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Seagate has delivered strong performance in its latest set of financial results, with growing cloud investment driving storage demand.
Seagate released its results for the second quarter of the 2025 fiscal year – the three months that ended on 27 December – last week. The company’s revenue for the quarter reached $2.3 billion, an increase of 70% on the corresponding quarter last year.
Seagate said its nearline products proved the standout area for the quarter, with cloud customers driving revenue from nearline storage to double year on year. “Nearline” storage” sits between online storage, which is immediately available, and offline storage used for backups or long-term storage that doesn’t need such frequent access.
Seagate’s customers increased their cloud capital spend by 50% in 2024, the company’s CEO William Mosley told an earnings call.
During the second quarter, the company sold 151 exabytes of hard disk drive (HDD) storage, up by 13 exabytes compared to the first quarter of the year, with HDD revenue also rising by 8%.
“Hard disk drives remain the preferred storage solution for the bulk of data storage needed in the cloud. We do not see these dynamics changing over the foreseeable future due to several advantages that HDDs hold over NAND,” Mosley said, including a substantially smaller cost per terabyte, as well as a lower carbon footprint.
Mosley added that he expects GenAI will continue to drive growth in the HDD market. That’s because much of the data used to train AI models, as well as the video and image content created by them, will be stored on HDDs.
“As data value continues to increase, so too does the strategic relevance of mass capacity storage, particularly in the era of AI,” he added. Seagate’s mass capacity revenue has now increased for six quarters in a row, the company said.
This month, the company announced it had started shipping its Exos M hard drives, which use its Mozaic 3+ HAMR (heat assisted magnetic resonance) technology.
The Exos M drives have capacity points up to 32 terabytes and Seagate confirmed this month it has been sampling Mozaic drives with capacities of up to 36 terabytes. The drives are aimed at companies that are scaling their data centres in the wake of the AI boom.
Mosley added he expects the uptake of Mozaic to increase quickly in the second half of the calendar year.
Last month, Seagate announced that it had been battling supply problems that were expected to affect the company’s bottom line.
In the earnings call, Mosely said he expected those problems would cause a $200 million hit in the current quarter, which ends in March. However, he added those problems are now resolved, the company “is able to meet our build-to-order commitments to major customers” and no further financial impact is expected in subsequent quarters.
Seagate is forecasting revenue for the current quarter to hit $2.1 billion, up around 25% on the corresponding quarter last year.
