Great. So we'll get started here. Thank you very much. So again, my name is Erik Woodring. I lead U.S. IT hardware coverage based out of New York. Quick disclosure from my end before we begin. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures for important disclosures or reach out to your sales representative. So I am delighted to be joined today by Seagate CFO, Gianluca Romano. Been a mainstay with us for a number of years. So Gianluca, thank you for coming. I'm excited to host you today. Thank you very much, Erik. Thank you for inviting us. Before we start, let me remind everyone that I will be making forward-looking statements today. You can learn more about the risk associated with those statements on our website. Perfect. So I want to start very high level because it has felt like there's been a demand inflection over the last few months. Not to say this year hasn't been very strong, but the last few months have felt very strong from a demand perspective. And I'd love to get your view on what you believe is kind of driving that underlying strength because we cite video very often, but video with multimodal still feels early days, a great opportunity, but still early. Token growth is very significant. So just where is the demand coming from as you see it? And maybe if there's any difference relative to the Analyst Day that you had back in May, what you're seeing. Yeah. I think when we have the Investor Days in May, we discuss about a certain revenue growth, especially in terms of exabyte revenue growth of about 25% in the nearline space. I would say from that point to today, we have seen demand even a bit stronger. It was already very strong before, but I would say possibly the gap between supply and demand has been growing a little bit. There are many drivers, as you said, and it's difficult for us to know exactly what is the main reason of one growth in demand compared to a different application. Video is for sure one. And I would say normal video and AI video. Video is consuming a lot of storage. And of course, when it starts to increase in terms of volume, the volume for the storage consumption becomes really, really huge. But it's not the only one. I think in the near future, you will see other applications like autonomous driving or robotics. Those are all applications that are in development today and will start consuming exabyte storage fairly soon. So we're very optimistic not only for the short term, but also for the long term. I think the world is going into a direction where all the important applications that will be used by companies and by people are based on data and data storage. OK. That's a perfect segue because we're kind of talking about a world that's moving into more AI workloads. We just haven't necessarily seen, and correct the record if I'm wrong, but these huge orders coming from AI-native vendors, whether that's Neoclouds or AI Labs. Where do they play in the world of HDDs? Or is it just too early to say because they're either so focused on training or leveraging compute that they're just maybe not at the storage layer yet? I'd just love your view on that. No, I think they're very important players. They focus on running the AI application. Usually, they work for or in conjunction with big cloud service providers like AWS or Google Cloud or Alibaba, Microsoft Azure. So they import the data from data centers that are run by those other customers of them. They run the application and send the data back, so the data and where the application is run is not in the same location, and this is a different model compared to a normal, I don't know, AWS or Google Cloud data center where in the same location you have a lot of storage and you have the application where they run. The Neocloud, they only focus on running the application, so they import the data from those other cloud service providers, they run the application, and send it back. If one day they become, let's say, a competitor of those cloud service providers, they will have to create their infrastructure, and that adds some complication for them. It's a more complicated infrastructure to run, but it's a step that eventually they will have to go through if they tend to go up into the stack and compete with today's customers. OK. And you kind of answered the question I was about to ask about how you think about kind of the midterm growth of exabytes stronger than the kind of 25 nearline you gave at your Analyst Day. Is there a way that we can kind of gain conviction in that by either thinking about some sort of exabyte per megawatt math, or historically we've been able to say a certain percentage of cloud capex, but GPU spending has maybe made that relationship a bit murkier? But is there a way that you think high level that we can all approximate kind of HDD demand top-down using some of these kind of simplistic metrics? Probably the best way is still looking at the CapEx of our customers. We are a percentage of their CapEx. We are probably in the mid-single digit of the CapEx. Of course, the CapEx is growing, and so the part that is allocated to storage is going to grow. Depending from the quarter, depending from the year, there is more focus on one component or the other. When our customers, they were very focused on buying more GPUs, now people were saying, oh, this is detracting from your business, and they said, it's just a matter of time. All those GPUs will generate data, and that data has to go into our hard disks to be stored, and actually, the time arrived, and demand for us is very strong. Yeah. Yeah. OK. Let's touch on supply because Seagate in the industry more broadly has maintained a ton of supply discipline since the last down cycle. Instead of saying, will you expand unit supply? Obviously, this is kind of a hot debate. Maybe my question instead is, is there some form of catalyst that would get you to change your mind on expanding unit supply? Or what would it take to expand unit supply from your perspective, if anything? Yeah. Right now, we don't see any reason to do it. I think with our product roadmap and with the industry product roadmap that has been defined by the various competitors, I think the industry will generate enough exabyte capacity without increasing the units to serve the short-term need of the data center. And when I say short-term need, it means data centers that have been built recently or are going to be built in the short term. We are probably not covering the additional demand that is the inventory or safety stock demand or maybe what our customer thinks they will need in two or three years, but there is time to go there. I think customers look at more unconstrained demand. So their demand can be really huge, even going back to the video application and video AI application. But data centers are complicated. There are a lot of components, and there is always some bottleneck at a certain point, so our job is to bring that unconstrained demand to something that is maybe more constrained, and therefore, we think if the industry grows about 25% in terms of exabyte, it will be enough to serve the short term, not having any data center that is being built and not having hard disks, so we will not be the bottleneck for data centers, but at the same time, we will not oversupply and we will not generate that level of inventory that we had in the past. Right. OK. So touching on another question related to supplies, is there a way that you can help us all understand the gap between supply and demand now? And how much, and we'll get into technology innovation because it leads to this question, but can your supply or should your supply kind of improve in calendar 2026 and 2027 as you come out with higher capacities of HAMR, as you kind of cross that crossover threshold in kind of mid-calendar 2026? So the question maybe is, how short of demand are we? And how much can supply improve as we look out maybe the next two years? Yeah. Our product roadmap for the next four or five quarters is mainly based on second generation of HAMR, which is a four TB per disk, so a 40 TB drive. It's a huge improvement compared to the first generation HAMR drive that is a 30 TB. So of course, we don't move all the mix from one to the other, but we can generate a fairly strong increase in exabyte when we move customers or when customers qualify bigger drives. And this is what we are going to do quarter after quarter during calendar 2026. We have the first two customers that are already in qualification for the second generation HAMR. So we think we can start probably selling some units in the first half of calendar 2026 and ramp much more in the second part. After that, we will go into the 5 TB per disk or the 50 TB. At our investor day, we show a product roadmap that actually is continuing to grow up to 10 TB per disk, so 100 TB drive that is an important step in HAMR technology, but it's probably not the end of HAMR technology. So what does this mean for your visibility today? You've kind of updated visibility at each kind of successive point where you've been able to interact with Wall Street, whether that's earnings or conferences. And it feels like every time we interact, some data point on visibility has elongated. So at earnings, you were largely committed for calendar 2026 nearline. You had some LTAs extending into calendar 2027. Where do we kind of stand now on kind of supply visibility? I would say we are similar to what you just discussed. We want to have firm orders when we start the product in our manufacturing, and to build a hard disk, you need between six and nine months, so it has to cover three, four, five quarters so that we don't get any surprise after we have started material in our manufacturing. So this is what we really focus on, is the next four or five quarters to have orders in place well-defined with all the terms. After that is more a customer request. Customers today, of course, are very interested in getting longer-term agreement, so we have LTAs in place for our calendar 2027, in some cases even longer. This is not as well-defined as a purchase order. It's more a discussion and an agreement on overall exabyte. And the exabyte that we can generate and we can allocate to them so they know what they will get from us. And therefore, they can plan their data center around all the components, but at least knowing what we will provide to them. Just one quick clarification point on that, which is I kind of hear. So purchase orders are firm orders. LTAs are, let's call them, demand planning tools. Is that the right way that we should all be thinking about the difference between the two? Every LTA is different. So there are some LTAs that are a little bit more defined. But in general, yes. I would say for us, it's more a customer demand. They want to have those LTAs. We want to have a purchase order for when we start production in our manufacturing. This is the most important. We want to support the real demand. So if a customer doesn't want to have hard disks, it's OK. We can move that production to someone else, or we can align our manufacturing to the real demand. Building inventory is not a solution. That means at a certain point, the demand goes really low because there is a lot of inventory. So forcing someone to receive a product is not a great strategy. This is a great point. I'd love if you can help us understand because I think the pushback that I would get or that you would get is, oh, well, there's double or over-ordering when you talk to customers. How do you fight back against that risk? You've kind of alluded to it. Yeah. We don't serve the full demand, as we said before. And that demand is actually moving out in time. So we see that demand not going away. It's just shifting out in time. That will help with the eventual cycle at a certain point. We don't take the peak demand, but possibly the down cycle will not be as deep as it has been in the past. And when we can generate a little bit more exabyte out of our manufacturing, we see we put that in the market at a fairly healthy price and see how quick it goes away. And usually, it goes away very quickly. So that means demand is actually real. Right. OK. So let's talk about kind of the reasons for being able to expand exabyte capacity. So you were the first to market with HAMR. You've already qualified five customers, at least five cloud customers, at least on the Mozaic 3 platform. You just mentioned some of the timing around Mozaic 4 and the 40 TB platform. But can you just help us understand again how we should think about the underlying mix of your exabytes going into HAMR, going into 40 TB versus 30 TB? What's the timeline as we should think about mix here? I would say this fiscal year that we land in June is mainly in terms of units sold is mainly for HAMR first generation, so 30 TB. We will have some of the second generation through the end of the fiscal year, but the majority of the units that we are producing today and are going to be sold in the fiscal year are mainly Mozaic 3, so 30 TB drive. We said by the end of this fiscal year, 40% of our exabyte sold will be based on HAMR technology. In this case, mainly the 3 TB per disk. The next fiscal year will be a fairly big transition from 3 TB per disk to 4 TB per disk. We said by the end of the following fiscal year, 70% of the exabyte will be sold with HAMR technology. So there is an increase in the overall HAMR volume. And there is a transition out of first generation HAMR into second generation HAMR. Second generation HAMR, if you remember our investor day, it's probably when we also get a major improvement in terms of profitability. We have a slide that we use for investor day where we show the cost per TB. And if you compare our last PMR drive and the first generation HAMR, the cost per TB of the first generation HAMR is a little bit lower, but not much lower. When you go to the second generation HAMR, the cost per unit for us to produce a second generation HAMR is fairly similar to the first generation HAMR. But we increase the capacity. [Crosstalk] exabytes? But we increase the capacity per unit by more than 30%. So this is a huge cost reduction for us in terms of cost per TB because finally we sell TB. And of course, the price per TB is based on supply demand. So we think with the second generation HAMR, our profitability will continue to increase. Right. So I'll get back to HAMR in a second, but I want to touch on that pricing because there's a lot of moving pieces in some cases because of supply demand is imbalanced. You've been able to raise prices. You've been able to lock in pricing with some of these purchase orders. But at the same time, as you're mixing into higher capacity drives, that price per TB is a little lower, so you could give back some of that margin to your customers. When we add all of that together, how should we all be thinking about price per TB in totality for Seagate as we think, again, like two, four, six quarters down the line? What's the right way to be thinking about that today? We have used this new methodology since more than two years, probably the last 10 quarters. So if you look over that period of time, we have quarters where the price per TB is a little bit higher sequentially, sometimes where it's slightly lower. But I would say it's generally fairly flat. So let's see what will happen in the future. But the strategy is the same. So I expect a fairly similar result from allocating the same strategy. Of course, every quarter is different because it depends how many agreements you are renegotiating, who is moving to the next product, who is not. And who is not is getting a price increase. And the ramp, because finally, how many units are you selling of that product in the specific quarter? So sometimes the impact in the P&L is a little bit later than the agreement. But I would say we have been fairly flat until now. So I would say flat to maybe slightly up is what we expect. OK. And so to get back to HAMR, the overarching question I have for you is, how much of a competitive advantage does HAMR provide Seagate? And I ask because if maybe demand wasn't as strong, you can clearly deliver the best TCO with HAMR. Demand is so strong that you have customers giving you LTAs into early calendar 2028. So I'd love to know how you think HAMR gives you the competitive advantage in this type of kind of extremely strong demand environment. You are right. Customers are looking for exabyte. This is what they want to receive from our industry. I would say if you have a higher capacity drive, HAMR is a way for us to generate higher capacity drive, not only with the fourth generation, but now going to the second generation, which is a 40 TB, and then 50 TB, and 60 TB. Continue to increase capacity is giving you a better financial return because with the pricing strategy that we have discussed, the majority of that cost saving remains into your profitability. This is probably the advantage of HAMR. Of course, we need to see what competition will do in terms of HAMR development. If they have a similar product, I guess we will have a fairly similar financial return. If they have a product that has a lower capacity per unit, of course, we will enjoy the best cost per TB. OK. We've kind of talked about the nearer-term risks that some investors have around the longevity of the cycle, around unit capacity. Longer term, how is Seagate thinking about the kind of SSD disruption risk? Some of the players on the NAND side believe that they'll have a kind of a cost competitive product by 2029 using hybrid bonding and whatnot. Just, I'd love your reaction to how you think about the competitive landscape beyond kind of the shorter term. I would say HAMR technology is a way to reduce the cost per TB, right? And I think especially in the first four or five years of the new technology is when you get the majority of the cost decline. Going from 30 TB- 40 TB, you're increasing your capacity per unit by more than 30%. And then you go from 40%- 50%, another 25%. 50%- 60%, another 20%. So there is a lot of opportunity for us to reduce the cost. Now, cost and price are two different things. I would say NAND is not really reducing their price today. It looks like price is going up. So that gap is actually increasing, not decreasing. I would say for storage, there is no reason why a customer should pay eight times more to buy a TB of storage. They will always give priority to hard disk. If you look at the last 15 years, the data center infrastructure has not changed. We had very different dynamics between NAND and hard disk. The architecture is already optimized. The storage is on hard disk. Running the application part or running the application includes a NAND. NAND volume is actually growing a lot, but not for storage. It's growing because it's needed when you run the application. The data is moved from hard disk into NAND. You run the application together with DRAM and GPU and CPUs and other components. Data is going back to hard disk. It's very simple and has not changed for many, many years. There is no reason to change it now when actually the HAMR technology can drive that cost per TB even lower than what was the prior technology. Right. OK. And maybe on HAMR, can you maybe speak to the qualification process? Obviously, you guys were first to market with HAMR. There were some hiccups along the way that you seem to have triaged, and that is now in the past. How do we think about the qualification timelines now? Can that accelerate? Has anything changed? Are there any bottlenecks as you see it going from 3 TB per platter to 4 TB? Yeah, let's just in totality there, maybe. No, in general, there are no differences. Right now, it's a normal product qualification. Of course, the first product with the first customer had to go through an intensive testing. And we had to find the right configuration for the drive to work into the cloud that requires a more intensive usage of the device. But once we find the configuration, we qualified customer number one. And after customer number one, we qualified four more customers in a very normal time. Usually, to do a qual, you take between two and three quarters because that's the time of the test. It's not for any other reason. So after that, everyone is qualifying with a normal time. So we don't see any reason why a second generation HAMR should take longer than that time. Right. OK. Last two questions to keep you on time. First is just we've talked about kind of flattish pricing. Obviously, with the benefit of moving up the areal density curve, you should be able to reduce cost per TB. I think last quarter, your gross margins expanded by 220 basis points sequentially. Maybe my question is, does that pace continue? I mean, if we see this kind of wedge continuing, is there not a clear path to 50% plus gross margins? It's not that we have a specific number in mind. We are executing our price strategy we have done for many, many quarters. And we will continue to do it because the supply-demand situation is actually the same or actually maybe even a little bit more misaligned today than what was in the prior quarter. So there is no reason to change our pricing strategy. And the mix is moving in the right direction. So of course, moving from the last PMR product into a 30 TB HAMR has some benefit. As I said before, when you go to the 40 TB HAMR, you have even better results. So we will continue to go in that direction. And depending from the time of the call and time of the ramp, our gross margin will continue to improve. We gave a model just a few months ago at our investor day. We have done better than that so far, and we will continue to optimize as much as we can. I also think that model when you run that model for three or four years is giving already a fantastic result, so if we can do better, it's all good, but it's not a bad model anyway. I think that's what you wanted, of course, and then maybe last question, how do we think about we're in a strong up cycle right now? How do we think about capital allocation or any changes to capital allocation? Obviously, you have your dividend, and that's protected. That's kind of your first priority, but how do we think about delivering versus buybacks? You obviously have a convert out there. Just help us all understand maybe what the path forward is because obviously your cash generation should be very strong as we keep looking forward. Yes, so we said we will return to our shareholder at least 75% of our free cash flow. This is, of course, over a period of time that we discussed at Investor Day that was not a three-year period of time, so every quarter is a bit different. In the short term, we gave priority to reducing our debt. A few years ago, we were above $6 billion. Right now, we are at $4.5 billion. Early this quarter, we actually reduced the convertible by $500 million. I think we will reduce our debt a little bit more. But we have also increased the dividend, so the January payment will be the first payment with increased dividend, and we have restarted share buyback in September, and I think we will do substantially more in the future quarters. Perfect. I'll keep you on time. Perfect. Thank you very much. Thank you, Erik. I appreciate it. Thank you.