10-QPeriod: Q2 FY2022

MICRON TECHNOLOGY INC Quarterly Report for Q1 Ended Dec 2, 2021

Filed January 6, 2022For Securities:MU

Summary

Micron Technology, Inc. reported strong financial results for the first quarter of fiscal year 2022, ending December 2, 2021. Revenue reached $7.69 billion, a significant increase of 33% year-over-year, driven by robust demand and increased average selling prices for both DRAM and NAND products. Net income also saw a substantial jump to $2.31 billion, or $2.04 per diluted share, compared to $803 million, or $0.71 per diluted share, in the prior year's quarter. The company demonstrated improved operational efficiency, with gross margins expanding significantly to 46% from 30% in the prior year's quarter, attributed to higher average selling prices and cost reductions. While revenue saw a slight sequential decrease of 7% from the previous quarter, this was attributed to customer component shortages and a mid-single-digit decline in average selling prices for NAND. Despite this, Micron's strategic focus on technology leadership, including 176-layer NAND and 1α DRAM, and its disciplined capital allocation, including share repurchases and dividends, position it well for continued growth in the dynamic memory and storage markets.

Financial Highlights

52 data points
Beta

Revenue

$7.79B

47.2% Gross Margin

Net Income

$2.26B

29.1% Net Margin

EPS (Diluted)

$2.00

Total Assets

$63.70B

Cash & Equivalents

$9.22B

Free Cash Flow

$1.02B

Financial Statements
Beta
Revenue$7.79B
Cost of Revenue$4.11B
Gross Profit$3.68B
R&D Expenses$792.00M
SG&A Expenses$263.00M
Operating Income$2.55B
Interest Expense$55.00M
Net Income$2.26B
EPS (Basic)$2.02
EPS (Diluted)$2.00
Shares Outstanding (Basic)1.12B
Shares Outstanding (Diluted)1.13B

Key Highlights

  • 1Revenue increased by 33% year-over-year to $7.69 billion, demonstrating strong market demand.
  • 2Net income surged to $2.31 billion, resulting in diluted EPS of $2.04, a significant improvement from the prior year.
  • 3Gross margin improved substantially to 46% from 30% year-over-year, reflecting higher ASPs and cost efficiencies.
  • 4DRAM revenue grew 38% and NAND revenue grew 19% year-over-year, highlighting strength in core product segments.
  • 5The company announced significant capital expenditure plans for 2022, ranging from $11 billion to $12 billion, focused on next-generation technologies.
  • 6Micron repurchased $259 million of common stock and declared a quarterly dividend of $0.10 per share, indicating a commitment to returning value to shareholders.
  • 7The company continues to invest in technology leadership, having introduced industry-leading 176-layer NAND and 1α DRAM.

Frequently Asked Questions

Micron's revenue increased significantly by 33% year-over-year to $7.69 billion, driven by strong demand and higher average selling prices for DRAM and NAND products. Net income more than doubled to $2.31 billion, resulting in diluted earnings per share of $2.04, up from $0.71 in the prior year's quarter. Gross margins also saw a substantial improvement, reaching 46% compared to 30% in the same period last year.

The primary drivers for Micron's performance include strong demand across various market segments, particularly for DRAM and NAND products. The company's ability to increase average selling prices (ASPs) and implement cost reduction measures through advanced technologies like 176-layer NAND and 1α DRAM have significantly contributed to improved gross margins.

Micron plans to invest heavily in capital expenditures for fiscal year 2022, estimating between $11 billion and $12 billion, to support the transition to advanced technologies and future growth. The company also demonstrated its commitment to shareholder returns by repurchasing $259 million of common stock and declaring a quarterly dividend of $0.10 per share.

Key risks highlighted in the filing include the ongoing volatility in average selling prices for semiconductor memory and storage products, intense industry competition, potential disruptions in the global supply chain (exacerbated by factors like COVID-19), and ongoing legal proceedings, particularly those related to intellectual property and antitrust matters. The company also faces risks associated with geopolitical tensions and trade policies.