Highlights

  • Seagate reported Q1 FY2027 revenue of $4.233 billion, up 61% year over year from $2.629 billion, with mass-capacity HDD demand from AI data centres driving the company's strongest quarterly result in several years.
  • GAAP EPS of $7.59 and gross margin of 57.3% reflected the pricing strength and operating leverage of Seagate's mass-capacity product portfolio during a period of sustained AI storage infrastructure demand.
  • Free cash flow of $1.479 billion in Q1 FY2027 enabled Seagate to raise its dividend by approximately 3% to $0.76 per share, demonstrating confidence in the durability of the current revenue cycle.
  • Q2 FY2027 guidance calls for revenue of $4.8 billion, plus or minus $100 million, and non-GAAP EPS of $9.20, representing continued sequential growth as hyperscale customers sustain HDD capacity procurement for AI workloads.

Seagate Technology (NASDAQ:STX) reported first-quarter fiscal 2027 results that captured the sustained and expanding demand for mass-capacity hard disk drives in AI data centre deployments — a market dynamic that has transformed the financial profile of the company's business over the past eighteen months. Revenue of $4.233 billion for the quarter ended 27 September 2026 was up 61% from $2.629 billion in the comparable year-ago period, with GAAP EPS of $7.59 and free cash flow of $1.479 billion confirming that demand for large-capacity storage in AI inference and model repository applications is generating durable, high-margin revenue for Seagate's leading position in the mass-capacity HDD segment.

Mass Capacity HDD Demand Powers Revenue Growth

Seagate's mass-capacity nearline HDD products, which serve as the primary long-duration storage layer in hyperscale AI data centres, have benefited from the structural requirement of AI infrastructure to store vast quantities of training data, model weights, and inference outputs. As AI deployments scale from tens of billions to hundreds of billions of parameters, the storage capacity requirements per cluster increase in proportion, creating sustained HDD demand that complements the higher-cost flash and GPU infrastructure that drives training and inference computation.

Seagate's HAMR (Heat-Assisted Magnetic Recording) technology, deployed in its highest-density drives, has expanded areal density beyond the limits of conventional PMR recording, enabling Seagate to offer drives with capacities that were not technically feasible in prior product generations. Management noted that HAMR-based drives are now in volume production and are being deployed by hyperscale customers who require the highest capacity per drive bay to maximise storage density within fixed data centre footprints.

Gross Margin and Earnings Performance

Gross margin of 57.3% for Q1 FY2027 reflects the pricing environment for mass-capacity HDD products, where supply remains constrained relative to AI-driven demand and where Seagate's product mix shift toward higher-capacity HAMR drives is accretive to average selling price per unit. GAAP EPS of $7.59 compared with a substantially lower figure in the year-ago quarter, when lower volumes and prior-cycle pricing dynamics had depressed earnings. Operating cash flow and free cash flow of $1.479 billion in the quarter provided the basis for the dividend increase announced alongside the earnings release.

Dividend Increase and Capital Return

Seagate increased its quarterly dividend by approximately 3% to $0.76 per share, payable to shareholders of record in the fourth quarter of calendar 2026. The dividend increase was framed by management as reflecting both the strong current revenue and cash flow performance and confidence in the durability of the AI-driven mass-capacity HDD demand cycle. The company also maintained its share repurchase programme, consistent with its stated capital allocation framework that balances investment in product development with returns to shareholders.

Q2 FY2027 Guidance and Outlook

For Q2 FY2027, Seagate guided revenue of $4.8 billion, plus or minus $100 million, representing approximately 13% sequential growth from Q1 and approximately 60% growth year over year at the midpoint. Non-GAAP EPS guidance of $9.20 reflects expected further margin expansion as higher-capacity HAMR drives represent an increasing proportion of revenue mix. Management characterised the forward demand environment as constructive, with hyperscale customers maintaining strong procurement levels for mass-capacity storage consistent with continued AI infrastructure expansion.

Stock Price Information

Seagate Technology (NASDAQ:STX) traded at $110.23 on 29 October 2026, representing a gain of 4.17% on the day, on volume of 6.61 million shares.