Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported July 28, 2026 · Beat 7 of last 7 quarters
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Seagate's record quarter and raised outlook underscore the accelerating demand for mass-capacity storage in AI data centers, with data center exabytes up 43% YoY and nearline capacity allocated into 2028. The company's HAMR ramp and pricing power signal that hard drives remain a critical, high-value tier in AI infrastructure, supporting the broader buildout thesis.
Seagate delivered record Q4 results with revenue of $3.6B, up 48% YoY, and non-GAAP EPS of $5.71, up 121% YoY. Non-GAAP gross margin expanded 570 bps sequentially to 52.7%, and free cash flow reached $1.1B, the strongest quarter in over a decade. Data center exabytes grew 43% YoY to 195 EB, with HAMR-based products representing ~40% of nearline exabyte run rate exiting the year. The company retired $300M of debt in the quarter and reduced net leverage to 0.4x.
Management expects fiscal 2027 revenue growth to outpace fiscal 2026's 34% growth, with sequential revenue and margin expansion each quarter. September quarter revenue guided to $4.1B ± $100M (up 56% YoY at midpoint), non-GAAP operating margin ~50%, and non-GAAP EPS of $7.30 ± $0.20. They reaffirmed mid-20% exabyte growth target, with HAMR-based Mozaic 4 ramping to 50% of HAMR exabytes by end of calendar 2026 and Mozaic 5 qualification shipments in late calendar 2027. Pricing remains strong, with most nearline exabytes allocated into calendar 2028 and customers seeking to extend planning horizons through 2029 and beyond. CapEx for fiscal 2027 expected within 4%–6% of revenue, and debt reduction continues with $1.2B retired in September quarter.
“Given our momentum and the improved visibility we have into demand, we expect fiscal 2027 revenue growth to outpace our performance in fiscal 2026.”
on Fiscal 2027 growth outlook
“We are not seeing customers pull back on planning horizons. As our strategic relationships deepen, many are actively seeking to extend planning horizons through 2029 and beyond, which we believe reflects growing confidence in their own long-term infrastructure needs.”
on Demand durability
“We see continued revenue and profitability expansion in the September quarter, supported by our Mozaic ramp and pricing strategy.”
on September quarter outlook
Given the guidance, it looks like you're implying mid-57% gross margin next quarter. Is that the guidance, and how do you think about cost-down execution as you move from Mozaic 3 to Mozaic 4?
Dave Mosley noted that product transitions require factory pauses and yield management, but out-executing the plan drives better cost. Gianluca Romano confirmed the pricing strategy continues, with mix shift to high-capacity nearline and Mozaic 4 providing another boost to profitability.
You've been steadfast on mid-to-high single-digit price per exabyte growth, but you reported 10% YoY in June and the September guide implies ~20%. Can you update us on pricing?
Gianluca Romano said the strategy hasn't changed, but the supply-demand gap is larger now, allowing better pricing on incremental output. He expects sequential revenue and margin improvement through the fiscal year, with pricing part of that.
Can you speak to like-for-like pricing versus new product benefits, and how contract roll-offs and renegotiations impact the strong 20%+ pricing in September?
Dave Mosley explained that like-for-like is tough due to rapid product transitions, but customers get better TCO. He noted that as they execute better and have more exabytes, customers often pay above contract price. Gianluca Romano added that new LTA negotiations continue to support pricing, though not a straight line.