Seagate Technology (STX) Q4 2024 earnings summary

Executive summary

• Q4 FY24 revenue reached $1.89 billion, up 18% year-over-year, driven by strong global cloud demand and disciplined expense management.

• Non-GAAP EPS was $1.05, exceeding guidance, with non-GAAP gross margin at 30.9% and HDD gross margins at the top end of the target range.

• Non-GAAP operating income was $327 million, up 79% sequentially, and adjusted EBITDA was $404 million, up 45% sequentially.

• Achieved all three financial priorities: increased profitability, cash generation, and a stronger balance sheet, aided by a build-to-order (BTO) strategy.

• Free cash flow for Q4 was $380 million, including $226 million from a business divestiture.

Financial highlights

• Q4 revenue was $1.89 billion; FY24 revenue was $6.55 billion.

• Q4 non-GAAP net income was $222 million; adjusted EBITDA was $404 million.

• Q4 non-GAAP gross margin was 30.9%, up 480 basis points quarter-over-quarter; FY24 non-GAAP gross margin was 25.5%.

• Q4 non-GAAP operating margin was 17.3%; FY24 non-GAAP operating margin was 10.3%.

• Cash and cash equivalents at quarter-end were $1.4 billion; net debt decreased to $4.37 billion.

Outlook and guidance

• Q1 FY25 revenue expected at $2.10 billion ± $150 million, with non-GAAP EPS guidance of $1.40 ± $0.20.

• Non-GAAP operating margin projected in the high teens; non-GAAP operating expense expected at ~$270 million.

• Mass capacity revenue projected to trend higher, offsetting lower legacy sales; gross margin to benefit from richer mix and pricing.

• Free cash flow in Q1 FY25 expected at or slightly above break-even.