Executive Vice President and Chief Financial Officer at Seagate Technology
Thank you, Dave. Our September quarter results highlight solid growth across nearly all financial metrics and demonstrate Seagate's [Indecipherable] execution and ongoing focus on dragging profitability and free cash flow generation. Revenue was $3.12 billion, up 3% sequentially. Non-GAAP operating margin expanded to 20.1% of revenue, up 200 basis points quarter-over-quarter. And non-GAAP EPS was $2.35%, up 18% sequentially and at the high end of our guidance range.
We grew total hard disk drive revenue to $2.9 billion, up 5% sequentially and 34% year-over-year. HDD capacity shipments increased 4% sequentially to 159% exabyte, up 39% relative to the prior year period. Growth was driven by increasing demand for our mass capacity product, which contributed 71% of total HDD revenue and 83% of HDD exabyte shipments. Revenue from the mass capacity markets increased to $2 billion, supported by growth across each of the underlying end market, which include Nearline, VIA and NAS products. Mass capacity revenue was up 8% sequentially and 51% compared with the prior year period, while capacity shipments into this market were up 7% sequentially and 53% year-over-year.
Based on our current outlook, we expect mass capacity exabyte by shipment to remain strong in the December quarter with under year '21 annual growth likely above our long-term target forecast [Phonetic] of about 35%. In the September quarter, Nearline revenue demand was driven by improving enterprise spending and healthy growth from cloud data center customers. Nearline shipment totaled 106 exabyte, up 5% sequentially and 65% year-on-year [Indecipherable] demand for our high-capacity brand, strong growth for dual actuator drive and ongoing market momentum, while our common platform product spending 16 to 20 terabyte drive.
Robust demand in the VIA market led to sequential revenue growth that was above the average for the mass capacity market and we expect solid demand to continue in the December quarter. The legacy market made up the remaining 29% of HDD revenue, holding relatively stable at $831 million, down 3% sequentially and up 5% year-over-year, improving enterprise demand, boosted sales for mission critical drive, which partially offset in decline in consumer drives, following a strong June quarter. We're starting to see a moderation in the face of our revenue decline following the significant market disruption brought down by the pandemic. While we could see some fluctuation in a given quarter, we believe the most pronounced impact are behind us.
Finally, turning to our non-HDD business. Revenue came in at $251 million, down 9% sequentially of June quarter level. Our system business has been partially impacted by some of the supply constraints that Dave discussed. We're working closely with our suppliers to mitigate risk and we continue to gain new customer wins for longer-term growth in the business. Overall, strong demand trend combined with positive industry dynamics led to a non-GAAP gross profit over than $956 million in the September quarter, up 8% sequentially and 57% year-over-year. Cost relating to freight and logistics are continuing to increment high. While we will continue to take steps to reduce the impact of these costs, we believe that we remain a headwind to the business through the fiscal year.
Our resulting non-GAAP gross margin expanded by about 140 basis points to 31%, well inside our long-term target range of 30% to 33%, including higher freight and logistics cost and component prices. HDD margins and now in the upper half of the range, reflecting better alignment in supply and demand and the transition to higher capacity drive. We anticipate continued solid gross margin performance with opportunity to increment higher as we have ramp our cost optimized product. Additionally, as COVID cost headwinds abate, we would expect margin to expand into the upper end of our target range over time. Non-GAAP operating expenses decreased to $339 million, reflecting less than one-time savings. [Indecipherable] management combined with higher revenue and margin expansion resulted in non-GAAP operating income of $627 million, up 16% sequentially and more than doubled the year-ago period.
Non-GAAP operating margin expanded to 20.1%, which is the top end of our long-term target range of 15% to 20% of revenue. Importantly, the September performance demonstrated our ability to grow profits faster than revenue, supporting our strategy of long-term value creation. Based on the little share count of approximately 221 million share, non-GAAP EPS for the September quarter was $2.35, the highest level in close to a decade. Where inventory relatively said, we have days inventory outstanding at 50 days. We are working with suppliers and managing strategic inventory levels for meeting entities for the business, while we continue to monitor this dynamic situation.
Capital expenditures were $117 million for the quarter. We currently expect fiscal year capex to be at the low end of our long-term target range of 4% to 6% of revenue, which is sufficient to support our future products roadmap, while maintaining expense discipline. Free cash flow generation increased to $379 million, up 7% quarter-over-quarter and more than double year-over-year. We delivered strong performance in the September quarter and expect improved free cash flow generation through the fiscal year, enabling us to fund our growth opportunities and return capital to our shareholders.
We used $153 million to fund the quarterly dividend and $425 million to repurchase 4.9 million ordinary shares, exiting the quarter with 225 million shares outstanding and approximately $3.8 billion remaining in our authorization. As Dave mentioned earlier, the Board approved a $0.03 increase to our quarterly dividend, raising the quarterly payout to $0.70 per share. We ended the September quarter with cash and cash equivalents of nearly $1 billion dollar and total liquidity was approximately $2.7 billion, including our revolving any facility. Adjusted EBITDA was $724 million for the quarter and $2.4 billion for the 12-month period ending in September. Total debt balance at the end of the quarter was $5.1 billion with a leverage ratio of 2.2 times.
In early October, we took advantage of the current attractive market environment to raise $725 million in capital, through a new $600 million fixed tenure term loan and upsized our existing term loan June 2026. These actions are consistent with our growing business and provide input to repay $230 million in debt and doing much. We reduced our average interest rate by 25 basis points and expect interest expenses for the December quarter to be approximately $56 million.
Looking ahead to our outlook for the December quarter, we anticipate a continuation of the strong demand environment that we experienced in the September quarter. We expect revenue to be in a range of $3.1 billion, plus or minus $150 million. We expect non-GAAP operating margin to remain around the top end of our long-term range of 15% to 20% of revenue, and we expect non-GAAP EPS to be in the range of $2.35, plus or minus $0.15. In summary, with an outstanding September, letting us [Indecipherable] to deliver strong top and bottom line growth in calendar year 2021 as well as fiscal 2022.
I will now turn the call back to Dave for final comments.