Seagate: Net Profit Up 120% YoYear in Q3FY2026, Annual Revenue Growth Target Raised to at Least 20%

Seagate Technology announced its financial results for the third quarter of fiscal 2026, ended April 3, 2026.

During the reporting period, the company generated $3.112 billion in total revenue, with a 44% year-over-year increase. Non-GAAP net income reached $934 million, up 129% year over year. Non-GAAP gross margin hit 47%, with a 4.8-percentage-point quarter-on-quarter increase, while non-GAAP operating margin expanded to 37.5%, rising 5.6 percentage points from the prior quarter.

By end market, data center revenue totaled $2.5 billion, surging 55% year over year and accounting for 80% of the company's total revenue. Edge IoT revenue reached $612 million, with a 12% year-over-year increase, representing 20% of overall revenue.

Hard drive shipments in the quarter reached 199 exabytes (EB), increasing 39% year-over-year, with approximately 90% going to data center customers. Seagate's strong performance growth was primarily driven by AI-driven rising demand for high-capacity hard disk drives, optimized product mix, and a significant increase in shipments of data center and enterprise-grade storage solutions.

Currently, Seagate's Nearline storage EB supply is largely pre-allocated through the end of calendar year 2027. Its build-to-order contracts have been secured through fiscal 2027, and strategic planning discussions have extended into 2028 and beyond.

Looking ahead to the fourth fiscal quarter, the company projects revenue of $3.45 billion (±$100 million) and non-GAAP earnings per share guidance of $5.00 (±$0.20).

For the longer term, management expects sequential improvements in both revenue and profitability each quarter. Profit growth will be mainly supported by pricing improvements, product mix migration to high-value HAMR technology, and reduced unit costs from 40TB HAMR hard drives. Mosaic 4 offers a maximum capacity of 44TB per drive, and major cloud service providers have completed qualification certifications for these high-capacity products. By the end of calendar year 2026, Mosaic 4 is expected to surpass Mosaic 3 in shipment volume, with overall HAMR EB capacity also crossing the inflection point at that time.

During the earnings call, Seagate CEO Dave Mosley raised the company's annual revenue growth target from low double digits to at least 20% annually for the next several years. This target is supported by strong market demand, a proven technology roadmap, and disciplined operational execution.