Seagate’s revenue soared 1.5 times – clouds purchased hard drives

Seagate Technology Holdings published financial results for the second quarter of fiscal 2025, which ended December 27, 2024. The company’s revenue grew 50% year over year and 7% sequentially to $2.33 billion, in line with Wall Street analysts’ forecast of $2.32 billion. GAAP earnings for the quarter amounted to $336 million, or $1.55 per share. while a year earlier the company had losses of $19 million ($0.09 per share). Diluted earnings per share (Non-GAAP) are $2.03 versus $0.12 a year earlier.

«Our results demonstrate structural improvements in the business and our focus on delivering value in an environment of improving demand,” said Seagate CEO Dave Mosley. He noted that the most significant increase in demand was observed in the cloud sector. “This broad demand from global cloud customers resulted in Nearline product revenue nearly doubling year-over-year in the December quarter and nearly 60 percent growth in Nearline drive revenue for the full calendar year,” Mosley said.

Image source: Seagate

The company has seen a significant increase in sales of 24 TB and 28 TB CMR drives, which have made a significant contribution to its revenue, writes the Blocks & Files resource.

Seagate’s revenue from HDD sales for the quarter was $2.2 billion, up 57% year-on-year. Older drive models (2.5″, PC, consumer) brought the company $275 million, which is 15% less than in the previous fiscal year. Revenue from JBOD systems and SSDs fell year-on-year by 9% to $156 million.

In total, during the second fiscal quarter, the total capacity of Seagate drives shipped was 150.8 EB, exceeding the previous quarter by 10% and by 59% – the result of a year ago. At the same time, the average HDD capacity increased by 41% over the year – from 8.2 to 11.6 TB. The total capacity of Nearline drives was 125.8 EB, which is 77% more than a year ago, equal to 70.9 EB.

For the current third quarter of fiscal 2025, the company expects to generate revenue of up to $2.1 billion ± $150 million, representing an increase of 26.9% compared to the third quarter of fiscal 2024 on average, but less than the previous quarter. According to LSEG, the consensus analyst forecast for revenue is $2.19 billion, writes Reuters. The company’s forecast for diluted earnings per share (Non-GAAP) is $1.70 ± $0.20 versus analysts’ forecast of $1.69.

Mosley has high hopes for sales growth due to the deployment of AI: “We expect generative AI to drive storage capacity growth in the future. This is especially true for data-intensive image and video content generated by AI models, which is projected to increase nearly 170-fold from 2024 to 2028.” “We also expect enterprises to replicate and store more data locally at the edge as AI computing and inference move closer to the source of data generation,” he added.

The head of Seagate also talked about continuing to qualify customers for drives with HAMR technology. “We are currently ramping up HAMR volume for our leading CSP customer, while advancing qualifications for additional cloud clients and hyperscalers, which will lay the foundation for the next phase of Mozaic volume expansion, which will begin in the second half of calendar 2025,” he noted.

Seagate plans to use HAMR to increase capacity without the need to add an additional wafer to its 10-wafer design products. Its competitor Western Digital already has 11-platter drives in its portfolio.