Seagate Technology reported GAAP net income of $1.29 billion for its fiscal fourth quarter of 2026, up sharply from $488 million in the same period a year earlier.
Diluted earnings increased to $5.58 per share from $2.24 per share. On a non-GAAP basis, quarterly net income reached $1.32 billion, or $5.71 per diluted share, compared with $2.59 per share in the prior-year period.
Revenue increased approximately 48% to $3.63 billion from $2.44 billion a year earlier, driven by strong demand from cloud data center customers and improved business execution.
Seagate’s GAAP gross margin expanded to 52.3% from 37.4%, while its non-GAAP gross margin increased to 52.7% from 37.9%.
GAAP operating margin reached 43%, compared with 23.2% in the prior-year quarter. The significant margin improvement indicates that higher demand and product pricing translated into stronger profitability rather than revenue growth alone.
Seagate generated $1.3 billion in operating cash flow and $1.1 billion in free cash flow during the quarter.
The company retired $302 million of debt and returned $283 million to shareholders through dividends and share repurchases.
For the full fiscal year ended July 3, 2026, Seagate reported GAAP net income of $3.18 billion, more than double the $1.47 billion generated in fiscal 2025.
Full-year diluted earnings increased to $13.90 per share from $6.77 per share.
Non-GAAP net income reached $3.54 billion, compared with $1.73 billion in the prior year. Adjusted diluted earnings increased to $15.58 per share from $8.10.
Fiscal 2026 revenue increased approximately 34% to $12.20 billion from $9.10 billion.
Seagate’s annual GAAP gross margin improved to 45.6% from 35.2%, while its adjusted gross margin reached 46.1%, compared with 35.8% in fiscal 2025.
GAAP operating margin increased to 33.6% from 20.8%, and non-GAAP operating margin rose to 36.5% from 23.4%.
The company generated $3.67 billion in operating cash flow and a record $3.1 billion in free cash flow during fiscal 2026.
Seagate used its stronger cash generation to return $810 million to shareholders through dividends and share repurchases while reducing debt by approximately $1.4 billion.
The company ended the fiscal year with $1.7 billion in cash and cash equivalents, up from $891 million a year earlier. Total debt stood at approximately $3.6 billion.
Chair and CEO Dave Mosley attributed the results to strong demand from cloud data center customers and disciplined execution.
Seagate expects demand for mass-capacity storage to remain strong as artificial intelligence increases the volume of data that companies generate, process and retain.
AI infrastructure requires substantial computing power, but it also creates growing storage requirements. Businesses need capacity for training datasets, model outputs, enterprise information and data produced by AI-enabled applications.
Seagate primarily addresses these requirements through high-capacity hard disk drives used by hyperscale cloud companies, enterprises and other organizations managing large amounts of information.
The company measures demand partly through exabyte growth, which represents the total amount of storage capacity customers deploy. One exabyte equals approximately one billion gigabytes.
Seagate is supporting this demand through its Mozaic platform and heat-assisted magnetic recording technology, commonly known as HAMR.
HAMR briefly heats a small portion of a hard disk’s recording surface while data is written, allowing more information to be stored within the same physical area.
Higher-capacity drives can help data center operators increase storage without adding physical devices, racks, power and supporting infrastructure at the same rate.
For the first quarter of fiscal 2027, Seagate expects revenue of approximately $4.1 billion, plus or minus $100 million.
The midpoint would represent an increase of approximately 13% from the company’s fiscal fourth-quarter revenue.
Seagate also expects non-GAAP diluted earnings of $7.30 per share, plus or minus $0.20. The outlook includes the estimated dilutive effect of its exchangeable senior notes due in 2028.
The company said its guidance assumes minimal effects from current global tariff policies and the conflict in the Middle East. Actual results could change if geopolitical, trade or supply chain conditions deteriorate.
Seagate’s board declared a quarterly cash dividend of $0.74 per share, payable on October 7, 2026, to shareholders of record as of September 24.
KEY QUOTES:
“Our performance is being driven by robust cloud data center demand and disciplined execution.”
“We see durable long-term demand for mass capacity storage.”
Dave Mosley, Chair and Chief Executive Officer of Seagate Technology
