Seagate Q4: Price per Exabyte to Double While Cost Per TB Falls

Seagate’s earnings report ticked a lot of boxes with accelerating revenue growth of 49% YoY and 17% QoQ, margins that are expanding with a significant step-up on GAAP operating margin, and a free cash flow margin that is leading to an important reduction in debt. On the technology roadmap side, Seagate's Mozaic 3+ platform is now qualified and operating in production environments across all major cloud customers. Mozaic 4+ is ramping with the two largest global CSPs, with additional customer qualifications underway, while Mozaic 5+ qualification shipments are set to begin in late calendar 2027 — positioning the areal-density roadmap to support exabyte demand growth into the back half of the decade. In the more near-term, management stated that price per exabyte grew approximately 10% in the June quarter, yet an analyst asserted the guidance implies this will reach 20% YoY growth by the September quarter. Meanwhile, the transition to higher-density HAMR products is simultaneously lowering cost per terabyte and expanding margins. Although lesser-known Seagate was in SK Hynix’s shadow yesterday evening, the report has captured our attention.