10-K · August 4, 2026
Seagate’s FY2026 results show a pronounced cyclical and structural inflection: revenue grew 34% to $12.195 billion, gross margin expanded 11 points to 46%, and diluted EPS more than doubled to $13.90. Growth was driven…
Earnings analysis · 10-Q
STX earnings analysis
Filed October 29, 2026 · Our reading of the company's report
The latest report
Seagate reported a strong September 2026 quarter, with revenue of $4.233 billion, gross margin of 57.3% and operating margin of 48%, all materially above the prior quarter and prior year. Growth was led by data center…
Read full summary
Seagate reported a strong September 2026 quarter, with revenue of $4.233 billion, gross margin of 57.3% and operating margin of 48%, all materially above the prior quarter and prior year. Growth was led by data center and nearline demand, while pricing actions and mix drove substantial margin expansion. Operating cash flow reached $1.7 billion and debt principal declined by $1.2 billion, although supplier commitments of $2.6 billion and remaining debt obligations create meaningful downside exposure.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Segment
- Data Center: 81% of revenue; Edge IoT: 19% of revenue.
- Segment
- Nearline HDD shipments: 198 exabytes, versus 195 exabytes in the prior quarter and 160 exabytes year over year.
- Segment
- Channel mix: OEMs 81%, distributors 15%, retailers 4%.
What stood out
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Revenue accelerated on pricing and nearline demand
Revenue was $4.233 billion, up $604 million, or approximately 17%, from $3.629 billion sequentially and up $1.6 billion, or approximately 61%, from $2.629 billion year over year. Management attributed the increases primarily to pricing actions and higher nearline demand.
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Pricing drove sharp margin expansion
Gross margin expanded to 57.3% from 52% sequentially and 39% year over year, while operating margin increased to 48% from 43% and 27%, respectively. Pricing actions and a mix shift toward higher-capacity products drove the year-over-year gross-margin improvement, partly offset by higher external component costs.
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Data center demand remained strong
Data Center represented 81% of revenue, and nearline shipments increased to 198 exabytes from 195 exabytes sequentially and 160 exabytes year over year. Management cited sustained global cloud demand, enterprise/OEM deployments and AI-related workloads as key drivers.
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Strong cash generation funded returns
Operating cash flow was $1.7 billion, while capital expenditures were $211 million, equivalent to approximately 5.0% of quarterly revenue. The company also paid $168 million in dividends and repurchased approximately 0.5 million shares for $400 million.
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Material debt reduction continued
The company reduced outstanding debt principal by $1.2 billion, including redemption and repurchase of certain Senior Notes for $1.1 billion and exchanges or redemption of remaining 2028 Notes for $186 million of cash and approximately 2 million shares.
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Profitability and shipment volumes improved
Net income increased to $1.761 billion from $1.294 billion sequentially and $549 million year over year. The company reported 220 exabytes of total HDD shipments, versus 218 exabytes in the prior quarter and 182 exabytes in the prior-year quarter.
What to watch
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Large supplier commitments create downside risk
The filing identifies approximately $2.6 billion of unconditional purchase obligations, primarily for inventory components, with $1.9 billion payable within one year. If demand or revenue declines, the company may face excess inventory, cancellation penalties or higher manufacturing costs.
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Debt service remains a material obligation
As of October 2, 2026, future long-term-debt principal payments totaled $2.4 billion and estimated future interest payments totaled $905 million, including $153 million due within one year. Cash and cash equivalents were $1.258 billion, down from $1.704 billion at the prior fiscal year-end.
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Geopolitical and export risks remain elevated
Trade-policy and export-control risk is significant given that Asia Pacific accounted for 47% of revenue. The company must complete 3 audits under its BIS Settlement Agreement, and the suspended denial order may be waived 5 years after the order date only if payment and audit requirements are satisfied.
Management's outlook
The 10-Q provides no quantitative revenue or EPS guidance. Management expects fiscal 2027 capital expenditures to remain within 4%-6% of revenue and believes cash sources will be sufficient to meet requirements for at least the next 12 months.
Earlier filings 4
10-Q · April 29, 2026
Seagate Technology's latest 10-Q filing reveals a strong Q3 performance with total revenue of $3.112 billion and non-GAAP earnings per share of $4.10, surpassing the consensus estimates of $2.954 billion and $3.45,…
10-Q · January 30, 2026
Seagate reported a strong December quarter with revenue of $2,825 million and diluted EPS of $2.60. Margins expanded materially (gross margin 41.6%, operating margin 29.8%), operating cash flow was robust at $1,255…
10-Q · May 2, 2025
Seagate reported a strong March 2025 quarter with revenue of $2,160 million and net income of $340 million (diluted EPS $1.57), driven by gross margin expansion to ~35.2% and operating income of $431 million.…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.