Seagate Technology Holdings plc (STX)

Business

From the fiscal year 2026 Form 10-K, accession 0001137789-26-000159.

Seagate is a provider of mass-capacity data storage. It designs and manufactures hard disk drives (HDDs), storage systems and related solutions, and has been in the storage business for nearly 50 years. The parent is Seagate Technology Holdings plc, an Irish public limited company; its principal executive offices are in Singapore.

Two end markets. Beginning in fiscal year 2026 Seagate presents its products under two end markets rather than its prior categories:

• Data Center, cloud and enterprise environments requiring scalable, high-capacity storage infrastructure for AI-enabled computing, business-critical applications and other data-intensive workloads. This is the large majority of the business: 80% of fiscal 2026 revenue, up from 75% in fiscal 2025. The Data Center portfolio includes high-capacity HDDs of up to 44TB and storage systems of up to 3.5PB.
• Edge / Internet of Things ("Edge IoT"), industrial, commercial and consumer environments where data is processed and stored closer to where it is created. 20% of fiscal 2026 revenue, down from 25%. The Edge IoT portfolio ranges from 1TB to 32TB and covers video and image applications, network-attached storage, smart infrastructure, personal computing, gaming, streaming and backup.

Seagate operates as one reportable segment. The Chief Executive Officer, as chief operating decision maker, evaluates performance on consolidated results including consolidated net income.

How it sells. Sales run through direct and indirect channels. Data Center products go mainly to cloud service providers ("CSPs"), OEMs, distributors and enterprises, many under master purchase agreements with deliveries scheduled against customer purchase orders and forecasts; for high-capacity nearline drives in particular, Seagate works with key customers on longer-term demand forecasts and supply commitments that include cancellation-charge provisions in certain circumstances. Edge IoT products go mainly through OEMs, distributors, retailers and third-party resellers under non-exclusive agreements with customary sales programs, limited return rights and price protection.

Fiscal 2026 revenue by channel was 81% OEMs, 13% distributors and 6% retailers (fiscal 2025: 80% / 12% / 8%). By bill-from geography, 50% Americas, 40% Asia Pacific and 10% EMEA. Revenue by bill-from country was $6,146 million United States, $4,880 million Singapore and $1,165 million The Netherlands. In fiscal year 2026 one customer accounted for approximately 14% of consolidated revenue, up from approximately 10% for the largest customer in fiscal 2025 (in fiscal 2024 no customer exceeded 10%).

Technology. The roadmap is centred on areal density, how much data fits on a disk's recording surface. The Mozaic platform carries Seagate's implementation of heat-assisted magnetic recording ("HAMR"), combined with advanced magnetic recording using proprietary photonics. Alongside density, Seagate advances performance technologies including multi-actuation, advanced channel coding and signal processing. Management cites IDC's forecast that the global datasphere grows at roughly a 27% compound annual rate through 2030 to around 718 zettabytes annually.

Vertical integration and manufacturing. Seagate designs and manufactures many of the critical technologies in its drives, including read/write heads, magnetic recording media and other core components, and uses strategic suppliers and contract manufacturers for selected components and assembly. Component manufacturing, subassembly and final test and assembly are performed in China, Malaysia, Northern Ireland, Singapore, Thailand and the United States. Principal product development sites are in California, Colorado, Minnesota and Singapore. At July 3, 2026 Seagate owned or leased approximately 9.8 million square feet worldwide; the largest sites are Korat, Thailand (2,706,000 sq ft, drives and subassemblies), Woodlands, Singapore (1,543,000 sq ft, media) and Minnesota (1,157,000 sq ft, recording heads and product development). Production inputs include rare earth elements, precious metals and specialized alloys.

Competition. Global competitors include HDD makers Western Digital Corporation and Toshiba Electronics Devices & Storage Corporation, NAND flash suppliers enabling alternative storage, and storage systems and solutions providers. Customers evaluate on capacity, performance, reliability, quality, total cost of ownership, energy efficiency, supply continuity, security features and technical support.

Demand patterns. Data Center demand moves with customer procurement and deployment schedules, IT spending and the timing of hyperscale infrastructure investment; enterprise demand tracks IT modernization and data centre refresh cycles. Edge IoT, including Consumer Solutions, is seasonally stronger in the first half of Seagate's fiscal year, reflecting back-to-school and holiday purchasing.

Intellectual property and people. As of July 3, 2026 Seagate held approximately 3,036 U.S. patents and 226 non-U.S. patents, with approximately 273 U.S. and 29 non-U.S. applications pending. It employed approximately 30,000 full-time employees worldwide, of whom approximately 25,000 were in Asia. All manufacturing sites are certified to ISO 45001.

Leadership. Executive officers as of August 4, 2026 were Dr. William D. Mosley (Board Chair since October 2025 and CEO since October 2017), Gianluca Romano (EVP and CFO since January 2019), Ban Seng Teh (EVP and Chief Commercial Officer), James C. Lee (EVP, Chief Legal Officer and Corporate Secretary), KianFatt Chong (EVP, Global Operations) and Dr. John C. Morris (EVP and Chief Technology Officer).

Cybersecurity governance. The Board has delegated cybersecurity and IT risk oversight to its Audit and Finance Committee, which receives at least quarterly reports from the Chief Information Security Officer and Chief Information Officer. The CISO reports to the CIO, who reports to the CFO. As of the date of the 10-K, Seagate had not identified any cybersecurity threat that has materially affected or is reasonably likely to materially affect its business strategy, results of operations or financial condition.

Risk factors

From the fiscal year 2026 Form 10-K, accession 0001137789-26-000159. Condensed to the substantive risks; the full text is in Item 1A of that filing.

Business, operations and industry

• Product transitions, especially HAMR. Results have historically depended on being among the first to market. Seagate is transitioning to areal density recording technologies using HAMR as part of the Mozaic launch. If development, qualification or production cycles run longer than anticipated, or Seagate otherwise fails to implement new HDD technologies, it may lose sales and market share. Higher-capacity, more complex drives also raise the likelihood of reliability, quality or operability problems, which drive rework, scrap, service and warranty costs.
• Customer concentration. A limited number of key customers, OEMs, large hyperscale data centre companies and CSPs, account for a significant portion of revenue; one customer was approximately 14% of fiscal 2026 revenue. Loss of, or a significant reduction by, any one of them would have a disproportionate effect. New key customers require a lengthy and rigorous qualification process, so a lost customer is difficult to replace.
• Commoditization and alternative media. Industry standards that ensure interoperability also constrain differentiation, which has historically put downward pressure on price. Increasing capacity, falling cost and improving energy efficiency have expanded SSD adoption; in data centres nearline HDDs and enterprise SSDs mostly complement each other, but they compete for certain high-performance workloads, and in Edge IoT and client applications solid-state storage continues to displace lower-capacity HDDs.
• Forecasting and fixed costs. Manufacturing requires product-specific inventory investment at least three to six months ahead of sale, and capacity decisions further ahead still. Because of vertical integration, a high proportion of costs are fixed and hard to reduce in the short term. Forecasting errors produce either underutilization charges or inability to meet demand; Seagate recognized factory underutilization charges in fiscal years 2023 and 2024 after customer inventory adjustments. During periods of increasing demand, complexity has also created difficulty recommissioning and fully utilizing production equipment.
• Long, unpredictable nearline sales cycle. The nearline sales cycle can exceed one year and depends on CSP procurement and deployment timing and on customers' ability to procure other data-centre components.
• Distributor and retail exposure. Sales through distributors and retailers are a substantial portion of revenue, are less predictable, and are subject to greater price erosion and volatility.
• Seasonality. Consumer product sales are higher in the first half of the fiscal year; the second half sees seasonal reductions around Lunar New Year and the European summer.
• International operations and currency. Prices are predominantly dollar-denominated even outside the U.S., so a stronger dollar raises the real cost to non-U.S. customers, while expenses denominated in Thai Baht, Singapore dollars, Chinese Renminbi and British Pound Sterling expose Seagate the other way. Some countries restrict cross-border movement of cash; Singapore may tax dividends from subsidiaries to the parent.
• M&A and divestiture execution. Acquisitions may not deliver anticipated benefits, may require dilutive equity or additional debt, may raise the effective tax rate or bring inadequate privacy and cybersecurity controls, and may lead to impairment charges.
• Cybersecurity. Seagate and its third-party providers face phishing, social engineering, malware, ransomware and unauthorized access attempts that are increasing in frequency and sophistication as AI capabilities evolve. Product or firmware vulnerabilities could expose customer systems. Incidents could impair product functionality, IT systems, manufacturing, supply chain and product development, and generate remediation, litigation, indemnification and regulatory costs.

Supply and manufacturing

• Critical components and single sourcing. Read/write heads, media substrates, ASICs, preamplifiers, spindle motors, printed circuit boards, suspension assemblies, DRAM and NAND flash are all sourced in whole or part from sole or limited suppliers, and the manufacturing equipment is frequently custom-made from a few suppliers with long lead times.
• Rare earth elements and China concentration. Certain rare earth elements are critical to manufacturing, and many are sourced from China, which accounts for a majority of global supply and processing capacity. Chinese export restrictions or bans, or U.S. import restrictions or bans, on rare earth minerals could materially and adversely impact supply chain continuity and operating results.
• Purchase commitments. Seagate enters long-term, non-cancelable purchase commitments and makes large up-front supplier investments. It has cancelled, reduced or modified commitments and incurred fees; disputes with suppliers over commitments have resulted in settlements and litigation.
• Latent product defects. Because products are complex and integrate into larger systems, some defects only become detectable after deployment; lead times for certain components are long, so a quality excursion can take significant time and resources to remediate.

Financial performance and general economic conditions

• Leverage and liquidity. Seagate is leveraged and needs significant cash to service indebtedness. Debt service reduces cash available for working capital, capital expenditure and product development; debt covenants limit dividends, restricted payments, investments and additional indebtedness. A covenant failure could accelerate indebtedness via cross-defaults.
• 2028 Notes settlement mechanics. If holders elect to exchange the 2028 Notes, Seagate must settle the principal portion in cash, which could adversely affect liquidity; the outstanding principal is classified as a current rather than long-term liability, reducing net working capital.
• Quarterly volatility. Revenue and results fluctuate significantly period to period, so management cautions that quarter-to-quarter and year-over-year comparisons may not be meaningful or an accurate indicator of future performance.
• Macroeconomic and geopolitical conditions. Inflation and elevated interest rates have negatively affected the business in recent quarters. Conflicts including Ukraine–Russia and the Middle East (including the Iran conflict) have increased costs for energy, rare earth minerals, materials, components and transportation. Manufacturing is concentrated in relatively few sites, so a disruption at a single location could affect a disproportionate share of capacity.
• Counterparty default. Exposure arises through cash and investment deposits, foreign currency forwards, capped calls and other derivatives; capped-call counterparty exposure rises with the price and volatility of Seagate's ordinary shares.

Legal, regulatory and compliance

• Export controls and the BIS settlement. On April 18, 2023 Seagate entered a Settlement Agreement with the U.S. Department of Commerce's Bureau of Industry and Security resolving allegations about sales of hard disk drives to Huawei. Seagate agreed to complete three audits of its compliance with Section 734.9 of the Export Administration Regulations and has completed the first two. The agreement includes a denial order that is suspended and will be waived five years after the order date provided Seagate makes full and timely payments and completes the audits. Failure to comply could lose the suspension and prohibit a range of export-related activities.
• Trade policy and tariffs. Current U.S. trade policy includes tariffs on certain non-U.S. goods including information and communication technology products, which may materially increase costs for imported goods, force price increases that reduce demand, or compress margin if prices cannot be raised. Retaliatory measures abroad could raise export costs or reduce non-U.S. demand.
• Tax. Several jurisdictions where Seagate operates have enacted legislation partially or fully implementing the OECD's Pillar Two global corporate minimum tax, which has increased the level of income tax Seagate is subject to.
• Litigation and investigations. Outcomes may differ materially from expectations and may require substantial damages, fines or penalties.

Intellectual property, human capital and the shares

• Patents may be held invalid or circumvented; enforcement requires litigation that may produce countersuits; protection is harder in jurisdictions with less developed IP enforcement. Third-party infringement claims can seek injunctions or substantial damages.
• Certain products depend on intellectual property and technology licensed from third parties, including open source, and on third-party hosted infrastructure.
• Competition for skilled personnel is intense in China, Northern Ireland, Singapore, Thailand and the United States. Because part of key personnel compensation is equity-linked, a falling share price is a retention disadvantage, while sustained appreciation raises the risk of unexpected attrition as vested awards become more valuable.
• The share price may be volatile, including on issuance of ordinary shares upon exchange of the 2028 Notes for amounts in excess of principal. There is no obligation to continue dividends or repurchases; the repurchase program was paused in the December 2022 quarter and resumed in the first quarter of fiscal year 2026.

Management's discussion and analysis, fiscal year 2026

From the fiscal year 2026 Form 10-K, accession 0001137789-26-000159. Comparisons are fiscal 2026 (53 weeks, ended July 3, 2026) against fiscal 2025 (52 weeks, ended June 27, 2025). The 10-K does not carry the fiscal 2025 vs. 2024 comparison, which remains in the prior year's annual report.

Overview

Seagate shipped 789 exabytes of HDD storage capacity in fiscal 2026 and generated revenue of approximately $12.2 billion, gross margin of 46% and net income of $3.2 billion. Operating cash flow was $3.7 billion. It paid $634 million in dividends and repurchased $176 million of ordinary shares. It reduced outstanding debt by $1.4 billion, through exchanges of the 2028 Notes for total consideration of $1.3 billion in cash and approximately 12.6 million ordinary shares, together with repurchases of Senior Notes.

Management's account of the year: demand for data storage solutions strengthened, led by data centre end markets, with sustained demand for high-capacity nearline drives across global cloud customers and increasing sales into enterprise edge deployments. Customers continue to invest in data centre infrastructure for both traditional data-intensive workloads and growing AI-related applications, which increases the volume of data generated, retained and reused. Management notes the macroeconomic environment remains dynamic with heightened geopolitical uncertainty and evolving trade policies, but believes structural changes to the business, naming its pricing strategy and supply discipline, together with long-term customer engagements give greater visibility into future demand.

Results of operations

As a percentage of revenue, gross margin was 46% versus 35%, operating margin 34% versus 21% and net income 27% versus 16%. (The 10-K's percentage table rounds to whole points.)

Revenue rose approximately 34%, or $3.1 billion, primarily on an increase in nearline exabytes shipped reflecting higher demand for nearline products, and on favorable pricing actions undertaken by the Company. Nearline exabytes shipped rose to 695 from 497, while non-nearline fell to 94 from 98, for a total of 789 versus 595.

Gross margin increased 11 percentage points, driven by pricing actions and a product mix shift to higher-capacity products.

Operating expenses. Product development rose $31 million, mainly a $22 million increase in outside services, $7 million in compensation and benefits and $7 million in facilities, partly offset by an $8 million decrease in material expenses. Marketing and administrative rose $16 million, mainly $11 million of compensation and benefits and $5 million of information technology. A $105 million legal settlement charge was recorded in fiscal 2026 in connection with a litigation matter (see below). Restructuring and other, net was $27 million, primarily employee termination benefits, against $25 million in fiscal 2025.

Other expense, net of $404 million comprised $284 million of interest expense and $151 million of net loss from debt transactions, partly offset by $30 million of interest income. The prior year's $377 million comprised $321 million of interest expense and a $53 million loss on investments.

Taxes. The provision was $506 million versus $44 million, an effective tax rate of 13.73% versus 2.91%. The rate differs from Singapore's 17% statutory rate primarily because of tax benefits on earnings in jurisdictions subject to tax incentive programs, offset by the effects of Pillar Two global minimum tax, which major jurisdictions in which Seagate operates implemented starting in fiscal 2026. Fiscal 2026 also includes a discrete benefit from releasing certain valuation allowances in connection with the OBBBA in July 2025 and net excess tax benefits on share-based compensation.

Liquidity and capital resources

Cash and cash equivalents were $1,704 million at July 3, 2026, up $813 million from $891 million a year earlier.

Operating. The $3.7 billion inflow reflects net income adjusted for depreciation, amortization and share-based compensation, with working capital movements of a $575 million increase in accounts receivable (higher revenue) and a $131 million increase in inventory (work-in-process), partly offset by a $528 million increase in accrued expenses, income taxes and warranty (accrued income taxes and legal settlements) and a $66 million increase in accounts payable (capital expenditures).

Investing. The $525 million outflow was primarily $569 million of payments for property, equipment and leasehold improvements, partly offset by $31 million of proceeds from sales of certain investments and $15 million of proceeds from a business divestiture. The prior year's $276 million reflected $265 million of capital expenditure and $47 million net cash used in the Intevac acquisition, offset by $10 million from equity investment sales and $25 million of divestiture proceeds.

Financing. The $2.3 billion outflow comprised $1.4 billion of redemption and repurchase of long-term debt, $634 million of dividends, $176 million of share repurchases, $119 million of taxes on net share settlement of equity awards and $22 million of debt fees, partly offset by $56 million of proceeds from shares issued under employee stock plans.

Liquidity sources at July 3, 2026 were approximately $1.7 billion of cash and cash equivalents, cash expected from operations, and $1.3 billion available under the senior unsecured revolving credit facility, which runs through January 30, 2030 and had no borrowings outstanding and no letters of credit drawn. The Credit Agreement carries one financial covenant, a net leverage ratio of no more than 6.75 to 1.00, declining over time so that the maximum permitted ratio for each fiscal quarter ending after July 2, 2027 is 4.25 to 1.00. Seagate was in compliance with all covenants at year end.

Commitments at July 3, 2026. Unconditional purchase obligations of approximately $2.1 billion, primarily inventory components, of which $1.6 billion is expected to be paid within one year. Unconditional capital expenditure commitments of $465 million, primarily equipment, of which approximately $375 million is expected within one year. Future minimum rent under non-cancelable operating leases of $437 million, $66 million within one year. Future principal payments on long-term debt of $3.6 billion, all maturing in more than one year, with estimated future interest of approximately $1.3 billion, $243 million within one year. Accrued legal settlements of $225 million, $150 million within one year and $75 million thereafter. A $43 million liability for unrecognized tax benefits, none expected to settle within one year.

Capital expenditure guidance. For fiscal year 2027, supporting the volume ramp of hard drives using HAMR technology, Seagate expects capital expenditures to be higher than in fiscal 2026 and still within its target range of 4–6% of revenue.

Capital returns. During fiscal 2026 Seagate repurchased approximately 1 million ordinary shares, including approximately 0.4 million withheld for statutory tax withholding on vesting equity awards. As of July 3, 2026, $4.8 billion remained available under the repurchase authorization, which the Board increased to $5.0 billion on May 21, 2025. All repurchases are effected as redemptions under the Constitution.

Debt

At September 13, 2023 Seagate HDD Cayman issued $1.5 billion of 3.50% Exchangeable Senior Notes due 2028 ("2028 Notes"), maturing June 1, 2028, with associated capped call transactions at a current cap price of $107.746 per share that cost $95 million. During fiscal 2026 Seagate materially dismantled this instrument through privately negotiated exchanges:

• November 12, 2025, $500 million principal exchanged for $500 million cash and approximately 4.3 million shares.
• February 19, 2026, $600 million principal exchanged for $600 million cash and approximately 6 million shares.
• May 27, 2026, $186 million principal exchanged for $186 million cash and approximately 2 million shares.

These were accounted for as induced conversions under ASU 2024-04, producing a non-cash induced conversion expense of $131 million within net loss from debt transactions in fiscal 2026. Separately, holders of $28 million principal exercised exchange rights in May 2026 under the original indenture terms (settled in cash plus approximately 0.3 million shares, with no gain or loss recognized), and holders of approximately $35 million exercised in June 2026 with settlement expected in August 2026. The exchange rate at July 3, 2026 was 12.1368 ordinary shares per $1,000 principal, equivalent to an exchange price of $82.39 per share. The effective interest rate on the 2028 Notes was 3.94%, with contractual interest expense of $34 million in fiscal 2026 versus $52 million in fiscal 2025.

Obligor exchange. A distinct transaction at the very start of fiscal 2026, unconnected to the 2028 Notes above, changed the issuer of Seagate's straight senior notes and created the paired "Old" and "New" series that appear in the repurchase and redemption figures below. On June 27, 2025 the Company completed offers to exchange any and all outstanding notes of eight series issued by Seagate HDD Cayman (the "Old Notes") for new notes issued by Seagate Data Storage Technology Pte. Ltd. ("SDST") (the "New Notes"), together with related consent solicitations. Settlement was on June 30, 2025, inside fiscal 2026, which began June 28, 2025. Approximately $2.81 billion of aggregate principal was tendered and accepted across the eight series, the 4.091% due 2029, 3.125% due 2029, 8.25% due 2029, 4.125% due 2031, 3.375% due 2031, 8.50% due 2031, 9.625% due 2032 and 5.75% due 2034, and SDST issued New Notes in the identical principal amount of each series. Other than SDST's identity as issuer and obligor, the terms of the New Notes are identical to the Old Notes as to interest rate, interest payment dates, optional redemption prices and maturity, with substantially the same covenants; they are guaranteed by Seagate Technology Holdings plc, Seagate Technology Unlimited Company and Seagate HDD Cayman. Supplemental indentures to the Old Notes' indentures became operative on the settlement date and eliminated all restrictive covenants and certain of the default provisions, and released the guarantors from their obligations on the Old Notes. Untendered balances of the Old series remain outstanding, which is why several maturities appear as both an Old and a New series. The exchange was accounted for as a debt modification, with no gain or loss recorded and immaterial third-party fees; principal was swapped one-for-one, so it substituted the obligor without changing the amount of debt outstanding.

Separately during fiscal 2026, Seagate repurchased for cash at a discount to principal $89 million of New June 2029 Notes, $2 million of New July 2029 Notes, $36 million of New January 2031 Notes and $1 million of Old January 2031 Notes, recording an immaterial net gain.

Legal and environmental contingencies

• In re Seagate Technology Holdings plc Securities Litigation. Two securities class actions filed in July 2023 in the Northern District of California against the Company, Dr. Mosley and Mr. Romano were consolidated in September 2023, asserting Section 10(b), Section 20(a) and Rule 10b-5 claims over a class period from September 14, 2020 to April 19, 2023. On April 3, 2026 the parties agreed to a settlement in principle for a total of $175 million, approximately $70 million of which will be paid by the Company's insurers; Seagate recorded the $105 million legal settlement charge. The court granted preliminary approval on July 7, 2026, and a final approval hearing is set for November 17, 2026.
• Lambeth Magnetic Structures LLC v. Seagate. Patent infringement complaint filed April 29, 2016 in the Western District of Pennsylvania. The district court entered judgment for Seagate on April 19, 2022, but on September 17, 2025 the Federal Circuit vacated that judgment and remanded for a new trial on infringement and enablement. Seagate believes the claims are without merit.
• Seagate v. Headway Technologies et al. Seagate's own antitrust and breach-of-contract action, filed February 18, 2020 against suppliers of HDD suspension assemblies including NHK Spring, TDK and Hutchinson Technology. Claims against TDK and HTI were dismissed with prejudice after settlement in 2022. A November 2023 ruling had denied the majority of Seagate's antitrust claims, but on January 8, 2026 the Ninth Circuit reversed and remanded, allowing the antitrust claims to proceed; NHK's rehearing petition was denied and NHK has petitioned the U.S. Supreme Court for certiorari.
• Godo Kaisha IP Bridge 1 v. Seagate. Patent action filed March 15, 2024, transferred to the District of Minnesota on September 4, 2024, with eight patents-in-suit. Seagate believes the claims are without merit.
• BIS settlement. Under the April 18, 2023 Settlement Agreement, Seagate agreed to pay $300 million to BIS in quarterly installments of $15 million over five years beginning October 31, 2023. Of the $300 million charge accrued in fiscal 2023, $45 million sat in Accrued expenses and $75 million in Other non-current liabilities at July 3, 2026. $75 million was paid during fiscal 2026 and reported as an operating outflow.
• Environmental. Seagate has been identified as a responsible or potentially responsible party at several sites, has fulfilled its responsibilities at some, and does not expect costs in connection with these sites to be material.

Acquisition and divestiture history

• Intevac, Inc., acquired March 31, 2025, a supplier of thin-film processing systems, for total consideration of $119 million, primarily cash for all outstanding common stock plus a special dividend. Seagate recorded approximately $97 million of net tangible assets (mainly cash and investments), $19 million of intangibles amortized straight-line over three years, and $2 million of goodwill, none deductible for tax.
• Sale of SoC operations, under an April 23, 2024 asset purchase agreement with Avago Technologies International Sales Pte. Limited, a Broadcom Inc. subsidiary, Seagate sold IP, equipment and other assets related to its system-on-chip products and restructured certain pre-existing purchasing agreements. Total consideration was $600 million, including $560 million of cash at close; of the remaining $40 million tied to standard indemnification clauses, $25 million was received in fiscal 2025 and the final $15 million was received in fiscal 2026. A $234 million portion of consideration attributed to the restructured purchase agreements was deferred and is recognized ratably. The fiscal 2024 pre-tax net gain was $313 million.

No acquisition or divestiture was entered into or completed during fiscal year 2026.

Auditor

Ernst & Young LLP, San Jose, California, issued an unqualified opinion on both the fiscal 2026 consolidated financial statements and internal control over financial reporting, dated August 4, 2026. It has served as Seagate's auditor since 1980. The single critical audit matter was revenue recognition for sales incentive program rebates and discounts, auditing management's estimates of final selling prices required testing subjective assumptions about the extent of price adjustments and the timing of distributor sales to end customers.

Interim detail: the March 2026 quarter

From the Form 10-Q for the quarter ended April 3, 2026, accession 0001137789-26-000088. This is the third quarter of fiscal year 2026, a period inside the year the annual report covers. The full-year figures above supersede it on an annual basis; this section carries the interim detail the 10-K does not report.

Seagate shipped 199.4 exabytes in the March 2026 quarter, generating revenue of approximately $3.1 billion, gross margin of 46.5% and net income of $748 million. Operating cash flow was $1.1 billion. It retired $641 million principal amount of long-term debt, spent $161 million on property, equipment and leasehold improvements and paid $161 million in dividends.

Revenue rose $287 million sequentially, on favorable pricing actions and higher exabytes shipped reflecting nearline demand, and $952 million year over year. Gross margin rose 5 percentage points sequentially on pricing actions, and 12 points year over year on pricing, favorable volume and product mix, and the non-recurrence of $10 million of restructuring costs tied to an inventory write-down. Sales incentive programs were approximately 10% of gross revenue, against 11% in the December 2025 quarter and 14% a year earlier, a fall that traces the same pricing story. Warranty cost on new shipments was 1.0% of revenue, versus 0.9% and 0.7%.

Nearline exabytes were 175.4 in the quarter against 165.0 sequentially and 119.6 a year earlier; non-nearline was 24.0, 25.0 and 24.0. Data Center was 80% of quarterly revenue against 75% a year earlier.

The $105 million legal settlement charge and $7 million of restructuring charges both fall in this quarter. Other expense, net of $134 million comprised a $69 million net loss from debt transactions and $68 million of interest expense, offset by $6 million of interest income, the debt-exchange cost showing through in the quarter it was incurred.

At April 3, 2026, cash and cash equivalents were approximately $1.1 billion, $1.3 billion remained available under the revolving facility, accrued legal settlements were $240 million, and future principal payments on long-term debt were $3.9 billion. Because the conditional conversion option of the 2028 Notes was triggered as of the calendar quarter ended March 31, 2026, the notes were exchangeable through June 30, 2026 and were classified within current liabilities at April 3, 2026.

Management's description of conditions was consistent with the full-year account: a strong demand environment particularly in data centre end markets, sustained nearline growth across global cloud customers, increasing enterprise edge deployments, and AI adoption driving data generation and storage needs for inferencing, training and maintaining AI model integrity, set against a dynamic macroeconomic environment with geopolitical uncertainty and evolving trade policies.

Presentation change. Beginning in fiscal year 2026 Seagate changed its presentation of principal data storage markets to Data Center and Edge IoT, reflecting current demand drivers and the growing impact of AI-driven applications. Revenue and HDD exabytes shipped by end market were restated retrospectively to the earliest period presented; there was no impact on previously reported consolidated net revenue.

Subsequent events

Post-period-end developments. The dividend below is the 10-K's own subsequent event note (Note 17); the remainder are drawn from the 10-K's debt note and from Current Reports on Form 8-K filed after the annual report.

Dividend declared. On July 28, 2026 the Board declared a quarterly cash dividend of $0.74 per share, payable October 7, 2026 to shareholders of record at the close of business on September 24, 2026.

$1 billion of notes redeemed. On July 15, 2026 the entire outstanding principal amounts of the Old December 2029 Notes, the New December 2029 Notes, the Old 8.50% July 2031 Notes and the New 8.50% July 2031 Notes, totalling $1 billion, were redeemed. Seagate expects to record a net loss of approximately $45 million in the first quarter of fiscal year 2027.

2028 Notes fully retired. Following the Notice of Full Provisional Redemption issued June 11, 2026 covering all remaining 2028 Notes, the redemption settled on September 8, 2026. Notes submitted for exchange before 5:00 p.m. New York time on September 3, 2026 were exchanged on that date, with principal paid in cash and the excess settled in ordinary shares. Seagate HDD paid approximately $150.97 million in cash (including cash in lieu of fractional shares) and delivered 1,647,862 ordinary shares, settling exchanges of $150.51 million aggregate principal amount; the shares were issued in reliance on the Section 3(a)(9) exemption. The redemption notice had covered approximately $150.7 million of principal. This retires the 3.50% Exchangeable Senior Notes due 2028 in full.

Fiscal fourth quarter and full-year results furnished. On July 28, 2026 Seagate furnished a press release reporting results for the fiscal fourth quarter and fiscal year ended July 3, 2026 (Exhibit 99.1 to the 8-K of that date). Fiscal Q4 2026 revenue was $3,629 million against $2,444 million a year earlier, with GAAP gross margin of 52.3% (non-GAAP 52.7%), GAAP operating margin of 43.0%, GAAP net income of $1,294 million and GAAP diluted EPS of $5.58 (non-GAAP $5.71). Quarterly cash flow from operations was $1.3 billion and free cash flow $1.1 billion; Seagate retired $302 million of debt and returned $283 million to shareholders. On a full-year basis the release states GAAP gross margin of 45.6% and GAAP diluted EPS of $13.90, with non-GAAP figures of 46.1% and $15.58 and non-GAAP net income of $3,538 million; revenue of $12,195 million and GAAP net income of $3,184 million match the 10-K. Free cash flow for the year was $3.1 billion and total debt at year end $3.6 billion.

Guidance for fiscal first quarter 2027, from the same release: revenue of $4.1 billion, plus or minus $100 million, and non-GAAP diluted EPS of $7.30, plus or minus $0.20. The guidance includes the estimated net dilutive impact of the Exchangeable Senior Notes due 2028 and assumes minimal impact from global tariff policies and the then-current Middle East conflict; it excludes estimated share-based compensation of $0.26 per share. Chief executive Dave Mosley attributed the quarter to robust cloud data centre demand and disciplined execution and said the Company sees the momentum continuing in 2027.

Board composition. On September 2, 2026 Mr. Shankar Arumugavelu notified the Board that he has decided not to stand for re-election at the 2026 Annual General Meeting. He will continue to serve until the conclusion of that meeting. The decision was not due to any disagreement with the Company on any matter relating to its operations, policies or practices. The Annual General Meeting is to be held October 24, 2026.

Securities litigation settlement approval. The court granted preliminary approval of the $175 million securities class action settlement on July 7, 2026; the final approval hearing is scheduled for November 17, 2026.

Filings that contain financial statements

• 8-K, accession 0001137789-26-000153 (filed July 28, 2026), Exhibit 99.1 furnishes the fiscal fourth quarter and full fiscal year 2026 results (income statement, balance sheet and cash flow statement), for the quarter and year ended July 3, 2026.
• 8-K, accession 0001137789-26-000084 (filed April 28, 2026), Exhibit 99.1 furnishes fiscal third quarter 2026 results (income statement, balance sheet and cash flow statement) for the quarter ended April 3, 2026.
• 8-K, accession 0001137789-26-000016 (filed January 27, 2026), Exhibit 99.1 furnishes fiscal second quarter 2026 results for the quarter ended January 2, 2026.
• 8-K, accession 0001137789-25-000283 (filed October 28, 2025), Exhibit 99.1 furnishes fiscal first quarter 2026 results for the quarter ended October 3, 2025.
• 8-K, accession 0001137789-25-000148 (filed July 29, 2025), Exhibit 99.1 furnishes fiscal fourth quarter and full fiscal year 2025 results (the year-ago comparative period) for the quarter and year ended June 27, 2025.
• 10-Q, accession 0001137789-26-000088 (filed April 29, 2026), interim financial statements for the fiscal third quarter and nine months ended April 3, 2026.
• 10-K, accession 0001137789-26-000159 (filed August 4, 2026), annual financial statements for fiscal year 2026, ended July 3, 2026.

Earnings and guidance

• July 28, 2026, Fiscal Q4/full-year 2026 results. Revenue of $3.6 billion for the quarter (GAAP gross margin 52.3%, GAAP diluted EPS $5.58; non-GAAP diluted EPS $5.71). For the full fiscal year, revenue was $12.2 billion, up from $9.1 billion in fiscal 2025, with GAAP diluted EPS of $13.90 and non-GAAP diluted EPS of $15.58. The company generated $3.7 billion of operating cash flow and $3.1 billion of free cash flow for the year, retired $1.4 billion of debt, and returned $810 million to shareholders through dividends and share repurchases during fiscal 2026. Management guided fiscal Q1 2027 revenue of $4.1 billion (+/- $100 million) and non-GAAP diluted EPS of $7.30 (+/- $0.20). The board declared a quarterly cash dividend of $0.74 per share, payable October 7, 2026 to holders of record September 24, 2026. (8-K, accession 0001137789-26-000153.)
• April 28, 2026, Fiscal Q3 2026 results. Revenue of $3.11 billion, GAAP diluted EPS of $3.27 and non-GAAP diluted EPS of $4.10. The company generated $1.1 billion of operating cash flow and $953 million of free cash flow, retired approximately $641 million of debt and returned $191 million to shareholders. Guidance for fiscal Q4 2026: revenue of $3.45 billion (+/- $100 million) and non-GAAP diluted EPS of $5.00 (+/- $0.20). A quarterly dividend of $0.74 per share was declared, payable July 7, 2026. (8-K, accession 0001137789-26-000084.)
• January 27, 2026, Fiscal Q2 2026 results. Revenue of $2.83 billion, GAAP diluted EPS of $2.60 and non-GAAP diluted EPS of $3.11, both quarterly records for gross margin, operating margin and non-GAAP EPS. Operating cash flow was $723 million and free cash flow $607 million. During the quarter the company retired $500 million principal amount of its Exchangeable Senior Notes due 2028 and paid $154 million of cash dividends. Guidance for fiscal Q3 2026: revenue of $2.90 billion (+/- $100 million) and non-GAAP diluted EPS of $3.40 (+/- $0.20). A quarterly dividend of $0.74 per share was declared. (8-K, accession 0001137789-26-000016.)
• October 28, 2025, Fiscal Q1 2026 results. Revenue of $2.63 billion, up 21% year over year, with GAAP diluted EPS of $2.43 and non-GAAP diluted EPS of $2.61 (both a record gross margin quarter). The company generated $532 million of operating cash flow and $427 million of free cash flow, and returned $182 million to shareholders through dividends and share repurchases; the board raised the quarterly dividend by roughly 3% to $0.74 per share. Guidance for fiscal Q2 2026: revenue of $2.70 billion (+/- $100 million) and non-GAAP diluted EPS of $2.75 (+/- $0.20). (8-K, accession 0001137789-25-000283.)
• July 29, 2025, Fiscal Q4/full-year 2025 results (comparative period). Revenue of $2.44 billion for the quarter and $9.10 billion for fiscal 2025, with GAAP diluted EPS of $6.77 and non-GAAP diluted EPS of $8.10 for the year. Fiscal 2025 operating cash flow was $1.1 billion and free cash flow was $818 million; the company returned $600 million to shareholders and reduced debt by $684 million during the year, exiting fiscal 2025 with total debt of $5.0 billion. The board declared a quarterly dividend of $0.72 per share. Guidance issued for fiscal Q1 2026: revenue of $2.50 billion (+/- $150 million) and non-GAAP diluted EPS of $2.30 (+/- $0.20). (8-K, accession 0001137789-25-000148.) A separate 8-K filed the next day, July 30, 2025, furnished the prepared-remarks transcript of the earnings call after a technical issue interrupted the live webcast (8-K, accession 0001137789-25-000150).

Capital structure and debt actions

• June 27, 2025 (announced) / June 30, 2025 (settled), Senior notes exchange offers completed. Seagate announced completion of exchange offers and consent solicitations under which roughly $2.8 billion aggregate principal of eight series of old senior notes issued by Seagate HDD Cayman were tendered and exchanged for new notes of the same principal amounts issued by a new subsidiary issuer, Seagate Data Storage Technology Pte. Ltd. (SDST), guaranteed by the company, Seagate HDD Cayman and Seagate Technology Unlimited Company. The new notes carry the same interest rates and maturities as the notes they replaced; the old indentures were amended to eliminate all restrictive covenants and certain of the default provisions and release the prior guarantors. (8-K, accession 0001193125-25-152915.)

Separately, over fiscal 2026 Seagate progressively retired the 3.50% Exchangeable Senior Notes due 2028 issued by its subsidiary Seagate HDD Cayman, through a series of privately negotiated exchanges followed by a final redemption:

• November 4-13, 2025, First tranche of 2028 notes exchanged. Seagate and Seagate HDD Cayman agreed to exchange $500 million principal amount of the 3.50% Exchangeable Senior Notes due 2028 for approximately $503.4 million in cash plus ordinary shares (8-K, accession 0001193125-25-265772, November 4, 2025). The exchange closed November 10-12, 2025, settled with 4,313,941 ordinary shares (8-K, accession 0001193125-25-279125, November 13, 2025).
• February 11-19, 2026, Second tranche exchanged. A further $600 million principal amount of the 2028 notes was exchanged for approximately $599.2 million in cash plus ordinary shares (8-K, accession 0001193125-26-047755, February 11, 2026). The exchange closed February 17-19, 2026, settled with 5,952,309 ordinary shares (8-K, accession 0001193125-26-059681, February 19, 2026).
• May 20-28, 2026, Third tranche exchanged. A further $185.908 million principal amount of the 2028 notes was exchanged for approximately $185.908 million in cash plus ordinary shares (8-K, accession 0001193125-26-233588, May 20, 2026). The exchange closed May 26-27, 2026, settled with 2,023,124 ordinary shares (8-K, accession 0001193125-26-243110, May 28, 2026).
• June 11, 2026, Redemption notice for remaining 2028 notes. Seagate HDD Cayman called for redemption all approximately $150.7 million of the 2028 notes still outstanding, with a redemption date of September 8, 2026 and a holder exchange deadline of September 3, 2026. (8-K, accession 0001193125-26-268170.)
• September 8-9, 2026, 2028 notes retired. On the redemption date, Seagate HDD Cayman redeemed for cash the notes not submitted for exchange and settled exchanges of $150.51 million principal amount of notes, delivering 1,647,862 ordinary shares plus approximately $150.97 million in cash. This retired the 3.50% Exchangeable Senior Notes due 2028 in full. This filing postdates the fiscal 2026 Form 10-K and is a subsequent event relative to it. (8-K, accession 0001193125-26-385961.)

Board and governance

• July 28, 2025, Chairman succession announced. Effective at the conclusion of the 2025 Annual General Meeting, CEO Dave Mosley succeeded Michael R. Cannon as Chairman of the Board; Cannon became Lead Independent Director. (8-K, accession 0001137789-25-000145.)
• August 23, 2025, New director appointed. Thomas (Tom) Szlosek, EVP and CFO of AutoNation, Inc., was appointed to the Board and to its Audit and Finance Committee. (8-K, accession 0001137789-25-000191.)
• October 25, 2025, 2025 Annual General Meeting results. Shareholders elected all 11 directors, approved (on an advisory basis) executive compensation, ratified Ernst & Young LLP as auditor, and approved amendments to the Employee Stock Purchase Plan (adding 10,000,000 shares) and the 2022 Equity Incentive Plan (adding 3,800,000 shares available for issuance, among other changes). (8-K, accession 0001137789-25-000287.)
• May 5, 2026, Cannon to retire from the Board. Michael R. Cannon, Lead Independent Director, notified the Board he would not stand for re-election at the 2026 Annual General Meeting, ending a 15-year board tenure; he will continue as a director through the meeting. (8-K, accession 0001137789-26-000093.)
• September 2, 2026, Second director declines re-election. Director Shankar Arumugavelu notified the Board he would not stand for re-election at the 2026 Annual General Meeting; he will continue to serve through the meeting. This filing postdates the fiscal 2026 Form 10-K. (8-K, accession 0001137789-26-000201.)

What is not reflected in these filings

No 8-K in this window discloses a new acquisition or divestiture signed or closed during fiscal 2026. (Seagate's fiscal 2026 Form 10-K separately discloses that the company completed a small, non-material acquisition of Intevac, Inc. on March 31, 2025, inside fiscal 2025, before this window begins, for total consideration of $119 million.)

About this file

STX annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

STX quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Derivation, Q4 FY2026. Discrete fourth quarter, obtained by difference: every income-statement and cash-flow amount is the fiscal 2026 figure reported in the FY2026 10-K (accession 0001137789-26-000159) less the corresponding nine-month figure reported in the Q3 FY2026 10-Q (accession 0001137789-26-000088). Revenue, for example, is $12,195 million less $8,566 million. The balance sheet is not derived: it is the July 3, 2026 balance sheet as printed in the 10-K. No per-share amounts are stated, because weighted-average share counts cannot be differenced.

STX year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

Adjustments

Notes

• The quarterly series covers the third and fourth quarters of fiscal 2026, because those are the quarters the two filings behind this record present. The Q3 FY2026 10-Q (accession 0001137789-26-000088) prints the three months ended April 3, 2026 beside the three months ended March 28, 2025, and the fourth quarter falls out of the FY2026 10-K (accession 0001137789-26-000159) as the fiscal year less the 10-Q's nine months. Seagate's first and second fiscal 2026 quarters are not carried as periods here, because neither filing presents financial statements for them. The 10-Q's management's discussion does show the December 2025 quarter's revenue, gross profit, income from operations and net income alongside the March 2026 quarter for sequential comparison, but it carries no balance sheet, no cash flow statement and no per-share amounts for that quarter, and the first quarter of fiscal 2026 is not presented at all.
• Q4 FY2026 is derived by difference rather than printed as a column. Each line equals the fiscal-year amount less the nine-month amount: revenue of $3,629 million is $12,195 million less $8,566 million, and net income of $1,294 million is $3,184 million less $1,890 million. The derived income statement is internally consistent - revenue less total operating expenses of $2,070 million gives operating income of $1,559 million, and operating income less other expense of $54 million and tax of $211 million gives net income of $1,294 million. No fourth-quarter per-share amount is stated, because a weighted-average share count cannot be obtained by subtraction and neither filing prints a discrete fourth-quarter per-share figure.
• Seagate's income statement does not print a gross profit line; it lists cost of revenue inside total operating expenses, so the total operating expenses figure here includes cost of revenue, exactly as the filings present it. Gross profit is revenue less cost of revenue. For fiscal 2026 and fiscal 2025 that figure is printed in the 10-K's results-of-operations summary ($5,558 million and $3,200 million); for fiscal 2024, for the quarters and for the nine-month periods it is computed the same way.
• The 10-Q's cash flow statement is presented for the nine months only, with no three-month column, so no third-quarter cash flow figures are reported here. The nine-month cash flows are in the year-to-date block. Fourth-quarter cash flows are derived from the fiscal year less those nine months, which gives operating cash flow of $1,305 million and free cash flow of $1,118 million.
• Free cash flow is operating cash flow less cash paid for property, equipment and leasehold improvements. Capital expenditure, investing and financing cash flows, dividends paid and share repurchases are carried with the sign the statements print - outflows are negative.
• Total debt is the current portion of long-term debt plus long-term debt less current portion, as printed on the balance sheet: $3,565 million at July 3, 2026 against $4,995 million at June 27, 2025. Seagate retired debt through exchanges of its 2028 notes and repurchases of senior notes during fiscal 2026, and shareholders' equity moved from a $453 million deficit to positive equity of $2,167 million.
• The 10-K's balance sheet presents two years, so fiscal 2024 carries an income statement and a cash flow statement but no balance sheet. The July 3, 2026 balance sheet appears twice - as the fiscal 2026 year-end and as the Q4 FY2026 period end - because it is the same statement.
• Seagate's fiscal year ends on the Friday nearest June 30. Fiscal 2026 was a 53-week year ending July 3, 2026, with a 14-week first quarter; fiscal 2025 and fiscal 2024 were 52-week years. The third and fourth quarters of fiscal 2026 were 13 weeks each, so the extra week of fiscal 2026 falls outside both quarters in this record.
• The legal settlement line is a $105 million charge recorded in the third quarter of fiscal 2026 for a settlement in principle of the consolidated securities class action, which the 10-K reports at a total of $175 million, roughly $70 million of it payable by insurers.
• Revenue by channel and revenue by country are the disaggregations in the 10-K's revenue note, which covers all three fiscal years; the 10-Q does not disaggregate the quarters on the same basis, so those splits are carried on the fiscal years only.
• Because this record's current period is a completed fiscal year, the trailing twelve months ended July 3, 2026 are fiscal 2026 itself, and no separate trailing-twelve-month block is stated.

Uncertainties

• Every Q4 FY2026 income-statement and cash-flow figure is a subtraction of two printed columns, not a figure either filing prints. The arithmetic is exact at the reported $1 million rounding, but a line that Seagate rounds differently in the annual and interim presentations could shift a derived amount by $1 million.
• No discrete third-quarter cash flow figures are reported, for Q3 FY2026 or Q3 FY2025: the 10-Q publishes cash flows for the nine months only.
• Fiscal 2024 has no balance sheet, and Q3 FY2025 has neither a balance sheet nor a cash flow statement, because the filings behind this record do not print them.
• Dividends declared per ordinary share are read from the captions of the equity statements ($2.94, $2.86 and $2.80 for fiscal 2026, 2025 and 2024; $0.74 and $0.72 for the third quarters of fiscal 2026 and 2025). The Q4 FY2026 figure of $0.74 is the fiscal-year amount less the nine-month amount. Dividends declared are not the same as the dividends paid in the cash flow statement, which for fiscal 2026 were $634 million against $649 million declared.

Prior year to date

Taken from the SEC filings and normalized to actual dollars.

Company details

Fiscal period

Source filings