Fiscal first quarter 2027
Filed Oct 27, 2026Seagate Technology Reports Fiscal First Quarter 2027 Financial Results
Fiscal Q1 2027 revenue, profitability, operating cash flow and free cash flow were substantially higher than the prior-year quarter, while the company retired debt, returned capital to shareholders and guided fiscal Q2 2027 revenue and non-GAAP diluted EPS above fiscal Q1 2027 reported levels.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $4.23B | – | – |
| Revenuenon-GAAP | $4.23B | – | – |
| Gross profitGAAP | $2.43B | – | – |
| Gross profitnon-GAAP | $2.45B | – | – |
| Gross marginGAAP | 57.3% | – | – |
| Gross marginnon-GAAP | 57.8% | – | – |
| Operating expensesGAAP | $363M | – | – |
| Operating expensesnon-GAAP | $300M | – | – |
| Income from operationsGAAP | $2.06B | – | – |
| Income from operationsnon-GAAP | $2.15B | – | – |
| Operating marginGAAP | 48.8% | – | – |
| Operating marginnon-GAAP | 50.7% | – | – |
| Income before income taxesGAAP | $1.98B | – | – |
| Provision for income taxesGAAP | $221M | – | – |
| Net incomeGAAP | $1.76B | – | – |
| Net incomenon-GAAP | $1.78B | – | – |
| Basic net income per shareGAAP | $7.72 | – | – |
| Diluted earnings per shareGAAP | $7.59 | – | – |
| Diluted net income per sharenon-GAAP | $7.68 | – | – |
| Net cash provided by operating activitiesGAAP | $1.69B | – | – |
| Free cash flownon-GAAP | $1.48B | – | – |
| Non-GAAP EBITDAnon-GAAP | $2.09B | – | – |
| Non-GAAP adjusted EBITDAnon-GAAP | $2.22B | – | – |
| Last twelve months non-GAAP adjusted EBITDAnon-GAAP | $6.09B | – | – |
| Cash dividends declared per ordinary shareGAAP | $0.74 | – | – |
Fiscal second quarter 2027 outlook
- Revenue$4.8 billion, plus or minus $100 million
- NoteNon-GAAP diluted EPS of $9.20, plus or minus $0.20
- NoteGuidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to estimated share-based compensation expenses of $0.30 per share.
Capital returns
- Returned $568 million to shareholders through dividends and share repurchases.
- Dividends to shareholders were $168 million.
- Repurchases of ordinary shares were $400 million.
- The Board declared a quarterly cash dividend of $0.76 per share, payable on January 7, 2027 to shareholders of record as of the close of business on December 23, 2026.
- Retired approximately $1.2 billion in principal debt in the fiscal first quarter.
- Subsequent to the end of the fiscal first quarter, retired an additional $750 million of principal debt.
What drove it
- Management cited a strengthening demand environment and long-term customer demand visibility.
- Management said data creation, retention and reuse continue to compound storage demand.
- Management cited HAMR-based technology, areal density gains, supply discipline and value-based pricing strategy.
- GAAP cost of revenue was $1,806 million, compared with $1,592 million, while revenue was $4,233 million, compared with $2,629 million.
- GAAP product development was $200 million, compared with $186 million, and marketing and administrative expense was $159 million, compared with $144 million.
Concerns
- Net loss from debt transactions was $44 million, compared with $6 million.
- Accounts receivable, net increased to $1,817 million from $1,534 million, and inventories, net increased to $1,700 million from $1,571 million.
- The company identified risks related to tariffs, trade restrictions and evolving global trade policy.
- Fiscal Q2 2027 non-GAAP diluted EPS guidance excludes known pre-tax charges related to estimated share-based compensation expenses of $0.30 per share and cannot be reconciled to the most directly comparable GAAP measure beyond that item.
- Future quarterly dividends are at the discretion of the Board and depend on financial position, operating results, available cash, cash flow, capital requirements and other factors.
What to watch
- Fiscal Q2 2027 revenue guidance of $4.8 billion, plus or minus $100 million.
- Fiscal Q2 2027 non-GAAP diluted EPS guidance of $9.20, plus or minus $0.20.
- Execution of the HAMR-based technology roadmap and management’s ability to address growing exabyte demand through areal density gains while maintaining supply discipline.
- The effects of debt retirement, including the additional $750 million of principal debt retired subsequent to quarter-end.
- Working-capital movements, including accounts receivable and inventories.
Balance sheet and cash flow
- Cash and cash equivalents were $1,258 million as of October 2, 2026, compared with $1,704 million as of July 3, 2026.
- Accounts receivable, net were $1,817 million as of October 2, 2026, compared with $1,534 million as of July 3, 2026.
- Inventories, net were $1,700 million as of October 2, 2026, compared with $1,571 million as of July 3, 2026.
- Total assets were $10,326 million as of October 2, 2026, compared with $9,972 million as of July 3, 2026.
- Long-term debt, less current portion was $2,351 million as of October 2, 2026, compared with $3,380 million as of July 3, 2026.
- Total liabilities were $6,873 million as of October 2, 2026, compared with $7,805 million as of July 3, 2026.
- Total shareholders’ equity was $3,453 million as of October 2, 2026, compared with $2,167 million as of July 3, 2026.
- Acquisition of property, equipment and leasehold improvements was $211 million, compared with $105 million.
- Net cash used in financing activities was $1,814 million, compared with $221 million.
- Cash, cash equivalents and restricted cash at the end of the period was $1,370 million, compared with $1,114 million.
- Gross debt was $2.4 billion after fiscal first-quarter debt retirement and $1.6 billion subsequent to the end of the fiscal first quarter.
- There were 230 million ordinary shares issued and outstanding as of the end of the quarter.
Analysis
Seagate reported fiscal Q1 2027 revenue of $4,233 million, compared with $2,629 million in fiscal Q1 2026. Profitability expanded sharply on the same comparison: GAAP gross margin was 57.3%, compared with 39.4%, and GAAP operating margin was 48.8%, compared with 26.4%. GAAP net income was $1,761 million, compared with $549 million, and GAAP diluted earnings per share were $7.59, compared with $2.43. Non-GAAP diluted net income per share was $7.68, compared with $2.61.
The release attributes the period to a strengthening demand environment, long-term customer demand visibility, supply discipline and value-based pricing. Management also identified HAMR-based technology and areal density gains as central to addressing growing exabyte demand. The cost structure supported the higher margins: GAAP cost of revenue was $1,806 million, while GAAP product development was $200 million and marketing and administrative expense was $159 million.
Cash generation was a major feature of the quarter. Net cash provided by operating activities was $1,690 million, compared with $532 million, and free cash flow was $1,479 million, compared with $427 million. The company spent $211 million on acquisition of property, equipment and leasehold improvements. Balance-sheet activity included approximately $1.2 billion of principal debt retired during the fiscal first quarter, followed by an additional $750 million subsequent to quarter-end. Cash and cash equivalents were $1,258 million at October 2, 2026, while long-term debt, less current portion was $2,351 million.
Capital allocation combined debt reduction with shareholder distributions. Seagate returned $568 million through dividends and share repurchases, consisting of $168 million of dividends to shareholders and $400 million of ordinary-share repurchases. The Board declared a quarterly cash dividend of $0.76 per share, payable January 7, 2027. The company also reported 230 million ordinary shares issued and outstanding at quarter-end.
For fiscal Q2 2027, Seagate guided revenue to $4.8 billion, plus or minus $100 million, and non-GAAP diluted EPS to $9.20, plus or minus $0.20. The EPS outlook excludes known pre-tax estimated share-based compensation expense of $0.30 per share. Items requiring attention include the $44 million net loss from debt transactions, higher accounts receivable and inventories versus July 3, 2026, and the company’s cited risks from tariffs, trade restrictions and evolving global trade policy.
Management, verbatim
Seagate delivered another quarter of record profitability and our highest ever free cash flow in the September quarter, demonstrating the earnings power of our business amid a strengthening demand environment.
Dave Mosley, chair and chief executive officer
Data creation, retention and reuse continue to compound storage demand with long term customer demand visibility reinforcing our view of a multi-year growth phase.
Dave Mosley, chair and chief executive officer
Our HAMR-based technology roadmap enables us to address growing exabyte demand through areal density gains while maintaining supply discipline.
Dave Mosley, chair and chief executive officer
Not in the filing
stated, not guessed- Segment revenue and segment profitability were not reported.
- Prior-period guidance was not provided, so comparison of actual results with prior guidance is unavailable.
- Fiscal Q2 2027 guidance for gross margin, operating expenses, tax rate, GAAP diluted EPS and free cash flow was not provided.
- Year-over-year and sequential percentage changes were not printed for the reported financial metrics.
- A reconciliation of fiscal Q2 2027 non-GAAP diluted EPS guidance to the most directly comparable GAAP measure was not provided beyond estimated share-based compensation expenses of $0.30 per share.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.