STX earnings analysis
What we found in STX's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Seagate’s FY2026 results show a pronounced cyclical and structural inflection: revenue grew 34% to $12.195 billion, gross margin expanded 11 points to 46%, and diluted EPS more than doubled to $13.90. Growth was driven by nearline HDD demand, higher data-center mix, pricing discipline and higher-capacity products, while the HAMR ramp provides the principal product roadmap catalyst for FY2027. Cash generation enabled $1.4 billion of debt reduction, dividends and modest share repurchases, although litigation, a materially higher tax rate and customer concentration remain notable constraints.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated to 34%
- FY2026 revenue rose 34% to $12.195 billion from $9.097 billion in FY2025 and $6.551 billion in FY2024. The company attributes the FY2026 increase primarily to higher nearline exabytes shipped and favorable pricing actions.
- Pricing and mix drove margin inflection
- Gross margin expanded to 46% from 35% in FY2025 and 23% in FY2024, while operating margin increased to 34% from 21% and 7%, respectively. Management cites pricing actions and a shift toward higher-capacity products.
- Nearline and data-center mix strengthened
- Nearline HDD shipments grew to 695 exabytes from 497 exabytes, lifting total HDD shipments to 789 exabytes from 595 exabytes. Data Center increased to 80% of revenue from 75%, supported by cloud and enterprise-edge demand tied to data-intensive and AI applications.
- Earnings and cash flow scaled sharply
- Net income increased to $3.184 billion, or $13.90 diluted EPS, from $1.469 billion, or $6.77, in FY2025; FY2024 net income was $335 million, or $1.58 per diluted share. Operating cash flow rose to $3.674 billion from $1.083 billion and $918 million over the same three-year period.
- HAMR roadmap supports capacity strategy
- The strategy centers on scalable, cost-efficient, reliable mass-capacity HDD storage for cloud, enterprise and Edge IoT workloads. The product roadmap includes a FY2027 HAMR volume ramp, with capital spending targeted at 4%-6% of revenue.
- Cash flow funded debt reduction and returns
- Capital allocation prioritized balance-sheet repair and shareholder returns: Seagate reduced outstanding debt by $1.4 billion, paid $634 million of dividends, repurchased $176 million of shares, and spent $569 million on property, equipment and leasehold improvements. Cash rose to $1.704 billion from $891 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- New securities-litigation settlement charge
- A newly recorded $105 million legal-settlement charge relates to the securities class action settlement; the total settlement is $175 million, with approximately $70 million expected to be paid by insurers. Final court approval is scheduled for November 17, 2026.
- Pillar Two materially increased tax burden
- Tax expense rose to $506 million from $44 million and the effective tax rate increased to 13.73% from 2.91%. The filing quantifies a $422 million Qualified Domestic Minimum Top-up Tax effect under Pillar Two, while tax-incentive benefits expire in whole or in part through FY2034.
- Customer concentration increased
- Customer concentration increased: one customer represented approximately 14% of FY2026 revenue versus approximately 10% in FY2025. Three customers accounted for 18%, 16% and 10% of accounts receivable at year-end, increasing exposure to demand or collection disruption at a small number of customers.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $13.9
- Gross margin
- 46%
- Operating margin
- 34%
- Segment
- The company reports one operating segment: manufacture and distribution of data-storage solutions.
- Segment
- Channel mix: OEMs $9.819 billion (81% of revenue), distributors $1.638 billion (13%), and retailers $738 million (6%).
- Segment
- End-market mix: Data Center was 80% of revenue and Edge IoT was 20%.
What they said about what is next.
The 10-K provides no revenue or EPS outlook. It states that FY2027 capital expenditures will be higher than FY2026 to support the HAMR hard-drive volume ramp, while remaining within the company’s 4%-6% of revenue target range.
The filing reads better than the one before it.
What came before.
- 10-Q · April 29, 2026
- Seagate Technology's latest 10-Q filing reveals a strong Q3 performance with total revenue of $3.112 billion and non-GAAP earnings per share of $4.10, surpassing the consensus estimates of $2.954 billion and $3.45,…
- 10-Q · January 30, 2026
- Seagate reported a strong December quarter with revenue of $2,825 million and diluted EPS of $2.60. Margins expanded materially (gross margin 41.6%, operating margin 29.8%), operating cash flow was robust at $1,255…
- 10-Q · May 2, 2025
- Seagate reported a strong March 2025 quarter with revenue of $2,160 million and net income of $340 million (diluted EPS $1.57), driven by gross margin expansion to ~35.2% and operating income of $431 million.…
- 10-Q · January 24, 2025
- Seagate reported a strong quarter with revenue of $2,325 million (up $770 million or 49.5% vs. prior-year quarter) and operating income of $488 million, driving net income of $336 million and diluted EPS of $1.55. Gross…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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