Seagate Technology Holdings Co., Ltd. has announced its second fiscal quarter report for the fiscal year 2023 ending December 30, 2022. The report shows a sharp fall in revenue and a net loss for the company.
Financial Results
In the second fiscal quarter of fiscal 2023, Seagate's revenue reached US$1.887 billion (approximately RMB 12.794 billion), which was significantly lower than the US$3.116 billion in Q2 in the fiscal year 2022. The gross profit margin also dropped from 30.4% to 13%. The net loss reached 33 million US dollars (approximately 224 million yuan), turning from profit to loss year-on-year.
Despite the overall financial downturn, Seagate generated an operating cash flow of $251 million and free cash flow of $172 million. The company also paid $145 million in cash dividends and reduced debt by $220 million. As of the end of the quarter, Seagate's total debt was $6 billion and cash and cash equivalents were $770 million. There were 206 million shares of common stock issued and outstanding.
Industry Challenges
Seagate's CEO, Dave Mosley, acknowledged the challenges facing the company and the industry as a whole. "We are executing on an industry-leading product roadmap that will position us well when the market eventually recovers," he said. A family of HAMR-based products greater than 30 TB per disk is expected to launch in June and densities will go beyond 3 terabytes."
However, a new report from Trendfocus suggests that shipments of HDD mechanical hard drives will almost halve in 2022, with shipments from all manufacturers falling sharply. Shipments from Seagate and Western Digital will also be almost halved.
Outlook for the Future
Despite the challenges, Seagate is optimistic about the future. The company expects revenue of US$200 million in the third fiscal quarter of the fiscal year 2023 (approximately 1.356 billion yuan), with fluctuations of US$15 million. Non-GAAP diluted EPS is expected to be $0.25, plus or minus $0.20.
Seagate has announced its second fiscal quarter report for fiscal year 2023, showing a sharp fall in revenue and a net loss for the company. Despite the challenges facing the industry, Seagate is focused on executing an industry-leading product roadmap that will position the company well when the market eventually recovers. The company is optimistic about the future and expects revenue to improve in the third fiscal quarter of the fiscal year 2023.
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