Seagate(STX) - 2025 Q2 - Quarterly Results

Revenue and Earnings - Revenue increased to $2.33 billion in fiscal Q2 2025, up from$1.56 billion in fiscal Q2 2024[4][6] - GAAP diluted EPS of $1.55 and non-GAAP diluted EPS of$2.03 in fiscal Q2 2025[4][6] - Fiscal Q3 2025 revenue guidance of $2.10 billion, plus or minus$150 million[14] - Fiscal Q3 2025 non-GAAP diluted EPS guidance of $1.70, plus or minus$0.20[14] - Net income for the six months ended December 27, 2024, was $641 million, compared to a net loss of$203 million for the same period in 2023[22] - Non-GAAP net income for the six months ended December 27, 2024, was $770 million, compared to a net loss of$21 million in the same period in 2023[28] Gross and Operating Margins - Gross margin improved to 34.9% (GAAP) and 35.5% (non-GAAP) in fiscal Q2 2025, compared to 23.3% (GAAP) and 23.6% (non-GAAP) in fiscal Q2 2024[4] - Non-GAAP gross margin for the six months ended December 27, 2024, was 34.5%, up from 21.8% in the same period in 2023[26] - Non-GAAP operating margin for the six months ended December 27, 2024, was 21.8%, compared to 5.6% in the same period in 2023[26] Cash Flow and Liquidity - Cash flow from operations of $221 million and free cash flow of$150 million in fiscal Q2 2025[5][6] - Cash and cash equivalents totaled $1.2 billion as of December 27, 2024[5] - Free cash flow for the six months ended December 27, 2024, was$177 million, up from $156 million in the same period in 2023[28] - Net cash provided by operating activities for the six months ended December 27, 2024, was$316 million, compared to $296 million in the same period in 2023[22] - Free cash flow is defined as net cash from operating activities less acquisition of property, equipment, and leasehold improvements[41] Dividends and Shareholder Returns - The company declared a quarterly cash dividend of$0.72 per share[6][7] Product Development and Innovation - Seagate began ramping HAMR-based Mozaic products with capacities up to 36 terabytes in the December quarter[3] Balance Sheet and Assets - Total assets increased to $7.96 billion as of December 27, 2024, up from$7.74 billion as of June 28, 2024[18] Non-GAAP Adjustments and Metrics - Share-based compensation for the six months ended December 27, 2024, was $87 million, up from$55 million in the same period in 2023[26] - Share-based compensation expenses are excluded from non-GAAP results to enhance understanding of the company's underlying performance and facilitate peer comparison[36] - Strategic investment gains, losses, and impairment charges are excluded from non-GAAP results due to their inconsistency in amount and frequency[37] - IT transformation costs are excluded from non-GAAP results as they are inconsistent in amount and frequency[38] - Income tax adjustments are calculated using a hybrid method and effective tax rate for non-GAAP adjustments[39] - Non-GAAP diluted share count adjustments exclude certain dilutive shares to reduce potential dilution from capped call transactions[40] - Adjusted EBITDA excludes non-core operating expenses such as impairment charges, restructuring costs, and share-based compensation[42] - LTM adjusted EBITDA is used to evaluate the company's debt portfolio and compliance with financial covenants[42] - Non-GAAP EBITDA for the last twelve months ended December 27, 2024, was $1,823 million[30] One-Time Events and Adjustments - The company recorded a pre-tax net gain of$313 million from the sale of System-on-Chip Operations in April 2024[32] - The company incurred $1 million in purchase order cancellation fees for the six months ended December 27, 2024, down from$114 million in the same period in 2023[28]