Seagate: Fiscal 4Q23 Financial Results

4FQ23 Highlights
• Revenue of $1.60 billion
• GAAP (loss) per share of $(0.44); non-GAAP (loss) per share of $(0.18)
• Cash flow from operations of $218 million and free cash flow of $168 million
• Declared cash dividend of $0.70 per share

FY23 Highlights
• Revenue of $7.38 billion
• GAAP (loss) per share of $(2.56); non-GAAP diluted earnings per share (EPS) of $0.19
• Cash flow from operations of $942 million and free cash flow of $626 million
• Returned $990 million to shareholders through dividends and share repurchases

Seagate Technology Holdings plc reported financial results for its fiscal fourth quarter and fiscal year ended June 30, 2023.

“Our 4FQ23 performance reflected the uneven pace of economic recovery in China, cloud inventory digestion, and cautious enterprise spending amid the uncertain macroeconomic environment. The proactive actions we’ve taken to lower costs, manage production output, reduce debt and drive operational leverage have underpinned resilient performance and solid cash gen, while continuing to advance our revolutionary HAMR technology,” said Dave Mosley, CEO. “Through our actions, Seagate is now leaner, our balance sheet healthier, and our product roadmap even stronger, positioning the company to weather the near-term business environment, deliver financial leverage, and capture attractive long-term opportunities for mass capacity storage.”

The company generated $218 million in cash flow from operations and $168 million in free cash flow during 4FQ23. For FY23, it generated $942 million in cash flow from operations and $626 million in free cash flow. During 4FQ23, it paid cash dividends of $145 million. For FY23, it returned $990 million of capital to shareholders, through the payment of cash dividends of $582 million and in 1FQ23 used $408 million to repurchase 5.4 million ordinary shares. In light of the macroeconomic environment, it paused stock repurchases for the reminder of the fiscal year. Additionally, it strengthened its balance sheet position by reducing its overall debt by approximately $800 million through debt exchange, retirement and restructuring since 1FQ23. As of the end of FY23 cash and cash equivalents totaled $786 million, and there were 207 million ordinary shares issued and outstanding.

Quarterly Cash Dividend
The board of directors declared a quarterly cash dividend of $0.70 per share, which will be payable on October 10, 2023 to shareholders of record as of the close of business on September 26, 2023. The payment of any future quarterly dividends will be at the discretion of the board and will be dependent upon firm’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.

Business Outlook for 1FQ24
• Revenue of $1.55 billion, ±$150 million
• Non-GAAP (loss) per share of $(0.16), plus or min$0.20
Guidance regarding non-GAAP (loss) per share excludes known pre-tax charges related to estimated share-based compensation expenses of $0.15 per share.

BIS settlement penalty
The company accrued a settlement penalty of $300 million for 3FQ23 related to the alleged violations of the US Export Administration Regulations between August 17, 2020 and September 29, 2021 by the US Department of Commerce’s Bureau of Industry and Security (BIS), which were subsequently resolved by a settlement agreement on April 18, 2023. This settlement penalty is excluded from the non-GAAP measures to facilitate a more meaningful evaluation of the company’s current operating performance and comparison to its past periods’ operating performance.