Data storage manufacturer Seagate (NASDAQ: STX) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 21.5% year on year to $2.83 billion. On top of that, next quarter’s revenue guidance ($2.9 billion at the midpoint) was surprisingly good and 4% above what analysts were expecting. Its non-GAAP profit of $3.11 per share was 9.6% above analysts’ consensus estimates.
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Seagate Technology (STX) Q4 CY2025 Highlights:
- Revenue: $2.83 billion vs analyst estimates of $2.75 billion (21.5% year-on-year growth, 2.6% beat)
- Adjusted EPS: $3.11 vs analyst estimates of $2.84 (9.6% beat)
- Adjusted EBITDA: $962 million vs analyst estimates of $893.5 million (34.1% margin, 7.7% beat)
- Revenue Guidance for Q1 CY2026 is $2.9 billion at the midpoint, above analyst estimates of $2.79 billion
- Adjusted EPS guidance for Q1 CY2026 is $3.40 at the midpoint, above analyst estimates of $3.01
- Operating Margin: 29.8%, up from 21% in the same quarter last year
- Free Cash Flow Margin: 21.5%, up from 6.5% in the same quarter last year
- Inventory Days Outstanding: 83, down from 86 in the previous quarter
- Market Capitalization: $78.06 billion
Company Overview
The developer of the original 5.25inch hard disk drive, Seagate (NASDAQ: STX) is a leading producer of data storage solutions, including hard drives and Solid State Drives (SSDs) used in PCs and data centers.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Seagate Technology struggled to consistently increase demand as its $10.06 billion of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result, but there are still things to like about Seagate Technology. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Seagate Technology’s annualized revenue growth of 24.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Seagate Technology reported robust year-on-year revenue growth of 21.5%, and its $2.83 billion of revenue topped Wall Street estimates by 2.6%. Beyond the beat, this marks 7 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 34.3% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 20.1% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and suggests the market is forecasting success for its products and services.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Seagate Technology’s DIO came in at 83, which is 6 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.
Key Takeaways from Seagate Technology’s Q4 Results
It was good to see Seagate Technology beat analysts’ EPS expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The market seemed to be hoping for more, and the stock traded down 2.5% to $364.09 immediately following the results.
Is Seagate Technology an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
