Seagate Technology Holdings Plc · NASDAQ:STX
Seagate Technology — Investor Day (February 2021)
113 slides from Seagate Technology's investor day presentation, February 2021
Slide 1: Seagate Analyst Day
SEAGATE ANA Ear Bay
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly r
Slide 3: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information To supplement the consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses non-GAAP measures of adjusted revenue, gross profit, gross margin, operating expenses, income from operations,
Slide 4: Unleash Potential, Maximize Value
Unleash Potential, Maximize Value Dr. Dave Mosley Chief Executive Officer
Slide 5: Key Takeaways
Key Takeaways 175ZB of data by 2025 and enterprises are Data Growth is Exploding preserving more to unlock data potential and gain competitive advantage. Seagate’s leading HDD technology roadmap 40+ Years of Innovation delivering mass capacity HDD economic advantages for years to come. Seagate has t
Slide 6: Perspectives on CY20
Perspectives on CY20 Managed Executed Delivered Enhanced COVID Technology Solid Financial Shareholder Challenges Roadmap Results Returns Addressed supply Ramped 16TB, launched 18TB Revenue +2% YoY Raised quarterly dividend disruptions and met our customer commitments Shipped first 20TB HAMR Op Margi
Slide 7: Data Growth is Exploding
Data Growth is Exploding Datasphere is Doubling Every Three Years 175ZB 80ZB 41ZB 20ZB 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global Datasphere, Nov 2018 Seagate 7
Slide 8: Data Growth Fueling Mass Capacity Storage Demand
Data Growth Fueling Mass Capacity Storage Demand Mass Capacity HDD Legacy HDD Other NAND/SSD Enterprise SSD 7,000 6,000 Exabytes Shipped 5,000 Massive Capacity HDDs 4,000 Mass Capacity HDDs storing >65% of 3,000 exabytes in 2026 2,000 Mass Capacity exabyte CAGR ~35% 1,000 Annual exabytes increase (2
Slide 9: Transition to the Cloud Has Driven Mass Capacity Demand
Transition to the Cloud Has Driven Mass Capacity Demand 40% Core Cloud Exabytes Shipped In 2020, approximately 40% of data was being stored in the cloud Edge Seagate successfully pivoted to address 25% growing demand, leading to ongoing success and ability to drive value Endpoints 2015 2020 Source:
Slide 10: Cloud Data Centers Choose Mass Capacity HDDs
Cloud Data Centers Choose Mass Capacity HDDs to Store 90% of Their Exabytes % HDD % SSD 1 90 2 95 3 84 90% EXABYTES Cloud # 4 5 90 97 Mass Capacity % Exabytes Stored 6 91 HDDs 7 83 8 93 9 91 Hyperscale Data Centers 10 92 Source: IDC Cloud Infrastructure Index 2019 Seagate 10
Slide 11: 40+ Years of Mass Capacity Storage Innovation
40+ Years of Mass Capacity Storage Innovation • Successful common platform PMR HDDs • 18TB ramping as planned • Scaling to 20TB+ • Areal density CAGR 20%+ • 20TB shipping as planned • 50TB in CY26; 100TB in CY30 • Dual actuator technology • Doubles drive performance • Volume shipments to cloud/edge
Slide 12: Delivering Mass Capacity TCO Economics For Years to Come
Delivering Mass Capacity TCO Economics For Years to Come 16X HDD Maintaining a Significant $/GB Advantage to SSD TLC: HDD 14X 12X SSD: HDD 10X QLC: HDD $/GB Ratio 8X 6X 4X 2X X 2020 2021 2022 2023 2024 2025 2026 Sources: Forward Insights Q4’20 SSD Insights Report, IDC WW Solid State Drive Forecast U
Slide 13: HDD Mass Capacity TAM Doubling to ~$24B in CY25
HDD Mass Capacity TAM Doubling to ~$24B in CY25 Seagate is Well Positioned to Address Demand 30000 25000 $26B $24B 20000 HDD Mass Capacity $12B Nearline 15000 2X Video & Image Applications (VIA) 10000 Network Attached Storage (NAS) 5000 0 CY20 CY25 CY26 Legacy Mass Capacity Source: Seagate Seagate 1
Slide 14: Mega Trends Driving Need for Mass Capacity Storage At The Edge
Mega Trends Driving Need for Mass Capacity Storage At The Edge 1PB Per day 100GB Per genome Smart Factory Human Genomics 2.5PB Per day Up to 32TB Smart City Per AV / day Autonomous Vehicle Sources: Smart Factory, Dell; Autonomous Vehicle, Renovo; Smart City, IDC; Human Genomics, SourceBioScience Sea
Slide 15: Data Gravity is Shifting More to The Cloud and Edge
Data Gravity is Shifting More to The Cloud and Edge ~70% Core Cloud The shift in data gravity leading to a Exabytes more distributed enterprise Shipped This “distributed enterprise” creates complexity in preserving, managing Edge and activating data ~50% ~30% Endpoints 2015 2020 2025 Source: Seagate
Slide 16: Mass Data Landscape Evolving
Mass Data Landscape Evolving Distributed enterprise creating cost, scale, and complexity challenges Seagate 16
Slide 17: Uniquely Positioned to Meet Evolving Mass Data Needs
Uniquely Positioned to Meet Evolving Mass Data Needs HDD Hardware & Software Systems & Deep Customer Innovation Development Data Architecture Relationships Knowledge Seagate 17
Slide 18: Addressing Distributed Enterprise Mass Data Challenges
Addressing Distributed Enterprise Mass Data Challenges Edge-to-Cloud Mass Storage Platform powered by Mass data transfer from Mass capacity storage Cloud St-aaS available at the “Metro endpoint-to-edge-to-core optimized for private clouds Edge” in collaboration with Equinix January 2020 September 20
Slide 19: Launching Lyve Cloud
Launching Lyve Cloud $ Storage as a Service • Fully managed, S3 object storage • Hosted with Platform Equinix® • Expanding to 4 metro locations in CY21 Simple, Trusted, Efficient • Predictable, cost-efficient, scalable mass data storage • Complements multi-cloud strategies • Enables mass data manage
Slide 20: Lyve Solves for the Cost & Complexity of the Distributed Enterprise
Lyve Solves for the Cost & Complexity of the Distributed Enterprise Ecosystem Seagate 20
Slide 21: Lyve Storage Platform Enables Access to a Large and Growing Market
Lyve Storage Platform Enables Seagate Access to a Large and Rapidly Growing Market Market Opportunity ~$50B Storage as a Service Seagate Well Positioned to Address New Opportunities: • Mass data leader with leading HDD portfolio • Software and data management experience Storage Infrastructure • Scal
Slide 22: Enhancing Value for Our Shareholders
Enhancing Value for Our Shareholders Cumulative Returns >$7B Over the Past 5 Years, We Have: >$5B • Generated >$6B in free cash flow • Returned >$7B to shareholders, through dividends and share repurchases >$3B • Raised the quarterly dividend 6% >$2B • Repurchased ~27% shares outstanding Today: Rais
Slide 23: And for All of Our Stakeholders
And for All of Our Stakeholders Integrity Innovation Inclusion We lead by example with an We deliver value for our We are committed to advancing equal commitment to people, our customers through discovery, equity in the workplace and ensuring planet, and profitability agility, and solutions all empl
Slide 24: Commitment to Global Corporate Citizenship
Commitment to Global Corporate Citizenship Cultivating a More Enabling a Upholding the Highest Diverse, Equitable and Sustainable Datasphere Standards of Ethics Inclusive Workforce • UNGC signatory and RBA founding • 59% Global workforce are women • Anti-Bribery and Corruption training member mandat
Slide 25: Strong, Experienced Leadership Team
Strong, Dr. Dave Mosley CEO Experienced Patricia Frost SVP Human Resources Gianluca Romano CFO Leadership Joan Motsinger B.S. Teh Team SVP Business Excellence EVP Global Sales and Sales Operations TRACK RECORD OF Jeff Fochtman Jeffrey D. Nygaard SVP Global Marketing SUCCESS EVP Operations, Products,
Slide 26: Leading HDD Innovation
Leading HDD Innovation Dr. John Morris Chief Technology Officer
Slide 27: Driving HDD Innovation
Driving HDD Innovation $ Leadership Scale TCO Demonstrating a strong, Scaling critical components HDD infrastructure positioned consistent, track record of areal beyond the next decade to enable to deliver sustainable total cost of density growth long-term capacity expansion ownership (TCO) reductio
Slide 28: The Need for New HDD Recording Technology
The Need for New HDD Recording Technology Reaching maximum capability of perpendicular recording Areal Density Explained Linear Density (down-track) Track Density (cross-track) Areal Density Perpendicular Media Grains Seagate 28
Slide 29: Heat-Assisted Magnetic Recording
Heat-Assisted Magnetic Recording Iron-Platinum Laser-Sourced Light Head Technology Media Technology Focused heat provides local High coercivity material enables Write Pole reduction in coercivity smaller, thermally stable grains Write pole sets magnetic bit Glass substrate enables required Near-Fiel
Slide 30: Areal Density Demonstration
Areal Density Demonstration Laboratory Areal Density Demonstrations + = Linear Pitch 13 nm Track Width Track 46 nm Head Media Density Head / media combinations are assessed for linear and track density capability 1 Tb/in2 Linear Density Seagate 30
Slide 31: Maximum Areal Density Tracking
Maximum Areal Density Tracking Maximum Laboratory-Demonstrated Laboratory Areal Density Demonstrations Areal Density by Quarter 3000 2500 Areal Track Density (Gb/in2) 2000 Density 1500 18TB Equivalent Capacity* 1000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Linear Density 2016 2017 2018
Slide 32: HAMR Areal Density 2017
HAMR Areal Density 2017 Maximum Laboratory-Demonstrated Laboratory Areal Density Demonstrations Areal Density by Quarter 3000 2500 Areal Track Density (Gb/in2) 2000 Density 1500 1000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Linear Density 2016 2017 2018 2019 2020 Seagate 32
Slide 33: HAMR Areal Density 2018
HAMR Areal Density 2018 Maximum Laboratory-Demonstrated Laboratory Areal Density Demonstrations Areal Density by Quarter 3000 2500 Areal Track Density (Gb/in2) 2000 Density 1500 1000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Linear Density 2016 2017 2018 2019 2020 Seagate 33
Slide 34: HAMR Areal Density 2019
HAMR Areal Density 2019 Maximum Laboratory-Demonstrated Laboratory Areal Density Demonstrations Areal Density by Quarter 3000 2500 Areal Track Density (Gb/in2) 2000 Density 1500 1000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Linear Density 2016 2017 2018 2019 2020 Seagate 34
Slide 35: HAMR Areal Density 2020
HAMR Areal Density 2020 Maximum Laboratory-Demonstrated Laboratory Areal Density Demonstrations Areal Density by Quarter 3000 2600 (Gb/in2) 2500 40TB Equivalent Capacity* Areal Track Density (Gb/in2) 2000 Density 1500 1000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Linear Density 2016 201
Slide 36: HAMR Areal Density Growth
HAMR Areal Density Growth Maximum Laboratory-Demonstrated Laboratory Areal Density Demonstrations Areal Density by Quarter 3000 2500 Areal Track Density 22% CAGR (Gb/in2) 2000 Density 1500 1000 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Linear Density 2016 2017 2018 2019 2020 Seagate 36
Slide 37: Product Maturity Cycle 3-5 Years
Product Maturity Cycle 3-5 Years Maximum Laboratory-Demonstrated Productization Areal Density by Quarter 50TB Equivalent Capacity* 50TB by 2026 3000 2500 40TB Equivalent Capacity* Summary Areal • Growth is robust and sustainable, with Density 22% CAGR CAGR > 20% (Gb/in2) 2000 • 20TB HAMR Product Shi
Slide 38: Media Technology – The Path to Future Growth
Media Technology – The Path to Future Growth ~40TB ~90TB ~105TB ~120TB+ Maximum Demonstrated Areal Density 2.6 Tb/in2 Media Type: Granular Ordered-Granular Bit Patterned Areal Density Limit: 4 – 6 Tb/in2 5 – 7 Tb/in2 > 8 Tb/in2 Path to 10TB per disc by 2030 Seagate 38
Slide 39: Total Cost of Ownership (TCO) - Explained
Total Cost of Ownership (TCO) - Explained Devices Compute & Rack Power Network Infrastructure TCO Components ($/TB) Device Acquisition Device Server Power (OPEX) Server Acquisition Enclosure Enclosure Acquisition Other Networking Rack Power Distribution Seagate 39
Slide 40: TCO – Dictated by Device Acquisition Cost
TCO – Dictated by Device Acquisition Cost Mass Capacity Rack Infrastructure TCO ($/TB) Mass Capacity Tenets SSD Power, compute & networking are minor components of TCO HDD Data-reduction occurs prior to the storage layer* TCO Components ($/TB) Device-level $/TB Drives TCO Device Acquisition Power (O
Slide 41: HDD Offers Lowest-TCO Storage Option
HDD Offers Lowest-TCO Storage Option Device-level $/TB drives TCO Capacity-normalized, Rack level with dense enclosures, Nearline HDDs, QLC SSDs, Equivalent server specifications *Market Pricing & Trends, Forward Insights, NAND Vendor Roadmaps, Seagate Market Research Seagate 41
Slide 42: HDD Offers Lowest-TCO Storage Option for Next Decade
HDD Offers Lowest-TCO Storage Option for Next Decade TCO equilibrium for 10+ years Capacity-normalized, Rack level with dense enclosures, Nearline HDDs, QLC SSDs, Equivalent server specifications *Market Pricing & Trends, Forward Insights, NAND Vendor Roadmaps, Seagate Market Research Seagate 42
Slide 43: Summary
Summary Heat-assisted magnetic recording is demonstrating areal density CAGR > 20% 50TB On track to deliver 50TB devices by 2026 Advanced technology will provide a path to 100TB+ devices $ Significant HDD total cost of ownership (TCO) benefit for 10+ years Seagate 43
Slide 44: Mass Capacity HDD Storage Leader Addressing Needs from Core to Edge
Mass Capacity HDD Storage Leader Addressing Needs from Core to Edge Jeff Fochtman SVP, Global Marketing
Slide 45: Key Takeaways
Key Takeaways Leadership Customer Portfolio and Brand Strength and Across All Core Satisfaction Hitting Investment Emerging Markets on All Metrics Simplification Opportunities Mass Capacity in high Total Customer Experience Fewer product Edge growing as data growth, legacy healthy initiatives and fo
Slide 46: Strong Portfolio Servicing Legacy and Mass Capacity Markets
Strong Portfolio Servicing Legacy and Mass Capacity Markets MASS CAPACITY LEGACY Seagate 46
Slide 47: Mass Capacity Exabyte Crossover
Mass Capacity Exabyte Crossover CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 5,000 4,500 4,000 We’re now in the Data Age 3,500 TAM 3,000 Exabytes Shipped 2,500 2,000 1,500 1,000 500 0 Mass Capacity HDD Legacy HDD Source: Seagate Seagate 47
Slide 48: The Future Brings Larger Capacity Steps
The Future Brings Larger Capacity Steps Fastest ramping nearline products in PMR while introducing HAMR at multiple capacity points CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 PMR 16TB 18TB 20TB 14 – 20+TB 30+TB 40+TB 50+TB Source: Seagate Roadmap Seagate 48
Slide 49: Multi-Actuator Technology
Multi-Actuator Technology Maintain sequential performance as capacity grows CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 14TB Optimal IOPS / TB 18TB Standardized Adoption Multi-Actuator 30+TB 40+TB 50+TB 16TB Single-Actuator 18TB Minimum IOPS / TB Source: Seagate Roadmap Seagate 49
Slide 50: Customers Leaning in to TCO Dual Actuator
Customers Leaning in to TCO Dual Actuator “ We are getting close to twice the throughput and IOPS, which are the improvements we expected to achieve with the MACH.2 technology.” Aaron Ogus, Distinguished Engineer Seagate 50
Slide 51: Hard Drive Demand is Growing at the Edge
Hard Drive Demand is Growing at the Edge HDD EB Shipped CY20-CY25 CAGR Core Cloud 36% CAGR Edge 41% Endpoints 4% CAGR CAGR 2020 2025 2020 2025 2020 2025 Source: Seagate Seagate 51
Slide 52: Portfolio and Investment Simplification
Portfolio and Investment Simplification Newer investments work harder FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 EB TAM represents the reflective calendar year exabytes Seagate 52
Slide 53: Customer Satisfaction Hitting All Metrics
Customer Satisfaction Hitting All Metrics Ranked # 1 in High Marks Exceeded Net Customer Service for Supply Delivery Promoter Score Target By majority enterprise and Demonstrate agility with COVID supply From out-of-box to customer cloud customers chain impact to meet delivery needs care experiences
Slide 54: Seagate Customer Ecosystem
Seagate Customer Ecosystem Seagate makes it possible for the world to share, store, and stream what matters most Seagate's branded solutions supported the personal data of Global Consumer over 15M people worldwide last year! Retail, Ecommerce Seagate partners with over 45,000+ partners to deliver be
Slide 55: Consumer and Retail Strength
Consumer and Retail Strength Driven by gaming product portfolio and strong e-tail brand presence Limited Edition Game Bundles Seagate 55
Slide 56: VIA Market Evolution: Simple to SMART... Everything
VIA Market Evolution: Simple to SMART... Everything Video Synopsis – Fever Detection + AI AI & Video Analytics Shortens Video Search Smart Transportation Public Health Banking Data collected & used in traffic Combination of thermal cameras + AI & analytics used to management. Future expansion to AI
Slide 57: Mass Capacity Growth Supported by New Edge Applications
Mass Capacity Growth Supported by New Edge Applications More data yields better deep learning performance Data preservation is critical to improving deep learning and unlocking data value Source: Baidu AI Chief Scientist, Andrew Ng at 2016 Sparks Conference Seagate 57
Slide 58: The Seagate Brand
The Seagate Brand Well positioned to solve unmet needs Seagate 58
Slide 59: Lyve Edge to Cloud Mass Storage Platform
Lyve Edge to Cloud Mass Storage Platform Ken Claffey SVP, Enterprise Data Solutions
Slide 60: Key Takeaways – Systems / Lyve Storage Platform
Key Takeaways – Systems / Lyve Storage Platform Device Mass Storage Edge to Core Foundation Platform Solutions Leveraging our systems Combining devices, systems Addressing data capabilities to accelerate HDD and our open-source software management complexity in mass capacity market adoption innovati
Slide 61: Lyve Enables the Mass Capacity Virtuous Circle
Lyve Enables the Mass Capacity Virtuous Circle Key Benefits Seagate For Enterprise: Solves the complexity Mass Capacity Device Market & Technology Innovation Leadership Delivering the Lowest cost per Byte of Distributed Data & Reduces the cost of storage For STX: Enabling Mass Capacity market growth
Slide 62: Endpoint and Edge Data Growth
Endpoint and Edge Data Growth Unstructured Data Predominantly Generated The Enterprise Growing at ~40% Each Year in the Enterprise is Distributed Installed Based of Bytes by Owner 100% Consumer 158ZB Data Not Stored 50% Enterprise 17ZB 0% 2012 2025 Data Stored 2010 2017 2025 Sources: Data Age 2025,
Slide 63: Lyve Addresses the Needs of the Distributed Enterprise
Lyve Addresses the Needs of the Distributed Enterprise Endpoint Edge Cloud Autonomous Vehicles Challenges: Lyve Mass Storage Platform • No easy means to ingest and transport large data • Lyve portfolio offers an integrated Data management platform for the Distributed Enterprise • Lack of large-scale
Slide 64: Lyve Platform Vision
Lyve Platform Vision Seamless data movement and storage across hybrid IT environment Endpoint Edge Core Cloud Orchestration & Fleet Management Major Public Cloud Integration Terabytes Petabytes 100 Petabytes Exabytes (Micro Edge) (Macro Edge) (Private Cloud) (Public Cloud) Seagate 64
Slide 65: Hyperscalers Pioneered a Blueprint for Mass Capacity
Hyperscalers Pioneered a Blueprint for Mass Capacity Seagate Enables an Open Mass Storage Architectural Platform Mass Capacity Centric Architecture (90/10) with 14TB Rapid Adoption of highest capacity storage device 16TB 18TB 20TB 14TB 16TB Enterprise 18TB Data Center “Software-defined everything” w
Slide 66: Seagate enables the hyperscale blueprint with an open SDS architecture
Seagate enables the hyperscale blueprint with an intelligent, scalable, and open SDS architecture for the Enterprise Optimized for Mass Supports Billions Available Capacity Devices of Objects on GitHub Efficiency Scalability Openness • Drive direct • Exabytes • Apache 2.0 license • Customize and add
Slide 67: Mass Capacity Storage Solutions
Mass Capacity Storage Solutions Public Cloud Storage Infrastructure and Private Storage Cloud Solutions Big Opportunity Product Economic CY25 Innovation Advantage Enterprise Storage Systems Cloud Storage Infrastructure Mass Capacity $ per Efficiency Market (CAPEX Spend $) & Solutions Seagate 67
Slide 68: Mass Capacity Storage Solutions (Systems)
Mass Capacity Storage Solutions (Systems) Big opportunity CY25 $11.7B SAM in 2025 Public cloud storage infrastructure and private cloud storage solutions Seagate estimates based on IDC Quarterly Enterprise Infrastructure Trackers – ESS Forecast 2020Q3 and Cloud IT Forecast 2020Q2 Seagate 68
Slide 69: Mass Capacity Storage Solutions
Mass Capacity Storage Solutions Product innovation powered by Open-Source Mass Capacity Object Storage Software Stack Mass capacity object storage solution with exabyte scale and industry leading TCO Self-healing, Lowest cost per PB Mass Capacity Storage Building Block Maximizes HDD tech advancement
Slide 70: Mass Capacity Storage Solutions (Systems)
Mass Capacity Storage Solutions (Systems) Delivering significant economic advantage at Petabyte scale Object Storage Systems, $/GB (Usable) Lowest cost per PB Flexible CAPEX and OPEX consumption 33X lower models (future) Driven by open-source ecosystem innovation $/GB Lyve Rack IDC Object Storage AS
Slide 71: Seagate and Raytheon Partner to Build Secure Storage Solutions
Seagate and Raytheon Partner to Build Secure Storage Solutions END-POINT CYBER RESILIENCY SOLUTION Windows Power CPU Firmware/ Operating Data Insider Applications Initialization Boot System Access Access Hardware-level Protections Operating System/Software-level Protections Continuous Monitoring Cry
Slide 72: Lyve Mobile - Edge Storage & Mass Data Transfer
Lyve Mobile - Edge Storage & Mass Data Transfer • Accelerate data activation at the edge with a rugged, secure and “ portable edge storage and data transport • Orchestration & Fleet Management software • Fast and easy deployment without technical expertise Moving 100’s of terabytes of data from a fl
Slide 73: Lyve Enables the Mass Capacity Virtuous Circle
Lyve Enables the Mass Capacity Virtuous Circle 100s Petabytes under Lyve Rack Innovation Seagate management by 2H CY22 AI Fueled Insight Telemetry Systems Business LYVE CLOUD MONETIZING Standard JBOD Seagate HDD Innovations MASS CAPACITY HAMR MACH-2 GROWTH Traditional System Architecture LYVE MOBILE
Slide 74: Lyve Cloud: Storage as a Service
Lyve Cloud: Storage as a Service Ravi Naik Chief Information Officer
Slide 75: Key Takeaways
Key Takeaways Unmet Introducing Multicloud Growth Market Need Lyve Cloud Enablement Opportunity More data is created Lyve Cloud is Storage as a St-aaS platform with Growing market with wide and less stored. Service (St-aaS) with Platform Equinix® delivers swath of verticals and use Economics are dif
Slide 76: CIOs are Asking for a Storage Solution
CIOs are Asking for a Storage Solution “ We need an easy answer to store more data and harness its power without worrying about total cost of ownership, security and data mobility.” CIOs Seagate 76
Slide 77: Launching Lyve Cloud
Launching Lyve Cloud $ Verticals Use Cases Hosting Hosted within an Equinix International Business Exchange™ (IBX®) data center. Available at Four Metros in CY21 Seagate 77
Slide 78: Perfect Complement for Multicloud Strategy
Perfect Complement for Multicloud Strategy Public Cloud Lyve Cloud works alongside Private and Private Cloud Public Clouds enterprises already use We believe it will become the preferred storage cloud for storing mass capacity data Compute Cloud Storage Cloud Seamless interconnectivity and interoper
Slide 79: Lyve Cloud Offers Compelling Value
Lyve Cloud Offers Compelling Value Seagate 79
Slide 80: Simple to Buy, Use, and Scale
Simple to Buy, Use, and Scale $ Access Pricing Complete Frictionless Always on data – ready Simple pricing – for the Everything is included – Enterprises keep control for activation capacity stored No extras or surprises of data with no lock-ins or egress fees Seagate 80
Slide 81: Customer quote: up and running with Lyve Cloud in hours
“ We were up and running with Lyve Cloud in just hours. Having clear line of sight on total cost is very attractive to our needs.” Sudhakar Chilukuri, CIO Seagate 81
Slide 82: Trusted: Secure, Certified, and Available with No Lock-ins
Trusted: Secure, Certified, and Available with No Lock-ins Certified to meet enterprise security needs Always on encryption – data in motion and at rest Highly available – presence at multiple metros Seagate 82
Slide 83: Efficient: Maximize Value from Our Innovations
Efficient: Maximize Value from Our Innovations $$$$$$ Data Generated Storage This Month $$$$$ $$$ Data Generated $$$ in the Past January February March Optimize TCO Interconnection Optimizes the single most Predictable and manageable TCO - Platform Equinix enables reduced growing aspect of enterpris
Slide 84: Executing on Growing Market Opportunity
Executing on Growing Market Opportunity Growth Data Growth Customer Seagate Focus Advantages Seagate 84
Slide 85: More Data Created. Less Stored.
More Data Created. Less Stored. A cost-efficient storage cloud will help enterprises store more data and harness its potential. Seagate 85
Slide 86: Market Sizing: Opportunity for Storage as a Service
Market Sizing: Opportunity for Storage as a Service IDC Semiannual Public Cloud Services Tracker, Forecast Pivot, 5/14/2020, Seagate Seagate 86
Slide 87: Seagate Unique Advantages
Seagate Unique Advantages HDD Crafted Closer From Edge Innovations by Seagate to Data to Cloud Faster path to value and Repeatable and scalable Lyve Cloud is available in Lyve Portfolio delivers better TCO for customers storage building block multiple regions value from Edge to Cloud Seagate 87
Slide 88: Customer Value: Better Cost and More Choices
Customer Value: Better Cost and More Choices $ $ Take Control of Storage Costs: Choice of Cloud to Complement Simple Pricing and No Lock-ins Multi-Cloud Strategy Enterprises have complete control of their Take advantage of choices in compute cloud bill – store more and activate and storage clouds Se
Slide 89: Serve the Growing Needs Across Verticals
Serve the Growing Needs Across Verticals Video and Image Applications Media and Entertainment $ Finance Big Data Analytics • Better TCO of Lyve Cloud for Big Data storage combined with access to clouds and ecosystems at Equinix Telco Education Content Repository • High-capacity storage needs of Medi
Slide 90: Tiger Bridge integrated with Seagate Lyve Cloud
“ Tiger Bridge, our continuous data protection and storage management software, integrated with Seagate Lyve Cloud offers customers a high-value option for storing and accessing large volumes of video data without billing surprises.” Lance Kelson, EVP Seagate 90
Slide 91: Lyve Cloud leverages interconnection at Equinix
“ Lyve Cloud's storage as a service offering leverages interconnection at Equinix to provide exciting new capabilities for customers across our global platform.” Eric Schwartz, Chief Strategy and Development Officer Seagate 91
Slide 92: Enhancing Value for All Stakeholders
Enhancing Value for All Stakeholders Gianluca Romano Chief Financial Officer
Slide 93: Our Path to Long-Term Value Creation
Our Path to Long-Term Value Creation $ $ Drive Optimize Allocate Capital to Revenue Growth Free Cash Flow Realize Greatest Returns • HDD Portfolio to capture mass • Profit growth enhanced by operational • Drive CAPEX efficiency without capacity storage demand discipline and continued cost reduction
Slide 94: FY20 Financial Results Demonstrate Solid Execution
FY20 Financial Results Demonstrate Solid Execution Positive progress towards our financial model in a very challenging macro environment Metric Our Goal Positive Progress Revenue Growth 2% - 6% CAGR +1% Revenue growth YoY despite global pandemic Op Margin 13% -16% ~15% Op Margin reflecting operation
Slide 95: Seagate's New 3-to-5 Year Financial Targets
Seagate’s New 3-to-5 Year Financial Targets Metric Target Performance How We Deliver Capture mass capacity data opportunities through Revenue Growth 3% - 6% CAGR technology & product roadmap execution Gross Margin 30% - 33% Growing profits faster than revenue through gross Op Profit Growth 6% - 13%
Slide 96: HDD Revenue Has Reached The Growth Inflection Point
HDD Revenue Has Reached The Growth Inflection Point Our Mass Capacity Revenue Surpassed Legacy 30% 57% >90% Mass Capacity % HDD Revenue Mass Capacity Revenue Seagate’s FY20 Mass Capacity revenue represented 57% of total HDD revenue and is expected to represent >90% in FY25 FY16 FY20 FY25e Seagate Ma
Slide 97: Mass Capacity Demand is Driving Overall HDD Revenue Growth
Mass Capacity Demand is Driving Overall HDD Revenue Growth By FY25 Mass Capacity Revenue ~2X Seagate’s Mass Capacity revenue expected to approximately double ~1.8X Mass Capacity growth far exceeds the decline in Legacy market segment FY16 FY20 FY25e Seagate Mass Capacity HDD Revenue Seagate Legacy H
Slide 98: HDD Replacement Cycle Provides Greater Revenue Stability
HDD Replacement Cycle Provides Greater Revenue Stability 8TB 8TB 16TB Replacement Capacity HDD Replacement Growing Mass Capacity installed base supports reliable revenue stream Expected replacement revenue >20% of Mass Capacity HDD revenue by FY25 HDD Replacement Cycle of 5 – 7 years FY20 FY21e FY25
Slide 99: Lyve Platform Offers Additional Revenue Growth and Stability
Lyve Platform Offers Additional Revenue Growth and Stability Non-HDD revenue approximately doubling with ~45% subscription-based revenue by FY25 Lyve Platform Accretive to gross margin Subscription supported by Lyve Platform Non-HDD Revenue ~$800M Traditional HW FY20 FY25e Seagate 99
Slide 100: Our Path to Optimizing Profitability
Our Path to Optimizing Profitability Product & Platform Simplification 20 10 # HDD Platforms ~10% 95% >2TB / disc as % of HDD EB Driving cost savings through product & platform simplification Cost / TB Resulting in lower cost / TB while increasing EB output By FY25 • 50% reduction in platforms FY20
Slide 101: Our Path to Optimizing Profitability
Our Path to Optimizing Profitability Cost Reduction Executing our cost reduction roadmap to deliver TCO Roadmap Execution economics for Mass Capacity 46% 46% 45% 38% Cost / TB Decline by Doubling 34% Capacity Every ~3 Years 22% FY03 – FY08 FY10 FY13 FY16 FY20 FY24 0.5 → 1TB 1 → 2TB 2 → 4TB 4 → 8TB 8
Slide 102: Our Path to Optimizing Profitability
Our Path to Optimizing Profitability Disciplined Expense Management OPEX Summary HDD NON-HDD Last 4-years: • Reduced OPEX by nearly $400M from FY16 to FY20 Next 5-years: • OPEX growth slower than revenue growth • Transitioning development from Legacy products to new business opportunities including
Slide 103: We Have a Sound Capital Structure
We Have a Sound Capital Structure $M Debt Maturity Profile (End FQ2’21) $3.5B Liquidity 600 $565 $525 • $1.8B Cash $504 $505 $500 $500 $500 $500 500 $490 • $1.7B Revolving credit facility 400 $381 $5.1B Debt 300 $245 • Low weighted average interest rate 4.3% 200 • Latest note issuance were the lowes
Slide 104: Capital Strategy
Capital Strategy $ Funding Our Growth Opportunities • Sustain R&D investment level • Intelligently deploy CAPEX to align supply with demand • Strategic investments Commitment to Our Dividend • Target 3% annual dividend increase Accelerating Share Repurchases • Retired ~8% of shares outstanding in fi
Slide 105: Delivering Strong Return on FCF Yield and Invested Capital
Delivering Strong Return on FCF Yield and Invested Capital Seagate one of twelve companies to be in top 20% for both FCF Yield and ROIC in S&P 500 in FY20 S&P 500 FCF Yield S&P 500 ROIC 2016 2016 | 2020 2020 Seagate Seagate Top 20% Top 20% Bottom Top Bottom Top Position Position Position Position RO
Slide 106: We Are Committed to Returning Capital to Shareholders
We Are Committed to Returning Capital to Shareholders $ Cumulative Returns >$7B >$5B Over the Past 5 Years, We Have • Generated >$6B in free cash flow >$3B • Returned >$7B to shareholders, through dividends and share repurchases >$2B • Raised the quarterly dividend 6% ~$1B • Retired 27% shares outst
Slide 107: Summary
Summary $ Growing Profitable Sustainable • Revenue growth driven by strong secular demand for mass capacity storage and new market opportunities available through our Lyve Storage Platform • Target profit growth to outpace revenue growth underpinned by technology roadmap execution and operational di
Slide 108: Seagate
SEAGATE ANA Ear Bay
Slide 109: Reconciliation Tables
Reconciliation Tables Reconciliation of Revenue to Non-GAAP Revenue ($M) FY16 FY17 FY18 FY19 FY20 FY21 YTD Revenue 11,160 10,771 11,184 10,390 10,509 4,937 Adjustment to discontinued products (4) (1) (6) 1 - - Non-GAAP Revenue 11,156 10,770 11,178 10,391 10,509 4,937 Reconciliation of Gross Profit t
Slide 110: Reconciliation Tables
Reconciliation Tables Reconciliation of Net Income to Non-GAAP Net Income ($M) FY16 FY17 FY18 FY19 FY20 FY21 YTD Net Income 248 772 1,182 2,012 1,004 503 Adjustment to discontinued products (4) (1) (6) 1 - - Accelerated depreciation, impairment and other charges related to cost saving efforts 76 83
Slide 111: Non-GAAP Measures Adjusted for the Following Items
Non-GAAP Measures Adjusted for the Following Items: Adjustment to discontinued products These adjustments relate to sales of certain discontinued products or changes in sales provision for discontinued products. These adjustments are inconsistent in amount and frequency and are excluded in the non-G
Slide 112: Non-GAAP Measures Adjusted for the Following Items
Non-GAAP Measures Adjusted for the Following Items: (Gains) losses and costs recognized on the modification or early redemption and repurchase of debt From time to time, the Company incurs gains or losses and fees from the early redemption and repurchase of certain long-term debt instruments. The ga
Slide 113: Seagate Analyst Day 2021
ANALYST DAY 2021
Seagate Technology Holdings — Investor Day (February 2021) on 6ix