Seagate Technology has announced its quarterly earnings for the second quarter of fiscal year 2018 (the quarter ending 12/29/2017). The Cupertino-based company has reported quarterly revenue of $2.9 billion, net income of $159 million, and diluted EPS of 55 cents. On a Non-GAAP reporting basis, Seagate saw Q2 FY2018 net income of $431 million and earnings per share of $1.48.
Seagate's revenue remained flat year-over-year, but increased 11.5% versus the previous quarter. Net income decreased 12% QOQ and 46% YoY using GAAP accounting methods, but on a non-GAAP basis Seagate reports a 54% increase versus the previous quarter and 4.6% increase versus the same quarter last year so it's not all bad news. The company is also managed to amass quite a bit of cash including $850 million from operations and $773 of free cash flow.
|Q2 FY2018||Q1 FY2018||Q2 FY2017||QOQ||YoY|
|Revenue||$2.9 billion||$2.6 billion||$2.9 billion||+11.5%||=|
|Net Income (GAAP)||$159 million||$181 million||$297 million||-12%||-46%|
|Diluted Earnings Per Share (GAAP)||0.55||0.62||1.00||-11.5%||-45%|
|Net Income (Non-GAAP)||$431 million||$279 million||$412 million||+54%||+4.6%|
|Diluted EPS (Non-GAAP)||1.48||0.96||1.38||+54%||+7.2%|
Seagate manufactures both mechanical hard drives and solid state drives, and while the company cranks out many internal and external drives for consumers, the company is very much focused on the enterprise market, especially where its solid state storage is concerned. Seagate states in its press release that it is heavily focused on cloud storage with its 60TB 3.5" SAS drive and NVMe add-in-card (which it demonstrated at FMS 2016). The company has partnered with Facebook to build its 1U Lightning storage solution (up to 120TB of flash storage using 60 2TB M.2 NVMe drives) and continues to target the enterprise and exascale/HPC markets with their absolutely massive and ever-growing data demands for big data analytics of financial and user data, uploaded and user-generated media, cloud backup, and research/simulation data for supercomputers. Further, the company continues to push mechanical enterprise storage to ever higher capacities with Barracuda Pro and also has its Ironwolf NAS and sequential-optimized Skyhawk drives for surveillance systems. On the flash storage front, Seagate has its Nytro M.2 NVMe and Nytro SAS SSDs.
Facebook's 1U Lightning JBOF System using 60 Seagate XM1440 M.2 SSDs.
I am interested to see where Seagate (STX) will go with its flash storage (Will they ever bring it to the consumer market in a big way? They do have a few products, but their focus seems to be mostly on enterprise.) and if they will manage to match or surpass Western Digital and Toshiba this year in the enterprise HDD capacity war. Currently, the company's Barracuda, IronWolf, and Exos drives top out at 12TB including the second generation Helium-sealed versions.