Seagate Technology Reports Fiscal First Quarter 2023 Financial Results

[btarunr]

Seagate Technology Holdings plc (NASDAQ: STX) (the "Company" or "Seagate") today reported financial results for its fiscal first quarter ended September 30, 2022. "Global economic uncertainties and broad-based customer inventory corrections worsened in the latter stages of the September quarter, and these dynamics are reflected in both near-term industry demand and Seagate's financial performance. We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability, including adjusting our production output and annual capital expenditure plans, and announcing a restructuring plan that will deliver meaningful cost savings while maintaining investments in the mass capacity solutions driving our future growth," said Dave Mosley, Seagate's chief executive officer.

"We continue to meet our development milestones for the 30+ terabyte product family, which is based on industry leading HAMR technology. Our team is executing well on our innovation roadmap, and we are seeing strong engagement from cloud customers. Looking beyond the current macro uncertainties, we are confident in the secular demand for mass capacity storage driven by the underlying growth in data and believe Seagate is in a great position to capture growth opportunities over the long-term."



During the fiscal first quarter the Company generated $245 million in cash flow from operations and $112 million in free cash flow, paid cash dividends of $147 million and repurchased 5.4 million ordinary shares for $408 million. The Company raised $600 million in new capital through a new term loan facility, exiting the fiscal first quarter with cash and cash equivalents totaling $761 million. There were 206 million ordinary shares issued and outstanding as of the end of the quarter.

For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.

Seagate has issued a Supplemental Financial Information document, which is available on Seagate's Investor Relations website at investors.seagate.com.

Quarterly Cash Dividend
The Board of Directors of the Company (the "Board") declared a quarterly cash dividend of $0.70 per share, which will be payable on January 5, 2023 to shareholders of record as of the close of business on December 21, 2022. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate's financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.

Restructuring Plan
On October 24, 2022, the Company's Board of Directors approved and committed to a restructuring plan (the "Plan") to reduce its cost structure to better align the Company's operational needs to current economic conditions while continuing to support the long-term business strategy. The Plan includes reducing its worldwide headcount by approximately 3,000 employees, or 8% of the global workforce, along with other cost saving measures.

The Plan, which the Company expects to be substantially completed by the end of the fiscal second quarter 2023, is expected to result in total pre-tax charges between $60 million and $70 million. The charges are expected to be primarily cash-based and consist of employee severance and other one-time termination benefits.

The Company expects to realize run-rate savings of approximately $110 million on an annualized basis starting in the fiscal third quarter 2023.

Business Outlook
The business outlook for the fiscal second quarter 2023 is based on our current assumptions and expectations; actual results may differ materially, as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release.

The Company is providing the following guidance for its fiscal second quarter 2023:

• Revenue of $1.85 billion, plus or minus $150 million
• Non-GAAP diluted EPS of $0.15, plus or minus $0.20

Guidance regarding non-GAAP diluted EPS excludes known pre-tax charges related to amortization of acquired intangible assets of $0.01 per share, estimated share-based compensation expenses of $0.18 per share, and restructuring costs of $0.29 to $0.34 per share.

We have not reconciled our non-GAAP diluted EPS guidance for fiscal second quarter 2023 to the most directly comparable GAAP measure because material items that may impact these measures are out of our control and/or cannot be reasonably predicted, including, but not limited to, accelerated depreciation, impairment and other charges related to cost saving efforts, pandemic-related lockdown charges, losses and costs on the modification or redemption and repurchase of debt, strategic investment losses (gains) or impairment charges, income tax adjustments on these measures, and other charges or benefits that may arise. The amounts of these measures are not currently available but may be material to future results. A reconciliation of the non-GAAP diluted EPS guidance for fiscal second quarter 2023 to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release.

Investor Communications
Seagate management will hold a public webcast today at 6:00 AM PT / 9:00 AM ET that can be accessed on its Investor Relations website at investors.seagate.com.

An archived audio webcast of this event will be available on Seagate's Investor Relations website at investors.seagate.com shortly following the event conclusion.

View at TechPowerUp Main Site

 

[The red spirit]

They are doing fine, despite not having much interesting tech to sell and clinging on dying tech (hard drives).

 

[bonehead123]

and consist of employee severance and other one-time termination benefits

As always, screw the little people first, the ones who work like dogs day in & day out to make you mo money, then just throw them out in the streets like a pile of used doggy poo

Here's a thought: how about "restructuring" all of those executive bonuses, stock grants, beach houses, lear jets, and slush fund expense accounts....

Yea right

 

[AnotherReader]

They are doing fine, despite not having much interesting tech to sell and clinging on dying tech (hard drives).

Their revenue fell by a third compared to last year; that is terrible.

 

[The red spirit]

Their revenue fell by a third compared to last year; that is terrible.

Maybe, but they cut their expenses too and it looks like they took debt, which may go to RnD.

 

[AnotherReader]

Maybe, but they cut their expenses too and it looks like they took debt, which may go to RnD.

I hope you're right, but without revenues, the only way is down.

 

[The red spirit]

I hope you're right, but without revenues, the only way is down.

Why? The writing was on the wall for basically decade that hard drives are dead. They had plenty of time to invest in something else and make themselves diversified, but if they fail at that, there's no reason why they shouldn't be culled from market.

 

[AnotherReader]

Why? The writing was on the wall for basically decade that hard drives are dead. They had plenty of time to invest in something else and make themselves diversified, but if they fail at that, there's no reason why they shouldn't be culled from market.

NAND is the only alternative; they don't have the money to research alternatives especially given the failure of better funded companies like Intel. They are part owners of Kioxia through a consortium. So they have some skin in the NAND market too.

 

[The red spirit]

NAND is the only alternative; they don't have the money to research alternatives especially given the failure of better funded companies like Intel. They are part owners of Kioxia through a consortium. So they have some skin in the NAND market too.

They don't need alternative, just some diversity and competitive prices.

 

[kapone32]

Their revenue fell by a third compared to last year; that is terrible.

Can we all keep in mind that last year was the best year in history for this industry? These companies made bank on their stock prices and sales in 2021 and now we are supposed to defend them because they did not have the foresight to see it was not going to last. This goes in conjunction with them shedding a large percentage of their workforce.

NAND is the only alternative; they don't have the money to research alternatives especially given the failure of better funded companies like Intel. They are part owners of Kioxia through a consortium. So they have some skin in the NAND market too.

Seagate are already in NAND in a big way. the 530 is one of the fastest Gen 4 drives on the market and has plenty of 5 star reviews on all of the e-tailers. They have also expanded that lineup but when they have 3-8 TB HDD on sale they move quickly. NAND is also ridiculous though as the pricing is so volatile that the 8 TB SSD I got 2 years ago for my Birthday is now $400 more on the same site (Newegg) and as fast as NAND controllers are getting size is more of an issue than ever before but anything over 2TB is prohibitive at best in terms of price.

 

[AnotherReader]

Can we all keep in mind that last year was the best year in history for this industry? These companies made bank on their stock prices and sales in 2021 and now we are supposed to defend them because they did not have the foresight to see it was not going to last. This goes in conjunction with them shedding a large percentage of their workforce.


Seagate are already in NAND in a big way. the 530 is one of the fastest Gen 4 drives on the market and has plenty of 5 star reviews on all of the e-tailers. They have also expanded that lineup but when they have 3-8 TB HDD on sale they move quickly. NAND is also ridiculous though as the pricing is so volatile that the 8 TB SSD I got 2 years ago for my Birthday is now $400 more on the same site (Newegg) and as fast as NAND controllers are getting size is more of an issue than ever before but anything over 2TB is prohibitive at best in terms of price.

8 TB SSD for a birthday gift! That is one expensive gift.
Yes I know that they aren't just in the dying HDD business; through Kioxia, they are one of the few SSD manufacturers to have their own NAND too.

 

[MxPhenom 216]

They are doing fine, despite not having much interesting tech to sell and clinging on dying tech (hard drives).

Hard drives are only dying in the consumer market. These are still in high demand in enterprise, cloud marketplaces. Seagate and anyone else making hard drives main buyers.

Why? The writing was on the wall for basically decade that hard drives are dead. They had plenty of time to invest in something else and make themselves diversified, but if they fail at that, there's no reason why they shouldn't be culled from market.

Hard drives are not dead. See my previous reponse

 

[The red spirit]

Hard drives are only dying in the consumer market. These are still in high demand in enterprise, cloud marketplaces. Seagate and anyone else making hard drives main buyers.



Hard drives are not dead. See my previous reponse

And? Sure they buy them now, but it's undeniable that flash is getting better and better, meanwhile hard drives stagnate. Once flash becomes faster, cheaper and as durable as hard drives, it's game over for them. And there hasn't been a significant price reduction or innovation in hard drives for over decade. Capacity also fails to grow at significant rates. So unless some siginificant innovation happens, hard drive industry is going to die, perhaps in decade or two. At best, it will become even more niche than it already is. And Seagate, no matter how much they try, their SSDs just lack marketshare to make up for their HDD business and I don't think that they even make flash, controllers or cache for them, so that makes them irrelevant.

 

[MxPhenom 216]

And? Sure they buy them now, but it's undeniable that flash is getting better and better, meanwhile hard drives stagnate. Once flash becomes faster, cheaper and as durable as hard drives, it's game over for them. And there hasn't been a significant price reduction or innovation in hard drives for over decade. Capacity also fails to grow at significant rates. So unless some siginificant innovation happens, hard drive industry is going to die, perhaps in decade or two. At best, it will become even more niche than it already is. And Seagate, no matter how much they try, their SSDs just lack marketshare to make up for their HDD business and I don't think that they even make flash, controllers or cache for them, so that makes them irrelevant.

That has been an ongoing talking point since SSDs first hit the industry, what 10-12 years ago? And it still hasn't reached cheap, durable, or capacity requirements for that market.

I don't know, but to me it sounds like you are coming from a position of PC enthusiast consumer that has no idea what these other segments of the market are looking for which is fine. I actually work in it and get to see how things change firsthand and honestly the adoption of SSDs in big datacenters, cloud, enterprise is not high at all (Mostly for caching from what I've seen. Not being used for storing mass quantities of data), and nothing that should conclude to anyone that HDD is EOL any time soon, not even in the next decade. Also, hard drive capacity has grown immensely and will continue with new recording technology that both WD and Seagate are working on.

If there was huge demand for SSD in these kind of markets you better believe WD and Seagate would be going at it hard, but neither really are. WD is going harder in consumer space that users of this forum occopy, but so is Seagate. However Seagate uses Toshiba NAND and Phison controllers.

 

[The red spirit]

That has been an ongoing talking point since SSDs first hit the industry, what 10-12 years ago? And it still hasn't reached cheap, durable, or capacity requirements for that market.

I don't know, but to me it sounds like you are coming from a position of PC enthusiast consumer that has no idea what these other segments of the market are looking for which is fine. I actually work in it and get to see how things change firsthand and honestly the adoption of SSDs in big datacenters, cloud, enterprise is not high at all (Mostly for caching from what I've seen. Not being used for storing mass quantities of data), and nothing that should conclude to anyone that HDD is EOL any time soon, not even in the next decade. Also, hard drive capacity has grown immensely and will continue with new recording technology that both WD and Seagate are working on.

If there was huge demand for SSD in these kind of markets you better believe WD and Seagate would be going at it hard, but neither really are. WD is going harder in consumer space that users of this forum occopy, but so is Seagate. However Seagate uses Toshiba NAND and Phison controllers.

Hasn't but worked a lot and got a lot further, HDDs got nowhere. WD and Seagate wouldn't go hard in SSDs, simply because all their talent and patents are focused on magnetic media and SSDs are nothing like hard drives. They would most likely die before they would achieve something or die while trying pumping out laggard products. At least Seagate also offers their own databases for rent, which is interesting. But yeah, after checking out Seagate's website it became depressing to realise that their consumer and pro hard drives went literally nowhere. Like how you could buy 12-14TB HDDs in around 2014, that only got bumped up to 20TB and only for enterprises. Some of their pro drives now have technological downgrades too. The only good stuff at Seagate are their "special" edition drives and maybe SSDs. It's not a company that grows, it's not a company that expects increased revenue anytime soon, it's not a company that can have great margins either. They are stuck in this poor situation until they uneventfully croak.

 

[kapone32]

Hasn't but worked a lot and got a lot further, HDDs got nowhere. WD and Seagate wouldn't go hard in SSDs, simply because all their talent and patents are focused on magnetic media and SSDs are nothing like hard drives. They would most likely die before they would achieve something or die while trying pumping out laggard products. At least Seagate also offers their own databases for rent, which is interesting. But yeah, after checking out Seagate's website it became depressing to realise that their consumer and pro hard drives went literally nowhere. Like how you could buy 12-14TB HDDs in around 2014, that only got bumped up to 20TB and only for enterprises. Some of their pro drives now have technological downgrades too. The only good stuff at Seagate are their "special" edition drives and maybe SSDs. It's not a company that grows, it's not a company that expects increased revenue anytime soon, it's not a company that can have great margins either. They are stuck in this poor situation until they uneventfully croak.

Seagate are not just into HDDs anymore. They have already positioned themselves to always be relevant in PC storage going forward. The biggest hurdle holding back Flash is that, in reverse to HDD the more drive space you get the higher the cost per TB. They can easily make 8 TB SSDs and I know that higher capacity exists in the enterprise space but paying sometime more than 100% markup on going from 2 TB for 4TB is total BS. We have been stuck at 1&2 TB for 98% of the consumer space since these drives got past 256 and 512GB as the sweet spot. Now you can get 1 TB for 512GB used to cost and just about everybody has branded flash to sell. There is also the fact that some newer technology HDDs can rival the slowest flash in some tasks.

 

[MxPhenom 216]

Hasn't but worked a lot and got a lot further, HDDs got nowhere. WD and Seagate wouldn't go hard in SSDs, simply because all their talent and patents are focused on magnetic media and SSDs are nothing like hard drives. They would most likely die before they would achieve something or die while trying pumping out laggard products. At least Seagate also offers their own databases for rent, which is interesting. But yeah, after checking out Seagate's website it became depressing to realise that their consumer and pro hard drives went literally nowhere. Like how you could buy 12-14TB HDDs in around 2014, that only got bumped up to 20TB and only for enterprises. Some of their pro drives now have technological downgrades too. The only good stuff at Seagate are their "special" edition drives and maybe SSDs. It's not a company that grows, it's not a company that expects increased revenue anytime soon, it's not a company that can have great margins either. They are stuck in this poor situation until they uneventfully croak.

You seem pretty black pilled about it. Seagate will be fine, they aint going anywhere.

 

[The red spirit]

Seagate are not just into HDDs anymore. They have already positioned themselves to always be relevant in PC storage going forward. The biggest hurdle holding back Flash is that, in reverse to HDD the more drive space you get the higher the cost per TB. They can easily make 8 TB SSDs and I know that higher capacity exists in the enterprise space but paying sometime more than 100% markup on going from 2 TB for 4TB is total BS. We have been stuck at 1&2 TB for 98% of the consumer space since these drives got past 256 and 512GB as the sweet spot. Now you can get 1 TB for 512GB used to cost and just about everybody has branded flash to sell. There is also the fact that some newer technology HDDs can rival the slowest flash in some tasks.

Give SSDs a few years and they will soon match HDDs in capacity per dollar too, big HDDs aren't cheap and have no way to get cheap with big physical limits and next to no RnD.

You seem pretty black pilled about it. Seagate will be fine, they aint going anywhere.

Um, really? Bigger and more diversified companies have failed. There's no reason why Seagate won't fail.

 

[MxPhenom 216]

Give SSDs a few years and they will soon match HDDs in capacity per dollar too, big HDDs aren't cheap and have no way to get cheap with big physical limits and next to no RnD.


Um, really? Bigger and more diversified companies have failed. There's no reason why Seagate won't fail.

Just say it, you want Seagate to fail.

 

[kapone32]

Give SSDs a few years and they will soon match HDDs in capacity per dollar too, big HDDs aren't cheap and have no way to get cheap with big physical limits and next to no RnD.

Yeah ok

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And look they have 8 TB NVME

https://www.amazon.ca/Corsair-MP600-Gen4-PCIe-NVMe/dp/B0BFDKPWPR/ref=sr_1_4?gclid=CjwKCAjw5P2aBhAlEiwAAdY7dHJwwfsqchYOxuMXNCJsWTJGOUaJX4b6UrKI704-E1eF5wuAS9m5yRoCVEUQAvD_BwE&hvadid=588814392622&hvdev=c&hvlocphy=9000811&hvnetw=g&hvqmt=e&hvrand=209720555330831383&hvtargid=kwd-302629540505&hydadcr=937_1014995673&keywords=8+tb+ssd&qid=1667261603&qu=eyJxc2MiOiIzLjQyIiwicXNhIjoiMi40OSIsInFzcCI6IjEuODgifQ%3D%3D&refinements=p_n_availability%3A12035748011&sr=8-4

I don't see HDD catching SSD prices anytime soon.

Though it's not a lot the 660P used to be no more than $99 but now is also over that. Intel does not even manufacture that drive anymore.

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[The red spirit]

Yeah ok

Seagate BarraCuda 8TB 5400 RPM 3.5" Hard Drive - Newegg.com

Buy Seagate BarraCuda NE-ST8000DM004 8TB 5400 RPM 256MB Cache SATA 6.0Gb/s 3.5" Internal Hard Drive Bare Drive with fast shipping and top-rated customer service. Once you know, you Newegg!

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vs

SAMSUNG 870 QVO Series8TB NVME Internal SSD SATA III 2.5" Form Factor - Newegg.com

Buy SAMSUNG 870 QVO Series 2.5" 8TB SATA III Samsung 4-bit QLC V-NAND Internal Solid State Drive (SSD) MZ-77Q8T0B/AM with fast shipping and top-rated customer service. Once you know, you Newegg!

www.newegg.ca

And look they have 8 TB NVME

https://www.amazon.ca/Corsair-MP600-Gen4-PCIe-NVMe/dp/B0BFDKPWPR/ref=sr_1_4?gclid=CjwKCAjw5P2aBhAlEiwAAdY7dHJwwfsqchYOxuMXNCJsWTJGOUaJX4b6UrKI704-E1eF5wuAS9m5yRoCVEUQAvD_BwE&hvadid=588814392622&hvdev=c&hvlocphy=9000811&hvnetw=g&hvqmt=e&hvrand=209720555330831383&hvtargid=kwd-302629540505&hydadcr=937_1014995673&keywords=8+tb+ssd&qid=1667261603&qu=eyJxc2MiOiIzLjQyIiwicXNhIjoiMi40OSIsInFzcCI6IjEuODgifQ%3D%3D&refinements=p_n_availability%3A12035748011&sr=8-4

I don't see HDD catching SSD prices anytime soon.

Though it's not a lot the 660P used to be no more than $99 but now is also over that. Intel does not even manufacture that drive anymore.

Intel 660p Series M.2 2280 1TB PCIe Internal SSD - Newegg.com

Buy Intel 660p Series M.2 2280 1TB PCIe NVMe 3.0 x4 3D2, QLC Internal Solid State Drive (SSD) SSDPEKNW010T8X1 with fast shipping and top-rated customer service. Once you know, you Newegg!

www.newegg.ca

And SSDs in in decade went from 2TB max to now 8TB if not more and became a lot cheaper. Hard drives moved nowhere in that time.

Just say it, you want Seagate to fail.

First of all, I don't care about Seagate myself, nor I care about Toshiba or WD. Second, I don't care about hard drives anymore because it's ancient technology that doesn't improve and isn't future in the slightest sense. They can only offer okayish sequential speeds, meanwhile they fall apart at IOPS and small random reads/writes. The only good thing about spinning rust is their price currently. If they managed to innovate something even in decade or so or just do something better eventually I might start to care, but it seems that HDD industry is basically dead and is irrelevant beyond some enterprise applications.

 

[MxPhenom 216]

And SSDs in in decade went from 2TB max to now 8TB if not more and became a lot cheaper. Hard drives moved nowhere in that time.


First of all, I don't care about Seagate myself, nor I care about Toshiba or WD. Second, I don't care about hard drives anymore because it's ancient technology that doesn't improve and isn't future in the slightest sense. They can only offer okayish sequential speeds, meanwhile they fall apart at IOPS and small random reads/writes. The only good thing about spinning rust is their price currently. If they managed to innovate something even in decade or so or just do something better eventually I might start to care, but it seems that HDD industry is basically dead and is irrelevant beyond some enterprise applications.

It seems like you just arent paying attention. I have no use for hard drives in any of my personal systems, but I also understand HDD is still the preferred storage medium and will be for a long time to come. I can seperate the two.

You act like hard drive capacity hasnt moved. It has, at roughly the same rate that SSDs have, and are cheaper, more endurance, etc. . Hard drives arent used for fast data read and writes, and thats not why any company uses them. They will use SSD for that (caching mostly) but data is stored more than put to work. 20-30% of all the data in the world is actually put to work and used.

Also what percentage from WD and Seagate do you think their sales volume goes too between enterprise channel vs retail/consumer channels?