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Apr 30, 2019

Seagate Technology Reports Fiscal Third Quarter 2019 Financial Results

– Revenue of $2.31 billion

– GAAP diluted earnings per share (EPS) of $0.69; non-GAAP diluted EPS of $0.83

– Cash flow from operations of $438 million and free cash flow of $291 million

– Returned $505 million to shareholders; declared cash dividend of $0.63 per share

CUPERTINO, CA – April 30, 2019 – Seagate Technology plc (NASDAQ: STX) (the “Company” or “Seagate”) today reported financial results for its fiscal third quarter ending March 29, 2019.

“Seagate executed very well in the third quarter while navigating near-term demand head-winds. Our focus on operational efficiency and expense discipline drove better-than-expected EPS and free cash flow generation,” said Dave Mosley, Seagate’s chief executive officer.

“We began shipping the industry’s first 16-terabyte high capacity drives in the fiscal third quarter and expect to ramp high volume production in the second half calendar 2019. The Data Age digital transformation has given rise to many new applications including machine learning, autonomous vehicles, and Smart Cities, which all rely on faster access to an increasing amount of data. These trends are creating significant opportunities for our mass data storage solutions and we are successfully executing our technology roadmap to address growing demand.”

Quarterly Financial Results

  GAAP   Non-GAAP
  FQ3 2019 FQ3 2018   FQ3 2019 FQ3 2018
Revenue ($M) $2,313 $2,803   $2,313 $2,803
Gross Margin 26.0% 30.2%   26.6% 30.8%
Net Income ($M) $195 $381   $235 $424
Diluted Earnings Per Share $0.69 $1.31   $0.83 $1.46

In the third quarter, the Company generated $438 million in cash flow from operations and $291 million in free cash flow. Year to date, the Company has generated $1.3 billion in cash flow from operations and $862 million in free cash flow. Seagate’s balance sheet is healthy and during the third quarter, the Company paid cash dividends of $178 million and repurchased 7.2 million ordinary shares for $327 million. Cash and cash equivalents totaled $1.4 billion at the end of the quarter. There were 277 million ordinary shares issued and outstanding as of the end of the quarter.

For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.

Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investors Relations website at www.seagate.com/investors.

Quarterly Cash Dividend

The Board of Directors of the Company (the “Board”) declared a quarterly cash dividend of $0.63 per share, which will be payable on July 3, 2019 to shareholders of record as of the close of business on June 19, 2019. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.

Business Outlook

Our outlook for the fourth fiscal quarter is based on our current assumptions and expectations; actual results may differ materially, as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release.

The Company is providing the following guidance for its fiscal fourth quarter 2019:
• Revenue of approximately $2.32 billion, plus or minus 5%
• Non-GAAP diluted earnings per share of approximately $0.83, plus or minus 5%

Guidance regarding non-GAAP diluted earnings per share excludes known charges related to amortization of acquired intangible assets of $0.06 per share.

We have not reconciled our non-GAAP diluted earnings per share to the most directly comparable GAAP measure because material items that may impact these measures are out of our control and/or cannot be reasonably predicted including, but not limited to, accelerated depreciation, impairment, and other charges related to cost saving efforts, restructuring charges, strategic investment losses or impairment recognized, income tax adjustments on these measures, and other charges that may arise. The amounts of these measures are not currently available, but may be material to future results. A reconciliation of the non-GAAP diluted earnings per share to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release.

Investor Communications

Seagate management will hold a public webcast today at 6:00 a.m. Pacific Time that can be accessed on its Investor Relations website at www.seagate.com/investors.

An archived audio webcast of this event will be available on Seagate’s Investors Relations website at www.seagate.com/investors shortly following the event conclusion.

About Seagate

To learn more about the Company’s products and services, visit www.seagate.com and follow us on Twitter, Facebook, LinkedIn, Spiceworks, YouTube and subscribe to our blog. The contents of our website and social media channels are not a part of this release.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about the Company’s plans, strategies and prospects, financial projections, expectations regarding market demand and the Company’s products, shifts in technology, the Company’s ability to meet market and industry expectations and the effects of these future trends and expectations on the Company’s business and shareholder value and dividend issuance plans for the fiscal quarter ending March 29, 2019 and beyond. These statements identify prospective information and may include words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “should,” “may,” “will,” or the negative of these words, variations of these words and comparable terminology. These forward-looking statements are based on information available to the Company as of the date of this report and are based on management’s current views and assumptions. These forward-looking statements are conditioned upon and also involve a number of known and unknown risks, uncertainties, and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company’s control and may pose a risk to the Company’s operating and financial condition. Such risks and uncertainties include, but are not limited to: items that may be identified during its financial statement closing process that cause adjustments to the estimates included in this report; the uncertainty in global economic and political conditions; the impact of the variable demand and adverse pricing environment for storage products; the Company’s ability to successfully qualify, manufacture and sell its storage products in increasing volumes on a cost-effective basis and with acceptable quality; the impact of competitive product announcements; the Company’s ability to achieve projected cost savings in connection with restructuring plans and consolidation of manufacturing activities; possible excess industry supply with respect to particular storage products and competing alternative storage technology solutions; the impact of trade barriers, such as import/export duties and restrictions, tariffs and quotas, imposed by the U.S. or other countries in which the Company conducts business; disruptions to its supply chain or production capabilities; unexpected advances in competing technologies or changes in market trends; the development and introduction of products based on new technologies and expansion into new data storage markets; the Company’s ability to effectively manage its debt obligations and comply with certain covenants in its credit facilities with respect to financial ratios and financial condition tests; currency fluctuations that may impact the Company’s margins, international sales and results of operations; cyber-attacks or other data breaches that disrupt the Company’s operations or result in the dissemination of proprietary or confidential information and cause reputational harm; cybersecurity threats and vulnerabilities associated with the Company’s infrastructure updates to its information technology systems; and fluctuations in interest rates. Information concerning risks, uncertainties and other factors that could cause results to differ materially from the expectations described in this press release is contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on August 3, 2018, the “Risk Factors” section of which is incorporated into this press release by reference, and other documents filed with or furnished to the SEC. These forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date and the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by applicable law.

The inclusion of Seagate’s website address in this press release is intended to be an inactive textual reference only and not an active hyperlink. The information contained in, or that can be accessed through, Seagate’s website and social media channels are not part of this press release.

Please click here to view the financial statements Q3 FY2019 Financial Statements.

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