Seagate Raises First Quarter Guidance After Revenue Jump
The data storage company reported fourth-quarter revenue of $3.629 billion, a 48.6% increase over the prior year.
Seagate Technology Holdings (STX) reported fourth-quarter revenue that rose 48.6% compared to the same period last year. The data storage maker saw a sequential increase of 16.6% from the $3.112 billion recorded in the third quarter.
The results marked a period of accelerating profitability and margin expansion. Non-GAAP gross margin reached 52.7% in the fourth quarter, up from 47.0% in the previous quarter and 37.9% in the prior-year period. Non-GAAP operating margin followed a similar trajectory, increasing to 44.6% from 37.5% in the third quarter and 26.2% a year ago.
Non-GAAP diluted earnings per share for the quarter were $5.71, an increase from $4.10 in the third quarter and $2.59 in the fourth quarter of 2024. Free cash flow for the period rose to $1.1 billion, up from $953 million in the third quarter.
For the full fiscal year 2025, annual revenue grew 34% to $12.2 billion compared to $9.1 billion in fiscal 2024. Full-year non-GAAP gross margin expanded to 46.1% from 35.8%, while the non-GAAP operating margin rose to 36.5% from 23.4%.
Seagate raised its outlook for the first quarter of fiscal 2026. The company now expects revenue of $4.1 billion (±$100 million), compared to the $3.45 billion (±$100 million) guidance provided for the fourth quarter of 2025. Non-GAAP diluted EPS guidance for the first quarter of 2026 is $7.30 (±$0.20), up from the $5.00 (±$0.20) guidance for the fourth quarter of 2025.
The company reduced total debt by $302 million in the fourth quarter and $1.4 billion for the full fiscal year, ending the year with total debt of $3.6 billion. On June 12, 2025, Seagate redeemed all outstanding 3.50% Exchangeable Senior Notes due 2028 following partial exchanges earlier in the year.