Seagate Technology Reports Strong Q2 2025 Earnings Results

Seagate Technology has marked its Q2 2025 earnings call with significant revenue growth, robust profit margins, and high demand in the cloud sector. Strong revenue and EPS stats indicate potential positive stock performance.

Date: 22-01-2025

AI Rating: 7

Earnings Per Share (EPS) and Revenue Growth: Seagate reported that its non-GAAP earnings per share (EPS) exceeded $2 for the first time in 12 quarters, signaling a positive trend in profitability. The December quarter saw a sequential revenue growth of 7%, totaling $2.33 billion, which reflects strong consumer demand, especially from the cloud sector.

Net Income and Profit Margins: The net income on a non-GAAP basis rose to $433 million, showcasing a strong performance with a non-GAAP operating margin of 23.1%. This indicates that Seagate is not only increasing its top-line revenue but is also managing its costs effectively to improve profitability.

Free Cash Flow (FCF): The company reported free cash flow generation of $150 million in the December quarter, a significant rise from just $27 million in the prior period. This positive cash flow is critical for operational flexibility and potential reinvestment into growth initiatives.

Return on Equity (ROE): Although the report did not specify the exact ROE figure, the strong EPS and operating income suggest an improving return for shareholders.

Overall, Seagate's strong December quarter, supported by escalating demand in the cloud sector and efficient cost management, positions the company well for future growth. However, an issue concerning supply constraints impacting the March quarter revenue highlights potential risks that may affect stock performance short term.

Stocks: STX