations; our cost saving plans, including our ability to execute such plans, the projected savings under such plans and ~~restructuring efforts;~~the assumptions on which the plans and projected savings are based; expectations regarding our business strategy and performance; the sufficiency of our sources of cash to meet cash needs for the next 12 months; and our expectations regarding capital ~~expenditures.~~expenditures and dividend issuance plans. 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 negative of these words, variations of these words and comparable ~~terminology.~~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 based on information available to the Company as of the date of this Quarterly Report on Form 10-Q and are subject to known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from historical experience and our present expectations or projections. Therefore, undue reliance should not be placed on forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth in “Part II, Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q. We undertake no obligation to update forward-looking ~~statements.~~statements, except as required by law.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements and notes to assist readers in understanding our results of operations, financial condition and cash flows. Our MD&A is organized as follows:

•Overview of the ~~March~~September 2023 quarter. Highlights of events in the ~~March~~September 2023 quarter that impacted our financial position.

•Results of Operations. Analysis of our financial results comparing the ~~March~~September 2023 quarter to the ~~December 2022~~June 2023 quarter and the ~~March~~September 2022 quarter.

•Liquidity and Capital Resources. ~~An analysis~~Analysis of changes in our balance ~~sheet~~sheets and cash flows, and discussion of our financial condition including potential sources of ~~liquidity.~~liquidity, material cash requirements and their general purpose.

•Critical Accounting Policies. Accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.

For an overview of our business, see “Part I, Item 1. Financial Statements—Note 1. Basis of Presentation and Summary of Significant Accounting Policies—Organization.”

Overview of the ~~March~~September 2023 quarter

During the ~~March~~September 2023 quarter, we shipped ~~119~~90 exabytes of HDD storage capacity. We generated revenue of approximately ~~$1.9~~$1.5 billion with a gross margin of ~~17%~~10%. Our operating cash flow was $~~228~~127 million and we paid $145 million in dividends. ~~Additionally,~~ ~~we accrued~~We issued $1.5 billion of convertible senior notes, repaid $1.3 billion of variable rate term loans, recorded a ~~settlement penalty~~net loss of ~~$300~~$29 million ~~related to BIS’ allegations regarding violations~~from early redemption of debt and a net gain of $104 million as a result of the ~~U.S. EAR~~termination of interest rate swap agreements.

~~, which were subsequently resolved by a settlement agreement in April 2023.~~Table of Contents

Recent ~~Development,~~Developments, Economic Conditions and Challenges

During the ~~March~~September 2023 quarter, the data storage industry and our business continued to be impacted by macroeconomic headwinds and customer inventory adjustments, which ~~led~~continued to ~~a slowdown in~~restrain near term demand for our ~~products, particularly in~~products. As a result of the ~~mass capacity markets. These reductions in~~challenging demand ~~have required us to reduce~~environment, we reduced manufacturing production plans and ~~recognize~~incurred order cancellation fees to terminate certain purchase commitments that were made with our suppliers and recognized manufacturing underutilization ~~charges.~~charges, among other actions. We expect these factors will continue to impact our business and results of operations over the near-term.

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During the March 2023 quarter, in light of further deteriorating economic conditions, we committed to an expansion of the October 2022 Plan to further reduce the global headcount by approximately 480 employees to a total reduction of approximately 3,480 employees. This expanded plan includes aligning our business plan to near-term market conditions, along with other cost saving measures. The October 2022 Plan is expected to be substantially completed by the end of the fiscal year 2023. In connection to this expansion of the October 2022 Plan, we incurred additional employee termination costs and accelerated depreciation of certain capital equipment that would not be utilized as part of our operations.

~~We continue to actively monitor the effects and potential impacts of the~~macroeconomic conditions, pandemic and other factors on all aspects of our business, supply chain, liquidity and capital resources. We are also actively working on opportunities to further lower our cost structure, drive operational efficiencies through simplifying our product roadmaps and maintain supply chain discipline including adjusting our manufacturing production plans, annual capital expenditure plans and other meaningful cost savings measures in response to these business conditions. Subsequently on April 20, 2023, we committed to undertake the April 2023 restructuring plan to further reduce our cost in response to changes in macroeconomic and business conditions. The April 2023 Plan is expected to be substantially completed by the end of the fiscal year 2023, with estimated total pre-tax charges of approximately $150 million. These charges are expected to be primarily cash-based and consist of employee severance and other one-time termination benefits. For a further discussion of the uncertainties and business risks, ~~associated with the COVID-19 pandemic,~~ see “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.

~~Subsequent Regulatory Settlement~~

On April 18, 2023, our subsidiaries Seagate Technology LLC and Seagate Singapore International Headquarters Pte. Ltd entered into the Settlement Agreement with the BIS that resolves BIS’ allegations regarding our sales of hard disk drives to Huawei between August 17, 2020 and September 29, 2021. Under the terms of the Settlement Agreement, we agreed to pay $300 million to the BIS in quarterly installments of $15 million over the course of five years beginning October 31, 2023. We have also agreed to complete three audits of its compliance with the license requirements of Section 734.9 of the U.S. EAR, including one audit by an unaffiliated third-party consultant chosen by us with expertise in U.S. export control laws and two internal audits. The Settlement Agreement also includes a denial order that is suspended and will be waived five years after the date of the order issued under the Settlement Agreement, provided that we have made full and timely payments under the Settlement Agreement and timely completed the audit requirements. While we are in compliance with and upon successful compliance in full with the terms of the Settlement Agreement,~~BIS has agreed it will not initiate any further administrative proceedings against us in connection with any violation of the EAR arising out of the transactions detailed in the Settlement Agreement.~~

While we believed that we complied with all relevant export control laws at the time we made the hard disk drive sales at issue, we determined that engaging with BIS and settling this matter was in the best interest of Seagate, our customers and our shareholders. In determining to engage with BIS and resolve this matter through a settlement agreement, we considered a number of factors, including the risks and cost of protracted litigation involving the U.S. government, as well as the size of the potential penalty and our desire to focus on current business challenges and long-term business strategy. The Settlement Agreement includes a finding that we incorrectly interpreted the regulation at issue to require evaluation of only the last stage of our hard disk drive manufacturing process rather than the entire process. As part of this settlement, we have agreed not to contest BIS’ determination that the sales in question did not comply with the U.S. EAR. Refer to “Item 1. Financial Statements—~~Note 12. Legal, Environmental and Other Contingencies” for more details.~~

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Results of Operations

We list in the tables below summarized information from our Condensed Consolidated Statements of Operations by dollars and as a percentage of revenue:


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023		December 30, 2022		April 1, 2022		March 31, 2023		April 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023		September 30, 2022
Revenue	Revenue	$	1,860	$	1,887	$	2,802	$	5,782	$	9,033	Revenue	$	1,454	$	1,602	$	2,035

Cost of revenue	Cost of revenue	1,541		1,641		1,996		4,735		6,323		Cost of revenue	1,305		1,298		1,553
Gross profit	Gross profit	319		246		806		1,047		2,710		Gross profit	149		304		482
Product development	Product development	191		200		233		625		694		Product development	171		172		234
Marketing and administrative	Marketing and administrative	123		125		141		377		410		Marketing and administrative	105		114		129
Amortization of intangibles	Amortization of intangibles	—		—		3		3		9		Amortization of intangibles	—		—		3
BIS settlement penalty		300		—		—		300		—

Restructuring and other, net	Restructuring and other, net	20		81		—		110		2		Restructuring and other, net	2		(8)		9

(Loss) income from operations	(Loss) income from operations	(315)		(160)		429		(368)		1,595		(Loss) income from operations	(129)		26		107
Other (expense) income, net		(85)		122		(78)		(43)		(197)
Other expense, net												Other expense, net	(18)		(111)		(80)
(Loss) income before income taxes	(Loss) income before income taxes	(400)		(38)		351		(411)		1,398		(Loss) income before income taxes	(147)		(85)		27
Provision for (Benefit from) income taxes	Provision for (Benefit from) income taxes	33		(5)		5		26		25		Provision for (Benefit from) income taxes	37		7		(2)
Net (loss) income	Net (loss) income	$	(433)	$	(33)	$	346	$	(437)	$	1,373	Net (loss) income	$	(184)	$	(92)	$	29


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended
		March 31, 2023		December 30, 2022		April 1, 2022		March 31, 2023		April 1, 2022			September 29, 2023		June 30, 2023		September 30, 2022
Revenue	Revenue	100	%	100	%	100	%	100	%	100	%	Revenue	100	%	100	%	100	%
Cost of revenue	Cost of revenue	83		87		71		82		70		Cost of revenue	90		81		76
Gross margin	Gross margin	17		13		29		18		30		Gross margin	10		19		24
Product development	Product development	10		11		8		11		9		Product development	12		11		12
Marketing and administrative	Marketing and administrative	7		7		5		7		5		Marketing and administrative	7		7		7
Amortization of intangibles	Amortization of intangibles	—		—		—		—		—		Amortization of intangibles	—		—		—
BIS settlement penalty		16		—		—		5		—

Restructuring and other, net	Restructuring and other, net	1		4		—		1		—		Restructuring and other, net	—		—		—
Operating margin	Operating margin	(17)		(8)		16		(6)		16		Operating margin	(9)		1		5
Other (expense) income, net		(4)		6		(4)		(1)		(2)
Other expense, net												Other expense, net	(1)		(7)		(4)
(Loss) income before income taxes	(Loss) income before income taxes	(21)		(2)		12		(7)		14		(Loss) income before income taxes	(10)		(6)		1
Provision for (Benefit from) income taxes		2		—		—		1		—
Provision for income taxes												Provision for income taxes	3		—		—
Net (loss) income	Net (loss) income	(23)	%	(2)	%	12	%	(8)	%	14	%	Net (loss) income	(13)	%	(6)	%	1	%

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Revenue

The following table summarizes information regarding consolidated revenues by channel, geography and market, and HDD exabytes shipped by market and price per terabyte:


		For the Three Months Ended									For the Nine Months Ended							For the Three Months Ended
		March 31, 2023			December 30, 2022			April 1, 2022			March 31, 2023			April 1, 2022				September 29, 2023			June 30, 2023			September 30, 2022
Revenues by Channel (%)	Revenues by Channel (%)																Revenues by Channel (%)
OEMs	OEMs	73		%	72		%	77		%	74		%	73		%	OEMs	71		%	74		%	76		%
Distributors	Distributors	16		%	16		%	12		%	15		%	16		%	Distributors	18		%	14		%	15		%
Retailers	Retailers	11		%	12		%	11		%	11		%	11		%	Retailers	11		%	12		%	9		%
Revenues by Geography (%) (1)	Revenues by Geography (%) (1)																Revenues by Geography (%) (1)
Asia Pacific	Asia Pacific	42		%	40		%	46		%	40		%	48		%	Asia Pacific	56		%	59		%	39		%
Americas	Americas	43		%	45		%	42		%	45		%	38		%	Americas	31		%	29		%	46		%
EMEA	EMEA	15		%	15		%	12		%	15		%	14		%	EMEA	13		%	12		%	15		%
Revenues by Market (%)	Revenues by Market (%)																Revenues by Market (%)
Mass capacity	Mass capacity	66		%	66		%	69		%	67		%	66		%	Mass capacity	70		%	61		%	68		%
Legacy	Legacy	20		%	22		%	23		%	20		%	25		%	Legacy	19		%	25		%	19		%
Other	Other	14		%	12		%	8		%	13		%	9		%	Other	11		%	14		%	13		%

HDD Exabytes Shipped by Market	HDD Exabytes Shipped by Market																HDD Exabytes Shipped by Market
Mass capacity	Mass capacity	104			97			133			305			402			Mass capacity	79			75			104
Legacy	Legacy	15			16			21			45			74			Legacy	11			16			14
Total	Total	119			113			154			350			476			Total	90			91			118

HDD Price per Terabyte	HDD Price per Terabyte	$	14		$	15		$	17		$	14		$	17		HDD Price per Terabyte	$	14		$	15		$	15

(1) Revenue is attributed to geography based on bill from locations.

Revenue in the ~~March~~September 2023 quarter decreased by ~~$27~~$148 million ~~from~~compared to the ~~December 2022~~June 2023 quarter, primarily due to ~~price erosion,~~lower market demand in legacy markets and our non-HDD products that were impacted by macroeconomic conditions, partially offset by an increase in mass capacity exabytes ~~shipped and higher demand for our non-HDD products.~~shipped.

Revenue ~~for~~in the ~~three and nine months ended March 31,~~September 2023 quarter decreased by ~~$942~~$581 million ~~and $3.3 billion from~~compared to the ~~three and nine months ended April 1,~~September 2022 ~~respectively,~~quarter, primarily due to a decrease in exabytes shipped, ~~as a result of lower market~~reflecting broad-based demand ~~in mass capacity and legacy markets that were impacted by~~slowdown resulting from weaker macroeconomic ~~conditions and price erosion. Additionally, the decrease in revenue for the nine months ended March 31, 2023 compared to the nine months ended April 1, 2022 was impacted by pandemic-related headwinds.~~conditions.

We maintain various sales incentive programs such as channel and OEM rebates. Sales incentive programs were approximately ~~16%~~20% of gross revenue for the ~~March~~September 2023 quarter, ~~17%~~19% for the ~~December 2022~~June 2023 quarter and ~~14%~~18% for the ~~March~~September 2022 quarter. Adjustments to revenues due to under or over accruals for sales incentive programs related to revenues reported in prior quarterly periods were less than 1%3% of quarterly gross revenue in all periods presented.

Cost of Revenue and Gross Margin


		For the Three Months Ended									For the Nine Months Ended							For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023			December 30, 2022			April 1, 2022			March 31, 2023			April 1, 2022			(Dollars in millions)	September 29, 2023			June 30, 2023			September 30, 2022
Cost of revenue	Cost of revenue	$	1,541		$	1,641		$	1,996		$	4,735		$	6,323		Cost of revenue	$	1,305		$	1,298		$	1,553
Gross profit	Gross profit	319			246			806			1,047			2,710			Gross profit	149			304			482
Gross margin	Gross margin	17		%	13		%	29		%	18		%	30		%	Gross margin	10		%	19		%	24		%

Gross margin for the ~~March~~September 2023 quarter ~~increased~~decreased compared to the ~~December 2022~~June 2023 quarter, primarily driven by ~~$108~~$118 million of order cancellation fees, ~~incurred during the December 2022 quarter that did not recur,~~an increase of $19 million, for a total of $59 million, in factory underutilization charges associated with lower production levels and ~~lower~~an increase of $10 million in accelerated depreciation expense for certain capital equipment, partially offset by ~~price erosion.~~a decrease of $9 million in depreciation expense as a result of change in useful lives of certain capital equipment.

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Gross margin for the ~~March~~September 2023 quarter decreased compared to the ~~March~~September 2022 quarter primarily ~~due to price erosion, less favorable product mix, $75 million of~~ ~~factory underutilization charges associated with lower production levels and~~ ~~accelerated depreciation expense~~ ~~for certain capital equipment.~~

~~Gross margin for the~~ ~~nine months ended March 31, 2023 decreased compared to the nine months ended April 1, 2022 primarily~~ driven by ~~$210 million factory underutilization charges associated with lower production levels and pandemic-related lockdown in one of our factories, $108~~$118 million of order cancellation fees, ~~price erosion and~~ accelerated depreciation expense for certain capital ~~equipment.~~equipment and less favorable product mix.

In the ~~March~~September 2023 quarter, total warranty cost was ~~1.7%~~1.8% of revenue and included an unfavorable change in estimates of prior warranty accruals of 0.9% of revenue primarily due to changes to our estimated future product return rates. Warranty cost related to new shipments was ~~0.8%~~0.9%, ~~0.7%~~0.8% and ~~0.7%~~0.6% of revenue for the ~~March~~September 2023 quarter, ~~December 2022~~June 2023 quarter and ~~March~~September 2022 quarter, respectively.

Operating Expenses


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023		December 30, 2022		April 1, 2022		March 31, 2023		April 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023		September 30, 2022
Product development	Product development	$	191	$	200	$	233	$	625	$	694	Product development	$	171	$	172	$	234

Marketing and administrative	Marketing and administrative	123		125		141		377		410		Marketing and administrative	105		114		129

Amortization of intangibles	Amortization of intangibles	—		—		3		3		9		Amortization of intangibles	—		—		3

BIS settlement penalty		300		—		—		300		—

Restructuring and other, net	Restructuring and other, net	20		81		—		110		2		Restructuring and other, net	2		(8)		9

Operating expenses	Operating expenses	$	634	$	406	$	377	$	1,415	$	1,115	Operating expenses	$	278	$	278	$	375

Product development expense. Product development expenses decreased by $9$1 million in the ~~March~~September 2023 quarter compared to the ~~December 2022~~June 2023 quarter, primarily due to a $7$6 million decrease in compensation and other employee benefits from the reduction in headcount as a result of our ~~October 2022~~ restructuring ~~plan~~plans and temporary salary reduction, and a $2 million decrease in ~~materials expense.~~depreciation expense, partially offset by a $4 million increase in lease expense and a $3 million increase in supply costs.

Product development expenses decreased by ~~$42~~$63 million in the ~~March~~September 2023 quarter compared to the ~~March~~September 2022 quarter, primarily due to a ~~$17 million decrease in variable compensation and related benefit expense,a $16~~$38 million decrease in compensation and other employee benefits from the reduction in headcount as a result of our ~~October 2022~~ restructuring ~~plan~~plans and temporary salary reduction, and a $6$27 million decrease in ~~materials expense.~~

~~Product development expenses decreased by $69 million for the~~ ~~nine months ended March 31, 2023 compared to the nine months ended April 1, 2022 primarily due to~~ ~~a $57 million decrease in variable compensation and related benefit expense,~~ ~~a $19 million decrease in c~~ompensation and other employee benefits from the reduction in headcount as a result of our October 2022 restructuring plan, a $7 million decrease in materials expense and a $4 million decrease in equipmentdepreciation expense, partially offset by a ~~$24~~$6 million increase in ~~depreciation expense as a result of acceleration of depreciation for certain capital equipment.~~lease expense.

Marketing and administrative ~~expense.~~expense. Marketing and administrative expenses decreased by $2$9 million in the ~~March~~September 2023 quarter compared to the ~~December 2022~~June 2023 quarter primarily due to a $5 ~~million decrease in~~ ~~compensation and other employee benefits primarily from the reduction in headcount as a result of our October 2022 restructuring plan~~ ~~and~~ ~~a $3~~ million decrease in outside services expense, ~~partially offset by~~ a ~~$7 million recovery in December 2022 quarter of an accounts receivable previously written-off in prior year.~~

~~Marketing and administrative expenses decreased by $18 million in the~~ ~~March 2023 quarter compared to the~~ ~~March 2022 quarter primarily due to a $10 million decrease in variable compensation and related benefit expense,~~a ~~$4 million decrease~~ ~~compensation and other employee benefits primarily from the reduction in headcount as a result of our October 2022 restructuring plan~~ ~~and a $3 million decrease in~~ ~~outside services expense.~~

~~Marketing and administrative expenses decreased by $33 million for the~~ ~~nine months ended March 31, 2023 compared to the nine months ended April 1, 2022 primarily due to~~ ~~a $34 million decrease in variable compensation~~ ~~and related benefit expense, a $7~~$2 million decrease in compensation and other employee benefits primarily from the reduction in headcount as a result of our ~~October 2022~~ restructuring ~~plan~~plans and temporary salary reduction, and a $7$2 million ~~recovery of an accounts receivable previously written-off~~decrease in advertising costs.

Marketing and administrative expenses decreased by $24 million in the ~~prior year, partially offset by~~September 2023 quarter compared to the September 2022 quarter primarily due to a $5$9 million ~~increase~~decrease in ~~travel expenses~~compensation and other employee benefits from the reduction in headcount as a result of ~~the easing of pandemic-related travel restrictions,~~our restructuring plans and temporary salary reduction, a $3$6 million ~~increase~~decrease in advertising costs, a $5 million decrease in outside services expense and a $2$4 million ~~increase~~decrease in ~~advertising costs.~~

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~~Amortization of intangibles.~~ ~~Amortization of intangibles for the three and nine months ended March 31, 2023 decreased~~ ~~by $3 million and~~ ~~$6 million, respectively, compared to the three and nine months ended April 1, 2022~~,travel expenses due to ~~certain intangible assets that reached the end of their useful lives~~.

~~BIS settlement penalty.~~ ~~BIS settlement penalty for the three and nine months ended March 31, 2023 was $300 million,~~ ~~related to BIS’ allegations of violations of the U.S. EAR, which were subsequently resolved by the Settlement Agreement in April 2023.~~cost saving measures.

Restructuring and other, net. Restructuring and other, net in the September 2023 quarter was not material.

Restructuring and other, net for the ~~three~~June 2023 quarter was a net gain of $8 million, primarily from the sales of certain properties and ~~nine months ended March 31, 2023 was $20~~assets of $156 million, ~~and $110 million, respectively, which was primarily comprised of~~partially offset by workforce reduction costs and other exit costs under our ~~October~~April 2023 restructuring plan.

Restructuring and other, net for the September 2022 ~~Plan.~~quarter was $9 million primarily related to cost incurred as part of restructuring of our workforce.

Other ~~(Expense) Income,~~Expense, Net


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023		December 30, 2022		April 1, 2022		March 31, 2023		April 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023		September 30, 2022
Other (expense) income, net		$	(85)	$	122	$	(78)	$	(43)	$	(197)
Other Expense, net												Other Expense, net	$	(18)	$	(111)	$	(80)

Other ~~(expense) income,~~expense, net. Other expense, net ~~increased~~decreased by ~~$207~~$93 million for the ~~March~~September 2023 quarter compared to the ~~December 2022~~June 2023 quarter primarily due to ~~a $204~~$104 million of net gain recognized from the termination of interest rate swaps associated with the repayment of term loans in ~~December 2022~~the September 2023 quarter and $9 million impairment of investment in the June 2023 quarter, partially offset by $29 million of net loss recognized from early redemption ~~and extinguishment of $964 million~~ of debt ~~from~~in the ~~July 2029 Notes, January 2031 Notes and July 2031 Notes in exchange with issuance~~September 2023 quarter.

Table of ~~the new December 2032 Notes of $750 million~~Contents.

Other expense, net indecreased by $7$62 million for the ~~March~~September 2023 quarter compared to the ~~March~~September 2022 quarter primarily due to a ~~$19~~$104 million of net gain recognized from the termination of interest rate swaps associated with the repayment of term loans, partially offset by $29 million of net loss recognized from early redemption of debt and $13 million net increase in interest expense ~~from~~primarily related to the ~~issuance of long-term debt partially offset by a~~ ~~net $10 million higher non-recurring gain from our strategic investments~~new senior notes issued in the ~~March 2022~~June 2023 quarter and the September 2023 quarter.

Other expense, net decreased by $154 million for the nine months ended March 31, 2023 compared to the nine months ended April 1, 2022 primarily due to a $204 million net gain recognized from early redemption and extinguishment of $964 million of debt from the July 2029 Notes, January 2031 Notes and July 2031 Notes in exchange with issuance of the new December 2032 Notes of $750 million, partially offset by a ~~$45 million increase in interest expense.~~

Income Taxes


		For the Three Months Ended						For the Nine Months Ended					For the Three Months Ended
(Dollars in millions)	(Dollars in millions)	March 31, 2023		December 30, 2022		April 1, 2022		March 31, 2023		April 1, 2022		(Dollars in millions)	September 29, 2023		June 30, 2023		September 30, 2022
Provision for (benefit from) income taxes	Provision for (benefit from) income taxes	$	33	$	(5)	$	5	$	26	$	25	Provision for (benefit from) income taxes	$	37	$	33	$	(2)

We recorded an income tax ~~provisions~~provision of ~~$33 million and $26~~$37 million for the three ~~and nine~~ months ended ~~March 31, 2023, respectively.~~September 29, 2023. The ~~discrete items in the~~ income tax provision ~~were not material~~included approximately $33 million of net discrete expense, primarily associated with an increase in our valuation allowance to account for the ~~three~~impacts of new tax guidance which clarifies the treatment of specified research and ~~nine months ended March 31, 2023.~~experimental expenditures issued by the U.S. Treasury Department under Internal Revenue Code Section 174 during the September 2023 quarter, partially offset by excess tax benefits related to share-based compensation expense. We will have income taxes payable based on profits generated in various jurisdictions.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted into U.S. law. The legislation includes a new corporate alternative minimum tax (the “CAMT”) of 15% on the adjusted financial statement income (“AFSI”) of corporations with average AFSI exceeding $1.0 billion over a three-year period. ~~The CAMT is effective~~We did not meet the criteria for ~~us beginning in~~ fiscal year 2024. We ~~assessed~~will continue to monitor the potential ~~impact~~application of ~~the~~ CAMT ~~and do not expect to have a material impact to our financial statements or results of operations.~~for future years.

During the ~~nine~~three months ended ~~March 31,~~September 29, 2023, our unrecognized tax benefits, excluding interest and penalties ~~increased~~decreased by approximately $1 $9 million to ~~$115~~$107 million, substantially all of which would impact the effective tax rate, if recognized, subject to certain future valuation allowance reversals. We do not expect material changes to our unrecognized tax benefits in the next twelve months beginning ~~April 1,~~September 30, 2023.

We recorded an income tax ~~provisions~~benefit of $5$2 million ~~and~~ ~~$25 million~~ for the three ~~and nine~~ months ended ~~April 1, 2022, respectively.~~September 30, 2022. The income tax provision for the three months ended ~~April 1,~~September 30, 2022 included approximately $6$7 million of net discrete tax benefit, primarily associated ~~with a change in the applicable tax rate within our non-U.S. operations. The income tax provision for the~~ ~~nine months ended~~ ~~April 1, 2022 included approximately $15 million~~ ~~of net discrete tax benefit, primarily associated~~ with net excess tax benefits related to share-based compensation expense.

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Our income tax provision recorded for the three ~~and nine~~ months ended ~~March 31,~~September 29, 2023 and ~~April 1,~~September 30, 2022 differed from the provision for income taxes that would be derived by applying the Irish statutory rate of 25% to income before income taxes, primarily due to the net effect of tax benefits related to (i) non-Irish earnings generated in jurisdictions that are subject to tax incentive programs and are considered indefinitely reinvested outside of Ireland and (ii) ~~current year generation of research credits.~~increase in valuation allowance.

Liquidity and Capital Resources

The following sections discuss our principal liquidity requirements, as well as our sources and uses of cash and our liquidity and capital resources. Our cash and cash equivalents are maintained in investments with remaining maturities of 90 days or less at the time of purchase. The principal objectives of our investment policy are the preservation of principal and maintenance of liquidity. We believe our cash equivalents are liquid and accessible. We operate in some countries that have restrictive regulations over the movement of cash and/or foreign exchange across their borders. However, we believe our sources of cash will continue to be sufficient to fund our operations and meet our cash requirements for the next 12 months. Although there can be no assurance, we believe that our financial resources, along with controlling our costs and capital expenditures, will allow us to manage the ongoing impacts of macroeconomic ~~and pandemic-related~~ headwinds including higher inflationary pressures, inventory adjustments by our customers and the overall market demand disruptions on our business operations for the foreseeable future. However, some challenges to our industry and to our business continue to remain uncertain and cannot be predicted at this time. Consequently, we will continue to evaluate our financial position in light of future developments, particularly those relating to the global economic ~~factors and the pandemic.~~factors.

We are not aware of any downgrades, losses or other significant deterioration in the fair value of our cash equivalents from the values reported as of ~~March 31,~~September 29, 2023. For additional information on risks and factors that could impact our ability to fund our operations and meet our cash requirements, see “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.

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Cash and Cash Equivalents


(Dollars in millions)	(Dollars in millions)	March 31, 2023		July 1, 2022		Change		(Dollars in millions)	September 29, 2023		June 30, 2023		Change
Cash and cash equivalents	Cash and cash equivalents	$	766	$	615	$	151	Cash and cash equivalents	$	795	$	786	$	9

Our cash and cash equivalents as of ~~March 31,~~September 29, 2023 increased by ~~$151~~$9 million from ~~July 1, 2022~~June 30, 2023 primarily as a result of net cash of $~~724~~127 million provided by operating activities and net proceeds of ~~$600 million~~$1.5 billion from the issuance of ~~long-term debt~~convertible senior notes, partially offset by ~~the~~$1.3 billion redemption of term loans, dividends paid to our shareholders of ~~$437~~$145 million, ~~repurchases~~ $126 million debt fees relating to issuance of ~~our ordinary shares of $408 million,~~long-term debt and capped call transaction and payments for capital expenditures of $~~266 million and~~ ~~$71 million redemption and repurchases of long-term debt.~~70 million.

Cash Provided by Operating Activities

Cash provided by operating activities for the ~~nine~~three months ended ~~March 31,~~September 29, 2023 was $~~724~~127 million and includes the effects of net loss adjusted for non-cash items including depreciation, amortization, share-based compensation and:

•a decrease of $~~538~~100 million in accounts receivable, primarily due to lower revenue and timing of collections;

•a decrease of ~~$365~~$88 million in inventories, primarily due to a decrease in units built to align with the prevailing demand environment; and

•an increase of ~~$110~~$25 million cash proceeds received from the settlement of certain interest rate swap agreements; partially offset by

•a decrease of ~~$327~~$89 million in accrued expenses as a result of payments related to restructuring activities;

•a decrease of $70 million in accounts payable,, primarily due to a decrease in materials purchased; and

•a decrease of ~~$168~~$12 million in accrued employee compensation, primarily due to ~~cash paid to our employees as part~~timing of ~~our discretionary spending plans.~~payroll accrual.

Cash Used in Investing Activities

Cash used in investing activities for the ~~nine~~three months ended ~~March 31,~~September 29, 2023 was ~~$252~~$70 million, primarily attributable to payments for the purchase of property, equipment and leasehold improvements.

Cash Used in Financing Activities

Net cash used in financing activities of ~~$321~~$49 million for the ~~nine~~three months ended ~~March 31,~~September 29, 2023 was primarily attributable to the following activities:

•$~~437~~1.3 billion redemption of term loans;

•$145 million in dividend payments;

•$~~408~~126 million in pa~~yments for repurchases~~debt fees relating to issuance of ~~our ordinary shares;~~long-term debt and capped call transaction; and

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•$7125 million ~~redemption and repurchases~~taxes paid related to net share settlement of ~~long-term debt;~~equity awards; partially offset by

•$~~600 million~~1.5 billion in net proceeds from the issuance of ~~Term Loan A3.~~2028 Notes and

•$35 million proceeds from issuance of ordinary shares under employee stock purchase plans.

Liquidity Sources

Our primary sources of liquidity as of ~~March 31,~~September 29, 2023 consist of: (1) approximately ~~$766~~$795 million in cash and cash equivalents, (2) cash we expect to generate from operations and (3) ~~$1.75~~$1.5 billion available for borrowing under ~~our Revolving Credit Facility, which is part~~the revolving credit facility of the Tenth Amendment (the “Revolving Credit ~~Agreement.~~Facility”).

As of ~~March 31,~~September 29, 2023, no borrowings (including swing line loans) were outstanding and no commitments were utilized for letters of credit issued under the Revolving Credit Facility. The Revolving Credit Facility is available for borrowings, subject to compliance with financial covenants and other customary conditions to borrowing.

~~The Credit Agreement includes three~~On September 27, 2023, we entered into the Tenth Amendment to modify our financial covenants: (1) interest coverage ratio and (2) total net leverage ~~ratio and (3) a minimum liquidity amount.~~ratio. The ~~term of the Revolving Credit Facility~~Company is ~~through October 14, 2026. As of March 31, 2023, we were~~ in compliance with ~~all of~~ the covenants under our debt agreements. On November 8, 2022, we entered into the Seventh Amendment to our Credit Agreement to increase the maximum permitted total leverage ratio we must comply with during the covenant relief period which ends on June 28, 2024.as of September 29, 2023. We continue to evaluate our debt portfolio and structure to comply with our financial debt covenants.

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We believe that our sources of cash will be sufficient to fund our operations and meet our cash requirements for at least the next 12 months. Our ability to fund liquidity requirements beyond 12 months will depend on our future cash flows, which are determined by future operating performance, and therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control. For additional information on risks and factors that could impact our ability to fund our operations and meet our cash requirements, including the pandemic, among others, see “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.

Cash Requirements and Commitments

Our liquidity requirements are primarily to meet our working capital, product development and capital expenditure needs, to fund scheduled payments of principal and interest on our indebtedness and to fund our quarterly dividend and any future strategic investments. As of ~~March 31,~~September 29, 2023, our contractual cash requirements have not changed materially since our Annual Report on Form 10-K for the fiscal year ended ~~July 1, 2022,~~June 30, 2023, except for the purchase obligations and long-term debt ~~obligations, restructuring and BIS settlement penalty.~~obligations.

Purchase obligations

Purchase obligations are defined as contractual obligations for the purchase of goods or services, which are enforceable and legally binding on us, and that specify all significant terms. From time to time, we enter into long-term, non-cancelable purchase commitments or make large up-front investments with certain suppliers in order to secure certain components or technologies for the production of our products or to supplement our internal manufacturing capacity for certain components. As of ~~March 31,~~September 29, 2023, we had unconditional purchase obligations of approximately ~~$4.1~~$3.7 billion primarily related to purchases of inventory components with ~~our~~our suppliers. We expect ~~$1.6~~$1.1 billion of these short-term commitments to be paid within one year and expect ~~$2.5~~$2.6 billion of these long-term commitments to be paid thereafter.

During the ~~nine~~three months ended ~~March 31,~~September 29, 2023, we recorded order cancellation fees of ~~$108~~$118 million to terminate certain purchase commitments related to the purchase of inventory components and ~~equipment,~~equipment, which were reflected under Cost of revenue on our Condensed Consolidated Statements of Operations. As of September 29, 2023, cumulative unpaid order cancellation fees on the Condensed Consolidated Balance Sheet were $151 million, with $133 million in Accrued expenses and $18 million in Accounts payable, all of which ~~$68 million remained unpaid as of March 31, 2023. We expect these remaining amounts~~is expected to be paid within one year.

Long-term debt and interest payments on debt

On ~~August 18, 2022,~~September 13, 2023, we ~~amended our credit agreement~~issued the 2028 Notes of $1.5 billion and ~~borrowed a new~~repaid Term ~~Loan~~Loans A1, A2 and A3 ~~in the aggregate principal amount~~ of $600 million. Term Loan A3 bears interest at a rate of SOFR plus a variable margin of 1.25% to 2.5%, in each case with such margin being determined based on the corporate credit rating of the Borrower or one of its parent entities. Term Loan A3 is repayable in quarterly installments and is scheduled to mature on July 30, 2027.

On November 30, 2022, we completed an exchange offer in which $964 million principal amount in aggregate of the July 2029 Notes, January 2031 Notes and July 2031 Notes were exchanged for $750 million principal amount of 9.625% Senior Notes due on December 1, 2032.$1.3 billion. The exchange was accounted for as a debt extinguishment and resulted in a net ~~gain~~loss of ~~$204~~$29 million for the ~~nine months ended March 31, 2023.~~

~~During the March 2023~~first quarter ~~$20 million principal amount~~ of the January 2031 Notes, $5 million principal amount of the June 2029 Notes and $5 million principal amount of the July 2031 Notes were repurchased for cash at a discount to their principal amounts, plus accrued and unpaid interest. We recorded a gain of $3 million on these repurchases during the March

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~~2023 quarter.~~fiscal year 2024.

As of ~~March 31,~~September 29, 2023, the future principal payment obligation on our long-term debt was ~~$6.0~~$5.7 billion, of which ~~$1.1 billion~~ will mature ~~within~~in more than one year. As of ~~March 31,~~September 29, 2023, future interest payments on this outstanding debt isare estimated to be approximately ~~$1.8~~$2.3 billion, of which ~~$316~~$325 million is expected to be paid within one year. From time to time, we may repurchase any of our outstanding senior notes in open market or privately negotiated purchases or otherwise, or we may repurchase outstanding senior notes pursuant to the terms of the applicable indenture. Refer to “Item 1. Financial Statements—Note 3. Debt” for more details.

BIS settlement penalty

We accrued a settlement penalty of $300 million for the quarter ended March 31, 2023, ~~quarter,~~ related to BIS’ allegations of violations of the U.S. EAR, which were subsequently resolved by the Settlement Agreement in April 2023. As part of the Settlement Agreement with BIS, quarterly payments of ~~$15~~$15 million will be made over the course of five years beginning October 31, 2023, of which ~~$30~~$60 million is expected to be paid within one year and ~~$270~~$240 million thereafter. Refer to “Item 1. Financial Statements—Note 12. Legal, Environmental and Other Contingencies” for more details.

Restructuring

On October 24, 2022, we committed to an October 2022 plan to reduce our cost structure to better align our operational needs to current economic conditions while continuing to support the long-term business strategy. On March 29, 2023, in light of further deteriorating economic conditions, we committed to an expansion of the October 2022 Plan to further reduce the global headcount by approximately 480 employees to a total reduction of approximately 3,480 employees. The expanded plan includes aligning our business plan to near-term market conditions, along with other cost saving measures. The October 2022 Plan is expected to be substantially completed by the end of the fiscal year 2023. During the ~~nine~~three months ended ~~March 31,~~September 29, 2023, we recorded restructuring and other, net of ~~$110~~$2 million, primarily related to the workforce reduction costs under the ~~October 2022 plan,~~restructuring plans, and made cash payments of ~~$88 million for all active restructuring plans.~~$89 million.

As of ~~March 31,~~September 29, 2023, the future cash payments related to our remaining active restructuring plans were ~~$38~~$32 million, of which ~~$35~~$30 million is expected to be paid within one year.

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Dividends

During the ~~March~~September 2023 quarter, our Board of Directors declared dividends of $0.70 per share, totaling $~~145~~146 million, which was paid on ~~April 6,~~October 10, 2023. On ~~April 20,~~October 26, 2023, our Board of Directors declared a quarterly cash dividend of $0.70 per share, payable on ~~July 5, 2023~~January 9, 2024 to shareholders of record at the close of business on ~~June~~December 21, 2023. Our ability to pay dividends in the future will be subject to, among other things, general business conditions within the data storage industry, our financial results, the impact of paying dividends on our credit ratings and legal and contractual restrictions on the payment of dividends by our subsidiaries to us or by us to our ordinary shareholders, including restrictions imposed by covenants on our debt instruments.

Share repurchases

From time to time, at our discretion, we may repurchase any of our outstanding ordinary shares through private, open market, or broker-assisted purchases, tender offers, or other means, including through the use of derivative transactions. As of ~~March 31,~~September 29, 2023, $1.9 billion remained available for repurchase under our existing repurchase authorization limit. We may limit or terminate the repurchase program at any time. All repurchases are effected as redemptions in accordance with our Constitution.

Other

For fiscal year ~~2023,~~2024, we expect capital expenditures to be ~~at the low-end of our long-term targeted range of 4% to 6% of revenue.~~lower than fiscal year 2023. We require substantial amounts of cash to fund any increased working capital requirements, future capital expenditures, scheduled payments of principal and interest on our indebtedness and payments of dividends. We will continue to evaluate and manage the retirement and replacement of existing debt and associated obligations, including evaluating the issuance of new debt securities, exchanging existing debt securities for other debt securities and retiring debt pursuant to privately negotiated transactions, open market purchases, tender offers or other means or otherwise. In addition, we may selectively pursue strategic alliances, acquisitions, joint ventures and investments, which may require additional capital.

~~Subsequent event~~

On April 20, 2023, we committed to the April 2023 restructuring plan to further reduce our cost structure in response to changes in macroeconomic and business conditions. The April 2023 Plan is intended to align our operational needs with the near-term demand environment while continuing to support the long-term business strategy. The April 2023 Plan is expected to be substantially completed by the end of the fiscal year 2023, with estimated total pre-tax charges of approximately $150 million. These charges are expected to be primarily cash-based and consist of employee severance and other one-time termination benefits.

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Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations are based upon our ~~condensed consolidated financial statements,~~Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of such statements requires us to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period and the reported amounts of assets and liabilities as of the date of the financial statements. Our estimates are based on historical experience and other assumptions that we consider to be appropriate in the circumstances. However, actual future results may vary from our estimates.

Other than as described in “Part I, Item 1. Financial Statements—Note 1. Basis of Presentation and Summary of Significant Accounting Policies”, there have been no other material changes in our critical accounting policies and estimates. Refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended ~~July 1, 2022,~~June 30, 2023, as filed with the SEC on August ~~5, 2022,~~4, 2023, for a discussion of our critical accounting policies and estimates.

Recent Accounting Pronouncements

See “Part I, Item 1. Financial Statements—Note 1. Basis of Presentation and Summary of Significant Accounting Policies” for information regarding the effect of new accounting pronouncements on our financial statements.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure to market risks due to the volatility of interest rates, foreign currency exchange rates, credit rating changes and equity and bond markets. A portion of these risks may be hedged, but fluctuations could impact our results of operations, financial position and cash flows.

Interest Rate Risk. Our exposure to market risk for changes in interest rates relates primarily to our cash investment portfolio. As of ~~March 31,~~September 29, 2023, we had no available-for-sale debt securities that had been in a continuous unrealized loss position for a period greater than 12 months. We determined no impairment related to credit losses for available-for-sale debt securities as of ~~March 31,~~September 29, 2023.

We have fixed rate ~~and variable rate~~ debt ~~obligations. We~~obligations, which we enter into ~~debt obligations~~ for general corporate purposes including capital expenditures and working capital needs. ~~Our Term Loans bear interest at a variable rate equal to SOFR plus a variable margin.~~

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We ~~have~~previously entered into certain interest rate swap agreements to convert the variable interest rate on ~~the~~our Term Loans to fixed interest rates. The objective of the interest rate swap agreements iswas to eliminate the variability of interest payment cash flows associated with the variable interest rate under the Term Loans. We designated the interest rate swaps as cash flow hedges. ~~As of March 31,~~On September 13, 2023, we terminated our interest rate swap agreements as we repaid the ~~aggregate notional amount of the Company’s interest-rate swap contracts was $1.6 billion, of which $600 million will mature through September 2025 and $1.0 billion will mature through July 2027.~~Term Loans.

The table below presents principal amounts and related fixed or weighted-average interest rates by year of maturity for our investment portfolio and debt obligations as of ~~March 31,~~September 29, 2023.

Fiscal Years Ended Total Fair Value at March 31, 2023
(Dollars in millions, except percentages) 2023 2024 2025 2026 2027 Thereafter
Assets
Money market funds, time deposits and certificates of deposit
Floating rate $ 236 $ — $ — $ — $ — $ — $ 236 $ 236
Average interest rate 4.34 % 4.34 %
Other debt securities
Fixed rate $ — $ — $ — $ 15 $ — $ 1 $ 16 $ 16
Debt
Fixed rate $ 540 $ 500 $ 479 $ — $ 505 $ 2,246 $ 4,270 $ 4,156
Average interest rate 4.75 % 4.88 % 4.75 % — % 4.88 % 6.21 % 5.55 %
Variable rate $ 23 $ 86 $ 138 $ 667 $ 144 $ 697 $ 1,755 $ 1,704
Average interest rate 5.52 % 5.48 % 5.49 % 5.59 % 5.44 % 5.47 % 5.52 %

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	Fiscal Years Ended																		Total			Fair Value at September 29, 2023
(Dollars in millions, except percentages)	2024			2025			2026			2027			2028			Thereafter
Assets
Money market funds, time deposits and certificates of deposit
Floating rate	$	122		$	—		$	—		$	—		$	—		$	—		$	122		$	122
Average interest rate	5.39		%																5.39		%
Other debt securities
Fixed rate	$	—		$	—		$	—		$	15		$	—		$	—		$	15		$	15



Debt
Fixed rate	$	—		$	479		$	—		$	505		$	1,500		$	3,245		$	5,729		$	5,564
Average interest rate	—		%	4.75		%	—		%	4.88		%	3.50		%	6.88		%	5.64		%

Foreign Currency Exchange Risk. From time to time, we may enter into foreign currency forward exchange contracts to manage exposure related to certain foreign currency commitments and anticipated foreign currency denominated expenditures. Our policy prohibits us from entering into derivative financial instruments for speculative or trading purposes.

We hedge portions of our foreign currency denominated balance sheet positions with foreign currency forward exchange contracts to reduce the risk that our earnings will be adversely affected by changes in currency exchange rates. The change in fair value of these contracts is recognized in earnings in the same period as the gains and losses from the remeasurement of the assets and liabilities. All foreign currency forward exchange contracts mature within 12 months.

We recognized a net loss of $1 million,a net gain of $11 million and a net gain of ~~$10~~$104 million in Cost of revenue, ~~and~~ Interest expense and Net gain recognized from termination of interest rate swap, respectively, related to the de-designation on discontinued cash flow hedges during the three months ended March 31, 2023. We recognized a net loss of $20 million and a net gain of $18 million in Cost of revenue and Interest expense, respectively, related to the de-designation on discontinued cash flow hedges during the ~~nine months ended~~September 29, 2023 ~~March 31, 2023.~~.

The table below provides information as of ~~March 31,~~September 29, 2023 about our foreign currency forward exchange contracts. The table is provided in dollar equivalent amounts and presents the notional amounts (at the contract exchange rates) and the weighted-average contractual foreign currency exchange rates.


(Dollars in millions, except weighted-average contract rate)	(Dollars in millions, except weighted-average contract rate)	Notional Amount		Weighted-Average Contract Rate		Estimated Fair Value(1)		(Dollars in millions, except weighted-average contract rate)	Notional Amount		Weighted-Average Contract Rate		Estimated Fair Value(1)
Foreign currency forward exchange contracts:	Foreign currency forward exchange contracts:							Foreign currency forward exchange contracts:
Singapore Dollar	Singapore Dollar	$	254	$	1.34	$	4	Singapore Dollar	$	308	$	1.34	$	(5)
Thai Baht	Thai Baht	148		$	34.22	2		Thai Baht	131		$	33.90	(10)
Chinese Renminbi	Chinese Renminbi	84		$	6.77	—		Chinese Renminbi	66		$	6.89	(2)
British Pound Sterling	British Pound Sterling	74		$	0.82	2		British Pound Sterling	63		$	0.80	(1)

Total	Total	$	560			$	8	Total	$	568			$	(18)

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(1) Equivalent to the unrealized net gain (loss) on existing contracts.

Other Market Risks. We have exposure to counterparty credit downgrades in the form of credit risk related to our foreign currency forward exchange contracts and our fixed income portfolio. We monitor and limit our credit exposure for our foreign currency forward exchange contracts by performing ongoing credit evaluations. We also manage the notional amount of contracts entered into with any one counterparty and we maintain limits on maximum tenor of contracts based on the credit rating of the financial institution. Additionally, the investment portfolio is diversified and structured to minimize credit risk.

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Changes in our corporate issuer credit ratings have minimal impact on our near-term financial results, but downgrades may negatively impact our future ability to raise capital, our ability to execute transactions with various counterparties, and may increase the cost of such capital.

We are subject to equity market risks due to changes in the fair value of the notional investments selected by our employees as part of our non-qualified deferred compensation plan—the SDCP.

In fiscal year 2014, we entered into a TRS agreement in order to manage the equity market risks associated with the SDCP liabilities. We pay a floating rate, based on SOFR plus an interest rate spread, on the notional amount of the TRS. The TRS is designed to substantially offset changes in the SDCP liabilities due to changes in the value of the investment options made by employees. See “Part I, Item 1. Financial Statements—Note 6. Derivative Financial Instruments” of this Quarterly Report on Form 10-Q.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by the Exchange Act Rule 13a-15, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on the evaluation, our management, including our chief executive officer and chief financial officer, concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective as of ~~March 31,~~September 29, 2023.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~March 31,~~September 29, 2023, there were no changes in our internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

For a discussion of legal proceedings, see “Part I, Item 1. Financial Statements—Note 12. Legal, Environmental and Other Contingencies” of this Quarterly Report on Form 10-Q.

ITEM 1A.RISK FACTORS

Summary of Risk Factors

The following is a summary of the principal risks and uncertainties that could materially adversely affect our business, results of operations, financial condition, cash flows, brand and/or the price of our outstanding ordinary shares, and make an investment in our ordinary shares speculative or risky. You should read this summary together with the more detailed description of each risk factor contained below. Additional risks beyond those summarized below or discussed elsewhere in this Quarterly Report on Form 10-Q may apply to our business and operations as currently conducted or as we may conduct them in the future or to the markets in which we currently, or may in the future, operate.

Risks Related to our Business, Operations and Industry

•Our ability to increase our revenue and maintain our market share depends on our ability to successfully introduce and achieve market acceptance of new products on a timely basis. If our products do not keep pace with customer requirements, our results of operations will be adversely affected.

•We operate in highly competitive markets and our failure to anticipate and respond to technological changes and other market developments, including price competition, could harm our ability to compete.

•We ~~may be~~have been adversely affected by reduced, delayed, loss of or canceled purchases by, one or more of our key customers, including large hyperscale data center companies and ~~cloud service providers (“CSPs”).~~CSPs.

•We are dependent on sales to distributors and retailers, which may increase price erosion and the volatility of our sales.

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•We must plan our investments in our products and incur costs before we have customer orders or know about the market conditions at the time the products are produced. If we fail to predict demand accurately for our products or if the markets for our products change, we may have insufficient demand or we may be unable to meet demand, which may materially adversely affect our financial condition and results of operations.

•Changes in demand for computer systems, data storage subsystems and consumer electronic devices may in the future cause a decline in demand for our products.

•We have a long and unpredictable sales cycle for nearline storage solutions, which impairs our ability to accurately predict our financial and operating results in any period and may adversely affect our ability to manage inventory and forecast the need for investments and expenditures.

•We experience seasonal declines in the sales of our consumer products during the second half of our fiscal year which may adversely affect our results of operations.

•We may not be successful in our efforts to grow our systems, SSD and Lyve revenues.

•Our worldwide sales and manufacturing operations subject us to risks that may adversely affect our business related to disruptions in international markets, currency exchange fluctuations and increased costs.

•The ongoing COVID-19 pandemic has impacted our business, operating results and financial condition, as well as the operations and financial performance of many of the customers and suppliers in industries that we serve. We are unable to predict the extent to which the pandemic and related effects will adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.

•If we do not control our costs, we will not be able to compete effectively and ~~may suffer an adverse impact on~~ our financial ~~condition.~~condition may be adversely impacted.

Risks Associated with Supply and Manufacturing

•Shortages or delays in the receipt of, or cost increases in, critical components, equipment or raw materials necessary to manufacture our products, as well as reliance on single-source suppliers, may affect our production and development of products and may harm our operating results.

•We have cancelled ~~purchased~~purchase commitments with suppliers and incurred cost associated with such cancellations, and if revenues fall or customer demand decreases significantly, we may not meet ~~all of~~ our purchase commitments to certain suppliers in the future, which could result in penalties, increased manufacturing costs or excess inventory.

•Due to the complexity of our products, some defects may only become detectable after deployment.

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Risks Related to Human Capital and Corporate Responsibility

•The loss of or inability to attract, retain and motivate key executive officers and employees could negatively impact our business prospects.

•We are subject to risks related to corporate and social responsibility that could adversely affect our reputation and ~~reputation.~~performance.

Risks Related to Financial Performance or General Economic Conditions

•Changes in the macroeconomic environment have impacted and may in the future negatively impact our results of operations.

•We may not be able to generate sufficient cash flows from operations and our investments to meet our liquidity requirements, including servicing our ~~indebtedness.~~

•~~We are subject~~indebtedness and continuing to ~~counterparty default risks.~~declare our quarterly dividend.

•Our quarterly results of operations fluctuate, sometimes significantly, from period to period, and may cause our share price to decline.

•Any cost reduction initiatives that we undertake may not deliver the results we expect and these actions may adversely affect our business.

•The effect of geopolitical uncertainties, war, terrorism, natural disasters, public health issues and other circumstances, on national and/or international commerce and on the global economy, could materially adversely affect our results of operations and financial condition.

•We are subject to counterparty default risks.

Legal, Regulatory and Compliance Risks

•Our business is subject to various laws, regulations, governmental policies, litigation, governmental investigations or governmental proceedings that may cause us to incur significant expense or adversely impact our results orof operations and financial condition.

•Some of our products and services are subject to export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered, and any changes to or violation of these laws could have a material adverse effect on our business, results of operations, financial condition and cash flows.

•Changes in U.S. trade policy, including the imposition of sanctions or tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

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Risks Related to Intellectual Property and Other Proprietary Rights

•We may be unable to protect our intellectual property rights, which could adversely affect our business, financial condition and results of operations.

•We are at times subject to intellectual property proceedings and claims which could cause us to incur significant additional costs or prevent us from selling our products, and which could adversely affect our results of operations and financial condition.

•Our business and certain products and services depend in part on IPintellectual property and technology licensed from third parties, as well as data centers and infrastructure operated by third parties.

Risks Related to Information Technology, Data and Information Security

•We could suffer a loss of revenue and increased costs, exposure to significant liability including legal and regulatory consequences, reputational harm and other serious negative consequences in the event of cyber-attacks, ransomware or other cyber security breaches or incidents that disrupt our operations or result in unauthorized access to, or the loss, corruption, unavailability or dissemination of proprietary or confidential information of our customers or about us or ~~our customers or~~ other third parties.

•We must successfully implement our new global enterprise resource planning system and maintain and upgrade our ITinformation technology systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Owning our Ordinary Shares

•The price of our ordinary shares may be volatile and could decline significantly.

•Any decision to reduce or discontinue the payment of cash dividends to our shareholders or the repurchase of our ordinary shares pursuant to our previously announced share repurchase program could cause the market price of our ordinary shares to decline significantly.

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RISKS RELATED TO OUR BUSINESS, OPERATIONS AND INDUSTRY

Our ability to increase our revenue and maintain our market share depends on our ability to successfully introduce and achieve market acceptance of new products on a timely basis. If our products do not keep pace with customer requirements, our results of operations will be adversely affected.

The markets for our products are characterized by rapid technological change, frequent new product introductions and technology enhancements, uncertain product life cycles and changes in customer demand. The success of our products and services also often depends on whether our offerings are compatible with our customers’ or third-parties’ products or services and their changing technologies. Our customers demand new generations of storage products as advances in computer hardware and software have created the need for improved storage, with features such as increased storage capacity, enhanced security, energy efficiency, improved performance and reliability and lower cost. We, and our competitors, have developed improved products, and we will need to continue to do so in the future.

Historically, our results of operations have substantially depended upon our ability to be among the first-to-market with new data storage product offerings. We may face technological, operational and financial challenges in developing new products. In addition, our investments in new product development may not yield the anticipated benefits. Our market share, revenue and results of operations in the future may be adversely affected if we fail to:

•develop new products, identify business strategies and timely introduce competitive product offerings to meet technological shifts or we are unable to execute successfully;

•consistently maintain our time-to-market performance with our new products;

•manufacture these products in adequate volume;

•meet specifications or satisfy compatibility requirements;

•qualify these products with key customers on a timely basis by meeting our customers’ performance and quality specifications; or

•achieve acceptable manufacturing yields, quality and ~~costs~~margins with these products.

Accordingly, we cannot accurately determine the ultimate effect that our new products will have on our results of operations. Our failure to accurately anticipate customers’ needs and accurately identify the shift in technological changes could materially adversely affect our long-term financial results.

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In addition, the concentration of customers in our largest end markets magnifies the potential adverse effect of missing a product qualification opportunity. If the delivery of our products is delayed, our customers may use our competitors’ products to meet their requirements.

When we develop new products with higher capacity and more advanced technology, our results of operations may decline because the increased difficulty and complexity associated with producing these products increases the likelihood of reliability, quality or operability problems. If our products experience increases in failure rates, are of low quality or are not reliable, customers may reduce their purchases of our products, our factory utilization may decrease and our manufacturing rework and scrap costs and our service and warranty costs may increase. In addition, a decline in the reliability of our products may make it more difficult for us to effectively compete with our competitors.

Additionally, we may be unable to produce new products that have higher capacities and more advanced technologies in the volumes and timeframes that are required to meet customer demand. We are transitioning to key areal density recording technologies that use HAMR technology to increase HDD capacities. If our transitions to more advanced technologies, including the transition to HDDs utilizing HAMR technology, require development and production cycles that are longer than anticipated or if we otherwise fail to implement new HDD technologies successfully, we may lose sales and market share, which could significantly harm our financial results.

We cannot assure you that we will be among the leaders in time-to-market with new products or that we will be able to successfully qualify new products with our customers in the future. If our new products are not successful, our future results of operations may be adversely affected.

We operate in highly competitive markets and our failure to anticipate and respond to technological changes and other market developments, including price competition, could harm our ability to compete.

We face intense competition in the data storage industry. Our principal sources of competition include HDD and SSD manufacturers, and companies that provide storage subsystems, including electronic manufacturing services and contract electronic manufacturing.

The markets for our data storage products are characterized by technological change, which is driven in part by the adoption of new industry standards. These standards provide mechanisms to ensure technology component interoperability but they also hinder our ability to innovate or differentiate our products. When this occurs, our products may be deemed commodities, which could result in downward pressure on prices.

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We also experience competition from other companies that produce alternative storage technologies such as flash memory, where increasing capacity, decreasing cost, energy efficiency and improvements in performance have resulted in SSDs that offer increased competition with our lower capacity, smaller form factor HDDs and a declining trend in demand for HDDs in our legacy markets. Some customers for both mass capacity storage and legacy markets ~~hav~~ehave adopted SSDs as an alternative to hard drives in certain applications. Further adoption of SSDs or other alternative storage technologies may limit our total addressable HDD market, impact the competitiveness of our product portfolio and reduce our market share.

Any resulting increase in competition could have a material adverse effect on our business, financial condition and results of ~~operations~~.operations.

We ~~may be~~have been adversely affected by reduced, delayed, loss of or canceled purchases by, one or more of our key customers, including large hyperscale data center companies and ~~CSPs~~.CSPs.

Some of our key ~~customer~~scustomers such as OEM customers including large hyperscale data center companies and CSPs account for a large portion of our ~~reven~~uerevenue in our mass capacity markets. While we have long-standing relationships with many of our customers, if any key customers were to significantly reduce, defer or cancel their purchases from us or delay product acceptances, or we were prohibited from selling to those key customers such as due to export regulations, our results of operations would be adversely affected. Although sales to key customers may vary from period to period, a key customer that permanently discontinues or significantly reduces its relationship with us, or that we are prohibited from selling to, could be difficult to replace. In line with industry practice, new key customers usually require that we pass a lengthy and rigorous qualification process. Accordingly, it may be difficult or costly for us to attract new key ~~customers~~.customers. Additionally, our customers’ demand for our products may fluctuate due to factors beyond our control. If ~~one~~any of our key customers unexpectedly ~~reduces, delays~~reduce, delay or ~~cancels~~cancel orders, our revenues and results of operations may be materially adversely ~~affected~~affected.

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Furthermore, ifto the extent that there is consolidation among our customer base, or when supply exceeds demand in our industry, our customers may be able to command increased leverage in negotiating prices and other terms of sale, causing price erosion, which could adversely affect our profitability. Furthermore, if such customer pressures require us to reduce our pricing such that our gross margins are diminished, it might not be feasible to sell to a particular customer, which could result in a decrease in our revenue. Consolidation among our customer base may also lead to reduced demand for our products, replacement of our products by the combined entity with those of our competitors and cancellations of orders, each of which could adversely affect our results of operations. If a significant transaction or regulatory impact involving any of our key customers results in the loss of or reduction in purchases by these key customers, it could have a materially adverse effect on our business, results of operations and financial ~~condition~~.condition.

We are dependent on sales to distributors and retailers, which may increase price erosion and the volatility of our ~~sales~~.sales.

A substantial portion of our sales has been to distributors and retailers of disk drive products. Certain of our distributors and retailers may also market competing products. We face significant competition in this distribution channel as a result of limited product qualification programs and a focus on price, terms and product availability. Sales volumes through this channel are also less predictable and subject to greater volatility. In addition, deterioration in business and economic conditions ~~could exacerbate~~has exacerbated price erosion and volatility as distributors or retailers lower prices to compensate for lower demand and higher inventory levels. Our distributors’ and retailers’ ability to access credit to fund their operations may also affect their purchases of our products. If prices decline significantly in this distribution channel or our distributors or retailers reduce purchases of our products or if distributors or retailers experience financial difficulties or terminate their relationships with us, our revenues and results of operations would be adversely affected.

We must plan our investments in our products and incur costs before we have customer orders or know about the market conditions at the time the products are produced. If we fail to predict demand accurately for our products or if the markets for our products change, we may have insufficient demand or we may be unable to meet demand, which may materially adversely affect our financial condition and results of operations.

Our results of operation are highly dependent on strong cloud and enterprise and/or consumer spending and the resulting demand for our products. Reduced ~~or weak~~ demand, particularly from our key cloud and enterprise customers as a result of a significant change in macroeconomic conditions or other factors may result in a significant reduction or cancellation of their purchases from us which can and have materially adversely impacted our business and financial condition.

Our manufacturing process requires us to make significant product-specific investments in inventory for production at least three to six months in advance. As a result, we incur inventory and manufacturing costs in advance of anticipated sales that may never materialize or that may be substantially lower than expected. If actual demand for our products is lower than the forecast, we may also experience excess and obsolescence of inventory, higher inventory carrying costs, factory underutilization charges and manufacturing rework costs, which have resulted in and could result in adverse material effects on our financial condition and results of operations. For example, due to customer inventory adjustments, we have experienced a slowdown in demand for our products, particularly in the mass capacity markets. These reductions in demand have required us to significantly reduce manufacturing production plans and recognize factory underutilization charges. We expect these factors will continue to impact our business and results of operations over the near term.

Other factors that have affected and may continue to affect our ability to anticipate or meet the demand for our products and adversely affect our results of operations include:

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•competitive product announcements or technological advances that result in excess supply when customers cancel purchases in anticipation of newer products;

•variable demand resulting from unanticipated upward or downward pricing pressures;

•our ability to successfully qualify, manufacture and sell our data storage products;

•changes in our product mix, which may adversely affect our gross margins;

•key customers deferring or canceling purchases or delaying product acceptances, or unexpected increases in their orders;

•manufacturing delays or interruptions, particularly at our manufacturing facilities in China, Malaysia, Northern Ireland, Singapore, Thailand or the United States;

•limited access to components that we obtain from a single or a limited number of suppliers; and

•the impact of changes in foreign currency exchange rates on the cost of producing our products and the effective price of our products to non-U.S. customers.

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Changes in demand for computer systems, data storage subsystems and consumer electronic devices may in the future cause a decline in demand for our products.

Our products are ~~components~~incorporated in computers, data storage systems deployed in data centers and consumer electronic devices. Historically, the demand for these products has been volatile. Unexpected slowdowns in demand for computers, data storage subsystems or consumer electronic devices generally result in sharp declines in demand for our products. Declines in customer spending on the systems and devices that incorporate our products could have a material adverse effect on demand for our products and on our financial condition and results of operations. Uncertain global economic and business conditions can exacerbate, and have in the past exacerbated, these risks.

We are dependent on our long-term investments to manufacture adequate products. Our investment decisions in adding new ~~assembly and test~~manufacturing capacity require significant planning and lead-time, and a failure to accurately forecast demand for our products could cause us to over-invest or under-invest, which would lead to excess capacity, underutilization charges, or impairments.

Sales to the legacy markets remain an important part of our business. These markets, however, have been, and we expect them to continue to be, adversely affected by:

•announcements or introductions of major new operating systems or semiconductor improvements or shifts in customer preferences, performance requirements and behavior, such as the shift to tablet computers, smart phones, NAND flash memory or similar devices that meet customers’ cost and capacity metrics;

•longer product life cycles; and

•changes in macroeconomic conditions that cause customers to spend less, such as the imposition of new tariffs, increased laws and regulations, and increased unemployment levels.

~~We believe that the~~The deterioration of demand for disk drives in certain of the legacy markets has accelerated, and we believe this deterioration may continue orand may further accelerate, which has caused and could further cause our operating results to suffer.

In addition, we believe announcements regarding competitive product introductions from time to time have caused customers to defer or cancel their purchases, making certain inventory obsolete. Whenever an oversupply of products in the market causes our industry to have higher than anticipated inventory levels, we experience even more intense price competition from other manufacturers than usual, which may materially adversely affect our financial results.

We have a long and unpredictable sales cycle for nearline storage solutions, which impairs our ability to accurately predict our financial and operating results in any period and may adversely affect our ability to manage inventory and forecast the need for investments and ~~expenditures~~.expenditures.

Our nearline storage solutions are technically complex and we typically supply them in high quantities to a small number of customers. Many of our products are tailored to meet the specific requirements of individual customers and are often integrated by our customers into the systems and products that they sell.

Our sales cycle for nearline storage solutions could exceed one year and could be unpredictable, depending on the time required for developing, testing and evaluating our products before deployment; the size of deployment; and the complexity of system configuration necessary for development. Additionally, our nearline storage solutions are subject to variability of sales primarily due to the timing of IT spending or a reflection of cyclical demand from CSPs based on the timing of their procurement and deployment requirements and their ability to procure other components needed to build out data center infrastructure. Given the length of development and qualification programs and unpredictability of the sales cycle, we may be unable to accurately forecast product demand, which may result in excess inventory and associated inventory reserves or write-downs, which could harm our business, financial condition and results of operations.

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We experience seasonal declines in the sales of our consumer products during the second half of our fiscal year which may adversely affect our results of operations.

In certain end markets, sales of computers, storage subsystems and consumer electronic devices tend to be seasonal, and therefore, we expect to continue to experience seasonality in our business as we respond to variations in our customers’ demand for our products. In particular, ~~we anticipate that~~ sales of our consumer products ~~will continue to~~may be lower during the second half of our fiscal year. Retail sales of certain of our legacy markets solutions traditionally experience higher demand in the first half of our fiscal year driven by consumer spending in the back-to-school season from late summer to fall and the traditional holiday shopping season from fall to winter. We experience seasonal reductions in the second half of our fiscal year in the business activities of our customers during international holidays like Lunar New Year, as well as in the summer months (particularly in Europe), which typically result in lower sales during those periods. Since our working capital needs peak during periods in which we are increasing production in anticipation of orders that have not yet been received, our results of operations will fluctuate even if the forecasted demand for our products proves accurate. Failure to anticipate consumer demand for our branded solutions ~~as well as an inability to maintain effective working relationships with retail and online distributors~~ may also adversely impact our future results of ~~operations~~. operations. Furthermore, it is difficult for us to evaluate the degree to which this seasonality may affect our business in future periods because of the rate and unpredictability of product transitions and new product introductions, as well as macroeconomic conditions. In particular, during periods ~~where~~when there are rapidly changing macroeconomic conditions, historical seasonality trends may not be a good indicator to predict our future performance and results of operations.

We may not be successful in our efforts to grow our systems, SSD and Lyve revenues.

We have made and continue to make investments to grow our systems, SSD and Lyve platform revenues. Our ability to grow systems, SSD and Lyve revenues is subject to the following risks:

•we may be unable to accurately estimate and predict data center capacity and requirements;

•we may be unable to offer compelling solutions or services to enterprises, subscribers or consumers;

•we may be unable to obtain cost effective supply of NAND flash memory in order to offer competitive SSD solutions; and

•our cloud systems revenues generally have a longer sales cycle, and growth is likely to depend on relatively large orders from a concentrated customer ~~orders,~~base, which may increase the variability of our results of operations and the difficulty of matching revenues with expenses.

Our results of operations and share price may be adversely affected if we are not successful in our efforts to grow our revenues as anticipated. In addition, our growth in these markets may bring us into closer competition with some of our customers or potential customers, which may decrease their willingness to do business with us.

Our worldwide sales and manufacturing operations subject us to risks that may adversely affect our business related to disruptions in international markets, currency exchange fluctuations and increased ~~costs~~.costs.

We are a global company and have significant sales operations outside of the United States, including sales personnel and customer support operations. We also generate a significant portion of our revenue from sales outside the U.S. Disruptions in the economic, environmental, political, legal or regulatory landscape in the countries where we operate may have a material adverse impact on our manufacturing and sales operations. Disruptions in financial markets and the deterioration of global economic conditions have had and may continue to have an impact on our sales to customers and end-users.

Prices for our products are denominated predominantly in dollars, even when sold to customers that are located outside the ~~U.S.~~United States An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside of the ~~U.S.~~United States. where we sell in dollars. This could adversely impact our sales and market share in such areas or increase pressure on us to lower our ~~price,~~prices, and adversely impact our profit margins. In addition, we have revenue and expenses denominated in currencies other than the dollar, primarily the Thai Baht, Singaporean dollar, Chinese Renminbi and British Pound Sterling, which further exposes us to adverse movements in foreign currency exchange rates. A weakened dollar could increase the effective cost of our expenses such as payroll, utilities, tax and marketing expenses, as well as overseas capital expenditures. Any of these events could have a material adverse effect on our results of operations. We have attempted to manage the impact of foreign currency exchange rate changes by, among other things, entering into foreign currency forward exchange contracts from time to time, which could be designated as cash flow hedges or not designated as hedging instruments. Our hedging strategy may be ineffective, and specific hedges may expire and not be renewed or may not offset any or more than a portion of the adverse financial impact resulting from currency variations. The hedging activities may not cover our full exposure, subject us to certain counterparty credit risks and may impact our results of operations. See “Item 3.7A. Quantitative and Qualitative Disclosures About Market Risk— Foreign Currency Exchange Risk” of this report for additional information about our foreign currency exchange risk.

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The shipping and transportation costs associated with our international operations are typically higher than those associated with our U.S. operations, resulting in decreased operating margins in some countries. Volatility in fuel costs, political instability or constraints in or increases in the costs of air transportation may lead us to develop alternative shipment methods, which could disrupt our ability to receive raw materials, or ship finished product, and as a result our business and results of operations may be harmed.

~~The ongoing COVID-19 pandemic has impacted our business, operating results and financial condition~~, as well as the operations and financial performance of many of the customers and suppliers in industries that we serve. We are unable to predict the extent to which the pandemic and related effects will adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.

The COVID-19 pandemic has resulted in a widespread health crisis and numerous disease control measures being taken to limit its spread. The impact of the pandemic on our business has included or could in the future include:

•disruptions to or restrictions on our ability to ensure the continuous manufacture and supply of our products and services, including insufficiency of our existing inventory levels and temporary or permanent closures or reductions in operational capacity of our facilities or the facilities of our direct or indirect suppliers or customers, and any supply chain disruptions;

•~~temporary shortages of skilled employees available to staff manufacturing facilities due to stay at home orders and travel restrictions within as well as into and out of countries;~~

•~~increases in operational expenses and other costs related to requirements implemented to mitigate the impact of the COVID-19 pandemic;~~

•~~delays or limitations on the ability of our customers to perform or make timely payments;~~

•~~reductions in short- and long-term demand for our products, or other disruptions in technology buying patterns;~~

•adverse effects on economies and financial markets globally or in various markets throughout the world, potentially leading to a prolonged economic downturn or reductions in business and consumer spending, which may result in decreased net revenue, gross margins, or earnings and/or in increased expenses and difficulty in managing inventory levels;

•~~delays to and/or lengthening of our sales or development cycles or qualification activity;~~

•~~challenges for us, our direct and indirect suppliers and our customers in obtaining financing due to turmoil in financial markets;~~

•workforce disruptions due to illness, quarantines, governmental actions, other restrictions and/or the social distancing measures we have taken to mitigate the impact of the COVID-19 pandemic in an effort to protect the health and well-being of our employees, customers, suppliers and of the communities in which we operate;

•~~increased vulnerability to cyberattacks due to the significant number of employees working remotely; and~~

•~~our management team continuing to commit significant time, attention and resources to monitoring the COVID-19 pandemic and seeking to mitigate its effects on our business and workforce.~~

The COVID-19 pandemic has increased economic and demand uncertainty. It continues to negatively affect our business and there is uncertainty around its duration and impact. The extent to which the COVID-19 pandemic will continue to impact our business, financial condition and results of operations is uncertain.

There are many factors outside of our control, such as new strains of COVID-19 virus, the distribution and efficacy of the existing or new vaccines, the response and measures taken by government authorities around the world, and the response of the financial and consumer markets to the prolonged pandemic and governmental measures. These impacts, individually or in the aggregate, could have a material and adverse effect on our business, results of operations and financial condition. Such effect may be exacerbated in the event the pandemic and the measures taken in response to it, and their effects, persist for an extended period of time, or if there is a resurgence of the outbreak or variants thereof. Under any of these circumstances, the resumption of normal business operations may be delayed or hampered by lingering effects of the COVID-19 pandemic on our operations, direct and indirect suppliers, partners and customers. The COVID-19 pandemic may also heighten other risks described in this Risk Factors section.

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If we do not control our costs, we will not be able to compete effectively and ~~may suffer an adverse impact on~~ our financial condition. may be adversely impacted.

We continually seek to make our cost structure and business processes more efficient. We are focused on increasing workforce flexibility and scalability, and improving overall competitiveness by leveraging our global capabilities, as well as external talent and skills, worldwide. Our strategy involves, to a substantial degree, increasing revenue and exabytes volume while at the same time controlling expenses. Because of our vertical design and manufacturing strategy, our operations have higher costs that are fixed or difficult to reduce in the short-term, including our costs related to utilization of existing facilities and equipment. If we fail to forecast demand accurately or if there is a partial or complete reduction in long-term demand for our products, we could be required to write off inventory, record excess capacity charges, which could negatively impact our gross margin and our financial results. If we do not control our manufacturing and operating expenses, our ability to compete in the marketplace may be impaired. In the past, activities to reduce costs have included closures and transfers of facilities, significant personnel reductions, restructuring efforts, asset write-offs and efforts to increase automation. Our restructuring efforts may not yield the intended benefits and may be unsuccessful or disruptive to our business operations which may materially adversely affect our financial ~~results~~.results.

RISKS ASSOCIATED WITH SUPPLY AND MANUFACTURING

Shortages or delays in the receipt of, or cost increases in, critical components, equipment or raw materials necessary to manufacture our products, as well as reliance on single-source suppliers, may affect our production and development of products and may harm our operating results.

The cost, quality and availability of components, subassemblies, certain equipment and raw materials used to manufacture our products are critical to our success. Particularly important for our products are components such as read/write heads, substrates for recording media, ASICs, spindle motors, printed circuit boards, suspension assemblies and NAND flash memory. Certain rare earth elements are also critical in the manufacture of our products. In addition, the equipment we use to manufacture our products and components is frequently custom made and comes from a few suppliers and the lead times required to obtain manufacturing equipment can be significant. Our efforts to control our costs, including capital expenditures, may also affect our ability to obtain or maintain such inputs and equipment, which could affect our ability to meet future demand for our products.

We rely on sole or a limited number of direct and indirect suppliers for some or all of these components and rare earth elements that we do not manufacture, including substrates for recording media, read/write heads, ASICs, spindle motors, printed circuit boards, suspension assemblies and NAND flash memory. Our options in supplier selection in these cases are limited and the supplier-based technology has been and may continue to be single sourced until wider adoption of the technology occurs and any necessary licenses become available. In light of this small, consolidated supplier base, if our suppliers increased their prices as a result of inflationary pressures from the current macroeconomic conditions or other changes in economic conditions, and we could not pass these price increases to our customers, our operating margin would decline. Also, many of such direct and indirect component suppliers are geographically concentrated, making our supply chain more vulnerable to regional disruptions such as severe weather, the occurrence of local or global health issues or pandemics, acts of terrorism, war and an unpredictable geopolitical climate, which may have a material impact on the production, availability and transportation of many components. We also often aim to lead the market in new technology deployments and leverage unique and customized technology from single source suppliers who are early adopters in the emerging market. If there are any technical issues in the supplier’s technology, it may also cause us to delay shipments of our new technology deployments, incur scrap, rework or warranty charges and harm our financial position.

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We have experienced and ~~continuing to~~could in the future experience increased costs and production delays when we were unable to obtain the necessary equipment or sufficient quantities of some components, and/or have been forced to pay higher prices or make volume purchase commitments or advance deposits for some components, equipment or raw materials that were in short supply in the industry in general. If our direct and indirect vendors for these components are unable to meet our cost, quality, supply and transportation requirements or fulfill their contractual commitments and obligations, we may have to reengineer some products, which would likely cause production and shipment delays, make the reengineered products more costly and provide us with a lower rate of return on these products. Further, if we have to allocate the components we receive to certain of our products and ship less of others due to shortages or delays in critical components, we may lose sales to customers who could purchase more of their required products from our competitor that either did not experience these shortages or delays or that made different allocations, and thus our revenue and operating margin would decline.

We cannot assure you that we will be able to obtain critical components in a timely and economic manner. In addition, from time to time, some of our suppliers’ manufacturing facilities are fully utilized. If they fail to invest in additional capacity or deliver components in the required timeframe, such failure would have an impact on our ability to ramp new products, and may result in a loss of revenue or market share if our competitors did not utilize the same components and were not ~~affected~~.affected. Further, if our customers experience shortages of components or materials used in their products it could result in a decrease in demand for our products and have an adverse effect on our results of operations.

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We have cancelled purchase commitments with suppliers and incurred cost associated with such cancellations, and if revenues fall or customer demand decreases significantly, we may not meet our purchase commitments to certain suppliers in the future, which could result in penalties, increased manufacturing costs or excess inventory.

From time to time, we enter into long-term, non-cancelable purchase commitments or make large up-front investments with certain suppliers in order to secure certain components or technologies for the production of our products or to supplement our internal manufacturing capacity for certain components. In the ~~December 2022~~September 2023 quarter, we cancelled purchase commitments with certain suppliers due to a change in forecasted demand and incurred fees associated with such cancellation. If our actual revenues in the future are lower than our projections or if customer demand decreases significantly below our projections, we may not meet our purchase commitments with suppliers. As a result, it is possible that our revenues will not be sufficient to recoup our up-front investments, in which case we will have to shift output from our internal manufacturing facilities to these suppliers, resulting in higher internal manufacturing costs, or make penalty-type payments under the terms of these contracts. Additionally, because our markets are volatile, competitive and subject to rapid technology and price changes, we face inventory and other asset risks in the event we do not fully utilize purchase commitments. If we cancel purchase commitments, are unable to fully utilize our purchase commitments or if we shift output from our internal manufacturing facilities in order to meet the commitments, our gross margin and operating margin could be materially adversely impacted.

Due to the complexity of our products, some defects may only become detectable after ~~deployment~~.deployment.

Our products are highly complex and are designed to operate in and form part of larger complex networks and storage systems. Our products may contain a defect or be perceived as containing a defect by our customers as a result of improper use or maintenance. Lead times required to manufacture certain components are significant, and a quality excursion may take significant time and resources to remediate. Defects in our products, third-party components or in the networks and systems of which they form a part, directly or indirectly, have resulted in and may in the future result in:in:

•increased costs and product delays until complex solution level interoperability issues are resolved;

•costs associated with the remediation of any problems attributable to our products;

•loss of or delays in revenues;

•loss of customers;

•failure to achieve market acceptance and loss of market share;

•increased service and warranty costs; and

•increased insurance costs.

Defects in our products could also result in legal actions by our customers for breach of warranty, property damage, injury or death. Such legal actions, including but not limited to product liability claims could exceed the level of insurance coverage that we have obtained. Any significant uninsured claims could significantly harm our financial ~~condition~~condition.

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RISKS RELATED TO HUMAN CAPITAL AND CORPORATE RESPONSIBILITY

The loss of or inability to attract, retain and motivate key executive officers and employees could negatively impact our business ~~prospects~~.prospects.

Our future performance depends to a significant degree upon the continued service of key members of management as well as marketing, sales and product development personnel. We believe our future success will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing, sales and product development personnel. We have experienced intense competition for qualified and capable personnel, including in the ~~U.S.,~~United States, Thailand, China, Singapore and Northern Ireland, and we cannot assure you that we will be able to retain our key employees or that we will be successful in attracting, assimilating and retaining personnel in the future. Additionally, because a portion of our key personnel’s compensation is contingent upon the performance of our business, including through cash bonuses and equity compensation, when the market price of our ordinary shares fluctuates or our results of operations or financial condition are negatively impacted, we may be at a competitive disadvantage for retaining and hiring employees. The reductions in workforce that result from our historical restructurings have also made and may continue to make it difficult for us to recruit and retain personnel. Increased difficulty in accessing, recruiting or retaining personnel may lead to increased manufacturing and employment compensation costs, which could adversely affect our results of operations. The loss of one or more of our key personnel or the inability to hire and retain key personnel could have a material adverse effect on our business, results of operations and financial condition.

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We are subject to risks related to corporate and social responsibility that could adversely affect our reputation and ~~reputation.~~performance.

Many factors influence our reputation including the perception held by our customers, suppliers, partners, shareholders, other key stakeholders and the communities in which we operate. Our key customers’ satisfaction with the volume, quality and timeliness of our products is a material element of our market reputation, and any damage to our key customer relationships could materially adversely affect our reputation. We face increasing scrutiny related to environmental, social and governance activities. We risk damage to our reputation if we fail to act responsibly in a number of areas, such as diversity and inclusion, environmental stewardship, sustainability, supply chain management, climate change, workplace conduct and human rights. The increasing concern over climate change could also result in shifting customer preferences and regulations. Changing customer preferences may result in increased demands or requirements regarding our solutions, products and services, including the use of packaging materials, chemicals and other components in our products. These demands may cause us to incur additional costs or make other changes to our operations, which could adversely affect our financial results. If we fail to manage these requirements in an effective manner, customer demand for our solutions, products, and services could diminish, and our profitability could suffer.

Further, despite our policies to the contrary, ~~we may not be able to control the conduct of every individual actor, and~~ our employees and personnel may violate environmental, social or governance standards or engage in other unethical conduct. These acts, or any accusation of such conduct, even if proven to be false, could adversely impact the reputation of our business. Any harm to our reputation could impact employee engagement and retention, our corporate culture and the willingness of customers, suppliers and partners to do business with us, which could have a material adverse effect on our business, results of operations and cash flows.

RISKS RELATED TO FINANCIAL PERFORMANCE OR GENERAL ECONOMIC CONDITIONS

Changes in the macroeconomic environment have impacted and may in the future negatively impact our results of operations.

Changes ~~especially when there are rapid changes,~~ in macroeconomic conditions may affect consumer and enterprise spending, and as a result, our customers may postpone or cancel spending in response to volatility in credit and equity markets, negative financial news and/or declines in income or asset values, all of which may have a material adverse effect on the demand for our products and/or result in significant ~~decreases~~changes in our product prices. Other factors that could have a material adverse effect on demand for our products and on our financial condition and results of operations include inflation, slower growth or recession, conditions in the labor market, healthcare costs, access to credit, consumer confidence and other macroeconomic factors affecting consumer and business spending behavior. These changes could happen rapidly and we may not be able to react quickly to prevent or limit our losses or exposures.

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Macroeconomic developments such as ~~slowing global economies, trade disputes, sanctions, increased tariffs between the U.S. and China, Mexico and other countries, the withdrawal of the United Kingdom (“U.K.”) from the EU, or~~ adverse economic conditions worldwide ~~resulting from the COVID-19 pandemic and efforts of governments and private industry to slow the pandemic~~ or efforts of governments to stimulate or stabilize the economy, international conflicts, trade disputes, sanctions, increased tariffs between the United States and China, Mexico and other countries and the withdrawal of the United Kingdom from the EU, have and may continue to adversely impact our business. Significant inflation and related increases in interest rates, have negatively affected our business in recent quarters and could continue in the near future to negatively affect our business, operating results or financial condition or the markets in which we operate, which, in turn, could adversely affect the price of our ordinary shares. A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending could cause current or potential customers to reduce their information technology (“IT”) budgets or be unable to fund data storage products, which could cause customers to delay, decrease or cancel purchases of our products or cause customers to not pay us or to delay paying us for previously purchased products and services.

We may not be able to generate sufficient cash flows from operations and our investments to meet our liquidity requirements, including servicing our indebtedness. and continuing to declare our quarterly dividend.

We are leveraged and require significant amounts of cash to service our debt. Our business may not generate sufficient cash flows to enable us to meet our liquidity requirements, including working capital, capital expenditures, product development efforts, investments, servicing our indebtedness and other general corporate requirements. If Our high level of debt presents the following risks:

•we ~~cannot~~are required to use a substantial portion of our cash flows from operations to service our debt, which reduces the availability of our cash flows to fund ~~our liquidity requirements, we may have to reduce or delay~~working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate ~~expenditures~~requirements;

•our substantial leverage increases our vulnerability to economic downturns, decreases the availability of capital and ~~capital allocation. We cannot assure you that any of these remedies would, if necessary, be effected on commercially reasonable terms, or at all, or that they would permit~~may subject us to ~~meet~~a competitive disadvantage vis-à-vis those of our competitors that are less leveraged;

•our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and our industry, and could limit our ability to borrow additional funds on satisfactory terms for operations or capital to implement our business strategies; and

•covenants in our debt agreements, including our Tenth Amendment, limit, among other things, our ability to pay future dividends or make other restricted payments and investments, which ~~would affect~~could restrict our ~~results of operations.~~ ability to execute on our business strategy or react to the economic environment.

In addition, our ability to service our debt obligations and comply with debt covenants depends on our financial performance. If we fail to meet our debt service obligations or fail to comply with debt covenants, or are unable to modify, obtain a waiver, or cure a debt covenant on terms acceptable to us or at all, we could be in default of our debt agreements and instruments. Such a default could result in an acceleration of ~~other debt~~our indebtedness, including via cross-defaults, and may require us to change capital allocation or engage in distressed debt transactions on terms unfavorable to us, which could have a material negative impact on our financial performance, stock market price and operations.

~~We are leveraged and require significant amounts~~In the event the conditional exchange feature of our 2028 Notes is triggered, holders of such notes will be entitled to exchange their notes at any time during specified periods at their option. Pursuant to the terms of the indenture governing the 2028 Notes, if one or more holders elect to exchange their notes, we would be required to settle the principal portion of our exchange obligation in cash, ordinary shares of the Company or a combination of cash ~~to service~~and ordinary shares of the Company, at our ~~debt. Our debt and debt service requirements~~ election, in respect of any remainder of the exchange obligation in excess of such principal amount. Such cash payment obligations could adversely affect our ~~ability~~liquidity. In addition, even if holders of the 2028 Notes do not elect to ~~operate our business and may reduce our options for capital allocation. Our high level of debt presents the following risks:~~

•convert their notes, we ~~are~~could be required under applicable accounting rules to ~~use~~reclassify all or a ~~substantial~~ portion of ~~our cash flow from operations to pay~~the outstanding principal ~~and interest on our debt, thereby reducing the availability~~of such notes as a current rather than long-term liability, which would result in a material reduction of our ~~cash flow to fund~~net working ~~capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances and other general corporate requirements;~~capital.

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•our substantial leverage increases our vulnerability to economic downturns, decreases availability of capital and may subject us to a competitive disadvantage vis-à-vis our competitors that are less leveraged;

•covenants in our debt instruments limit our ability to pay future dividends or make other restricted payments and investments, which could restrict our ability to execute on our business strategy or react to the economic environment.

In ~~addition, in~~ the event that we need to refinance all or a portion of our outstanding debt as it matures or incur additional debt to fund our operations, we may not be able to ~~obtain terms as favorable as the terms of our existing debt or~~ refinance our existing debt or incur additional debt to fund our operations on terms acceptable to us or at all. If prevailing interest rates or other factors result in higher interest rates upon refinancing, then the interest expense relating to ~~the refinanced~~our debt would increase. Furthermore, if any rating agency changes our credit rating or outlook, our debt and equity securities could be negatively affected, which could adversely affect our ability to refinance existing debt or raise additional capital and increase the interest costs under our existing credit agreement.

Our quarterly results of operations fluctuate, sometimes significantly, from period to period, and may cause our share price to decline.

Our quarterly revenue and results of operations fluctuate, sometimes significantly, from period to period. These fluctuations, which we expect to continue, have been and may continue to be precipitated by a variety of factors, including:

•.uncertainty in global economic and political conditions, and instability or war or adverse changes in the level of economic activity in the major regions in which we do business;

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•competitive pressures resulting in lower prices by our competitors which may shift demand away from our products;

•announcements of new products, services or technological innovations by us or our competitors, and delays or problems in our introduction of new, more cost-effective products, the inability to achieve high production yields or delays in customer qualification or initial product quality issues;

•changes in customer demand or the purchasing patterns or behavior of our customers;

•application of new or revised industry standards;

•disruptions in our supply chain, including increased costs or adverse changes in availability of supplies of raw materials or components;

•increased costs of electricity and/or other energy sources, freight and logistics costs or other materials or services necessary for the operation of our business;

•pandemics or other global health issues that impact our operations as well as those of our customers and suppliers;

•the impact of corporate restructuring activities that we have and may continue to engage in;

•changes in the demand for the computer systems and data storage products that contain our products;

•unfavorable supply and demand imbalances;

•our high proportion of fixed costs, including manufacturing and research and development expenses;

•any impairments in goodwill or other long-lived assets;

•changes in tax laws, such as global tax developments applicable to multinational businesses; the impact of trade barriers, such as import/export duties and restrictions, sanctions, tariffs and quotas, imposed by the United States or other countries in which the Company conducts business;

•the evolving legal and regulatory, economic, environmental and administrative climate in the international markets where the Company operates; and

•adverse changes in the performance of our products.

As a result, we believe that quarter-to-quarter and year-over-year comparisons of our revenue and results of operations may not be meaningful, and that these comparisons may not be an accurate indicator of our future performance. Our results of operations in one or more future quarters may fail to meet the expectations of investment research analysts or investors, which could cause an immediate and significant decline in our market value.

Any cost reduction initiatives that we undertake may not deliver the results we expect and these actions may adversely affect our business.

From time to time, we engage in restructuring plans that have resulted and may continue to result in workforce reduction and consolidation of our real estate facilities and our manufacturing footprint. In addition, management will continue to evaluate our global footprint and cost structure, and additional restructuring plans are expected to be formalized. As a result of our restructurings, we have experienced and may in the future experience a loss of continuity, loss of accumulated knowledge, disruptions to our operations and inefficiency during transitional periods. Any cost-cutting measures could impact employee retention. In addition, we cannot be sure that any future cost reductions or global footprint consolidations will deliver the results we expect, be successful in reducing our overall expenses as we expect or that additional costs will not offset any such reductions or global footprint consolidation. If our operating costs are higher than we expect or if we do not maintain adequate control of our costs and expenses, our results of operations may be adversely affected.

The effect of geopolitical uncertainties, war, terrorism, natural disasters, public health issues and other circumstances, on national and/or international commerce and on the global economy, could materially adversely affect our results of operations and financial condition.

Geopolitical uncertainty, terrorism, instability or war, such as the military action against Ukraine launched by Russia and the latest developments in the conflict between Israel and Palestine, natural disasters, public health issues and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on our business, our direct and indirect suppliers, logistics providers, manufacturing vendors and customers. Our business operations are subject to interruption by natural disasters such as floods and earthquakes, fires, power or water shortages, terrorist attacks, other hostile acts, labor disputes, public health issues and related mitigation actions, and other events beyond our control. Such events may decrease demand for our products, make it difficult or impossible for us to make and deliver products to our customers or to receive components from our direct and indirect suppliers, and create delays and inefficiencies in our supply chain.

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A significant natural disaster, such as an earthquake, fire, flood, or significant power outage could have an adverse impact on our business, results of operations, and financial condition. The impact of climate change may increase these risks due to changes in weather patterns, such as increases in storm intensity, sea-level rise and temperature extremes in areas where we or our suppliers and customers conduct business. We have a number of our employees and executive officers located in the San Francisco Bay Area, a region known for seismic activity, wildfires and drought conditions, and in Asia, near major earthquake faults known for seismic activity. To mitigate wildfire risk, electric utilities are deploying public safety power shutoffs, which affects electricity reliability to our facilities and our communities. Many of our suppliers and customers are also located in areas with risks of natural disasters. In the event of a natural disaster, losses and significant recovery time could be required to resume operations and our financial condition and results of operations could be materially adversely affected.

We are subject to counterparty default risks.

We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash and investment deposits, and foreign currency forward exchange contracts and other derivative instruments. As a result, we are subject to the risk that the counterparty to one or more of these arrangements will, voluntarily or involuntarily, default on its performance obligations. In times of market distress in particular, a counterparty may not comply with its contractual commitments that could then lead to it defaulting on its obligations with little or no notice to us, thereby limiting our ability to take action to lessen or cover our exposure. Additionally, our ability to mitigate our counterparty exposures could be limited by the terms of the relevant agreements or because market conditions prevent us from taking effective action. If one of our counterparties becomes insolvent or files for bankruptcy, our ability to recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of the counterparty or the applicable laws governing the bankruptcy proceedings. In the event of any such counterparty default, we could incur significant losses, which could have a material adverse effect on our business, results of operations, or financial condition.

Further, our customers could have reduced access to working capital due to global economic conditions, higher interest rates, reduced bank lending resulting from contractions in the money supply or the deterioration in the customer’s, or their bank’s financial condition or the inability to access other financing, which would increase our credit and non-payment risk, and could result in an increase in our operating costs or a reduction in our revenue. Also, our customers outside of the United States are sometimes allowed longer time periods for payment than our U.S. customers. This increases the risk of nonpayment due to the possibility that the financial condition of particular customers may worsen during the course of the payment period. In addition, some of our OEM customers have adopted a subcontractor model that requires us to contract directly with companies, such as original design manufacturers, that provide manufacturing and fulfillment services to our OEM customers. Because these subcontractors are generally not as well capitalized as our direct OEM customers, this subcontractor model exposes us to increased credit risks. Our agreements with our OEM customers may not permit us to increase our product prices to alleviate this increased credit risk.

~~Our quarterly results of operations fluctuate, sometimes significantly, from period to period, and may cause our share price to decline~~.

•~~uncertainty in global economic and political conditions, and instability or war or adverse changes in the level of economic activity in the major regions in which we do business;~~

•~~pandemics, such as COVID-19, or other global health issues that impact our operations as well as those of our customers and suppliers;~~

•~~competitive pressures resulting in lower prices by our competitors which may shift demand away from our products;~~

•~~changes in customer demand or the purchasing patterns or behavior of our customers;~~

•~~application of new or revised industry standards;~~

•~~disruptions in our supply chain, including increased costs or adverse changes in availability of supplies of raw materials or components;~~

•~~increased costs of electricity and/or other energy sources, freight and logistics costs or other materials or services necessary for the operation of our business;~~

•~~the impact of corporate restructuring activities that we have and may continue to engage in;~~

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•~~changes in the demand for the computer systems and data storage products that contain our products;~~

•~~unfavorable supply and demand imbalances;~~

•~~our high proportion of fixed costs, including manufacturing and research and development expenses;~~

•~~any impairments in goodwill or other long-lived assets;~~

•changes in tax laws, such as global tax developments applicable to multinational businesses; the impact of trade barriers, such as import/export duties and restrictions, sanctions, tariffs and quotas, imposed by the U.S. or other countries in which the Company conducts business;

•~~the evolving legal and regulatory, economic, environmental and administrative climate in the international markets where the Company operates; and~~

•~~adverse changes in the performance of our products.~~

~~Any cost reduction initiatives that we undertake may not deliver the results we expect and these actions may adversely affect our business~~.

Geopolitical uncertainty, terrorism, instability or war, such as the military action against Ukraine launched by Russia, natural disasters, public health issues and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on our business, our direct and indirect suppliers, logistics providers, manufacturing vendors and customers. Our business operations are subject to interruption by natural disasters such as floods and earthquakes, fires, power or water shortages, terrorist attacks, other hostile acts, labor disputes, public health issues (such as the COVID-19 pandemic) and related mitigation actions, and other events beyond our control. Such events may decrease demand for our products, make it difficult or impossible for us to make and deliver products to our customers or to receive components from our direct and indirect suppliers, and create delays and inefficiencies in our supply chain.

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Should major public health issues, including pandemics, arise, we could be negatively affected by stringent employee travel restrictions, additional limitations or cost increases in freight and other logistical services, governmental actions limiting the movement of products or employees between regions, increases in or changes to data collection and reporting obligations, delays in production ramps of new products, and disruptions in our operations and those of some of our key direct and indirect suppliers and customers. For example, the COVID-19 pandemic resulted in government-imposed travel restrictions, border closures, stay-at-home orders, facility closures or operating constraints in a number of our global locations, disruptions in our operations and those of our suppliers, partners, and customers, increases in air freight rates, limited numbers of employees available to staff manufacturing operations, and shortages of supplies of personal protective equipment required for our manufacturing operations. If any of these circumstances continue for an additional extended period of time, our manufacturing ability and capacity, or those of our key direct and indirect suppliers or customers, could be impacted, and our results of operations and financial condition could be adversely affected.

LEGAL, REGULATORY AND COMPLIANCE RISKS

Our business is subject to various laws, regulations, governmental policies, litigation, governmental investigations or governmental proceedings that may cause us to incur significant expense or adversely impact our results orof operations and financial ~~condition~~.condition.

Our business is subject to regulation under a wide variety of U.S. federal and state and non-U.S. laws, regulations and policies. Laws, regulations and policies may change in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. In particular, potential uncertainty of changes to global tax laws, including global initiatives put forth by the Organization for Economic Co-operation and Development (“OECD”) and tax laws in any jurisdiction in which we operate have had and may continue to have an effect on our business, corporate structure, operations, sales, liquidity, capital requirements, effective tax rate, results of operations, and financial performance. The member states of the European Union agreed to implement the OECD’s Pillar Two framework, which imposes a global corporate minimum tax rate of 15%. Other countries may also adopt the Pillar Two framework. These changes may materially increase the level of income tax on our U.S. and non-U.S. jurisdictions. Jurisdictions such as China, Malaysia, Northern Ireland, Singapore, Thailand and the U.S., in which we have significant operating assets, and the European Union each have exercised and continue to exercise significant influence over many aspects of their domestic economies including, but not limited to, fair competition, tax practices, anti-corruption, anti-trust, data privacy, protection, security and sovereignty, price controls and international trade, which have had and may continue to have an adverse effect on our business operations and financial condition.

Our business, particularly our Lyve products and related services, is subject to state, federal, and international laws and regulations relating to data privacy, data protection and data ~~security. Changes~~security, including security breach notification, data retention, transfer and localization. Laws and regulations relating to these matters evolve frequently and their scope may change through new legislation, amendments to existing legislation and changes in interpretation or enforcement and may impose conflicting and inconsistent obligations. Any such changes, and any changes to our products or services or ~~the~~ manner in which our customers utilize ~~our products or services~~them may result in new or enhanced costly compliance requirements and governmental or regulatory ~~scrutiny. Additionally,~~scrutiny, may limit our ~~business is subject~~ability to ~~state, federal,~~operate in certain jurisdictions or to engage in certain data processing activities, and ~~international laws and regulations that subject~~may require us to ~~requirements~~modify our practices and policies, potentially in a material manner, which we may be unable to ~~notify vendors, customers,~~do in a timely or ~~employees of a data security breach.~~commercially reasonable manner or at all.

Further, the sale and manufacturing of products in certain states and countries has and may continue to subject us and our suppliers to state, federal and international laws and regulations governing protection of the environment, including those governing climate change, discharges of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the cleanup of contaminated sites, restrictions on the presence of certain substances in electronic products and the responsibility for environmentally safe disposal or recycling. If additional or more stringent requirements are imposed on us and our suppliers in the future, we could incur additional operating costs and capital expenditures. If we fail to comply with applicable environmental laws, regulations, initiatives, or standards of conduct, our customers may refuse to purchase our products and we could be subject to fines, penalties and possible prohibition of sales of our products into one or more states or countries, liability to our customers and damage to our reputation, which could result in a material adverse effect on our financial condition or results of operations.

As the laws and regulations to which we are subject to continue to change and vary greatly from jurisdiction to jurisdiction, compliance with such laws and regulations may be onerous, may create uncertainty as to how they will be applied and interpreted, and may continue to increase our cost of doing business globally.

From time to time, we have been and may continue to be involved in various legal, regulatory or administrative investigations, inquiries, negotiations or proceedings arising in the normal course of business. Litigation and government investigations or ~~governmental~~other proceedings are subject to inherent risks and uncertainties that may cause an outcome to differ materially from our expectations and may result in us being required to pay substantial damages, fines or penalties and cease certain practices or activities, and may harm our reputation and market position, all of which could materially harm our ~~business.~~business, results of operations and financial conditions. The costs associated with litigation and government ~~investigations~~proceedings can also be unpredictable depending on the complexity and length of time devoted to such litigation or ~~investigation.~~proceeding. Litigation and governmental investigations or ~~government~~other proceedings may also divert the efforts and attention of our key personnel, which could also harm our business.

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In addition, regulation or government scrutiny may impact the requirements for marketing our products and slow our ability to introduce new products, resulting in an adverse impact on our business. Although we have implemented policies and procedures designed to ensure compliance, there can be no assurance that our employees, contractors or agents will not violate these or other applicable laws, rules and regulations to which we are and may be subject. ~~Violations~~Actual or perceived violations of these laws and regulations could lead to significant penalties, restraints on our export or import privileges, monetary fines, government investigations, disruption of our operating activities, damage to our reputation and corporate brand, criminal proceedings and regulatory or other actions that could materially adversely affect our results of operations. The political and media scrutiny surrounding a governmental investigation for the violation of such laws, even if an investigation does not result in a finding of violation, could cause us significant expense and collateral consequences, including reputational harm, that could have an adverse impact on our business, results of operations and financial condition.

Some of our products and services are subject to export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered, and any changes to or violation of these laws could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Due to the global nature of our business, we are subject to import and export restrictions and regulations, including the ~~EAR~~Export Administration Regulations (“EAR”) administered by ~~the~~ BIS and the trade and economic sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”). We incorporate encryption technology into certain of our products and solutions. These encryption products and the underlying technology may be exported outside of the United States only with export authorizations, including by license, a license exception or other appropriate government authorizations, including the filing of an encryption registration. The ~~U.S.,~~United States, through the BIS and OFAC, places restrictions on the sale or export of certain products and services to certain countries, persons and entities, as well as for certain end-uses, such as military, military-intelligence and weapons of mass destruction end-uses. The U.S. government also imposes sanctions through executive orders restricting U.S. companies from conducting business activities with specified individuals and companies. Although we have controls and procedures to ensure compliance with all applicable regulations and orders, we cannot predict whether changes in laws or regulations by the ~~U.S.,~~United States, China or another jurisdiction will affect our ability to sell our products and services to existing or new customers. Additionally, we cannot ensure that our interpretation of relevant restrictions and regulations will be accepted in all cases by relevant regulatory and enforcement authorities. On April 18, 2023, we entered into ~~the~~a Settlement Agreement with BIS (the “Settlement Agreement”) that resolves BIS’ allegations regarding our sales of hard disk drives to Huawei. We have also agreed to complete three audits of our compliance with the license requirements of Section 734.9 of the EAR. The Settlement Agreement also includes a denial order that is suspended and will be waived five years after the date of the order issued under the Settlement Agreement, provided that we have made full and timely payments under the Settlement Agreement and timely completed the audit requirements. ~~Our failure~~Despite our best efforts to comply with the terms of the Settlement Agreement, failure to do so could result in significant penalties, including the loss of the suspension of the denial order which would prohibit us from exporting our products subject to the EAR outside of the United States, and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Violators of any U.S. export control and sanctions laws may be subject to significant penalties, which may include monetary fines, criminal proceedings against them and their officers and employees, a denial of export privileges, and suspension or debarment from selling products to the U.S. government. Moreover, the sanctions imposed by the U.S. government could be expanded in the future. Our products could be shipped to restricted end-users or for restricted end-uses by third parties, including potentially our channel partners, despite our precautions. In addition, if our partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties. A significant portion of our sales are to customers in Asia Pacific and in other geographies that have been the recent focus of changes in U.S. export control policies. Any further limitation that impedes our ability to export or sell our products and services could materially adversely affect our business, results of operations, financial condition and cash flows.

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Other countries also regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to sell or distribute our products and services or could limit our partners’ or customers’ ability to sell or use our products and services in those countries, which could materially adversely affect our business, results of operations, financial condition and cash flows. Violations of these regulations may result in significant penalties and fines. InFor example, in our Settlement Agreement with BIS, we agreed to pay a penalty of $300 million over a period of five years to resolve BIS’ allegations. Changes in our products and services or future changes in export and import regulations may create delays in the introduction of our products and services in those countries, prevent our customers from deploying our products and services globally or, in some cases, prevent the export or import or sale of our products and services to certain countries, governments or persons altogether. From time to time, various governmental agencies have proposed additional regulation of encryption technology, including the escrow and government recovery of private encryption keys. Any change in export or import regulations, economic sanctions or related legislation, increased export and import controls, or change in the countries, governments, persons or technologies targeted by such regulations, in the countries where we operate could result in decreased use of our products and services by, or in our decreased ability to export or sell our products and services to, new or existing customers, which could materially adversely affect our business, results of operations, financial condition and cash flows.

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If we were ever found to have violated applicable export control laws, we may be subject to penalties which could have a material and adverse impact on our business, results of operations, financial condition and cash flows. Even if we were not found to have violated such laws, the political and media scrutiny surrounding any governmental investigation of us could cause us significant expense and reputational harm. Such collateral consequences could have a material adverse impact on our business, results of operations, financial condition and cash flows.

Changes in U.S. trade policy, including the imposition of sanctions or tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

We face uncertainty with regard to U.S. government trade policy. Current U.S. government trade policy includes tariffs on certain non-U.S. goods, including information and communication technology products. These measures may materially increase costs for goods imported into the United States. This in turn could require us to materially increase prices to our customers which may reduce demand, or, if we are unable to increase prices to adequately address any tariffs, quotas or duties, could lower our margin on products sold and negatively impact our financial performance. Changes in U.S. trade policy have resulted in, and could result in more, U.S. trading partners adopting responsive trade policies, including imposition of increased tariffs, quotas or duties. Such policies could make it more difficult or costly for us to export our products to those countries, therefore negatively impacting our financial performance.

RISKS RELATED TO INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

We may be unable to protect our intellectual property rights, which could adversely affect our business, financial condition and results of ~~operations~~.operations.

We rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements, security measures and licensing arrangements to protect our intellectual property rights. In the past, we have been involved in significant and expensive disputes regarding our intellectual property rights and those of others, including claims that we may be infringing patents, trademarks and other intellectual property rights of third parties. We expect that we will be involved in similar disputes in the future.

There can be no assurance that:

•any of our existing patents will continue to be held valid, if challenged;

•patents will be issued for any of our pending applications;

•any claims allowed from existing or pending patents will have sufficient scope or strength to protect us;

•our patents will be issued in the primary countries where our products are sold in order to protect our rights and potential commercial advantage;

•we will be able to protect our trade secrets and other proprietary information through confidentiality agreements with our customers, suppliers and employees and through other security measures; and

•others will not gain access to our trade secrets.

In addition, our competitors may be able to design their products around our patents and other proprietary rights. Enforcement of our rights often requires litigation. If we bring a patent infringement action and are not successful, our competitors would be able to use similar technology to compete with us. Moreover, the defendant in such an action may successfully countersue us for infringement of their patents or assert a counterclaim that our patents are invalid or unenforceable.

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Furthermore, we have significant operations and sales in countries where intellectual property laws and enforcement policies are often less developed, less stringent or more difficult to enforce than in the United States. Therefore, we cannot be certain that we will be able to protect our intellectual property rights in jurisdictions outside the United States.

We are at times subject to intellectual property proceedings and claims which could cause us to incur significant additional costs or prevent us from selling our products, and which could adversely affect our results of operations and financial ~~condition~~.condition.

We are subject from time-to-time to legal proceedings and claims, including claims of alleged infringement of the patents, trademarks and other intellectual property rights of third parties by us, or our customers, in connection with the make, use, sale, or offer for sale of our products. Intellectual property litigation can be expensive and time-consuming, regardless of the merits of any claim, and could divert our management’s attention from operating our business. In addition, intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, which may cause actual results to differ materially from our expectations. Some of the actions that we face from time-to-time seek injunctions against the sale of our products and/or substantial monetary damages, which, if granted or awarded, could materially harm our business, financial condition and operating results.

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We cannot be certain that our products do not and will not infringe issued patents or other intellectual property rights of others. We may not be aware of currently filed patent applications that relate to our products or technology. If patents are later issued on these applications, we may be liable for infringement. If our products were found to infringe the intellectual property rights of others, we could be required to pay substantial damages, cease the manufacture, use and sale of infringing products in one or more geographic locations, expend significant resources to develop non-infringing technology, discontinue the use of specific processes or obtain licenses to the technology infringed. We might not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to reengineer our products successfully to avoid infringement. Any of the foregoing could cause us to incur significant costs and prevent us from selling our products, which could adversely affect our results of operations and financial condition. See “Item 1. Financial Statements—Note 12. Legal, Environmental and Other Contingencies” contained in this report for a description of pending intellectual property proceedings.

Our business and certain products and services depend in part on IPintellectual property and technology licensed from third parties, as well as data centers and infrastructure operated by third parties.

Some of our business and some of our products rely on or include software licensed from third parties, including open source licenses. We may not be able to obtain or continue to obtain licenses from these third parties at all or on reasonable terms, or such third parties may demand cross-licenses to our intellectual property. Third-party components and technology may become obsolete, defective or incompatible with future versions of our products or services, or our relationship with the third party may deteriorate, or our agreements may expire or be terminated. We may face legal or business disputes with licensors that may threaten or lead to the disruption of inbound licensing relationships. In order to remain in compliance with the terms of our licenses, we monitor and manage our use of third-party software, including both proprietary and open source license terms to avoid subjecting our products and services to conditions we do not intend, such as the licensing or public disclosure of our intellectual property without compensation or on undesirable terms. The terms of many open source licenses have not been interpreted by U.S. courts, and these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our products or services. Additionally, some of these licenses may not be available to us in the future on terms that are acceptable or that allow our product offerings to remain competitive. Our inability to obtain licenses or rights on favorable terms could have a material effect on our business, financial condition, results of operations and cash flow, including if we are required to take remedial action that may divert resources away from our development efforts.

In addition, we also rely upon third-party hosted infrastructure partners globally to serve customers and operate certain aspects of our business or services. Any disruption of or interference at our hosted infrastructure partners would impact our operations and our business could be adversely impacted.

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RISKS RELATED TO INFORMATION TECHNOLOGY, DATA AND INFORMATION SECURITY

We could suffer a loss of revenue and increased costs, exposure to significant liability including legal and regulatory consequences, reputational harm and other serious negative consequences in the event of cyber-attacks, ransomware or other cyber security breaches or incidents that disrupt our operations or result in unauthorized access to, or the loss, corruption, unavailability or dissemination of proprietary or confidential information of our customers or about us or other third ~~parties~~.parties.

Our operations are dependent upon our ability to protect our digital infrastructure and data. We manage and store various proprietary information and sensitive or confidential data relating to our operations, as well as to our customers, suppliers, employees and other third parties, and we store subscribers’ data on our edge-to-cloud mass storage platform. As our operations become more automated and increasingly interdependent and our edge-to-cloud mass storage platform service grows, our exposure to the risks posed by storage, transfer, and maintenance of data, such as damage, corruption, loss, or unavailability, ~~of, or damage to,~~unauthorized acquisition and other processing, and other security risks, including risks of disruptions to our platform or security breaches and incidents impacting our digital infrastructure and data, will continue to increase.

Despite the measures we and our vendors put in place designed to ~~secure~~protect our computer equipment and data, ~~belonging to us,~~ our customers, suppliers, employees or other third parties, the ~~computer equipment~~digital infrastructure and data have been and may continue to be vulnerable to phishing, employee or contractor error, hacking, cyberattacks, ransomware and other ~~cyberattacks,~~malware, malfeasance, system error or other irregularities or incidents, including from attacks or breaches and incidents ~~or attacks~~ at third party vendors we utilize. In addition, the measures we take may not be sufficient for all eventualities. There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our suppliers’ or other vendors’ systems, networks, or other components or infrastructure have not been compromised or do not contain exploitable defects, bugs or vulnerabilities. We anticipate that these threats will continue to grow in scope and complexity over time due to the development and deployment of increasingly advanced tools and ~~techniques~~techniques.

We and our vendors may be unable to ~~attack~~anticipate or prevent these attacks and other threats, react in a timely manner, or implement adequate preventive measures, and we and they may face delays in detection or remediation of, or other responses to, ~~exploit any~~ security ~~vulnerabilities of our products~~breaches and ~~services.~~

other security-related incidents. The costs to eliminate or address ~~the foregoing~~ security problems and security vulnerabilities before or after a security breach or incident may be significant. Certain legacy ITinformation technology (“IT”) systems may not be easily remediated, and our disaster recovery planning may not be sufficient for all eventualities. Our remediation and other aspects of our efforts to address any attack, compromise, breach or incident may not be successful and could result in interruptions, delays or cessation of ~~service~~service. Security breaches or incidents and unauthorized access to, or loss, corruption, unavailability, or processing of ~~existing~~data we and our vendors maintain or ~~potential~~otherwise process has exposed us and could expose us, our vendors and customers ~~that may impede our sales, manufacturing, distribution~~ or other ~~critical functions and may~~third parties to a risk of loss or misuse of this data. Any actual or perceived breach incident could result in litigation or governmental investigations, fines, penalties, indemnity obligations and other potential liability and costs for us, materially damage our brand, cause us to lose existing or potential customers, impede critical functions or otherwise materially harm our ~~business.~~business, results of operations and financial condition.

~~Table~~Additionally, defending against claims, litigation or regulatory inquiries or proceedings relating to any security breach or other security incident, regardless of ~~Contents~~

merit, could be costly and divert attention of key personnel. We cannot ensure that any provisions in our contracts with customers or others relating to limitations of liability would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any claim. The insurance coverage we maintain that is intended to address certain data security risks may be insufficient to cover all types of claims or losses that may arise and has been increasing in price over time. We cannot be certain that insurance coverage will continue to be available to us on economically reasonable terms, or at all.

We must successfully implement our new global enterprise resource planning system and maintain and upgrade our ITinformation technology systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of ~~operations~~.operations.

~~From time to time, we expand and improve our IT systems to support our business going forward. Consequently, we~~We are in the process of implementing, and will continue to invest in and implement, modifications and upgrades to our IT systems and procedures, including making changes to legacy systems or acquiring new systems with new functionality, and building new policies, procedures, training programs and monitoring tools.

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We are engaged in a multi-year implementation of a new global enterprise resource planning system (“ERP”) which requires significant investment of human and financial resources. The ERP is designed to efficiently maintain our financial records and provide information important to the operation of our business to our management team. In implementing the ERP, we may experience significant increases to inherent costs and risks associated with changing and acquiring these systems, policies, procedures and monitoring tools, including capital expenditures, additional operating expenses, demands on management time and other risks and costs of delays or difficulties in transitioning to or integrating new systems policies, procedures or monitoring tools into our current systems. Any significant disruption or deficiency in the design and implementation of the ERP may adversely affect our ability to process orders, ship product, send invoices and track payments, fulfill contractual obligations, maintain effective disclosure controls and internal control over financial reporting or otherwise operate our business. These implementations, modifications and upgrades may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, difficulties with implementing new technology systems, such as ERP, delays in our timeline for planned improvements, significant system failures or our inability to successfully modify our IT systems, policies, procedures or monitoring tools to respond to changes in our business needs in the past have caused and in the future may cause disruptions in our business operations, increase ~~data~~ security risks, and may have a material adverse effect on our business, financial condition and results of operations.

RISKS RELATED TO OWNING OUR ORDINARY SHARES

The price of our ordinary shares may be volatile and could decline ~~significantly~~.significantly.

The market price of our ordinary shares has fluctuated and may continue to fluctuate or decline significantly in response to various factorssome of which are beyond our control, including:

•general stock market conditions, or general uncertainty in stock market conditions due to global economic conditions and negative financial news unrelated to our business or ~~industry, including the impact of the COVID-19 pandemic;~~industry;

•the timing and amount of or the discontinuance of our share repurchases;

•actual or anticipated variations in our results of operations;

•announcements of innovations, new products, significant contracts, acquisitions, or significant price reductions by us or our competitors, including those competitors who offer alternative storage technology solutions;

•our failure to meet our guidance or the performance estimates of investment research analysts, or changes in financial estimates by investment research analysts;

•significant announcements by or changes in financial condition of a large customer;

•the ability of our customers to procure necessary components which may impact their demand or timing of their demand for our products, especially during a period of persistent supply chain shortages;

•reduction in demand from our key customers due to macroeconomic conditions that reduce cloud, enterprise or consumer spending;

•actual or perceived security breaches or incidents or security vulnerabilities;

•actual or anticipated changes in the credit ratings of our indebtedness by rating agencies; and

•the sale of our ordinary shares held by certain equity investors or members of management.

In addition, in the past, following periods of decline in the market price of a company’s securities, class action lawsuits have often been pursued against that company. ~~If similar~~Similar litigation ~~were~~has been pursued against us, and it could result in substantial costs and a diversion of management’s attention and resources, which could materially adversely affect our results of operations, financial condition and liquidity.

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Any decision to reduce or discontinue the payment of cash dividends to our shareholders or the repurchase of our ordinary shares pursuant to our previously announced share repurchase program could cause the market price of our ordinary shares to decline ~~significantly~~.

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significantly.

Although historically we have announced regular cash dividend payments and a share repurchase program, we are under no obligation to pay cash dividends to our shareholders in the future at historical levels or at all or to repurchase our ordinary shares at any particular price or at all. The declaration and payment of any future dividends is at the discretion of our Board of Directors. Our previously announced share repurchase program was paused in the December 2022 quarter, remained paused through the ~~March 2023~~first quarter of fiscal year 2024 and ~~may be discontinued at any time.~~there are no assurances as to if and when the program will resume. Our payment of quarterly cash dividends and the repurchase of our ordinary shares pursuant to our share repurchase program are subject to, among other things, our financial position and results of operations, distributable reserves, available cash and cash flow, capital and regulatory requirements, market and economic conditions, our ordinary share price and other factors. Any reduction or discontinuance by us of the payment of quarterly cash dividends or the repurchase of our ordinary shares pursuant to our share repurchase program could cause the market price of our ordinary shares to decline significantly. Moreover, in the event our payment of quarterly cash dividends or repurchases of our ordinary shares are reduced or discontinued, our failure to resume such activities at historical levels could result in a persistent lower market valuation of our ordinary shares.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchase of Equity Securities

All repurchases of our outstanding ordinary shares are effected as redemptions in accordance with our Constitution.

As of ~~March 31,~~September 29, 2023, $1.9 billion remained available for repurchases under the existing repurchase authorization. There is no expiration date on this authorization. The timing of purchases will depend upon prevailing market conditions, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time.

The following table sets forth information with respect to all repurchases of our ordinary shares made during the fiscal quarter ended ~~March 31,~~September 29, 2023, including statutory tax withholdings related to vesting of employee equity awards (in millions, except average price paid per share):

Period

Total Number of Shares Repurchased(1)

Average Price Paid Per Share(1)

Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)

~~December 31, 2022~~July 1, 2023 through ~~January 27,~~July 28, 2023

—

~~1,926~~1,921

~~January 28,~~July 29, 2023 through ~~February 24,~~August 25, 2023

—

~~1,925~~1,921

~~February 25, 2022~~August 26, 2023 through ~~March 31,~~September 29, 2023

—

~~1,924~~1,897

Total

—

_____________________________

(1) Repurchase of shares pursuant to the repurchase program described above, as well as tax withholdings.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

~~Not applicable.~~During the first quarter of fiscal year 2024, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

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ITEM 6.EXHIBITS

Incorporated by Reference

Exhibit No.

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Filed Herewith

Exhibit No.

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Filed Herewith

3.1

Certificate of Incorporation of Seagate Technology Holdings plc

10-K

001-31560

3.1

8/6/2021

3.1

Certificate of Incorporation of Seagate Technology Holdings plc

10-K

001-31560

3.1

8/6/2021

3.2

Constitution of Seagate Technology Holdings public limited company as of May 18, 2021 (as amended by special resolution dated May 14, 2021)

S-8

001-31560

4.1

10/20/2021

3.2

Constitution of Seagate Technology Holdings public limited company as of May 18, 2021 (as amended by special resolution dated May 14, 2021)

S-8

001-31560

4.1

10/20/2021

4.1

Indenture for the 2028 Notes, dated as of September 13, 2023, among Seagate HDD Cayman, as Issuer, Seagate Technology Holdings plc and Seagate Technology Unlimited Company, as Guarantors, and Computershare Trust Company, National Association, as Trustee.

8-K

001-31560

4.1

9/13/2023

4.2

Form of 3.50% Exchangeable Senior Note due 2028 (included in Exhibit 4.1).

8-K

001-31560

4.2

9/13/2023

10.1

Settlement Agreement, dated as of April 18, 2023

8-K

001-31560

10.1

4/19/2023

10.1

Purchase Agreement, dated as of September 7, 2023, by and among Seagate HDD Cayman, Seagate Technology Holdings plc, Seagate Technology Unlimited Company and Morgan Stanley & Co. LLC, as representative of the initial purchasers named therein.

8-K

001-31560

10.1

9/8/2023

10.2

Form of Capped Call Option Transaction Confirmation.

8-K

001-31560

10.2

9/8/2023

10.3

Tenth Amendment, dated as of September 27, 2023, to the Credit Agreement, dated as of February 20, 2019.

31.1

Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1

Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14 (a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1†

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.1†

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document.

101.INS

Inline XBRL Instance Document.

101.SCH

Inline XBRL Taxonomy Extension Schema.

101.SCH

Inline XBRL Taxonomy Extension Schema.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

104

Inline XBRL Cover page and contained in Exhibit 101.

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101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

104

Inline XBRL Cover page and contained in Exhibit 101.

+ Management contract or compensatory plan or arrangement.

† The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Seagate Technology Holdings plc under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

5958

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY

DATE:

~~April 26,~~October 27, 2023

BY:

/s/ Gianluca Romano

Gianluca Romano

Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

6059


(Dollars in millions)
Existing Notes	Principal Amount Outstanding as of July 1, 2022		Principal Amount Exchanged
July 2031 Notes	$	500	$	423
July 2029 Notes	500		336
January 2031 Notes	500		205
Total	$	1,500	$	964


Fiscal Year	Amount
Remainder of 2023	$	563
2024	586
2025	617
2026	667
2027	649

Thereafter	2,943
Total	$	6,025


	As of July 1, 2022
(Dollars in millions)	Contracts Designated as Hedges		Contracts Not Designated as Hedges
Singapore Dollar	$	178	$	52
Thai Baht	133		35
Chinese Renminbi	92		24
British Pound Sterling	64		15
Total	$	467	$	126


	Fiscal Years Ended																		Total			Fair Value at March 31, 2023
(Dollars in millions, except percentages)	2023			2024			2025			2026			2027			Thereafter
Assets
Money market funds, time deposits and certificates of deposit
Floating rate	$	236		$	—		$	—		$	—		$	—		$	—		$	236		$	236
Average interest rate	4.34		%																4.34		%
Other debt securities
Fixed rate	$	—		$	—		$	—		$	15		$	—		$	1		$	16		$	16



Debt
Fixed rate	$	540		$	500		$	479		$	—		$	505		$	2,246		$	4,270		$	4,156
Average interest rate	4.75		%	4.88		%	4.75		%	—		%	4.88		%	6.21		%	5.55		%
Variable rate	$	23		$	86		$	138		$	667		$	144		$	697		$	1,755		$	1,704
Average interest rate	5.52		%	5.48		%	5.49		%	5.59		%	5.44		%	5.47		%	5.52		%