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Seagate quarterly profit margins reach record high for the first time in 11 years
Wednesday, February 4, 2026 at 06:40 AM
Seagate has reported its quarterly financial results, showing that its profit margins have reached a record high for the first time in 11 years, driven by demand for storage infrastructure.
Context
Seagate achieved a historic financial milestone in its fiscal second quarter of 2026, reporting record-breaking non-GAAP gross margins of 42.2%. This performance marks the company's highest profitability level in 11 years, supported by a 22% year-over-year revenue jump to $2.83 billion. The results signal a structural shift as the company transitions from a cyclical hardware vendor to a high-margin strategic partner within the AI data center supply chain.
The margin expansion is primarily driven by the "data tsunami" triggered by generative AI, which has spiked demand for mass-capacity "nearline" storage. Seagate is leading this shift through the commercial ramp of its Mozaic 3+ platform, utilizing HAMR (Heat-Assisted Magnetic Recording) technology to provide high-efficiency 30TB+ drives. With manufacturing capacity already fully allocated through the end of 2026 and supply visibility extending into 2028, the company is successfully leveraging its technology lead to command premium pricing and capture sustained growth.
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