Seagate Technology’s Q1 fiscal quarter revenue rose 61% year-over-year, but its strong earnings report failed to boost its stock price, with shares falling more than 8% at one point in after-hours trading.

Seagate Technology released its first-quarter fiscal 2027 financial results for the period ended October 2, 2026, reporting revenue of $4.23 billion, up roughly 61% year-over-year and beating analyst expectations of $4.11 billion. Adjusted earnings per share (EPS) came in at $7.68, exceeding the forecast of $7.39. AI infrastructure development continues to drive demand for the company’s data storage products, with margins improving notably. The first quarter’s GAAP gross margin rose to 57.3% from 39.4% in the year-ago period; non-GAAP gross margin climbed to 57.8% from 40.1%, while non-GAAP operating margin jumped to 50.7% from 29.0%. Cost of revenue grew only around 13% year-over-year, lower than the revenue growth rate. On the cash flow front, quarterly operating cash flow hit $1.69 billion, and free cash flow reached $1.479 billion, up roughly 246% year-over-year. Both gross margin and free cash flow set new record highs, and the company raised its quarterly dividend by approximately 3% to $0.76 per share. Seagate projects its second fiscal quarter revenue will be $4.8 billion (with a range of plus or minus $100 million), and adjusted EPS of $9.20 (plus or minus $0.20), both higher than prior analyst estimates of $4.55 billion in revenue and $8.66 in EPS. CEO Dave Mosley stated: “Data creation, retention, and reuse continue to drive storage demand growth, and visibility into long-term customer demand supports our judgment of a multi-year growth cycle. Our Heat-Assisted Magnetic Recording (HAMR) technology roadmap will meet growing storage needs by increasing hard disk areal density while maintaining supply discipline.” Despite the better-than-expected results and second-quarter guidance, Seagate’s stock fell more than 8% in after-hours trading, according to data from BIT Stock Platform. The stock closed regular trading at $667.85 on the day, with a year-to-date gain of nearly 150%.