Seagate Reports $4.233 Billion in Fiscal First-Quarter 2027 Revenue
Key Facts
Seagate Technology reported revenue of $4.233 billion for fiscal first-quarter 2027, ended October 2, compared with $2.629 billion in the year-earlier period. The company posted GAAP net income of $1.761 billion and diluted earnings per share of $7.59. On a non-GAAP basis, net income was $1.781 billion and earnings per share were $7.68. CEO Dave Mosley said, "The creation, retention and reuse of data continues to compound demand for storage." Mosley linked the long-term demand visibility to the company's expectation that growth will extend for several years. The results followed prior first-quarter guidance for revenue of $4.1 billion, plus or minus $100 million, and non-GAAP diluted earnings per share of $7.30, plus or minus $0.20.
Revenue growth came alongside a significant widening in gross margins. The GAAP margin was 57.3%, compared with 39.4% in the first quarter of 2026, while the non-GAAP margin rose to 57.8% from 40.1%. The figures reflect improved sales profitability during the period, alongside higher revenue and net income. Mosley said demand is compounding as data is created, retained and reused, activities that call for substantial storage capacity. He also said the company sees long-term demand visibility supporting its expectation of a growth phase lasting several years. The company did not attribute margin growth to a single factor, but presented it as part of the quarterly results and management's market outlook.
The company reinforced its results with strong cash flow, reporting $1.7 billion in operating cash flow and $1.5 billion in free cash flow during the quarter. Mosley said Seagate generated its highest-ever free cash flow in the September quarter. The company used cash to reduce debt, retiring about $1.2 billion of principal during the quarter and ending the period with total debt of $2.4 billion. After the quarter ended, it repaid an additional $750 million of principal, reducing the total to $1.6 billion. It also declared a quarterly cash dividend of $0.76 per share, payable January 7, 2027, to shareholders of record on December 23, 2026. These actions link reported cash performance with lower liabilities and the distribution of part of the return to shareholders.
Mosley pointed to the heat-assisted magnetic recording (HAMR) technology roadmap as part of the plan to meet growing demand for exabyte-scale storage. He said increasing areal density enables the company to address demand growth while maintaining supply discipline, and that its value-based pricing strategy supports profitable growth, cash flow and shareholder returns. In March, the company said its HAMR-based Mozaic 4+ platform had entered production at two major hyperscale cloud providers, supporting capacities of up to 44 terabytes. It said then that drives of this capacity were shipping in volume to both providers. On October 26, Seagate announced that Microsoft Azure Storage had completed qualification of a Broadcom HBA for use with its HAMR and SMR technologies, as part of an expansion in the use of high-capacity storage in data centers. This provides technical context for management's comments on demand for high-capacity storage, without changing the reported quarterly results.
The first-quarter results follow a strong prior period: Seagate reported revenue of $3.629 billion in fiscal fourth-quarter 2026, compared with $2.444 billion in the corresponding quarter of 2025, and GAAP net income of $1.294 billion and diluted earnings per share of $5.58. When reporting fiscal 2026 results, Mosley said annual revenue had increased 34% and free cash flow reached a record $3.1 billion. He added that performance at the time benefited from strong demand from cloud data centers, with momentum continuing into 2027. In the stock market, the company's shares rose from $630.49 on October 23 to $644.21 at the close on October 26, 2026. The available share-price reaction data do not include a comparison with the broader market or the stock's movement after the results announcement.
The company expects fiscal second-quarter 2027 revenue of $4.8 billion, plus or minus $100 million, and non-GAAP diluted earnings per share of $9.20, plus or minus $0.20. The outlook follows its earlier first-quarter projections of $4.1 billion in revenue and $7.30 in non-GAAP earnings per share, and the actual results it reported for the period ended October 2. The new projections put the coming quarter's revenue and profitability at the forefront of what markets will watch as demand for high-capacity storage continues. The declared dividend remains tied to the December 23 record date and January 7, 2027 payment date. Management says the compounding creation, retention and reuse of data, together with the HAMR roadmap and supply discipline, supports its view of multi-year growth.