Seagate Technology Q4 Earnings Call Highlights AI Storage Demand – July 29, 2026

Seagate Technology Holdings plc (STX Quick QuoteSTX – Free Report) emphasized accelerating data center demand, expanding margins and its HAMR technology roadmap during its fourth-quarter fiscal 2026 earnings call. Management highlighted AI-driven storage needs as a key growth factor while outlining continued margin expansion and cash generation.

The company reported adjusted earnings per share of $5.71, beating the Zacks Consensus Estimate of $5.10. Revenues of $3.63 billion surpassed the Zacks Consensus Estimate of $3.49 billion.

STX Focuses on Data Center Growth

CEO and chairman William Mosley said Seagate’s fiscal 2026 performance was supported by sustainable market demand, technology execution and operational discipline. Mosley pointed to cloud demand and AI-enabled applications as major drivers of storage growth.

STX reported that data center demand represented about 90% of exabyte shipments, with most nearline exabytes allocated into calendar 2028 through long-term supply agreements. Management said that customers are extending planning horizons as infrastructure needs increase.

The company also noted that enterprise nearline revenues increased for a fifth consecutive quarter. Management highlighted broader adoption of tiered storage architectures across cloud, enterprise and newer AI-focused customers.

Seagate Advances HAMR Roadmap

Seagate noted that its HAMR-based Mozaic platform remains central to increasing storage density and supporting future exabyte growth. Mosley said that HAMR products represented approximately 40% of nearline exabyte shipment run rate exiting fiscal 2026.

The company stated that Mozaic 3 products are qualified across major cloud customers, while Mozaic 4 is ramping with leading cloud service providers. Management expects 50% of HAMR exabytes to be on Mozaic 4 by the end of calendar 2026.

Seagate also discussed continued investments in manufacturing tools and technology to support product transitions. Management said that these investments are aimed at improving areal density while maintaining efficient drive production.

STX Expands Profitability Profile

STX delivered strong financial improvement in fourth-quarter fiscal 2026, with non-GAAP gross margin reaching 52.7% and operating margin expanding to 44.6%. Revenues increased 48% year over year.

CFO Gianluca Romano said that pricing discipline, stronger product mix and higher nearline demand supported margin expansion. Romano added that the company expects sequential margin and cash generation improvement throughout fiscal 2027.

The company generated $1.1 billion in free cash flow during the quarter and $3.1 billion during fiscal 2026. Seagate also reduced fiscal-year debt by $1.4 billion while returning capital through dividends and share repurchases.

Seagate Sets Higher Fiscal 2027 Outlook

The company provided first-quarter fiscal 2027 guidance for revenues of approximately $4.1 billion, plus or minus $100 million, and non-GAAP EPS of $7.30, plus or minus 20 cents.

Management said that demand visibility from its build-to-order model supports confidence in continued growth. The company expects pricing strategy, Mozaic adoption and strong demand conditions to support profitability.

Romano noted that September-quarter operating margin is expected around 50% based on the midpoint of revenue guidance. He also added that non-GAAP operating expenses are expected at approximately $300 million.

STX Addresses Pricing and Demand

A Wells Fargo analyst asked about gross margin sustainability and cost improvements during the analyst question-and-answer session. Management said product transitions and higher-capacity drives provide opportunities for continued cost benefits.

A Morgan Stanley analyst questioned recent pricing trends and future expectations. Romano explained that stronger supply-demand conditions have been providing additional pricing benefits while the company continues executing its long-term pricing strategy.

A Bernstein analyst asked about HAMR adoption and Mozaic 4 contributions. Management said it remains on track with adoption milestones and expects Mozaic 4 to become a larger contributor during fiscal 2027.

Seagate Maintains Strategic Focus

Seagate entered fiscal 2027 focused on expanding storage capacity through technology transitions rather than increasing drive unit volumes. Management emphasized higher-capacity products and manufacturing execution as the foundation for growth.

The company continues prioritizing debt reduction, free cash flow generation and capital efficiency while investing in HAMR capabilities. Management reiterated confidence in demand visibility and customer commitments.

Zacks Rank and Style Scores Signals

STX carries a Zacks Rank #1 (Strong Buy), indicating the stock is positioned favorably based on the Zacks Rank methodology, which focuses on earnings estimate revisions. The Rank can change as analysts update estimates following new company information. You can see the complete list of today’s Zacks #1 Rank stocks here.

The stock has a Growth Score of A, while its Value Score is F, Momentum Score is F and VGM Score is D. Zacks Style Scores evaluate characteristics such as value, growth and momentum, with higher scores indicating stronger attributes within those categories.