Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Seagate Technology Reports Fiscal First Quarter 2025 Financial Results By: Seagate Technology Holdings plc via Business Wire October 22, 2024 at 16:05 PM EDT Fiscal Q1 2025 Highlights Revenue increased to $2.17 billion GAAP diluted earnings per share (EPS) of $1.41; non-GAAP diluted EPS of $1.58 Cash flow from operations of $95 million and free cash flow of $27 million Increased quarterly cash dividend by approximately 3% to $0.72 per share Seagate Technology Holdings plc (NASDAQ: STX) (the “Company” or “Seagate”), a leading innovator of mass-capacity data storage, today reported financial results for its fiscal first quarter ended September 27, 2024. "Seagate is off to an outstanding start to the fiscal year, highlighted by gross margin expanding to the highest level in more than a decade," said Dave Mosley, Seagate’s chief executive officer. "We executed on our plans to aggressively ramp our 28-terabyte nearline drives and broaden the number of cloud customers entering qualification on HAMR-based Mozaic products. We are excited by the strong product momentum which positions us well to address customer demand while delivering profitable growth. Our confidence in Seagate’s future opportunities is reflected in the decision to raise the quarterly dividend as announced today," Mosley concluded. Quarterly Financial Results GAAP Non-GAAP FQ1 2025 FQ1 2024 FQ1 2025 FQ1 2024 Revenue ($M) $ 2,168 $ 1,454 $ 2,168 $ 1,454 Gross Margin 32.9 % 10.2 % 33.3 % 19.8 % Operating Margin 18.6 % (8.9 %) 20.4 % 2.8 % Net Income (Loss) ($M) $ 305 $ (184 ) $ 337 $ (46 ) Diluted Earnings (Loss) Per Share $ 1.41 $ (0.88 ) $ 1.58 $ (0.22 ) For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables. During the fiscal first quarter the Company generated $95 million in cash flow from operations, $27 million in free cash flow and returned $147 million of capital to shareholders through its quarterly dividend. As of the end of the quarter, cash and cash equivalents totaled $1.2 billion, and there were 211 million ordinary shares issued and outstanding. Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investor Relations website at investors.seagate.com. Quarterly Cash Dividend The Board of Directors of the Company (the “Board”) declared a quarterly cash dividend of $0.72 per share, which will be payable on January 6, 2025 to shareholders of record as of the close of business on December 15, 2024. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board. Business Outlook The business outlook for the fiscal second quarter 2025 is based on our current assumptions and expectations; actual results may differ materially as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release. The Company is providing the following guidance for its fiscal second quarter 2025: Revenue of $2.30 billion, plus or minus $150 million Non-GAAP diluted EPS of $1.85, plus or minus $0.20 Guidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to estimated share-based compensation expenses of $0.22 per share. We have not reconciled our non-GAAP diluted EPS guidance for fiscal second quarter 2025 to the most directly comparable GAAP measure, other than estimated share-based compensation expenses, because material items that may impact these measures are out of our control and/or cannot be reasonably predicted, including, but not limited to, net (gain) loss recognized from early redemption of debt, purchase order cancellation fees, strategic investment losses (gains) or impairment charges, income tax adjustments on these measures, and other charges or benefits that may arise. The amounts of these measures are not currently available but may be material to future results. A reconciliation of the non-GAAP diluted EPS guidance for fiscal second quarter 2025 to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release. Investor Communications Seagate management will hold a public webcast today at 2:00 PM PT / 5:00 PM ET that can be accessed on its Investor Relations website at investors.seagate.com. An archived audio webcast of this event will be available on Seagate’s Investor Relations website at investors.seagate.com shortly following the event conclusion. About Seagate Seagate Technology is a leading innovator of mass-capacity data storage. We create breakthrough technology so you can confidently store your data and easily unlock its value. Founded over 45 years ago, Seagate has shipped over four billion terabytes of data capacity and offers a full portfolio of storage devices, systems, and services from edge to cloud. To learn more about how Seagate leads storage innovation, visit www.seagate.com and our blog, or follow us on X, Facebook, LinkedIn, and YouTube. © 2024 Seagate Technology LLC. All rights reserved. Seagate, Seagate Technology, and the Spiral logo are registered trademarks of Seagate Technology LLC in the United States and/or other countries. Cautionary Note Regarding Forward-Looking Statements This press release and our other communications regarding our quarterly financial results 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. Forward-looking statements include, among other things, statements about the Company’s plans, programs, strategies, prospects, and opportunities; financial outlook for future periods, including the fiscal second quarter 2025; expectations regarding our ability to service debt and continue to generate free cash flow; expectations regarding our ability to make timely quarterly payments under the settlement agreement with the U.S. Department of Commerce’s Bureau of Industry and Security; expectations regarding logistical, macroeconomic, or other factors affecting the Company; expectations regarding market demand for the Company’s products, our visibility into such demand and our ability to optimize our level of production and meet market and industry expectations and the effects of these future trends on Company’s financial and operational performance, including our ability to deliver profitable growth; anticipated shifts in technology and storage industry trends, and anticipated demand and performance of new storage product introductions, including HAMR-based Mozaic products; and expectations regarding the Company’s business strategy and performance, as well as dividend issuance plans for the fiscal quarter ending December 27, 2024 and beyond. 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 the negative of these words, variations of these words and comparable 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 subject to various uncertainties and risks that could cause our actual results to differ materially from historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s latest periodic report on Form 10-Q or Form 10-K filed with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on, and which speak only as of, the date hereof. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, unless required by applicable law. The inclusion of Seagate’s website addresses in this press release are provided for convenience only. The information contained in, or that can be accessed through, Seagate’s websites and social media channels are not part of this press release. SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) September 27, 2024 June 28, 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,239 $ 1,358 Accounts receivable, net 628 429 Inventories, net 1,383 1,239 Other current assets 358 306 Total current assets 3,608 3,332 Property, equipment and leasehold improvements, net 1,599 1,614 Goodwill 1,219 1,219 Deferred income taxes 1,038 1,037 Other assets, net 508 537 Total Assets $ 7,972 $ 7,739 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 1,778 $ 1,786 Accrued employee compensation 148 106 Accrued warranty 71 74 Current portion of long-term debt 479 479 Accrued expenses 685 654 Total current liabilities 3,161 3,099 Long-term accrued warranty 70 75 Other non-current liabilities 844 861 Long-term debt, less current portion 5,197 5,195 Total Liabilities 9,272 9,230 Total Shareholders’ Deficit (1,300 ) (1,491 ) Total Liabilities and Shareholders’ Deficit $ 7,972 $ 7,739 SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 Revenue $ 2,168 $ 1,454 Cost of revenue 1,454 1,305 Product development 181 171 Marketing and administrative 129 105 Restructuring and other, net 1 2 Total operating expenses 1,765 1,583 Income (loss) from operations 403 (129 ) Interest income 7 2 Interest expense (85 ) (84 ) Net gain from termination of interest rate swap — 104 Net loss from early redemption of debt — (29 ) Other, net (9 ) (11 ) Other expense, net (87 ) (18 ) Income (loss) before income taxes 316 (147 ) Provision for income taxes 11 37 Net income (loss) $ 305 $ (184 ) Net income (loss) per share: Basic $ 1.45 $ (0.88 ) Diluted $ 1.41 $ (0.88 ) Number of shares used in per share calculations: Basic 211 208 Diluted 216 208 Cash dividends declared per ordinary share $ 0.70 $ 0.70 SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 OPERATING ACTIVITIES Net income (loss) $ 305 $ (184 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 64 76 Share-based compensation 38 25 Net loss from redemption and repurchase of debt — 7 Deferred income taxes (3 ) 28 Other non-cash operating activities, net 23 (50 ) Changes in operating assets and liabilities: Accounts receivable, net (199 ) 100 Inventories, net (144 ) 88 Accounts payable 10 (70 ) Accrued employee compensation 37 (12 ) BIS settlement penalty (15 ) — Accrued expenses, income taxes and warranty 16 54 Other assets and liabilities (37 ) 65 Net cash provided by operating activities 95 127 INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements (68 ) (70 ) Net cash used in investing activities (68 ) (70 ) FINANCING ACTIVITIES Redemption and repurchase of debt — (1,288 ) Proceeds from issuance of long-term debt — 1,500 Dividends to shareholders (147 ) (145 ) Taxes paid related to net share settlement of equity awards (28 ) (25 ) Proceeds from issuance of ordinary shares under employee stock plans 29 35 Other financing activities, net — (126 ) Net cash used in financing activities (146 ) (49 ) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash — 1 (Decrease) increase in cash, cash equivalents and restricted cash (119 ) 9 Cash, cash equivalents and restricted cash at the beginning of the period 1,360 788 Cash, cash equivalents and restricted cash at the end of the period $ 1,241 $ 797 Use of non-GAAP financial information The Company uses non-GAAP measures of gross profit, gross margin, operating expenses, income from operations, operating margin, net income, diluted EPS, free cash flow, EBITDA, adjusted EBITDA and last twelve months adjusted EBITDA, which are adjusted from results based on GAAP to exclude certain benefits, expenses, gains and losses. These non-GAAP financial measures are used by management to evaluate the business and provided to enhance the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to investors as these non-GAAP results exclude certain benefits, expenses, gains and losses that the Company believes are not part of the Company's ongoing operations and not indicative of its core operating results. These non-GAAP financial measures are some of the measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute or replacement for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in its industry. SEAGATE TECHNOLOGY HOLDINGS PLC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (In millions, except per share amounts, gross margin and operating margin) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 GAAP Gross Profit $ 714 $ 149 Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Purchase order cancellation fees (1 ) 118 Share-based compensation 10 7 Other charges — 1 Non-GAAP Gross Profit $ 723 $ 288 GAAP Gross Margin 32.9 % 10.2 % Non-GAAP Gross Margin 33.3 % 19.8 % GAAP Operating Expenses $ 311 $ 278 Restructuring and other, net (1 ) (2 ) Share-based compensation (28 ) (18 ) Other charges (1 ) (10 ) Non-GAAP Operating Expenses $ 281 $ 248 GAAP Income (Loss) From Operations $ 403 $ (129 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Purchase order cancellation fees (1 ) 118 Restructuring and other, net 1 2 Share-based compensation 38 25 Other charges 1 11 Non-GAAP Income From Operations $ 442 $ 40 GAAP Operating Margin 18.6 % (8.9 )% Non-GAAP Operating Margin 20.4 % 2.8 % GAAP Net Income (Loss) $ 305 $ (184 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Net gain from termination of interest rate swap — (104 ) Net loss from early redemption of debt — 29 Purchase order cancellation fees (1 ) 118 Restructuring and other, net 1 2 Share-based compensation 38 25 Strategic investment losses or impairment charges 1 — Other charges 1 11 Income tax adjustments (8 ) 44 Non-GAAP Net Income (Loss) $ 337 $ (46 ) GAAP Diluted Net Income (Loss) Per Share $ 1.41 $ (0.88 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 0.06 Net gain from termination of interest rate swap — $ (0.50 ) Net loss from early redemption of debt — 0.14 Purchase order cancellation fees — 0.57 Restructuring and other, net — 0.01 Share-based compensation 0.18 0.12 Strategic investment losses or impairment charges — — Other charges — 0.05 Income tax adjustments (0.04 ) 0.21 Non-GAAP diluted share count adjustments1 0.03 — Non-GAAP Diluted Net Income (Loss) Per Share1 $ 1.58 $ (0.22 ) Shares Used In Diluted Net Income (Loss) Per Share Calculation GAAP 216 208 Non-GAAP diluted share count adjustments1 (3 ) — Non-GAAP 213 208 GAAP Net Cash Provided by Operating Activities $ 95 $ 127 Acquisition of property, equipment and leasehold improvements (68 ) (70 ) Free Cash Flow $ 27 $ 57 _____________________________________ 1 For the three months ended September 27, 2024, using the if-converted method, approximately 3 million shares are issuable upon conversion of our 2028 exchangeable senior notes. These dilutive effects are expected to be offset in full by the capped call transactions and are excluded from non-GAAP shares used in diluted net income per share calculation. For the three months ended September 29, 2023, GAAP and non-GAAP diluted net loss per share were computed using weighted average basic shares of 208 million, as a result of the net loss reported during the period. SEAGATE TECHNOLOGY HOLDINGS PLC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (In millions) (Unaudited) For the Three Months Ended September 27, 2024 June 28, 2024 March 29, 2024 December 29, 2023 Last Twelve Months GAAP Net Income (Loss) $ 305 $ 513 $ 25 $ (19 ) $ 824 Depreciation and amortization 64 63 63 62 252 Interest expense 85 82 82 84 333 Interest income (7 ) (7 ) (3 ) (3 ) (20 ) Income tax expense 11 25 33 15 84 Non-GAAP EBITDA 458 676 200 139 1,473 Net gain from business divestiture — (313 ) — — (313 ) Purchase order cancellation fees (1 ) (26 ) (1 ) (4 ) (32 ) Restructuring and other, net 1 (3 ) 2 (31 ) (31 ) Share-based compensation 38 38 34 30 140 Strategic investment losses or impairment charges 1 8 — 43 52 Underutilization charges, net of depreciation and amortization — 20 38 31 89 Other charges 1 4 5 8 18 Non-GAAP Adjusted EBITDA $ 498 $ 404 $ 278 $ 216 $ 1,396 The Company’s Non-GAAP measures are adjusted for the following items: Accelerated depreciation, impairment and other charges related to cost saving efforts These expenses are excluded in the non-GAAP measures due to the inconsistency in amount and frequency, and they are not normal operating expenses or indicative of the Company's operating performance. Exclusion of these amounts provides a supplemental view of the Company's operating performance to investors to enable them to evaluate the Company's current operating performance compared to the past periods' operating performance. Net gain from business divestiture The Company recorded a pre-tax net gain of $313 million in connection to the sale of System-on-Chip Operations in April 2024. The net gain is excluded in the non-GAAP measures because it is not indicative of the Company's operating performance. The Company excludes this amount to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods' operating performance. Net loss (gain) from early redemption of debt and termination of interest rate swap From time to time, the Company incurs gains, losses and fees from the early redemption and repurchase of certain long-term debt instruments and termination of related interest rate swap agreements. The amount of these charges may be inconsistent in size and varies depending on the timing of the early redemption of debt and/or termination of interest rate swap. The Company does not believe these are part of its normal operating performance. Exclusion of these amounts provides a supplemental view of the Company's operating performance to investors to enable them to evaluate the Company's current operating performance compared to the past periods' operating performance. Purchase order cancellation fees Purchase order cancellation fees are the costs incurred to cancel certain purchase commitments made with the Company's suppliers for component and equipment purchases that will not be received due to change in forecasted demand. These charges are inconsistent in amount and frequency. The Company does not believe these are part of its normal operating expenses. Exclusion of these amounts provides a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Restructuring and other, net Restructuring and other, net are costs associated with restructuring plans that are primarily related to costs associated with reduction in the Company’s workforce, exiting certain facilities and other related costs, as well as charges or gains from sale of properties. These costs or benefits do not reflect the Company’s normal or ongoing operating performance and consequently the Company excludes these expenses to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Share-based compensation These expenses consist primarily of expenses for employee share-based compensation. Given the variety of equity awards used by companies, the varying methodologies for determining share-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding share-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time and compare it against the Company’s peers, a majority of whom also exclude share-based compensation expense from their non-GAAP results. Strategic investment gains, losses and impairment charges From time to time, the Company incurs gains, losses or impairment charges from strategic investments that are measured and accounted at fair value, under the equity method of accounting, as available-for-sale debt securities or adjust for downward or upward adjustments to the carrying value under the measurement alternative if an impairment or observable price adjustment is recognized in the current period that are not considered normal operating expenses or gains. The resulting expense, gain or impairment loss is inconsistent in amount and frequency and the Company excludes these amounts to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Other charges The other charges primarily include IT transformation costs. These charges are inconsistent in amount and frequency and are excluded to provide a supplemental view to investors to evaluate the Company's current operating performance compared to past periods’ operating performance. Income tax adjustments Provision or benefit for income taxes represents the tax effects of non-GAAP adjustments determined using a hybrid with and without method and effective tax rate for the applicable adjustment and jurisdiction. Non-GAAP diluted share count adjustments Using the if-converted method, diluted net income per share is calculated assuming that the excess value above the principal of the 2028 exchangeable notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. Non-GAAP shares used in diluted net income per share calculation excluded certain dilutive shares, which are expected to be offset partially or in full by the capped call transactions entered by the Company in conjunction with our 2028 exchangeable senior notes in order to reduce the potential dilution to the Company’s ordinary shares upon the conversion. Free cash flow Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less acquisition of property, equipment and leasehold improvements. Free cash flow does not reflect non-cash items, net cash used or provided by financing activities and net cash used or provided by investing activities, other than acquisition of property, equipment and leasehold improvements. This non-GAAP financial measure is used by management to assess the Company's sources of liquidity, capital structure and operating performance. EBITDA, adjusted EBITDA and last twelve months (LTM) adjusted EBITDA EBITDA is defined as net income (loss) before income tax expense, interest expense, interest income, depreciation and amortization. Adjusted EBITDA excludes certain expenses, gains and losses that the Company believes are not indicative of its core operating results. These adjustments primarily include impairment and other charges related to cost saving efforts, net loss (gain) from early redemption of debt, net gain from termination of interest rate swap, net gain from business divestiture, purchase order cancellation fees, restructuring and other, net, share-based compensation, strategic investment losses or impairment charges, other extraordinary charges such as factory underutilization charges. LTM adjusted EBITDA is defined as the total of last twelve months adjusted EBITDA. These non-GAAP financial measures are used by management to evaluate the Company’s debt portfolio and structure to comply with its financial debt covenants. View source version on businesswire.com: https://www.businesswire.com/news/home/20241022235947/en/Contacts Investor Relations Contact: Shanye Hudson, (510) 661-1600 shanye.hudson@seagate.com Media Contact: Karin Taylor (408) 772-8279 karin.h.taylor@seagate.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Seagate Technology Reports Fiscal First Quarter 2025 Financial Results By: Seagate Technology Holdings plc via Business Wire October 22, 2024 at 16:05 PM EDT Fiscal Q1 2025 Highlights Revenue increased to $2.17 billion GAAP diluted earnings per share (EPS) of $1.41; non-GAAP diluted EPS of $1.58 Cash flow from operations of $95 million and free cash flow of $27 million Increased quarterly cash dividend by approximately 3% to $0.72 per share Seagate Technology Holdings plc (NASDAQ: STX) (the “Company” or “Seagate”), a leading innovator of mass-capacity data storage, today reported financial results for its fiscal first quarter ended September 27, 2024. "Seagate is off to an outstanding start to the fiscal year, highlighted by gross margin expanding to the highest level in more than a decade," said Dave Mosley, Seagate’s chief executive officer. "We executed on our plans to aggressively ramp our 28-terabyte nearline drives and broaden the number of cloud customers entering qualification on HAMR-based Mozaic products. We are excited by the strong product momentum which positions us well to address customer demand while delivering profitable growth. Our confidence in Seagate’s future opportunities is reflected in the decision to raise the quarterly dividend as announced today," Mosley concluded. Quarterly Financial Results GAAP Non-GAAP FQ1 2025 FQ1 2024 FQ1 2025 FQ1 2024 Revenue ($M) $ 2,168 $ 1,454 $ 2,168 $ 1,454 Gross Margin 32.9 % 10.2 % 33.3 % 19.8 % Operating Margin 18.6 % (8.9 %) 20.4 % 2.8 % Net Income (Loss) ($M) $ 305 $ (184 ) $ 337 $ (46 ) Diluted Earnings (Loss) Per Share $ 1.41 $ (0.88 ) $ 1.58 $ (0.22 ) For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables. During the fiscal first quarter the Company generated $95 million in cash flow from operations, $27 million in free cash flow and returned $147 million of capital to shareholders through its quarterly dividend. As of the end of the quarter, cash and cash equivalents totaled $1.2 billion, and there were 211 million ordinary shares issued and outstanding. Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investor Relations website at investors.seagate.com. Quarterly Cash Dividend The Board of Directors of the Company (the “Board”) declared a quarterly cash dividend of $0.72 per share, which will be payable on January 6, 2025 to shareholders of record as of the close of business on December 15, 2024. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board. Business Outlook The business outlook for the fiscal second quarter 2025 is based on our current assumptions and expectations; actual results may differ materially as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release. The Company is providing the following guidance for its fiscal second quarter 2025: Revenue of $2.30 billion, plus or minus $150 million Non-GAAP diluted EPS of $1.85, plus or minus $0.20 Guidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to estimated share-based compensation expenses of $0.22 per share. We have not reconciled our non-GAAP diluted EPS guidance for fiscal second quarter 2025 to the most directly comparable GAAP measure, other than estimated share-based compensation expenses, because material items that may impact these measures are out of our control and/or cannot be reasonably predicted, including, but not limited to, net (gain) loss recognized from early redemption of debt, purchase order cancellation fees, strategic investment losses (gains) or impairment charges, income tax adjustments on these measures, and other charges or benefits that may arise. The amounts of these measures are not currently available but may be material to future results. A reconciliation of the non-GAAP diluted EPS guidance for fiscal second quarter 2025 to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release. Investor Communications Seagate management will hold a public webcast today at 2:00 PM PT / 5:00 PM ET that can be accessed on its Investor Relations website at investors.seagate.com. An archived audio webcast of this event will be available on Seagate’s Investor Relations website at investors.seagate.com shortly following the event conclusion. About Seagate Seagate Technology is a leading innovator of mass-capacity data storage. We create breakthrough technology so you can confidently store your data and easily unlock its value. Founded over 45 years ago, Seagate has shipped over four billion terabytes of data capacity and offers a full portfolio of storage devices, systems, and services from edge to cloud. To learn more about how Seagate leads storage innovation, visit www.seagate.com and our blog, or follow us on X, Facebook, LinkedIn, and YouTube. © 2024 Seagate Technology LLC. All rights reserved. Seagate, Seagate Technology, and the Spiral logo are registered trademarks of Seagate Technology LLC in the United States and/or other countries. Cautionary Note Regarding Forward-Looking Statements This press release and our other communications regarding our quarterly financial results 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. Forward-looking statements include, among other things, statements about the Company’s plans, programs, strategies, prospects, and opportunities; financial outlook for future periods, including the fiscal second quarter 2025; expectations regarding our ability to service debt and continue to generate free cash flow; expectations regarding our ability to make timely quarterly payments under the settlement agreement with the U.S. Department of Commerce’s Bureau of Industry and Security; expectations regarding logistical, macroeconomic, or other factors affecting the Company; expectations regarding market demand for the Company’s products, our visibility into such demand and our ability to optimize our level of production and meet market and industry expectations and the effects of these future trends on Company’s financial and operational performance, including our ability to deliver profitable growth; anticipated shifts in technology and storage industry trends, and anticipated demand and performance of new storage product introductions, including HAMR-based Mozaic products; and expectations regarding the Company’s business strategy and performance, as well as dividend issuance plans for the fiscal quarter ending December 27, 2024 and beyond. 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 the negative of these words, variations of these words and comparable 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 subject to various uncertainties and risks that could cause our actual results to differ materially from historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s latest periodic report on Form 10-Q or Form 10-K filed with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on, and which speak only as of, the date hereof. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, unless required by applicable law. The inclusion of Seagate’s website addresses in this press release are provided for convenience only. The information contained in, or that can be accessed through, Seagate’s websites and social media channels are not part of this press release. SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) September 27, 2024 June 28, 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,239 $ 1,358 Accounts receivable, net 628 429 Inventories, net 1,383 1,239 Other current assets 358 306 Total current assets 3,608 3,332 Property, equipment and leasehold improvements, net 1,599 1,614 Goodwill 1,219 1,219 Deferred income taxes 1,038 1,037 Other assets, net 508 537 Total Assets $ 7,972 $ 7,739 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 1,778 $ 1,786 Accrued employee compensation 148 106 Accrued warranty 71 74 Current portion of long-term debt 479 479 Accrued expenses 685 654 Total current liabilities 3,161 3,099 Long-term accrued warranty 70 75 Other non-current liabilities 844 861 Long-term debt, less current portion 5,197 5,195 Total Liabilities 9,272 9,230 Total Shareholders’ Deficit (1,300 ) (1,491 ) Total Liabilities and Shareholders’ Deficit $ 7,972 $ 7,739 SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 Revenue $ 2,168 $ 1,454 Cost of revenue 1,454 1,305 Product development 181 171 Marketing and administrative 129 105 Restructuring and other, net 1 2 Total operating expenses 1,765 1,583 Income (loss) from operations 403 (129 ) Interest income 7 2 Interest expense (85 ) (84 ) Net gain from termination of interest rate swap — 104 Net loss from early redemption of debt — (29 ) Other, net (9 ) (11 ) Other expense, net (87 ) (18 ) Income (loss) before income taxes 316 (147 ) Provision for income taxes 11 37 Net income (loss) $ 305 $ (184 ) Net income (loss) per share: Basic $ 1.45 $ (0.88 ) Diluted $ 1.41 $ (0.88 ) Number of shares used in per share calculations: Basic 211 208 Diluted 216 208 Cash dividends declared per ordinary share $ 0.70 $ 0.70 SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 OPERATING ACTIVITIES Net income (loss) $ 305 $ (184 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 64 76 Share-based compensation 38 25 Net loss from redemption and repurchase of debt — 7 Deferred income taxes (3 ) 28 Other non-cash operating activities, net 23 (50 ) Changes in operating assets and liabilities: Accounts receivable, net (199 ) 100 Inventories, net (144 ) 88 Accounts payable 10 (70 ) Accrued employee compensation 37 (12 ) BIS settlement penalty (15 ) — Accrued expenses, income taxes and warranty 16 54 Other assets and liabilities (37 ) 65 Net cash provided by operating activities 95 127 INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements (68 ) (70 ) Net cash used in investing activities (68 ) (70 ) FINANCING ACTIVITIES Redemption and repurchase of debt — (1,288 ) Proceeds from issuance of long-term debt — 1,500 Dividends to shareholders (147 ) (145 ) Taxes paid related to net share settlement of equity awards (28 ) (25 ) Proceeds from issuance of ordinary shares under employee stock plans 29 35 Other financing activities, net — (126 ) Net cash used in financing activities (146 ) (49 ) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash — 1 (Decrease) increase in cash, cash equivalents and restricted cash (119 ) 9 Cash, cash equivalents and restricted cash at the beginning of the period 1,360 788 Cash, cash equivalents and restricted cash at the end of the period $ 1,241 $ 797 Use of non-GAAP financial information The Company uses non-GAAP measures of gross profit, gross margin, operating expenses, income from operations, operating margin, net income, diluted EPS, free cash flow, EBITDA, adjusted EBITDA and last twelve months adjusted EBITDA, which are adjusted from results based on GAAP to exclude certain benefits, expenses, gains and losses. These non-GAAP financial measures are used by management to evaluate the business and provided to enhance the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to investors as these non-GAAP results exclude certain benefits, expenses, gains and losses that the Company believes are not part of the Company's ongoing operations and not indicative of its core operating results. These non-GAAP financial measures are some of the measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute or replacement for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in its industry. SEAGATE TECHNOLOGY HOLDINGS PLC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (In millions, except per share amounts, gross margin and operating margin) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 GAAP Gross Profit $ 714 $ 149 Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Purchase order cancellation fees (1 ) 118 Share-based compensation 10 7 Other charges — 1 Non-GAAP Gross Profit $ 723 $ 288 GAAP Gross Margin 32.9 % 10.2 % Non-GAAP Gross Margin 33.3 % 19.8 % GAAP Operating Expenses $ 311 $ 278 Restructuring and other, net (1 ) (2 ) Share-based compensation (28 ) (18 ) Other charges (1 ) (10 ) Non-GAAP Operating Expenses $ 281 $ 248 GAAP Income (Loss) From Operations $ 403 $ (129 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Purchase order cancellation fees (1 ) 118 Restructuring and other, net 1 2 Share-based compensation 38 25 Other charges 1 11 Non-GAAP Income From Operations $ 442 $ 40 GAAP Operating Margin 18.6 % (8.9 )% Non-GAAP Operating Margin 20.4 % 2.8 % GAAP Net Income (Loss) $ 305 $ (184 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Net gain from termination of interest rate swap — (104 ) Net loss from early redemption of debt — 29 Purchase order cancellation fees (1 ) 118 Restructuring and other, net 1 2 Share-based compensation 38 25 Strategic investment losses or impairment charges 1 — Other charges 1 11 Income tax adjustments (8 ) 44 Non-GAAP Net Income (Loss) $ 337 $ (46 ) GAAP Diluted Net Income (Loss) Per Share $ 1.41 $ (0.88 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 0.06 Net gain from termination of interest rate swap — $ (0.50 ) Net loss from early redemption of debt — 0.14 Purchase order cancellation fees — 0.57 Restructuring and other, net — 0.01 Share-based compensation 0.18 0.12 Strategic investment losses or impairment charges — — Other charges — 0.05 Income tax adjustments (0.04 ) 0.21 Non-GAAP diluted share count adjustments1 0.03 — Non-GAAP Diluted Net Income (Loss) Per Share1 $ 1.58 $ (0.22 ) Shares Used In Diluted Net Income (Loss) Per Share Calculation GAAP 216 208 Non-GAAP diluted share count adjustments1 (3 ) — Non-GAAP 213 208 GAAP Net Cash Provided by Operating Activities $ 95 $ 127 Acquisition of property, equipment and leasehold improvements (68 ) (70 ) Free Cash Flow $ 27 $ 57 _____________________________________ 1 For the three months ended September 27, 2024, using the if-converted method, approximately 3 million shares are issuable upon conversion of our 2028 exchangeable senior notes. These dilutive effects are expected to be offset in full by the capped call transactions and are excluded from non-GAAP shares used in diluted net income per share calculation. For the three months ended September 29, 2023, GAAP and non-GAAP diluted net loss per share were computed using weighted average basic shares of 208 million, as a result of the net loss reported during the period. SEAGATE TECHNOLOGY HOLDINGS PLC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (In millions) (Unaudited) For the Three Months Ended September 27, 2024 June 28, 2024 March 29, 2024 December 29, 2023 Last Twelve Months GAAP Net Income (Loss) $ 305 $ 513 $ 25 $ (19 ) $ 824 Depreciation and amortization 64 63 63 62 252 Interest expense 85 82 82 84 333 Interest income (7 ) (7 ) (3 ) (3 ) (20 ) Income tax expense 11 25 33 15 84 Non-GAAP EBITDA 458 676 200 139 1,473 Net gain from business divestiture — (313 ) — — (313 ) Purchase order cancellation fees (1 ) (26 ) (1 ) (4 ) (32 ) Restructuring and other, net 1 (3 ) 2 (31 ) (31 ) Share-based compensation 38 38 34 30 140 Strategic investment losses or impairment charges 1 8 — 43 52 Underutilization charges, net of depreciation and amortization — 20 38 31 89 Other charges 1 4 5 8 18 Non-GAAP Adjusted EBITDA $ 498 $ 404 $ 278 $ 216 $ 1,396 The Company’s Non-GAAP measures are adjusted for the following items: Accelerated depreciation, impairment and other charges related to cost saving efforts These expenses are excluded in the non-GAAP measures due to the inconsistency in amount and frequency, and they are not normal operating expenses or indicative of the Company's operating performance. Exclusion of these amounts provides a supplemental view of the Company's operating performance to investors to enable them to evaluate the Company's current operating performance compared to the past periods' operating performance. Net gain from business divestiture The Company recorded a pre-tax net gain of $313 million in connection to the sale of System-on-Chip Operations in April 2024. The net gain is excluded in the non-GAAP measures because it is not indicative of the Company's operating performance. The Company excludes this amount to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods' operating performance. Net loss (gain) from early redemption of debt and termination of interest rate swap From time to time, the Company incurs gains, losses and fees from the early redemption and repurchase of certain long-term debt instruments and termination of related interest rate swap agreements. The amount of these charges may be inconsistent in size and varies depending on the timing of the early redemption of debt and/or termination of interest rate swap. The Company does not believe these are part of its normal operating performance. Exclusion of these amounts provides a supplemental view of the Company's operating performance to investors to enable them to evaluate the Company's current operating performance compared to the past periods' operating performance. Purchase order cancellation fees Purchase order cancellation fees are the costs incurred to cancel certain purchase commitments made with the Company's suppliers for component and equipment purchases that will not be received due to change in forecasted demand. These charges are inconsistent in amount and frequency. The Company does not believe these are part of its normal operating expenses. Exclusion of these amounts provides a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Restructuring and other, net Restructuring and other, net are costs associated with restructuring plans that are primarily related to costs associated with reduction in the Company’s workforce, exiting certain facilities and other related costs, as well as charges or gains from sale of properties. These costs or benefits do not reflect the Company’s normal or ongoing operating performance and consequently the Company excludes these expenses to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Share-based compensation These expenses consist primarily of expenses for employee share-based compensation. Given the variety of equity awards used by companies, the varying methodologies for determining share-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding share-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time and compare it against the Company’s peers, a majority of whom also exclude share-based compensation expense from their non-GAAP results. Strategic investment gains, losses and impairment charges From time to time, the Company incurs gains, losses or impairment charges from strategic investments that are measured and accounted at fair value, under the equity method of accounting, as available-for-sale debt securities or adjust for downward or upward adjustments to the carrying value under the measurement alternative if an impairment or observable price adjustment is recognized in the current period that are not considered normal operating expenses or gains. The resulting expense, gain or impairment loss is inconsistent in amount and frequency and the Company excludes these amounts to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Other charges The other charges primarily include IT transformation costs. These charges are inconsistent in amount and frequency and are excluded to provide a supplemental view to investors to evaluate the Company's current operating performance compared to past periods’ operating performance. Income tax adjustments Provision or benefit for income taxes represents the tax effects of non-GAAP adjustments determined using a hybrid with and without method and effective tax rate for the applicable adjustment and jurisdiction. Non-GAAP diluted share count adjustments Using the if-converted method, diluted net income per share is calculated assuming that the excess value above the principal of the 2028 exchangeable notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. Non-GAAP shares used in diluted net income per share calculation excluded certain dilutive shares, which are expected to be offset partially or in full by the capped call transactions entered by the Company in conjunction with our 2028 exchangeable senior notes in order to reduce the potential dilution to the Company’s ordinary shares upon the conversion. Free cash flow Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less acquisition of property, equipment and leasehold improvements. Free cash flow does not reflect non-cash items, net cash used or provided by financing activities and net cash used or provided by investing activities, other than acquisition of property, equipment and leasehold improvements. This non-GAAP financial measure is used by management to assess the Company's sources of liquidity, capital structure and operating performance. EBITDA, adjusted EBITDA and last twelve months (LTM) adjusted EBITDA EBITDA is defined as net income (loss) before income tax expense, interest expense, interest income, depreciation and amortization. Adjusted EBITDA excludes certain expenses, gains and losses that the Company believes are not indicative of its core operating results. These adjustments primarily include impairment and other charges related to cost saving efforts, net loss (gain) from early redemption of debt, net gain from termination of interest rate swap, net gain from business divestiture, purchase order cancellation fees, restructuring and other, net, share-based compensation, strategic investment losses or impairment charges, other extraordinary charges such as factory underutilization charges. LTM adjusted EBITDA is defined as the total of last twelve months adjusted EBITDA. These non-GAAP financial measures are used by management to evaluate the Company’s debt portfolio and structure to comply with its financial debt covenants. View source version on businesswire.com: https://www.businesswire.com/news/home/20241022235947/en/Contacts Investor Relations Contact: Shanye Hudson, (510) 661-1600 shanye.hudson@seagate.com Media Contact: Karin Taylor (408) 772-8279 karin.h.taylor@seagate.com
Fiscal Q1 2025 Highlights Revenue increased to $2.17 billion GAAP diluted earnings per share (EPS) of $1.41; non-GAAP diluted EPS of $1.58 Cash flow from operations of $95 million and free cash flow of $27 million Increased quarterly cash dividend by approximately 3% to $0.72 per share
Seagate Technology Holdings plc (NASDAQ: STX) (the “Company” or “Seagate”), a leading innovator of mass-capacity data storage, today reported financial results for its fiscal first quarter ended September 27, 2024. "Seagate is off to an outstanding start to the fiscal year, highlighted by gross margin expanding to the highest level in more than a decade," said Dave Mosley, Seagate’s chief executive officer. "We executed on our plans to aggressively ramp our 28-terabyte nearline drives and broaden the number of cloud customers entering qualification on HAMR-based Mozaic products. We are excited by the strong product momentum which positions us well to address customer demand while delivering profitable growth. Our confidence in Seagate’s future opportunities is reflected in the decision to raise the quarterly dividend as announced today," Mosley concluded. Quarterly Financial Results GAAP Non-GAAP FQ1 2025 FQ1 2024 FQ1 2025 FQ1 2024 Revenue ($M) $ 2,168 $ 1,454 $ 2,168 $ 1,454 Gross Margin 32.9 % 10.2 % 33.3 % 19.8 % Operating Margin 18.6 % (8.9 %) 20.4 % 2.8 % Net Income (Loss) ($M) $ 305 $ (184 ) $ 337 $ (46 ) Diluted Earnings (Loss) Per Share $ 1.41 $ (0.88 ) $ 1.58 $ (0.22 ) For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables. During the fiscal first quarter the Company generated $95 million in cash flow from operations, $27 million in free cash flow and returned $147 million of capital to shareholders through its quarterly dividend. As of the end of the quarter, cash and cash equivalents totaled $1.2 billion, and there were 211 million ordinary shares issued and outstanding. Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investor Relations website at investors.seagate.com. Quarterly Cash Dividend The Board of Directors of the Company (the “Board”) declared a quarterly cash dividend of $0.72 per share, which will be payable on January 6, 2025 to shareholders of record as of the close of business on December 15, 2024. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board. Business Outlook The business outlook for the fiscal second quarter 2025 is based on our current assumptions and expectations; actual results may differ materially as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release. The Company is providing the following guidance for its fiscal second quarter 2025: Revenue of $2.30 billion, plus or minus $150 million Non-GAAP diluted EPS of $1.85, plus or minus $0.20 Guidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to estimated share-based compensation expenses of $0.22 per share. We have not reconciled our non-GAAP diluted EPS guidance for fiscal second quarter 2025 to the most directly comparable GAAP measure, other than estimated share-based compensation expenses, because material items that may impact these measures are out of our control and/or cannot be reasonably predicted, including, but not limited to, net (gain) loss recognized from early redemption of debt, purchase order cancellation fees, strategic investment losses (gains) or impairment charges, income tax adjustments on these measures, and other charges or benefits that may arise. The amounts of these measures are not currently available but may be material to future results. A reconciliation of the non-GAAP diluted EPS guidance for fiscal second quarter 2025 to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release. Investor Communications Seagate management will hold a public webcast today at 2:00 PM PT / 5:00 PM ET that can be accessed on its Investor Relations website at investors.seagate.com. An archived audio webcast of this event will be available on Seagate’s Investor Relations website at investors.seagate.com shortly following the event conclusion. About Seagate Seagate Technology is a leading innovator of mass-capacity data storage. We create breakthrough technology so you can confidently store your data and easily unlock its value. Founded over 45 years ago, Seagate has shipped over four billion terabytes of data capacity and offers a full portfolio of storage devices, systems, and services from edge to cloud. To learn more about how Seagate leads storage innovation, visit www.seagate.com and our blog, or follow us on X, Facebook, LinkedIn, and YouTube. © 2024 Seagate Technology LLC. All rights reserved. Seagate, Seagate Technology, and the Spiral logo are registered trademarks of Seagate Technology LLC in the United States and/or other countries. Cautionary Note Regarding Forward-Looking Statements This press release and our other communications regarding our quarterly financial results 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. Forward-looking statements include, among other things, statements about the Company’s plans, programs, strategies, prospects, and opportunities; financial outlook for future periods, including the fiscal second quarter 2025; expectations regarding our ability to service debt and continue to generate free cash flow; expectations regarding our ability to make timely quarterly payments under the settlement agreement with the U.S. Department of Commerce’s Bureau of Industry and Security; expectations regarding logistical, macroeconomic, or other factors affecting the Company; expectations regarding market demand for the Company’s products, our visibility into such demand and our ability to optimize our level of production and meet market and industry expectations and the effects of these future trends on Company’s financial and operational performance, including our ability to deliver profitable growth; anticipated shifts in technology and storage industry trends, and anticipated demand and performance of new storage product introductions, including HAMR-based Mozaic products; and expectations regarding the Company’s business strategy and performance, as well as dividend issuance plans for the fiscal quarter ending December 27, 2024 and beyond. 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 the negative of these words, variations of these words and comparable 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 subject to various uncertainties and risks that could cause our actual results to differ materially from historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s latest periodic report on Form 10-Q or Form 10-K filed with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on, and which speak only as of, the date hereof. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, unless required by applicable law. The inclusion of Seagate’s website addresses in this press release are provided for convenience only. The information contained in, or that can be accessed through, Seagate’s websites and social media channels are not part of this press release. SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) September 27, 2024 June 28, 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,239 $ 1,358 Accounts receivable, net 628 429 Inventories, net 1,383 1,239 Other current assets 358 306 Total current assets 3,608 3,332 Property, equipment and leasehold improvements, net 1,599 1,614 Goodwill 1,219 1,219 Deferred income taxes 1,038 1,037 Other assets, net 508 537 Total Assets $ 7,972 $ 7,739 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 1,778 $ 1,786 Accrued employee compensation 148 106 Accrued warranty 71 74 Current portion of long-term debt 479 479 Accrued expenses 685 654 Total current liabilities 3,161 3,099 Long-term accrued warranty 70 75 Other non-current liabilities 844 861 Long-term debt, less current portion 5,197 5,195 Total Liabilities 9,272 9,230 Total Shareholders’ Deficit (1,300 ) (1,491 ) Total Liabilities and Shareholders’ Deficit $ 7,972 $ 7,739 SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 Revenue $ 2,168 $ 1,454 Cost of revenue 1,454 1,305 Product development 181 171 Marketing and administrative 129 105 Restructuring and other, net 1 2 Total operating expenses 1,765 1,583 Income (loss) from operations 403 (129 ) Interest income 7 2 Interest expense (85 ) (84 ) Net gain from termination of interest rate swap — 104 Net loss from early redemption of debt — (29 ) Other, net (9 ) (11 ) Other expense, net (87 ) (18 ) Income (loss) before income taxes 316 (147 ) Provision for income taxes 11 37 Net income (loss) $ 305 $ (184 ) Net income (loss) per share: Basic $ 1.45 $ (0.88 ) Diluted $ 1.41 $ (0.88 ) Number of shares used in per share calculations: Basic 211 208 Diluted 216 208 Cash dividends declared per ordinary share $ 0.70 $ 0.70 SEAGATE TECHNOLOGY HOLDINGS PLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 OPERATING ACTIVITIES Net income (loss) $ 305 $ (184 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 64 76 Share-based compensation 38 25 Net loss from redemption and repurchase of debt — 7 Deferred income taxes (3 ) 28 Other non-cash operating activities, net 23 (50 ) Changes in operating assets and liabilities: Accounts receivable, net (199 ) 100 Inventories, net (144 ) 88 Accounts payable 10 (70 ) Accrued employee compensation 37 (12 ) BIS settlement penalty (15 ) — Accrued expenses, income taxes and warranty 16 54 Other assets and liabilities (37 ) 65 Net cash provided by operating activities 95 127 INVESTING ACTIVITIES Acquisition of property, equipment and leasehold improvements (68 ) (70 ) Net cash used in investing activities (68 ) (70 ) FINANCING ACTIVITIES Redemption and repurchase of debt — (1,288 ) Proceeds from issuance of long-term debt — 1,500 Dividends to shareholders (147 ) (145 ) Taxes paid related to net share settlement of equity awards (28 ) (25 ) Proceeds from issuance of ordinary shares under employee stock plans 29 35 Other financing activities, net — (126 ) Net cash used in financing activities (146 ) (49 ) Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash — 1 (Decrease) increase in cash, cash equivalents and restricted cash (119 ) 9 Cash, cash equivalents and restricted cash at the beginning of the period 1,360 788 Cash, cash equivalents and restricted cash at the end of the period $ 1,241 $ 797 Use of non-GAAP financial information The Company uses non-GAAP measures of gross profit, gross margin, operating expenses, income from operations, operating margin, net income, diluted EPS, free cash flow, EBITDA, adjusted EBITDA and last twelve months adjusted EBITDA, which are adjusted from results based on GAAP to exclude certain benefits, expenses, gains and losses. These non-GAAP financial measures are used by management to evaluate the business and provided to enhance the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to investors as these non-GAAP results exclude certain benefits, expenses, gains and losses that the Company believes are not part of the Company's ongoing operations and not indicative of its core operating results. These non-GAAP financial measures are some of the measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute or replacement for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in its industry. SEAGATE TECHNOLOGY HOLDINGS PLC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (In millions, except per share amounts, gross margin and operating margin) (Unaudited) For the Three Months Ended September 27, 2024 September 29, 2023 GAAP Gross Profit $ 714 $ 149 Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Purchase order cancellation fees (1 ) 118 Share-based compensation 10 7 Other charges — 1 Non-GAAP Gross Profit $ 723 $ 288 GAAP Gross Margin 32.9 % 10.2 % Non-GAAP Gross Margin 33.3 % 19.8 % GAAP Operating Expenses $ 311 $ 278 Restructuring and other, net (1 ) (2 ) Share-based compensation (28 ) (18 ) Other charges (1 ) (10 ) Non-GAAP Operating Expenses $ 281 $ 248 GAAP Income (Loss) From Operations $ 403 $ (129 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Purchase order cancellation fees (1 ) 118 Restructuring and other, net 1 2 Share-based compensation 38 25 Other charges 1 11 Non-GAAP Income From Operations $ 442 $ 40 GAAP Operating Margin 18.6 % (8.9 )% Non-GAAP Operating Margin 20.4 % 2.8 % GAAP Net Income (Loss) $ 305 $ (184 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 13 Net gain from termination of interest rate swap — (104 ) Net loss from early redemption of debt — 29 Purchase order cancellation fees (1 ) 118 Restructuring and other, net 1 2 Share-based compensation 38 25 Strategic investment losses or impairment charges 1 — Other charges 1 11 Income tax adjustments (8 ) 44 Non-GAAP Net Income (Loss) $ 337 $ (46 ) GAAP Diluted Net Income (Loss) Per Share $ 1.41 $ (0.88 ) Accelerated depreciation, impairment and other charges related to cost saving efforts — 0.06 Net gain from termination of interest rate swap — $ (0.50 ) Net loss from early redemption of debt — 0.14 Purchase order cancellation fees — 0.57 Restructuring and other, net — 0.01 Share-based compensation 0.18 0.12 Strategic investment losses or impairment charges — — Other charges — 0.05 Income tax adjustments (0.04 ) 0.21 Non-GAAP diluted share count adjustments1 0.03 — Non-GAAP Diluted Net Income (Loss) Per Share1 $ 1.58 $ (0.22 ) Shares Used In Diluted Net Income (Loss) Per Share Calculation GAAP 216 208 Non-GAAP diluted share count adjustments1 (3 ) — Non-GAAP 213 208 GAAP Net Cash Provided by Operating Activities $ 95 $ 127 Acquisition of property, equipment and leasehold improvements (68 ) (70 ) Free Cash Flow $ 27 $ 57 _____________________________________ 1 For the three months ended September 27, 2024, using the if-converted method, approximately 3 million shares are issuable upon conversion of our 2028 exchangeable senior notes. These dilutive effects are expected to be offset in full by the capped call transactions and are excluded from non-GAAP shares used in diluted net income per share calculation. For the three months ended September 29, 2023, GAAP and non-GAAP diluted net loss per share were computed using weighted average basic shares of 208 million, as a result of the net loss reported during the period. SEAGATE TECHNOLOGY HOLDINGS PLC RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (In millions) (Unaudited) For the Three Months Ended September 27, 2024 June 28, 2024 March 29, 2024 December 29, 2023 Last Twelve Months GAAP Net Income (Loss) $ 305 $ 513 $ 25 $ (19 ) $ 824 Depreciation and amortization 64 63 63 62 252 Interest expense 85 82 82 84 333 Interest income (7 ) (7 ) (3 ) (3 ) (20 ) Income tax expense 11 25 33 15 84 Non-GAAP EBITDA 458 676 200 139 1,473 Net gain from business divestiture — (313 ) — — (313 ) Purchase order cancellation fees (1 ) (26 ) (1 ) (4 ) (32 ) Restructuring and other, net 1 (3 ) 2 (31 ) (31 ) Share-based compensation 38 38 34 30 140 Strategic investment losses or impairment charges 1 8 — 43 52 Underutilization charges, net of depreciation and amortization — 20 38 31 89 Other charges 1 4 5 8 18 Non-GAAP Adjusted EBITDA $ 498 $ 404 $ 278 $ 216 $ 1,396 The Company’s Non-GAAP measures are adjusted for the following items: Accelerated depreciation, impairment and other charges related to cost saving efforts These expenses are excluded in the non-GAAP measures due to the inconsistency in amount and frequency, and they are not normal operating expenses or indicative of the Company's operating performance. Exclusion of these amounts provides a supplemental view of the Company's operating performance to investors to enable them to evaluate the Company's current operating performance compared to the past periods' operating performance. Net gain from business divestiture The Company recorded a pre-tax net gain of $313 million in connection to the sale of System-on-Chip Operations in April 2024. The net gain is excluded in the non-GAAP measures because it is not indicative of the Company's operating performance. The Company excludes this amount to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods' operating performance. Net loss (gain) from early redemption of debt and termination of interest rate swap From time to time, the Company incurs gains, losses and fees from the early redemption and repurchase of certain long-term debt instruments and termination of related interest rate swap agreements. The amount of these charges may be inconsistent in size and varies depending on the timing of the early redemption of debt and/or termination of interest rate swap. The Company does not believe these are part of its normal operating performance. Exclusion of these amounts provides a supplemental view of the Company's operating performance to investors to enable them to evaluate the Company's current operating performance compared to the past periods' operating performance. Purchase order cancellation fees Purchase order cancellation fees are the costs incurred to cancel certain purchase commitments made with the Company's suppliers for component and equipment purchases that will not be received due to change in forecasted demand. These charges are inconsistent in amount and frequency. The Company does not believe these are part of its normal operating expenses. Exclusion of these amounts provides a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Restructuring and other, net Restructuring and other, net are costs associated with restructuring plans that are primarily related to costs associated with reduction in the Company’s workforce, exiting certain facilities and other related costs, as well as charges or gains from sale of properties. These costs or benefits do not reflect the Company’s normal or ongoing operating performance and consequently the Company excludes these expenses to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Share-based compensation These expenses consist primarily of expenses for employee share-based compensation. Given the variety of equity awards used by companies, the varying methodologies for determining share-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding share-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time and compare it against the Company’s peers, a majority of whom also exclude share-based compensation expense from their non-GAAP results. Strategic investment gains, losses and impairment charges From time to time, the Company incurs gains, losses or impairment charges from strategic investments that are measured and accounted at fair value, under the equity method of accounting, as available-for-sale debt securities or adjust for downward or upward adjustments to the carrying value under the measurement alternative if an impairment or observable price adjustment is recognized in the current period that are not considered normal operating expenses or gains. The resulting expense, gain or impairment loss is inconsistent in amount and frequency and the Company excludes these amounts to provide a supplemental view to investors to evaluate the Company's current operating performance compared to the past periods’ operating performance. Other charges The other charges primarily include IT transformation costs. These charges are inconsistent in amount and frequency and are excluded to provide a supplemental view to investors to evaluate the Company's current operating performance compared to past periods’ operating performance. Income tax adjustments Provision or benefit for income taxes represents the tax effects of non-GAAP adjustments determined using a hybrid with and without method and effective tax rate for the applicable adjustment and jurisdiction. Non-GAAP diluted share count adjustments Using the if-converted method, diluted net income per share is calculated assuming that the excess value above the principal of the 2028 exchangeable notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. Non-GAAP shares used in diluted net income per share calculation excluded certain dilutive shares, which are expected to be offset partially or in full by the capped call transactions entered by the Company in conjunction with our 2028 exchangeable senior notes in order to reduce the potential dilution to the Company’s ordinary shares upon the conversion. Free cash flow Free cash flow is a non-GAAP measure defined as net cash provided by operating activities less acquisition of property, equipment and leasehold improvements. Free cash flow does not reflect non-cash items, net cash used or provided by financing activities and net cash used or provided by investing activities, other than acquisition of property, equipment and leasehold improvements. This non-GAAP financial measure is used by management to assess the Company's sources of liquidity, capital structure and operating performance. EBITDA, adjusted EBITDA and last twelve months (LTM) adjusted EBITDA EBITDA is defined as net income (loss) before income tax expense, interest expense, interest income, depreciation and amortization. Adjusted EBITDA excludes certain expenses, gains and losses that the Company believes are not indicative of its core operating results. These adjustments primarily include impairment and other charges related to cost saving efforts, net loss (gain) from early redemption of debt, net gain from termination of interest rate swap, net gain from business divestiture, purchase order cancellation fees, restructuring and other, net, share-based compensation, strategic investment losses or impairment charges, other extraordinary charges such as factory underutilization charges. LTM adjusted EBITDA is defined as the total of last twelve months adjusted EBITDA. These non-GAAP financial measures are used by management to evaluate the Company’s debt portfolio and structure to comply with its financial debt covenants. View source version on businesswire.com: https://www.businesswire.com/news/home/20241022235947/en/
Investor Relations Contact: Shanye Hudson, (510) 661-1600 shanye.hudson@seagate.com Media Contact: Karin Taylor (408) 772-8279 karin.h.taylor@seagate.com
