Seagate Technology Holdings Plc · NASDAQ:STX

Seagate Technology — Q3 2020 Earnings Presentation

17 slides from Seagate Technology's earnings presentation, Apr 22, 2020

  1. Slide 1: Supplemental Financial Information Q3 FY20

    SUPPLEMENTAL FINANCIAL INFORMATION Q3 FY20

  2. Slide 2: Safe Harbor Statement

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Safe Harbor Statement This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Information concerning risks, uncertainties and other fac

  3. Slide 3: Use of Non-GAAP Financial Information

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 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 measur

  4. Slide 4: Q3 FY20 Financial Highlights

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Q3 FY20 Financial Highlights $2.7B 27.4% 13.8% $1.22 120.2EB REVENUE GROSS MARGIN OPERATING MARGIN DILUTED EPS HDD CAPACITY GAAP GAAP GAAP SHIPPED $1.3B 28.0% 15.5% $1.38 4.1TB YTD CASH FLOW FROM GROSS MAR

  5. Slide 5: Quarterly Financial Trends

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Quarterly Financial Trends Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 GAAP Results Revenue ($M) 2,313 2,371 2,578 2,696 2,718 Gross Margin % 26.0% 26.3% 26.0% 28.1% 27.4% Operating Expenses ($M) 365 292 398 374 37

  6. Slide 6: HDD Product Mix Trends

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 HDD Product Mix Trends Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Capacity Shipped (EB) Mass Capacity 43.0 52.2 63.9 71.3 91.1 Nearline 30.0 34.8 47.4 49.0 76.4 Legacy 33.6 32.2 34.5 35.6 29.1 Average Capacity per

  7. Slide 7: Mass Capacity Trends

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Mass Capacity Trends 62% 6,000 60% 1,600 55% 60% 53% 51% 57% 49% 45% 46% 51% 4,500 45% 1,200 44% 49% 45% 47% 38% 46% 42% 43% 40% 30% 35% 3,000 30% 800 30% 28% 400 15% 1,500 15% - - - - Q3FY19 Q4FY19 Q1FY20

  8. Slide 8: Seagate Nearline Demand Trend

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Seagate Nearline Demand Trend 100.0 76.4 EB 80.0 60.0 44.5 EB 40.0 25.7 EB 12.2 20.0 EB - Q1FY16 Q1FY17 Q4FY18 Q3FY20 Nearline Exabyte Shipped (EB) NOTE: Minor changes and calculation variances to historic

  9. Slide 9: Cash, Cash Flow, and Operational Trends

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Cash, Cash Flow, and Operational Trends Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Cash1 ($M) 1,388 2,220 1,784 1,744 1,612 Debt ($M) 4,522 4,253 4,140 4,141 4,103 Cash Flow From Operations ($M) 438 448 456 480 39

  10. Slide 10: Strategy and Perspectives on Debt

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Strategy and Perspectives on Debt • Earned and maintained Investment Grade benchmarks Sound Capital • Debt with a pro forma weighted average maturity of ~6 years Management • Maintain strong balance sheet

  11. Slide 11: Financial Covenants: Total Leverage Ratio

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Financial Covenants: Total Leverage Ratio1 6.0 $4.8 $4.8 $4.8 4.5x $4.3 $4.5 $4.3 $4.1 $4.1 $4.1 4.0 3.0x 2.0 2.2x 2.2x 2.4x 2.2x 2.0x 1.9x 2.0x 1.5x 1.8x 1.7x 0.0 0.0x Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q

  12. Slide 12: Financial Covenants: Interest Coverage Ratio

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Financial Covenants: Interest Coverage Ratio1 300 18.0x $246 $237 $234 $233 $229 $229 $223 $227 $209 200 12.0x 11.3x 11.3x 10.3x 10.4x 8.9x 9.6x 100 8.2x 8.8x 6.0x 7.5x 0 0.0x Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q

  13. Slide 13: Debt Maturity Profile

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Debt Maturity Profile1 Characteristics of Maturity Profile: • Staggered maturity • Manageable tranche levels provide ample liquidity at maturity 1,000 $775 800 $749 $690 600 $525 $502 $490 $381 400 200 $19

  14. Slide 14: Reconciliation Tables

    RECONCILIATION TABLES SEAGATE

  15. Slide 15: Reconciliation of Gross Margin and Operating Expenses to Non-GAAP

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Reconciliation of Gross Margin to Non-GAAP Gross Margin ($M) Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Gross Margin 601 624 671 758 746 Amortization of acquired intangible assets 14 12 10 10 9 Share-based compens

  16. Slide 16: Reconciliation of Net Income to Credit Agreement Defined EBITDA

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Reconciliation of Net Income to Credit Agreement Defined EBITDA ($M) Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Net Income 381 461 450 384 195 983 200 318 320 Interest Income (10) (15)

  17. Slide 17: Non-GAAP Measures Adjusted for the Following Items

    Supplemental Financial Information Fiscal Q3 2020 (quarter ended April 3, 2020) April 22, 2020 Non-GAAP Measures Adjusted for the Following Items: Amortization of acquired intangible assets The Company records expense from amortization of intangible assets that were acquired in connection with its b

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