STX - Earnings call transcript Q1 2025 | Seagate Technology Holdings plc

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Operator

Welcome to the Seagate Technology Fiscal First Quarter 2025 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Shanye Hudson, Senior Vice President, Investor Relations. Please go ahead.

Shanye Hudson

Thank you. to welcome and everyone, today's call. Hello,

our are Gianluca Romano, me earnings of release information our Dave Investors on We've Mosley, and Officer; press for supplemental detailed Executive website. Chief and quarter our section our results the Seagate's posted Joining September Chief Officer. Financial

certain We've non-GAAP cannot non-GAAP our our figures reconciled items During reconciliation earnings in not may predicted. today's and press call, Form website are figures outlook release measures refer will measures because that effort. of a unreasonable Non-GAAP GAAP impact we on material out are and the is in our these without included reconciled not to X-K. Therefore, be measures GAAP posted the corresponding control to measures. available to and/or reasonably GAAP

begin, relied I'd and current management's call us as should remind that subsequent you may of information to risks upon to by our to views statements as subject forward-looking are of like available in differ that they these today contains uncertainties forward-looking Actual associated implied be Before today's reflect contained those any assumptions business. on based and we with or as from statements materially date. results not

as the Investors all website. report and the Form our information, most risks, XX-K the learn quarterly as Form supplemental more our factors refer affect that may future and recent To about business well the on which on found release uncertainties SEC of issued annual including may our filings, other press our report to please of section on be results, today and XX-Q

In we primary all with open in for thank we'll the then queue. prepared opportunity one questions. our remarks, call provide participate, the analysts and the asking up you advance reentering to question to Following order for

you, to over call the Dave. hand now I'll

William Mosley

guidance strategic period. prior and cost with XXX% our quarter $X.XX, our gross non-GAAP product of Shanye, growing which was gross cloud is in billion, mass of with to Continuing fiscal non-GAAP improved outcome contributed drive This and midpoint growth, demand environment. improvement into the increasing line basis in hello, we over profitable our revenue benefiting margins level range. impressive also the now that and strong the mid-XX% ability at from profitability. our XX% Company first over strength, profit efficiencies in top discipline above to with with coupled range, and HDD non-GAAP a decade. the enterprise results capacity better-than-anticipated margin delivered to XX.X%, sequentially compared came pricing by everyone. the demonstrate markets, expanded $X.XX enhanced mix in and These EPS gross the was nearly have and points a drove growth the to OEM a Seagate Thank highest performance XXX driven were year both year start built by sustained revenue supply you, and business, an non-GAAP the operations. Fiscal

which Amid opportunities. future our confidence our nearly are drives, anticipate I'll our Mozaic-based landscape, dividend this combined growing opportunities in discuss X%. industry-leading of industry with Reflecting portfolio environment, a road further confidence, products, expansion supply-demand The high-capacity map, lends nearline business margin ramp by HAMR increasing as healthy we Seagate's favorable including technology increasingly shortly. we our we quarterly

that quarters. good is our for reinforced the March is inclusive demand fiscal next over demand by typical the fluctuation the of see growth for Our potential for which with build-to-order We model, XXXX, quarter. significant seasonal few optimism the provides revenue visibility us

capacity. We supply are address leveraging we'll efficiently our discipline, by near-term maintaining and growth demand available exabyte

technology further and complete well role shipments. HAMR node ramp as demand mainly growth, qualifications are support with we we that, vital transitions Beyond playing through positioned to a

we for managing though we believe demand Cloud In providers, driven trends. market their cloud levels capacity the U.S. positive September continue robust, inventory mass see was revenue and the customers by quarter, nearline are growth remains to to Turning demand our well. globally. drives trends

on growing instance, customers social e-commerce and For of content highlighted media video some platforms. have the use

that and ideally XX% data-intensive digital diverse, large that audiences. engaging trends comprise Data of well are the generation to video which bytes AI and future. research content customers. effective most our cloud format personalization can video for HDDs, confident capacity is significantly stored proportion longer-form close technology indicates the for for suggests opportunities enhance public and revenue foreseeable will through that content. bode hold suited Furthermore, environments mass HDDs storing we video are in for These for

we unit, stable drive In our content per the average capacity pushing high. VIA per sales remained in a Among to storage an the reflects well stability. quarter improvement as uptick a markets, OEM demand server record the enterprise in multi-quarter higher the following and demand nearline slightly and as of in new expectations. of customers, This ahead traditional increase meaningful enterprise observed first the period September

We storage witnessing are solutions utilize higher drives. towards capacity shift cloud-like that a more

analytics. increased due is transition needs data longer to This in video retention part and

into platform a HDDs and that products, AI produced HDD customers' secure content same capacity also crucial catalyst provide are These scalability being for mass applications, applications. and data cost Mozaic we is advantages engines why generative powerful creation. which of for host storage camera a by and to believe preserves will to demands. solutions, provide efficiency evolving trusted, AI feeds Our including by be driver continue AI the Gen economical AI-powered VIA to a data simply our

This data is continuous training into models fed the AI ultimately back cycle. a in

with adoption solutions with move scale product road challenges. into of power Seagate's for prepare Compared architects and cost, HDD map each continue phase, approximately per addressing these NAND-based terabyte. key is they challenges. cost center grapple to data Xx to alternatives, our widespread lower the As storage GenAI offer

important much very HDDs growing per of a to footprint, XXx ramp roughly can good centers. Xx world's number delivering plans. to And NAND, capital customers, have qualification segue product surge translate given And provides embodied our to relative data economies into demand. the scale cloud necessary and That carbon the a anticipated which support are lower efficient, data carbon of HDDs more the into lower in according terabyte

X focus growth driving have on all of primary them. profitable We progressing aimed XXXX the at of we're over term, for areas and long fiscal

include up the ramping in XX September platform, to platform ramp last PMR mass final storage with company's in They will the capacity. product we Consistent terabytes and our plans, expanding of needs. adoption, Seagate Mozaic began that aggressively address to PMR quarter, currently is our Mozaic capacity customers' map road which our to the executing enable breadth

have second highest revenue to adoption. to continuing base we We our are product, the quickly catapulted very pleased and both with broaden ramp customer drives December and the pace customer of in quarter. our These are volume

testing a that in global very being and intensive our qualifications X-plus already hands VIA customer progressing and mass market Mozaic customer process. The per thorough customer are terabyte expanded been customers. have multiple cloud platform spanning leveraged of and a now that qualification qualifications well the future CSP The what our have HAMR-based with customer few qualification gained learnings disc enterprise with quals drives is product already into we end, To segments. through are We and enterprise HAMR nearline, on generations. lead the completed has

and the mid-calendar ramp timing base shipment expectation points Our for across broader customer revenue XXXX. still to

required that and feedback Mozaic of the storage requirements satisfy technologies lowest strong, the remains has total cost technology proposition HAMR our the value in ownership. customer reinforced foundational platform provides high-capacity to at confidence Our

platform. disc leadership expect the this We as the X-plus technology on our per map, to HAMR road stage terabyte deliver next extend we of our

As aerial improved a reminder, the cost to step increase entirely customer X per gains, through density supporting our structurally to function both disc profile. path terabyte additional per reduction terabytes margin Seagate's achieved and capacity with being TCO is benefit

amid industry is supply well performing backdrop an In dynamics. demand healthy closing, improving Seagate with

are compelling drive for our factors the build point an and X performance inflection We our strong to future to quarters ability the technology These value to map. and made profitable with we've growth rooted create customers business underpin stakeholders. of changes at road our long-term our on last sequential and exciting structural in

hand now to off it Gianluca. Thank and you, I'll

Gianluca Romano

started to sequentially delivering XX% XX% We and fourth increased and Dave. growth a to September sequentially income was reflecting range operating quarter of EPS non-GAAP XX.X% you, profitability revenue non-GAAP margin $X.XX strong XXXX, our and Thank revenue, our adjustment consecutive quarter. operating ongoing demand $XXX year-over-year. $X.XX XX% of non-GAAP was translating up and fiscal Seagate trends, guidance revenue of end for improving price a at billion, cost million, the discipline. continued high and

up grew disk legacy hard XX% capacity $X.X billion. more $X exabyte continued revenue consecutive expected nearline a quarter, shipments quarter, drive total in XXX Mass was billion, revenue by XXX scalable enterprise fifth secular represent and the significant cost-efficient in growth grew Mass exabytes our Mass capacity shipments than strength decline XX% sequentially the revenue sales. the exabytes Mass along business. for of the increased business, HDD demand, offsetting sequentially XXX nearline in to sequentially. for XX% driven Within XX% continued cloud compared a up reflecting in with capacity exabyte, now capacity XX% long-term shipments totaled the record with uptick June to exabytes storage.

XX in began XX the to shipment quarter, our the planned, nearline helped from period. XX PMR exabytes ramp prior and boost As XXX exabytes terabyte Seagate's to up which in we to

quarter. has of more been our revenue earlier, highlighted represented this the Dave September As nearline XX% for product in customer reception strong than and

demand project our September and quarter. across We improve CSP in expect revenue remained as high-capacity continue we for the global shipments similar customers. broadened will in to Demand quarter VIA enterprise currently products nearline the latest December the December stable relatively in and products quarter, our for

and Smart VIA decision ongoing driver a worldwide, for City budget for has new been play uncertainties demand factor business China in a in The for the conditions remain projects. products a economic in projects that headwind economic the market. key VIA key regional

We VIA in announced would optimistic time. recently impact China positively stimulus over plan demand are cautiously that on

steady of million, our legacy products total of other remaining roughly million. The $XXX totaled X% $XXX revenue. of revenue held businesses, XX% representing derived was which from our at Sales

in refurbished has drives programs. include [ security year-over-year under other a drives, ] SSD, by our system, closed business that ] The grown XX% about businesses and and [

in Moving profit favorable September a million. efficiency of increase demand mix the ongoing significant XX% sequentially on reflects increased shift adjustment to gross our statement. income the Non-GAAP capacity rest mass improving and With price to environment. to cost continued quarter the products, $XXX in

gross was significantly margin average. gross resulting HDD at XXX originally remains non-GAAP company Non-GAAP we higher more capacity, gross level. particular, which anticipated. corporate the in business than expanded than had was the the Our slightly mass basis points by quarter-over-quarter, margin for non-GAAP and margin Overall XX.X%

in continued and share share of improved September profitability with variable commensurate to income the $XXX on $XX plan, December million. due XX% shares. quarter largely up up expense compensation expenses operating to non-GAAP increased net higher the EBITDA $X.XX our in levels million, Adjusted was levels. above to $XXX project count based Non-GAAP original a resulting per diluted were $XXX improve million, quarter-over-quarter sequentially quarter. Non-GAAP totaled and EPS and approximately XX% we Other similar million, to of XXX million income in and

the our fiscal the supply chain the of will generation have to cash the on cash cash to take improve rest Moving free increasing December expect It free through demand. initial fully our $XX capital so, capital meeting the reflecting steps to and while which balance was a at quarter and flow generation. time, working sheet. support flow couple normalize to for million, same impact working mass Even of Free in more adjust capacity will flow flow to quarters cash we year. to some

Capital fiscal expenditures $XX quarter for were for million 'XX. the

million low and to end maintain expect long-term quarterly the continue through discipline the to of We at target We X% of capital X% the outstanding. dividend with CapEx $XXX quarter XXX to million to revenue. exiting range will the returned of shareholders be shares

company in the share, credit available confidence support dividend, billion of liquidity, billion, the revolving to capacity to improving approved undrawn $X.X our payout facility. mass are in closed quarterly September to increased our that $X.X earlier, increase our staging quarterly mentioned material reflecting per the demand. $X.XX an Dave We long-term we in with the including Inventory As raising including quarter business.

quarter more and than X.Xx balance debt with see further was our We exited in quarter, of of the $X.X ratio at with coming net Our the maturing a long-term debt and to quarters. of beyond. leverage obligation billion end fiscal the expect reduction XX% 'XX in the September

markets. outlook. by our into sales improvement higher, mass to along These to further now global driven OEM more mix trend I are of Turning high positive the capacity ongoing revenue the customer continued pricing Mass growth capacity cloud legacy to actions. anticipate than for demand from in that lower nearline and and revenue capacity trends We to our with with enterprise drives, expected the profit and just offset described richer other markets. ongoing expand

quarter With or better and the this $X.X an represents to minus XX% Non-GAAP be our context, At low of margin million. are revenue range $XXX expected in in increase of revenue $XXX year-over-year. billion, non-GAAP to December midpoint, sequentially X% is range the range. to of million. expand percentage XXs expenses midpoint expected into expect the At operating the operating be the guidance, we plus of

or a non-GAAP a EPS approximately expense non-GAAP tax diluted shares minus million. of our about expect XXX on plus $X.XX share We based be and to $X.XX $XX of million count

to for call the I will now Dave comments. final back turn

William Mosley

future technology improvements a implemented and for meet enhance differentiated strong in Gianluca. that structural technology the in capital environment. remain In map of dedicated on strong underscores Seagate anticipated us will we our and profitability winning deploying a our is we global that favorable that I'm model value form the to requirements demand growth have cost-efficient high well and Demand leadership Thanks, closing, confident GenAI confidence storage support customers. for our significant enhancing shareholders. for to capacity our demand, the and road further from combination team, drives deliver data evolving nearline including our applications. Seagate's build and that and positions solutions profitability expansion achieving will momentum in business scalable, success

questions. Operator, let's the up call for now open

Operator

from comes Instructions] And today America. question with Mohan of Bank first Wamsi our [Operator

Wamsi Mohan

around visibility Dave, I commentary demand flesh if build-to-order bit you very year. out good was fiscal a your wondering this this could and little into

quarter. some quarter demand different what March around including around be you thinking to from demand March experienced wondering seasonality expect before. could as You you've around noted if significant maybe was bookends growth, on that some typically seasonality elaborate a I maybe you what growth you're going bit

hear could, ramping expecting products, HAMR. you're to also year next competitors' And gets your sounds thoughts versus I volume. to I'd around, capacities higher if sort mid your slightly as have be curious compete in how It there you're which HAMR like of currently

William Mosley

Thanks, Wamsi.

of year models well. ago ago, get So build-to-order X a back instilled things. go If a I months it's to working or we predictability, I largely think couple and these

we booked As confident those into we look the quarters we're pretty well. next year, that

only way we're that what the happy the to very running build. business build need I'm So given And we're we predictability. going to

fully as we industry not what through an of recovered years just went still couple We're from a ago.

buffers have So built I and as is I'm in markets, quite up think perspective. pleased with how think the cautious There year. build-to-order carefully. gone. inventory the alluded to, low From little is cloud is a don't next we'll that on models some I a still perspective, any, everyone you some watch I my are from seasonality But think

here. with predictability And so from happy the capacity the think I we mass are predictability, cloud

a sure. else we prepared points CMR is mentioned shipping we And that, net up. put the products. From XX even can shipping on On for we're leading top leadership of And no I we think higher, the in perspective, as terabytes capacity perspective, second over a remarks, going there's part, higher. point capacity SMR the qual even from then one

I'm very our there. So with comfortable positions

with on. the So the quals comfortable so lack I'm get X perspective, portfolio all and to we've leadership. on. get exactly sure you're or and that mean, so very technology way. of I to got quite And terabytes to on and we capacity ramps our of referring not from on We're done our what disk leadership all then

Operator

TD next with from Cowen. comes question Our Krish Sankar

Sreekrishnan Sankarnarayanan

dipped 'XX? pricing kind range. share XXXX? to temporary Historically, XX% your last customers WD along few share? same the low loss? the potential a you're market I how had it the more from you about Dave, but of XX% to rational yours? on about to more behind high customer-specific in in Is HAMR it it's than talk that to How industry share. down And factors quarters, think are it think calendar Can where mid-XXs, question are disruption extremely this in causing about the HDD. Is been path, in It's ordering

William Mosley

Thanks, Krish. to is your running market said ago said share, when market Yes, Wamsi's of a of question, exactly a want to year number for an outcome share order. changed our we we these we I And times, place play. build

predictability, longer or I building that. said, we something market So channel hoping it want a going into than horizon time for then we're rather bunch share and like to a push a and

on. the so cash the generating at we the of cycle, the more really demand of you're predictability when market think It's and were that I share bottom of doesn't matter.

we're margins we've obviously, rewarded demand we the the As made for and we money we're clearly more the higher, back way. extend into take that things, our then of getting -- that on, so and taking get we'll now are that investments

the think market reequilibrate. share I will so And

From be an as be want capacity customers exabyte to continue push the fine and think there. to just going higher share I we'll points, we're to going to perspective, higher proposition I TCO think fine because

let answer pricing think the On side, Gianluca question there. I I'll the

Gianluca Romano

Thank you, Yes. Dave.

the Every think to also this our environment quarter. have is quarter, we higher be little improvement, little driving a gross and the positive for industry. I seen what bit pricing bit of a margin every continued is

have June side, in unused As those some capacity the any September we of still you the on in quarter. we costs. know, had extra cost And don't quarter,

latest margin. And guided, gross in we December, help we into PMR from So that important in ramping you coming the and product. very is we improvement further a us, further to our at expect that which margin, going course, if improvement had look of more in is, of the also margin, little gross how of bit operating mix,

quarter between for good action that supply is Seagate for still think continuing I volume general in in Of the and have a for long-term course, we ongoing. and have our certain and our we are strategy. balance industry, pricing demand And a December HAMR the of and we also

Operator

Amit with question next And our Evercore. comes Daryanani from

Amit Daryanani

is question these as always the how Dave, there's HDD shipments that you them? love you your deployed peak up look that industry really, around your inventory confident confidence? your broadly, you to that gain do shipping customers getting of have levels. I'd the perhaps, sitting guess, versus, the perspective, with is you I by right for kind in cyclical at this Seagate specifically do fear are exabyte get How ending get that actually at now,

then are there's a you fear, where I upside forward that above versus now? more What that lot really gross today, folk is very cyclical your are Seagate the to would target. as you go is of appropriate margin long-term you think confident you And say, actually related to margins frame which do

William Mosley

Thanks, we over Amit. run have the years. Yes, many business a many, cyclical

cloud, it's a bit down of as now think sure, big we're be to I side lot changed the the used that a the in quite client from in the pandemic, but came market. on particular, cyclicality, periodical, very crash then server. There and we I'm bubble of back And big a it. in a seasonality it's totally not as caused

an that's of there. So think anomaly kind I

what know actually customers we have. do How

or have think But We really we're to units do pushing in as to not triangulate able many ourselves, processes drives, and that. exabyte our points. I nearly being improved we've also for

with the build-to-order And bit. actually, some helps a that quite of model, us

So that that we're were planning you overbuilding we know to if not overbuild.

terabytes costs platforms, and can gains. bring have we're introduce is on really capacity way the and the to drive more we mean XXs And gross point go aerial market. the we XXs we be XXs upsides that able we the I on lower believe sure focused your those serve on lower work with what that to cost to to on to more and margin, doing, making and density Exactly to for in that's

much that building through for good them, A customers for to data want a centers efficiency more online able get are data our proposition it's to more is be support but and to also. so cost TCO to centers capacity we time efficient put for who reduction need continued our long because

demand, there's think but with point, to all significant and still, do your I it supply So demand margin and properly. managing to supply upside gross starts,

Operator

from comes Erik with And Woodring our next question Morgan Stanley. today

Erik Woodring

we on gross stay Gianluca, theme the maybe here. margins just if of

guidance your XX% a think basis about December the sequentially. I roughly quarter XX margin, for implies points gross up

about over X X by margins to the gross growing sequentially X quarters. points been You've last

of can still able I'm expansion the been be favorable, some positive understand gross might just you expansion and margin again, gross seeing And more the drive relative we you've gross XX are not me made months? pricing help and comments wondering, why over to to so just in obviously, the if last margin mix points Dave quarter, on margins, multiple

Gianluca Romano

Erik, XXX underutilization elimination in quarter, better cost capacity also I gross the structure about before, charges. of said we improvement. September points the had as was in of the support higher the That from well, and because our margin basis

that going not now any improvement have we anymore. charges have in to the We other utilization December because don't are quarter

making ramp But we our of good volume and are pricing and a some structure, our we with on are HAMR. still progressing we see will PMR product, latest

the positive. that executed those the all are quarter. had So we we quarter can. of beginning our focus on quarter improving know, as based And after as as quarter best to at during then guide keep we And is and you we the forecast

much as long be keep We cycle can. to for We up we are increase time. trying consistent this not as to one and at too want

Operator

today next from our question And Sachs. with comes Toshiya Goldman Hari

Toshiya Hari

multipart I on one HAMR. a had

Is you Is call 'XX? a that that at I your think getting lead be I expectation on on in at your guys early that customer talked the now around about Any or QX? last thoughts believe. helpful. qualification conference, would QX,

sort the you the the And so? over you've of through been or process hand. year past talked qualification process customers that qualification customer customers some than then, debugging your or those smoother of expect at lead to cloud having companies Dave, be we about Should given products on additional

William Mosley

running we last film spec. intense on way call another our of failure are in. are we have as team's test summer haven't we the time I we ramp that mode. did running get Thanks, speak about us we drives, earnings process behind this spring more are all improvements talked with to beds slowed last volume the mode and The on was nor us. modes Toshiya. high Yes, that of the we about confidence down tests, make and that to really to sure all based that is hide worked have failure we designed more more here seen detect later, modes stresses And that the quarter these hair beyond configurations, our hard

So and of sometimes to that customers we're it are. customers and qualifications, that going get to learning there's are it that on it, ongoing. where different The bit of prove That's to and confident and be it, it's right interoperability us. proving behind so a a now initial we're those little facets tests takes forth. we the I'm to relative confident of prove but exactly data time able lot applications so think we about center know When quals different with we

as else have customers. issue. significant say, why those to no ramp to going I'd that's high come we've we those other fixed, customers really confidence it No last one other because concerns down got -- this problem that this there. one does And is we see It volume,

recipe, already Some shipments that there. -- it already have I the have not everywhere. quals kinds think They now we're multiple may apply getting run of going But that to stresses. product tough and themselves qualified non-cloud we these same the volume we're already customers have

Operator

question next with today Our Asiya comes from Merchant Citigroup.

Asiya Merchant

and -- HAMR ramp that's given But lower, negative How the near the to guys and a there once I how driver. obviously, the should are volumes get overall let's shipments, that much think more start you ramping? we qualifications And further issues from might some margin shipment see are the is HAMR along, that there? about how December ramp gross March, more think term, we you're to margins about sense to you you to margins, as ramps? guys impact HAMR should a be into margins just As say, and impact

William Mosley

Asiya, near it term, to give want want term, don't Long away. it give away. we we to don't

And gross to think add HAMR our definitely well. does want we we to accretive to it margin. customers So benefit as be

the So have the that there's capacity you a they we then Do increase build-outs for -- to replace to have sure to drives. they're data the make -- center trade-off. And want it the doing. to higher say you pay for

to sure And our As have the we're full, factories can are that take in out getting near confident matter those paid I'm we we make turn HAMR, demand we said do over take It's managing supply it. well. supply out so largely to picture or drives term of properly. just for a before, it and to the and of the as

Gianluca Romano

I'll side, PMR below per cost volume. on HAMR cost a of say similar per level is Yes. the the terabyte cost terabyte.

at So margin. for HAMR. the is But to not point, the the sure, accretive in there HAMR an our pricing, short this we gross on should there's depends course, And of in why cycle. where are advantage on the and be timing term, no reason

Operator

our with Fargo. from Aaron Rakers Wells today comes next question And

Aaron Rakers

kind quick $XXX OpEx do looks A curious, the It couple to little you expected real think we operating bit we million Any from of of expenses kind was could a expense as how in what normalizing questions. your of relative into quarter about March framework just beyond? out look about quarter. the this operating the of a perspective? think than I'm trajectory like guide, higher we of model

then And of follow-on. as quick kind the

are you debt maturing think As I level, how reentering thinking January, possibility you repurchase in activity the from $XXX about going share it's million that the, of get forward? of

Gianluca Romano

Yes.

the and compensation. On between June is variable to September due the OpEx, only increase

we comp. year, last more hiring of variable not -- a just didn't people. good matter we It's are variable have we And have level. comp this So year, at fairly a

fairly I XXX the around to new the probably the said, through flat of say, beginning here, range. The XXX, as year, you in from stay rest we debt, that maturing So would is I fiscal January. is of think

we that to going are with as before, hand. said So cash we on address

our lower want before we'll bit even debt. share start reducing to start buybacks. little a We we So be

at So then share you that, debt. know, take little we I'll as of company, increased dividend look say, we we to for buyback, a bit want care priority and after have top in will the that further the then And a time. probably is

Operator

next Timothy Arcuri question from today will UBS. with Our come

Timothy Arcuri

capacity a outlook kind question just the that I now up max against you're had given your today. bumping about of

you're So more, you're add probably December, unless -- close not nearline, you to soon. ship going in mean, quite that to XXX but I decide exabyte to of

you're off mix coming mean, and exabytes nicely I back. on So on the bottom growing

But a model not is it off here? think to that you realize to of kind if to of unless starting going degree capacity, expand flatten you exabyte start should up. expand things lose pricing you're capacity. of go I like we to But the seems in And going freedom from

William Mosley

Tim, think new we'll exactly transitioning exabyte products. I Yes, capacity by point, your to expand to

about And it, expand so capacity to capacity be We'll think on that we'll proposition even just from what use an without the basis. if margin that's perspective. driver efficiently exabyte points, be capacity I those go XX it terabytes-ish as at exabyte higher confident take we'll or to able XX a much to which from heads able to terabytes-ish more adding XX we're also model. into out significant And media into to the someday, cost -- where is builds you

Operator

Muse next our question And with Fitzgerald. today comes C.J. Cantor from

Christopher Muse

for visibility your in you March. about fiscal seasonality for growth notwithstanding prepared good in 'XX, Dave, remarks, talked

X March like where you quarter? will to your months? hoping mass today backdrop, capacity, be speak that at based the then we what about, look was how into I is could thinking nearline. So X, seasonality X, for Is for of it visibility least should And kind on

William Mosley

Yes.

think mass a model goes and you period that that virtue is And of that's build-to-order capacity X-month C.J. about, talked the established on. that we've actually full, I it out pretty

serving That's all processes that. going technology as understand us qualification They customers get well. all get to they well. think that predictable economics. so we're access I And these through

I not don't certainly higher I in the total now, historical would significantly there's than think buildup or And I demands. going demand anything. say right is think inventory

don't So I think cycle there's a coming.

fairly the and right re-upping, But I fairly running we front predictable even People obviously, think year as get we're certainly are the next of I through configurations. business. the visibility half into through, you get half back build-to-order the now, And year. better probably if a we'll feel of the confident will, year. early

Gianluca Romano

Yes.

in capacity, seasonality of in is part we June the legacy and fairly lower business March March business, year, in of of quarter quarter, grow is on fairly start usually December. C.J., slowest part the seasonality, On a the and September part the also is majority surveillance particular, the where have quarter the mass but usually, the and in is to the of VIA weak strong so in that they the

or when that mass So only 'XX of legacy there in also in part, seasonality but some your not the capacity quarters calendar consider the you for X products. model is

Operator

Steven our today LLC. comes from Fox And Fox question Advisors next with

Steven Fox

on you point capacity I following up available. guess, the have on how much just

you last X talked think that how any would do can better maybe VIA further that think in create platter when color debottlenecking. and how say, potential next get and that terabytes a I your on understand helpful. you over, from satisfy you XX that next from all the customer going But comfortable I capacity I a quarter, cycle get per go enterprise you months, idea year. be X. do like There's Or manage you to here, with needs? we Like the all still about

William Mosley

Yes.

question and We're very it's still any any kind could turns good turns which put big I still the supply. on -- recovery not we lead very some on how long cautious of additional time. innings And there's being in is of would macro the to supply if there early all about markets that; a on; really say we're a that's would think have be question edge -- would on, things very, get. GenAI very if a I If yet.

talked So we more exabytes earlier. exactly about described, satisfy we've you and can as

But if I much to have lead longer time. which think -- be longer supply, will, would demand, you additional we'd add drive

capacity, on spend we do adds revenue capacity X% add our small CapEx, you get some because so technology transition we of that. As of

As be new necessarily slow, you're to buying efficient. be tools, But tend growth would think. I they the more

Operator

Our comes Baruah Ananda Loop next question with from today Capital.

Ananda Baruah

want of increasing what -- and sticking increases, where question. of aerial the mentioned capacity, video there that to with times. HAMR GenAI, sort increases, in sort of position you put you Dave, just were guess, as event right progress long the data on all that things capacity to density et I with in even you cetera, a If HAMR anticipate lead apps, be

of whole some that. you process the guys the I get be what be that That would guess, you would you would kind process? that like? just look can us sense Can component is heard ways needs tended What what be that We've to. to of also maybe about also that change give have helpful.

William Mosley

Yes. Thanks, Ananda.

And pushing less What's we maybe think at those markets, of or when I even about And be into But of gets get XX you in that. value the your components it -- other attention. take industry density, we get out aerial prop our level. obviously, that that's of that capacity fix talking on capacity in by to some highest forward would growth these max the a point. terabytes we capacity lot the of points. than

we maintain can we bands want much hit still more actually really margins. aggressive to if So and price good

because solve resurgence, half problems that right? many capacity a a you half saw freed will, each -- drives max So to can if -- make are address components you helps up are those as those we that's going much lot with you components of the way. go where then go density that can being more drive, the markets if And efficient twice think capacity, dedicated of in I aerial

Ananda Baruah

probably the hit for in of just HAMR, that, for super That's good sort helpful. time complete industry a it. strong like map I to got you measured come? in with not does good ability out that case years, feel mean, even of guys I And you mean amount exabyte ships pretty like to a months? to when

Gianluca Romano

supply much Well, it depends, plan. higher if our than our plan right? demand have supply is We

bit units. not a is we this we industry is time will to is transition, of our think to that of for the do. more what period technology this this in profitable focus but on most the want Of way have course, we we and And time, is have unbalance on address, progress little to

from be. where X our see or will let's X where demand we quarters So know in now, but supply is

Operator

Vijay comes Mizuho. next from question Rakesh today our with And

Vijay Rakesh

just I'm do of start be about some like? some road capacity you idle -- you to lay think the the you've On the headcount wondering to in if on. calender looks unit that for bring capacity and Gianluca, Can shipments talked you give map you 'XX. back bring on what I trying size, the as And could out how a past, think

William Mosley

we will are perspective, specifically these relatively just mass my didn't customers many From all speak fast push. probably Thanks, mid-XXXX. about how shipped Vijay. full we we'll units qualification right we Yes, the done said be and how factories to We that that now. just -- for

those would transition when with transition, rather plan will ramped aggressively. would I'd form and say, empty we a say, they we in like the factories, made, exabytes we'll form, as hey, less so we we customers more than year ago And but than of the it this this much probably have had a make have be

time, we last carefully. accordingly to components to HAMR It's use This I product important components that that the our well. in realize very very, pivot use very we PMR we'll in we of generation think and make -- that sure that the similar are as

all components heads obviously, components. but critical So media, the and other the not

have leverage product comfortable mechanics, very being if much feel we from the so And still the to other to, there. electronics, we pivot there's the one to able

that what allows us that's So flexibility.

Gianluca Romano

point, much capacity idle standpoint, at From have Yes. say anymore. would we capacity don't I idle a this

September are will we the latest increasing of quarter. December HAMR what additional certain that that to demand. very And PMR moving support doing ramping now exabytes into the generate transition we now aggressively level already with then our is will are products So a transition technology and faster in the

Operator

our with And O'Malley from comes question today Barclays. Thomas next

Thomas O'Malley

it and that obviously you been middle you more would at out into in try say are it just as for let's year. just you're growth, really technology next But we in But and like HAMR humor if guys. calendar talking you getting Dave, too. you some just coming me good really volume looks the of fully the couple head to things, per I like are 'XX, the capacity back half, good. a quarters sounds clarify about transitions of kind year fiscal It's of sounds

you into imagine for next substantially And so the more fiscal guys. you would year

at what that the fact see were you wouldn't you're guys delays technology -- the the to see further actions If on guys you side, and factory take given from wouldn't capacity just you perspective, HAMR transitions. a would

Just that's but me you not what slip ideal of the planning you're with quarters we've that through couple guy. do for qualification instance. Obviously, a and largest not walk seen in that, would the

it's want to how about just things So understand guys you I think if further delayed.

William Mosley

running, about it that test are sets the talked how exactly reasons the the We how worried -- the running. we're I'm for Yes. you qualifications see very about. We see are really pivot. question, and last pivot very, question, can very Vijay's But exactly I earlier generation in from technology the the to confident make to being able to the we the PMR was it think easily. HAMR not

not either. is a us ramped really And last product generation yet for with we're margins on PMR great good that fully

I it perspective, than very it rather from and we quarter of said, like if So that this, came like some customers one back. this easily can like want pivot out delay

Thomas O'Malley

you AI, in call. of And outlook then some on your obviously just Helpful. on the terms made earlier comments

the of still on You're kind come. saying it's

time contribution when some this year? would conversations early come next that customers, as a fiscal to of see may something have frame you In Is you with there? initial terms of do start as that

William Mosley

I of are This complex there's think because Tom. that AI. lot is Thanks, called different topic Yes. things really a a

Some some are specifically identify them with new workloads more workloads. our we in trends as about talked orders brand remarks. and which or the towards coupled right, are applications. things traditional video, predictive say that really that people of we've them recent Gen of seen years would demand brand-new prepared AI would is What AI are that that that's for reference we and And years, purchase seeing to workloads, I are

models And I to we don't more there's drive way I'll now. going that that's in that and is right AI there. that -- that a grow, that's on through business now a much I seeing biggest think right efficient for the thing flowing while customers' and a we're call think our see bubble it because demand

drive fundamental continued a value customers. with in a new that competition I our could happening think different new as coming technologies, bunch video value there's for store vectors, continue applications of to

new call people traditional know give I but I because we're about AI ways. why being credit that's used very some interesting, it. workloads, those in they're I'll to think And creative excited So

Operator

next Benchmark question the Miller Co. with from Our comes Mark today

Mark Miller

AI upside there. cycle? the believe AI will refresh want a year? that and of just your I if Do Second opportunity with your major go when? to drive good back next on so, And Congratulations results guidance. half and you to PCs chips

William Mosley

the I of new that's change I Yes. I applications talk that, think it late, will applications space topic. Look, that And Mark, most new grew spec-ing up are, has ton to that slow about And into not do It's hardware. and quickly anybody's don't guess. that to about some of I of about visibility applications customers have spec-ing relatively applications. with that PC still although about come. adopt these new it's I video is of a exact course, to How your think change. those to point, they're been of

other and especially So of professionals tools that create video, audio all more as yes, the I certainly aggressively. but do -- can enable think creative much that you when you well to allow create happen do to to edge, analytical kinds them counts at

spin they'll off more think data. I

are. by service that already serviced cloud providers the that data of Some will be

I'm PCs those And edge, see where someone be and are and the to from be going to AI really is the It's in may yet. we just a what I about to so about we're that seeing I think still very that. can't near excited closer it predict I early. development, growing excited from I'm going think be application but applications But And driver really it, future.

Mark Miller

Okay.

Seagate Technology (STX) 22 Oct 242025 Q1 Earnings call transcript