[Management View]
Seagate reported record-setting revenue growth of $2.44 billion for the June quarter, marking a 30% YoY increase. Non-GAAP gross margin reached 37.9%, a record high, driven by demand for higher-capacity drives from cloud and enterprise customers. The company is advancing its HAMR-based products, with significant customer qualifications and a clear timeline for ramping advanced platforms. Build-to-order contracts secure nearline capacity through mid-2026, with visibility extending into the latter half of the year. Shareholder returns remain a priority, with nearly 75% of free cash flow distributed and plans to resume buybacks.

[Outlook]
Seagate provided September quarter revenue guidance of $2.5 billion (+/- $150 million), reflecting a 15% YoY increase at the midpoint. Non-GAAP operating margin is expected to reach the mid- to high-twenties percentage range, with EPS guidance of $2.30 (+/- $0.20). The company is focused on ramping its 4 terabyte per disk HAMR platform, targeting volume production in early calendar 2026. Long-term growth is anticipated in the low- to mid-teens, supported by AI-driven demand and mass capacity storage needs.

[Financial Performance]
- Revenue: $2.44 billion (+30% YoY, +13% QoQ)
- Non-GAAP EPS: $2.59
- Free Cash Flow: $425 million (+97% QoQ)
- Adjusted EBITDA: $697 million (+73% YoY, +24% QoQ)
- Mass Capacity Revenue: $2 billion (+40% YoY)
- Nearline Shipments: 137 exabytes (+52% YoY, +14% QoQ)

[Q&A Highlights]
Question 1: Can you clarify the implied gross margin guidance for the September quarter?
Answer: Management confirmed that the implied gross margin expansion is higher than modeled estimates. They emphasized that revenue, gross margin, and operating margin are all guided upward, with a clear path to achieving 40% gross margins in the near future.

Question 2: What trends are driving AI inference demand at the edge and in the cloud?
Answer: AI inference demand is driven by video properties stored in the cloud and diverse edge applications such as factory safety and hospital data analytics. Edge data is increasingly retained longer, supporting AI models and inferencing. Management expects mid-twenties exabyte growth, with sovereign datasets and viral applications contributing to demand.

Question 3: What is the revenue contribution from HAMR products, and how will this impact gross margins?
Answer: HAMR revenue is steadily increasing, with three major cloud customers qualified. The ramp of HAMR products is expected to positively impact gross margins due to higher capacity and lower cost per terabyte. The 4 terabyte per disk platform is targeted for early calendar 2026.

Question 4: Why is September quarter revenue guidance slightly below consensus, and how aligned is HAMR capacity with demand?
Answer: Guidance reflects production capability rather than demand constraints. Some capacity is allocated for customer qualifications, impacting sellable volume. Management anticipates strong demand and further revenue and profitability improvements in subsequent quarters.

Question 5: How is HAMR adoption progressing among customers beyond the first major client?
Answer: Multiple customers are ramping HAMR products, with strong pull for higher-capacity drives. The transition to Mosaic 3+ and 4+ platforms is enabling efficient exabyte growth.

Question 6: What pricing assumptions are embedded in long-term agreements (LTAs) for HAMR products?
Answer: Pricing strategy remains consistent, with slight increases in like-for-like pricing during contract negotiations. HAMR products offer significant TCO benefits, enabling Seagate to maintain cost advantages.

Question 7: How will free cash flow generation and share repurchases evolve in FY2026?
Answer: Free cash flow is expected to expand further, with share buybacks resuming. CapEx will increase slightly to support HAMR ramp but remain within the 4%-6% of revenue target.

Question 8: What impact will the global minimum tax have on GAAP and non-GAAP tax rates?
Answer: Both GAAP and non-GAAP tax rates will align at 16%, reflecting the global minimum tax.

[Sentiment Analysis]
Analysts expressed confidence in Seagate's strategic execution, particularly in HAMR technology ramp and pricing strategy. Management maintained an optimistic tone, emphasizing strong demand, operational efficiency, and alignment with long-term growth targets.

[Quarterly Comparison]
| Metric | Q4 FY2025 | Q3 FY2025 | YoY Change | QoQ Change |
|----------------------------|-----------|-----------|------------|------------|
| Revenue | $2.44B | $2.16B | +30% | +13% |
| Non-GAAP EPS | $2.59 | $2.30 | +13% | +12% |
| Free Cash Flow | $425M | $216M | +97% | +97% |
| Adjusted EBITDA | $697M | $561M | +73% | +24% |
| Nearline Shipments | 137 EB | 120 EB | +52% | +14% |

[Risks and Concerns]
1. Production constraints due to customer qualification requirements may limit near-term revenue growth.
2. Global minimum tax implementation could impact profitability.
3. Potential macroeconomic uncertainties and trade policy changes may affect demand and supply chain dynamics.

[Final Takeaway]
Seagate delivered record financial performance in FY2025, driven by strong demand for mass capacity storage and advancements in HAMR technology. The company is well-positioned for sustained growth, supported by long-term agreements, robust pricing strategies, and a clear technology roadmap. While production constraints and tax changes pose challenges, Seagate's strategic execution and focus on innovation provide confidence in its ability to drive revenue, profitability, and shareholder returns in FY2026 and beyond.