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Seagate Technology Plc (STX -0.83%) held its Q4 2024 earnings call on July 23, 2024, reporting a strong end to the fiscal year. The company’s revenue increased by 18% year on year, driven by growing global cloud demand. Seagate achieved a non-GAAP gross margin of nearly 31% with HDD gross margins exceeding that level. The company’s non-GAAP EPS of $1.05 exceeded expectations.
In fiscal year 2024, Seagate focused on increasing profitability, driving cash generation, and strengthening its balance sheet. The company expanded non-GAAP operating profit by 64% and grew free cash flow sequentially each quarter. Seagate’s operating and financial momentum, coupled with an improving demand environment, position the company well for the new fiscal year.
Market trends indicate strong nearline cloud demand growth, driven by traditional cloud computing workloads and new AI-related deployments. Seagate believes HDDs will play a crucial role in supporting AI applications by offering cost-efficient storage solutions. The enterprise OEM market is also showing gradual improvement, with increasing demand for higher-density storage solutions to prepare for future AI applications.
Seagate is focused on executing its mass capacity product roadmap, including completing the qualification of HAMR-based drives and ramping up 28 terabyte PMR, SMR product platform drives. The company is working with customers to address their exabyte growth needs through product transitions while ensuring supply discipline.
Overall, Seagate remains optimistic about long-term growth opportunities in the mass capacity storage demand market. The company’s BTO strategy aims to provide greater demand predictability and supply assurance for customers. Seagate is leveraging new high-capacity drives to profitably expand exabyte shipment volume and meet customers’ growing data demands. The company’s focus on profitability, supply discipline, and product innovation positions it well for continued success in the evolving storage market landscape.
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