Seagate Technology Holdings (NASDAQ:STX) Beats Q1 Earnings and Revenue Estimates

Seagate Technology Holdings (NASDAQ:STX) reported financial results for its fiscal first quarter that surpassed analyst expectations, driving a positive market response as the data storage specialist continues to capitalize on robust demand for its high-capacity products.

Quarterly Performance Versus Estimates

The company’s results for the quarter ended October 3, 2025, demonstrated significant strength, with both top and bottom-line figures coming in ahead of market forecasts.

• Revenue: Reported at $2.629 billion, exceeding the analyst consensus estimate of $2.570 billion.
• Earnings Per Share (Non-GAAP): Came in at $2.61, beating the estimated $2.40 per share.

This performance represents a substantial year-over-year improvement, with revenue growing 21% from the $2.168 billion reported in the same quarter last year. The company's profitability metrics also expanded notably, with GAAP gross margin increasing to 39.4% from 32.9% in the prior-year period.

Market Reaction and Price Action

The earnings beat was met with positive sentiment from investors. Following the release, Seagate's stock advanced approximately 4% in after-market trading. This immediate reaction suggests that the results reinforced investor confidence in the company's trajectory and its ability to exceed financial targets. The positive price movement adds to what has been a strong rally for the stock throughout 2025, largely fueled by optimism surrounding demand for data storage driven by artificial intelligence applications.

Business Outlook and Forward Estimates

Looking ahead, Seagate provided guidance for the fiscal second quarter of 2026 that appears optimistic relative to current analyst projections.

• Q2 2026 Revenue Guidance: The company expects revenue of approximately $2.70 billion, plus or minus $100 million. The midpoint of this range sits slightly above the current analyst consensus of $2.682 billion.
• Q2 2026 EPS Guidance: Seagate forecasts non-GAAP diluted EPS of $2.75, plus or minus $0.20. The midpoint of this guidance, $2.75, is meaningfully higher than the analyst estimate of $2.40 for the quarter.

This forward-looking guidance, particularly on profitability, indicates management's confidence in sustaining operational momentum and likely contributed to the positive market reception.

Key Takeaways from the Earnings Report

Beyond the headline numbers, several points from the earnings release underscore the company's current operational strengths.

• Strong Execution and Demand: CEO Dave Mosley attributed the performance to "strong execution and robust customer demand for our high-capacity storage products."
• Cash Flow Generation: The company generated $532 million in cash flow from operations and $427 million in free cash flow during the quarter, highlighting efficient operations.
• Capital Returns: Seagate continued its commitment to returning capital to shareholders, paying $153 million in dividends and repurchasing $29 million of its ordinary shares.
• Strategic Positioning for AI: Management emphasized that its new Mozaic HAMR products are now qualified with five of the world’s largest cloud customers, positioning the company to benefit from growing data storage needs tied to existing use cases and new AI applications.

For a detailed look at historical earnings, future estimates, and analyst projections for Seagate Technology Holdings, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.