Seagate Technology (STX) Q3 2025 earnings summary

Executive summary

• Revenue grew significantly year-over-year across recent quarters, with Q3 2025 reaching $2.16 billion and Q2FY25 at $2.33 billion, driven by strong demand for mass-capacity and nearline cloud storage.

• Non-GAAP gross margin expanded for multiple consecutive quarters, reaching 36.2% in Q3 2025, and operating margin improved to 23.5%.

• Net income and EPS saw substantial increases, with Q3 2025 GAAP net income at $340 million and non-GAAP EPS at $1.90.

• Free cash flow and adjusted EBITDA improved, with $216 million in free cash flow and $563 million in adjusted EBITDA in Q3 2025.

• Continued ramp of high-capacity and HAMR-based drives, with positive customer feedback and visibility into demand through H1 2026.

Financial highlights

• Q3 2025 revenue was $2.16 billion, non-GAAP gross margin 36.2%, and non-GAAP operating margin 23.5%.

• GAAP diluted EPS was $1.57, non-GAAP diluted EPS $1.90; adjusted EBITDA for the quarter was $563 million.

• Cash and cash equivalents at quarter-end were $814 million; debt reduced to $5.1 billion after $536 million repayment.

• Free cash flow for Q3 2025 was $216 million; $152 million returned to shareholders via dividends.

• Mass capacity HDD revenue and exabyte shipments saw strong sequential and year-over-year growth.

Outlook and guidance

• Q4 2025 revenue guidance is $2.40 billion ±$150 million; non-GAAP EPS expected at $2.40 ±$0.20.

• Non-GAAP operating expenses forecast at $285–$290 million; minimal direct impact from tariffs anticipated.

• Free cash flow generation expected to improve sequentially through the rest of the year.

• Management expects long-term growth in hard drive storage driven by data demand and AI adoption.

• Liquidity sources are sufficient to fund operations and meet cash requirements for at least the next 12 months.