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Call sheet · Q1'25

Seagate Technology Holdings (STX)

Q1'25 earnings call · held October 22, 2024 · compared with the Q4'24 call · management-credibility review
4/12
Disclosure score
2 high, 4 medium, 2 low flags
Financial quality
Bottom line
The sleeper story is that 28TB PMR drives proved Seagate doesn't need HAMR to win, rocketing to 20% of nearline revenue in one quarter while HAMR timelines slip into mid-2025. Yes, gross margins hit 33.3% and the Street will cheer, but the binding constraint is physical capacity: they literally cannot build more drives even as cloud demand explodes, creating artificial scarcity that should drive pricing power. 'Our nearline exabyte supply is committed through the end of the calendar year' means every incremental dollar comes from price or mix, not volume. My view changes if HAMR fails qualification again, forcing them to add capacity to meet 2025 demand.

The 30-second version

  • The sleeper: 28TB PMR drives became second-highest revenue product in ONE quarter, proving HAMR isn't the only growth path
  • The obvious: Record 33.3% gross margins and 'significant' FY25 growth, but nearline capacity is 100% committed through December
  • The red flag: HAMR qualification timeline quietly slipped AGAIN, now targeting 'mid-calendar 2025' for broader ramp

What changed this quarter

MetricQ4'24Q1'25Change
Revenue$1.89B (+18% YoY)$2.17B (+49% YoY)+15% QoQ acceleration
Non-GAAP EPS$1.05$1.58+50% QoQ surge
Non-GAAP Gross Margin30.9%33.3%+240 bps expansion
Mass Capacity Revenue$1.4B$1.7B+21% QoQ growth
Nearline Exabytes84 EB109 EB+30% QoQ surge
Total Exabyte Shipments114 EB128 EB+12% QoQ growth
Operating Cash Flow$380M (incl. $126M SOC sale)Not disclosedMetric disappeared
Free Cash Flow$380M$27M-93% collapse
Non-GAAP Operating Margin17%20.4%+340 bps expansion
Legacy Revenue$290M$270M-7% decline continues

Accountability tracked

7 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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