Key Highlights
- Seagate’s Q3 adjusted earnings per share reached $4.10, surpassing the $3.48 analyst consensus, while revenue totaled $3.11B versus $2.95B projected
- Year-over-year revenue surged 44% compared to $2.16B in the prior-year quarter
- Fourth-quarter outlook calls for $5.00 EPS and $3.45B in revenue, both exceeding analyst projections
- Non-GAAP gross margin climbed to 47.0% from 36.2% in the year-ago period
- STX shares jumped more than 18% during extended trading, hitting $687.00
Seagate Technology (STX) delivered an impressive fiscal third quarter for 2026, exceeding analyst projections on both the top and bottom lines, while unveiling fourth-quarter guidance that significantly outpaced Wall Street expectations.
The data storage giant reported adjusted earnings per share of $4.10, comfortably ahead of the $3.48 consensus forecast. Quarterly revenue reached $3.11 billion, surpassing expectations of $2.95 billion and marking a 44% increase from the $2.16 billion recorded in the comparable quarter last year.
Shares ended Tuesday’s regular trading session at $579.03 before climbing to $687.00 during after-hours activity — representing a gain exceeding 18%.
Seagate Technology Holdings plc, STX
Net earnings climbed to $748 million, a substantial increase from the $340 million posted in the year-earlier period. GAAP gross margin reached 46.5%, while the non-GAAP measure hit 47.0%, marking a significant improvement from the 36.2% recorded during the prior-year quarter.
Seagate produced $1.1 billion in operating cash flow and $953 million in free cash flow throughout the quarter. These robust figures came even as the company paid down $641 million in outstanding debt during the same timeframe.
Shareholders received $191 million through a combination of dividend payments and share repurchases. The company’s board approved a quarterly cash dividend of $0.74 per share, scheduled for payment on July 7, 2026, to shareholders of record as of June 24, 2026.
CEO Dave Mosley characterized the quarter as delivering “record margin performance,” noting that the company produced “close to $1 billion in free cash flow.”
Forward Outlook Significantly Tops Expectations
The primary catalyst for the after-hours rally was the company’s forward-looking guidance. Seagate projected fourth-quarter revenue of $3.45 billion, give or take $100 million, compared to the analyst consensus of $3.15 billion — representing a 9% upside at the midpoint.
Fourth-quarter adjusted earnings per share guidance landed at $5.00, plus or minus $0.20, well above the $3.97 analyst forecast. This represents a 26% premium over Street expectations.
Executives noted that the guidance assumes limited impact from tariff policies and present geopolitical uncertainties.
Artificial Intelligence Fueling Storage Expansion
Seagate emphasized artificial intelligence as a critical growth catalyst. The company highlighted that expanding AI workloads are driving accelerated data generation, which consequently boosts long-term storage capacity requirements.
This strategic positioning resonated strongly with investors and helped explain the robust revenue expansion.
Over the trailing twelve-month period, STX has climbed approximately 610%, positioning it among the top performers within the technology hardware sector.
The stock’s 52-week trading range extended from $77.56 to $592.84. Before Tuesday’s after-hours surge, shares were already trading near the upper end of that range.
Seagate’s price momentum remains positive across short-, medium-, and long-term horizons, based on Benzinga’s stock evaluation metrics.
The company’s third-quarter free cash flow of $953 million combined with debt reduction of $641 million demonstrates ongoing balance sheet improvement.
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