AI Data Surge Boosts Performance: Seagate Improves Margins and Cash Flow

Seagate Technology Holdings plc (NASDAQ: STX) reported fiscal third-quarter 2026 revenue of $3.11 billion and GAAP diluted earnings per share of $3.27, with non-GAAP diluted EPS of $4.10, reflecting a marked year-over-year improvement in profitability.

During the quarter, the company generated $953 million in free cash flow, used approximately $641 million to pay down debt, and returned about $191 million to shareholders through dividends and share repurchases.

The board of directors declared a quarterly cash dividend of $0.74 per share, payable on July 7. For the fourth quarter, Seagate expects revenue of roughly $3.45 billion and non-GAAP diluted EPS around $5.00. Recent insider transaction filings show key executives sold several thousand shares on the open market, realizing approximately $5.5 million in proceeds.

In its April 28 earnings release, Seagate highlighted record profitability—achieving a non-GAAP gross margin of 47%—driven by strong demand for high-capacity enterprise hard disk drives and Mozaic HAMR-based products for data centers.

Peer company Western Digital also reported higher revenue and profits for its fiscal third quarter 2026 at the end of April, underscoring a broad recovery in the high-capacity storage market.

Seagate is a global leader in high-capacity HDDs and data storage solutions, with performance closely tied to demand from cloud data centers and enterprise servers. As generative AI and advanced data analytics drive rapid data growth, capital investment and technological competition in the high-capacity HDD and next-generation HAMR storage segments are intensifying.