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# Seagate Net Income Jumps To $1.76 Billion As Gross Margin Hits 57.3%
- URL: https://www.bullished.co/seagate-net-income-jumps-to-1-76-billion-as-gross-margin-hits-57-3-4627a0e3/
- Published: 2026-10-27T20:21:15.000Z
- Updated: 2026-10-27T20:21:15.000Z
- Description: The hard drive maker guided December-quarter revenue to $4.8 billion and retired $1.2 billion of debt.
- Author: Matteo Parrino
- Tags: Earnings, STX, Industry: Technology

[Seagate](https://www.bullished.co/tag/stx/), which designs and makes hard disk drives and storage systems, reported fiscal first-quarter [net income of $1.76 billion](https://www.sec.gov/Archives/edgar/data/0001137789/000113778926000300/stxq12027pressreleasefinan.htm?ref=bullished.co), more than triple the $549 million of a year earlier, on revenue of $4.23 billion. The company, in an 8-K filed Tuesday, also guided to higher sales and earnings for the December quarter.

## Margins widen sharply

Revenue for the quarter ended October 2 rose to $4.23 billion from $2.63 billion a year earlier. Net income came to $7.59 per diluted share, against $2.43; on an adjusted basis, earnings were $7.68 per share, up from $2.61.

Gross margin, the share of sales left after production costs, climbed to 57.3% from 39.4%. Operating margin rose to 48.8% from 26.4%.

Free cash flow reached $1.5 billion, versus $427 million a year earlier. CEO Dave Mosley called it the company's "highest ever free cash flow" and pointed to a "multi-year growth phase" backed by long-term customer demand visibility.

## Debt cut, dividend raised

Seagate retired about $1.2 billion of debt during the quarter, lowering gross debt to $2.4 billion, and retired another $750 million after quarter-end, bringing it to $1.6 billion. It returned $568 million to shareholders through dividends and buybacks, and held $1.3 billion in cash.

The board raised the quarterly dividend by about 3% to $0.76 per share, payable January 7, 2027, to holders of record on December 23, 2026.

## Guidance for the December quarter

For the fiscal second quarter, Seagate guided to revenue of $4.8 billion, plus or minus $100 million, and adjusted earnings of $9.20 per share, plus or minus $0.20.

The company serves cloud and enterprise customers in its Data Center business, which makes up the vast majority of sales, as well as industrial and consumer buyers. A [Yahoo Finance preview](https://uk.finance.yahoo.com/news/seagate-stocks-surge-5-6-183029790.html?ref=bullished.co) put the stock at $680.27 in Tuesday morning trading, ahead of the results.

Management holds a webcast Tuesday at 5:00 p.m. Eastern to lay out the assumptions behind its December-quarter outlook.

### Sources

- [8-K Filing — Seagate Technology Holdings plc (STX)](https://www.sec.gov/Archives/edgar/data/0001137789/000113778926000300/stx-20261027.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit stxq12027pressreleasefinan.htm — Seagate Technology Holdings plc 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001137789/000113778926000300/stxq12027pressreleasefinan.htm?ref=bullished.co) — SEC EDGAR
- [Seagate Stocks Surge 5.6% Before Tonight's 28% Sequential EPS Growth Test](https://uk.finance.yahoo.com/news/seagate-stocks-surge-5-6-183029790.html?ref=bullished.co) — Yahoo Finance
- [Learn Why The Bull Case For Seagate (STX) Could Change Following Analyst Upgrades](https://finance.yahoo.com/markets/stocks/articles/learn-why-bull-case-seagate-055831599.html?ref=bullished.co) — Yahoo Finance

### More on Seagate Technology

- [Seagate CEO William Mosley Sells $17.4 Million In STX Shares Under Pre-Scheduled Plan](https://www.bullished.co/seagate-ceo-william-mosley-sells-17-4-million-in-stx-shares-under-pre-scheduled-plan-809a9187/)
- [Seagate CEO William Mosley Sells $10.3 Million In STX Shares Under Pre-Scheduled Plan](https://www.bullished.co/seagate-ceo-william-mosley-sells-10-3-million-in-stx-shares-under-pre-scheduled-plan-81202119/)

[All Seagate Technology (STX) coverage →](https://www.bullished.co/tag/stx/)