Seagate Technology's Q1 fiscal quarter revenue grew 61% year-over-year, but strong financial results failed to boost the stock price, dropping over 8% in after-hours trading at one point.
BlockBeats news, October 28 — Seagate Technology reported fiscal first-quarter 2027 results for the period ended October 2, 2026, with revenue of $4.23 billion, up about 61% year-over-year and above analysts' estimate of $4.11 billion; adjusted earnings per share were $7.68, above the expected $7.39. AI infrastructure buildout continues to drive demand for the company's data storage products.
Margins improved markedly. First-quarter GAAP gross margin rose to 57.3% from 39.4% a year earlier, non-GAAP gross margin rose to 57.8% from 40.1%; non-GAAP operating margin rose to 50.7% from 29.0%. Cost of revenue grew only about 13% year-over-year over the same period, below revenue growth.
On cash flow, quarterly operating cash flow was $1.690 billion, and free cash flow reached $1.479 billion, up about 246% year-over-year. The company's gross margin and free cash flow both hit record highs, and it raised its quarterly dividend by about 3% to $0.76 per share.
Seagate expects second-quarter revenue of $4.8 billion, plus or minus $100 million; adjusted earnings per share of $9.20, plus or minus $0.20, both above analysts' prior estimates of $4.55 billion in revenue and $8.66 in earnings per share.
CEO Dave Mosley said: the creation, retention and reuse of data continue to drive storage demand growth, and visibility into customers' long-term needs supports the company's view of a multi-year growth cycle. The company's heat-assisted magnetic recording (HAMR) technology roadmap will meet growing storage demand by increasing hard drive areal density while maintaining supply discipline.
Despite results and next-quarter guidance beating expectations, according to BIT stock platform data, Seagate shares fell as much as 8% in after-hours trading. The stock closed regular trading that day at $667.85, with a year-to-date gain of nearly 150%.
