Seagate Beats Expectations With Strong Q3 Results
Seagate Technology PLC (NASDAQ:STX) reported third-quarter results that exceeded Wall Street expectations, driven by strong demand and improved profitability.
The company posted adjusted earnings per share of $4.10, surpassing analyst estimates of $3.48. Revenue reached $3.11 billion, also beating forecasts of $2.95 billion. On a yearly basis, revenue surged 44% from $2.16 billion in the same quarter last year.
Stock Jumps on Strong Guidance
Following the earnings release, Seagate shares rose 12.4% in after-hours trading on Tuesday. The rally was fueled by optimistic fourth-quarter guidance that significantly exceeded market expectations.
Seagate forecasts adjusted EPS of around $5.00 (± $0.20), well above the consensus estimate of $3.97. The midpoint suggests a 26% upside compared to expectations.
For revenue, the company expects $3.45 billion (± $100 million), compared to analyst forecasts of $3.15 billion. This implies a 9% beat at the midpoint.
Record Margins and Strong Cash Flow
CEO Dave Mosley highlighted the company’s strong performance, noting that Seagate exceeded the upper end of its guidance, delivered record margins, and generated nearly $1 billion in free cash flow.
The company reported a non-GAAP gross margin of 47.0%, a sharp improvement from 36.2% a year earlier.
Balance Sheet Strength and Shareholder Returns
Seagate generated $1.1 billion in operating cash flow and $953 million in free cash flow during the quarter.
The company also strengthened its balance sheet by reducing debt by approximately $641 million. Additionally, it returned $191 million to shareholders through dividends and share buybacks.
Dividend Announcement
Seagate’s board declared a quarterly cash dividend of $0.74 per share. The dividend will be paid on July 7, 2026, to shareholders of record as of June 24, 2026.
