Seagate announces financial results bolstered by 'robust' sales

Written by Jennifer Allen

July 29, 2020 | 15:00

Tags: #business #financial-results

Companies: #seagate

Seagate Technology has reported its fourth quarter and fiscal year financial results and they've been bolstered by 'robust cloud and data centre demand'. 

The company reported revenue of $2,517 million in Q4 2020 compared to $2,371 million the previous year with a lower operating margin down 3.4 percent. Dave Mosley, Seagate's chief executive officer, explained that 'Fiscal 2020 marked a strong year of progress as we grew mass capacity storage revenue by 25% and increased our overall revenue.' He attributed that to a successful year for achieving its technology roadmap and strengthening its balance sheet. However, there was some apprehension. 

In the statement, Mosley explained that while 'the June quarter was led by robust cloud and data centre demand, which drove record exabyte shipments for our nearline mass capacity and drives,' the firm is concerned about economic uncertainty and COVID-19 related disruptions. Crucially, Seagate seems to be appreciating that there could be issues due to 'impacted demand in other key end markets including video and image applications'. However, Mosley continued somewhat more positively, 'entering fiscal year 2021, the level of macro uncertainty remains high and we will continue to carefully manage our cash and expenses. However, we anticipate demand across our end markets to improve within the next six months and currently model revenue to be fairly flat in fiscal year 2021, supported by the strength of our mass capacity product portfolio.'

Effectively, the plan is to take advantage of the 'unabated' growth in data in the longer term. This is somewhat demonstrated by Mosley discussing how the firm is 'ramping shipments of our industry capacity leading 16-terabyte drives to support strong customer demand'. While these won't be drives you see in your home just yet, there's a huge amount to be made from data centre and cloud storage operations here. 

Unlike some other financial results discussions, Seagate didn't use the time to unveil new products or even suggest what's coming next. Ultimately though, it's quite a clear cut answer - more storage capacity and plenty of it. With the growth of data in the cloud particularly strong, this is certainly going to be where the money is for Seagate rather than having to worry about enticing regular consumers. 

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