Seagate revenue jumps 49% to $3.63B as AI storage demand surges

Seagate Technology Holdings plc reported fiscal fourth-quarter revenue of $3.63 billion, beating the $3.49 billion consensus estimate by about 4.6%, as AI-driven demand for mass-capacity storage accelerated across cloud data centers. Adjusted earnings per share came in at $5.71, topping the $5.08 analyst forecast by 12.4%.

"Seagate's strong fourth quarter exceeded our expectations for revenue and non-GAAP EPS, capping a fiscal 2026 in which we grew annual revenue 34%, delivered record profitability, and generated a record $3.1 billion in free cash flow," Chief Executive Officer Dave Mosley said in the earnings release.

Revenue rose 48.5% from $2.44 billion a year earlier, while non-GAAP gross margin expanded to 52.7% from 37.9%. Non-GAAP operating margin reached 44.6%, surpassing the 41.9% analyst estimate by 270 basis points. For the full fiscal year, Seagate reported revenue of $12.2 billion, up 34% from $9.1 billion, and non-GAAP net income of $3.54 billion, or $15.58 per diluted share, compared with $1.73 billion, or $8.10, a year earlier.

The company generated $1.3 billion in cash from operations and $1.1 billion in free cash flow during the quarter. Seagate reduced its total debt by $302 million in the period and by $1.4 billion for the full year, ending fiscal 2026 with $3.6 billion in total debt and $1.7 billion in cash.

Seagate guided for fiscal first-quarter revenue of $4.0 billion to $4.2 billion, with a midpoint of $4.1 billion that exceeds the $3.79 billion consensus by 8.2%. The company forecast non-GAAP diluted EPS of $7.30, plus or minus $0.20, well above the $5.85 analyst estimate. The guidance implies year-over-year revenue growth of about 56% and EPS growth of roughly 180%.

The stock fell 8.5% in Tuesday's regular session but surged more than 10% in after-hours trading following the release. Storage peers also rallied after-hours, with Western Digital gaining over 6%, SK Hynix American depositary receipts rising more than 3%, and Micron Technology adding over 1%.

Mosley attributed the momentum to AI's accelerating data-generation cycle, which is driving durable demand for mass-capacity storage. Seagate's Mozaic platform, built on its heat-assisted magnetic recording technology, positions the company to capture exabyte-level demand as hyperscale cloud providers scale their AI infrastructure.

The guidance raise signals management expects AI-related storage demand to sustain its upward trajectory. Investors will watch the fiscal first-quarter earnings call in late October for updates on HAMR technology adoption and segment margin trends.

This article is for informational purposes only and does not constitute investment advice.