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SEC filingSeagate delivered a breakout quarter defined by surging nearline demand and pricing power, driving 44% revenue growth and 90% gross profit expansion as operating leverage amplified results.
Seagate reported Q3 FY2026 revenue of $3.1 billion, a 44% increase from $2.2 billion in the prior year period. This growth was primarily driven by favorable pricing actions and an increase in exabytes shipped, reflecting higher demand for nearline products. The company's ability to capture pricing power in the current demand environment underscores the strength of its market position and product portfolio alignment with customer needs.
Net cash provided by operating activities was $2.4 billion, a significant increase from $575 million in the prior year period. After capital expenditures of $382 million, free cash flow reached $2.0 billion. The company continues to make strategic investments to support demand recovery and technology transitions, with capital expenditures increasing from $182 million in the prior year. Management noted that the business generates cash flows to meet liquidity requirements including working capital, capital expenditures, product development efforts, and servicing indebtedness.
The company enters into long-term, non-cancelable purchase commitments to secure components and technologies for production. Management highlighted that supply chain dynamics may require volume purchase commitments or advance deposits for components in short supply. Looking forward, Seagate continues to monitor the environment and assess plans to mitigate future risk. The company's strengthened financial position, evidenced by robust cash generation and expanding margins, provides flexibility to navigate ongoing operational and macroeconomic uncertainties while investing in technology transitions.