Seagate Technology (Nasdaq: STX) delivered one of the stronger earnings prints in the data storage sector in recent memory Wednesday, sending shares soaring roughly 18% after the company not only crushed third-quarter expectations but followed up with fourth-quarter guidance that blew past analyst consensus by an even wider margin.
A Quarter That Exceeded on Every Metric
Seagate posted adjusted earnings per share of $4.10 against a consensus estimate of $3.48 — a 18% beat — while revenue came in at $3.11 billion versus the $2.95 billion Wall Street had modeled. Critically, that top-line result represents a 44% year-over-year jump from the $2.16 billion Seagate reported in the same quarter last year, underscoring the scale of the demand acceleration the company is capturing.
Margin performance was equally impressive. Seagate expanded its non-GAAP gross margin to 47.0%, up sharply from 36.2% in the prior year period — a nearly 11-percentage-point improvement that reflects both the operating leverage in Seagate’s business model and the pricing power the company is exercising in a tight supply environment. The company also generated $1.1 billion in cash flow from operations and $953 million in free cash flow during the quarter, giving management substantial flexibility to deploy capital. Seagate used that capacity aggressively, retiring approximately $641 million in debt while returning $191 million to shareholders through dividends and share repurchases.
CEO Dave Mosley didn’t undersell the result. “Seagate delivered outstanding March quarter results, exceeding the high end of our revenue and EPS guidance, achieving record margin performance, and generating close to $1 billion in free cash flow,” Mosley said.
Guidance That Stole the Show
Strong as the Q3 numbers were, Seagate’s Q4 guidance arguably drove more of the stock’s reaction. The company projected adjusted EPS of $5.00, plus or minus $0.20 — a midpoint that sits 26% above the analyst consensus of $3.97. On the revenue side, Seagate guided to $3.45 billion, plus or minus $100 million, against a consensus of $3.15 billion, representing a 9% beat at the midpoint before the quarter has even begun.
That combination — a massive earnings beat followed immediately by guidance that resets expectations even higher — is precisely the setup that produces outsized single-day moves, and the market responded accordingly.
Wall Street Turns More Bullish
The results prompted at least one prominent analyst to reinforce his conviction. Bank of America’s Wamsi Mohan reiterated a Buy rating on STX following the print, pointing to secular cloud demand, ongoing revenue and margin improvement, and the company’s path toward higher-capacity HAMR hard disk drives as the key pillars of the bull case. “We see incremental gross margins remaining strong, and see continued growth in pricing, margins and cash flow throughout F27,” Mohan said.
Shareholder Returns Continue
Alongside the earnings release, Seagate’s board declared a quarterly cash dividend of $0.74 per share, payable July 7, 2026 to shareholders of record as of June 24, 2026 — continuing the company’s consistent return of capital even as it aggressively pays down debt and invests in next-generation storage technology.
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