10-QPeriod: Q1 FY2024

MICRON TECHNOLOGY INC Quarterly Report for Q1 Ended Nov 30, 2023

Filed December 21, 2023For Securities:MU

Summary

Micron Technology, Inc. reported its financial results for the first quarter of fiscal year 2024, ending November 29, 2023. The company experienced a significant revenue increase of 18% sequentially to $4.726 billion, driven by growth in both DRAM and NAND product sales. This marks a positive shift from the challenging market conditions of the previous year. Despite the revenue growth, the company reported a net loss of $1.234 billion for the quarter. The gross margin showed improvement, moving from a negative 11% in the prior quarter to negative 1%, indicating early signs of recovery in pricing and margins as demand begins to normalize and industry supply discipline improves. Key factors influencing the quarter include increasing demand, particularly for AI-related applications, and customers working through their inventory levels. The company is strategically managing capital expenditures and wafer starts to control inventory. Micron is also making significant investments in future capacity, particularly in the United States, with plans for new DRAM fabrication facilities in Idaho and New York, contingent on CHIPS Act support. The company reiterated its expectation for capital expenditures in the range of $7.5 billion to $8.0 billion for fiscal year 2024. While the financial performance shows signs of recovery, persistent challenges such as pricing volatility and operational costs remain.

Financial Highlights

52 data points
Beta

Revenue

$4.73B

-0.7% Gross Margin

Net Income

-$1.23B

-26.1% Net Margin

EPS (Diluted)

$-1.12

Total Assets

$63.78B

Cash & Equivalents

$8.15B

Free Cash Flow

-$395.00M

Financial Statements
Beta
Revenue$4.73B
Cost of Revenue$4.76B
Gross Profit-$35.00M
R&D Expenses$845.00M
SG&A Expenses$263.00M
Operating Income-$1.13B
Interest Expense$132.00M
Net Income-$1.23B
EPS (Basic)$-1.12
EPS (Diluted)$-1.12
Shares Outstanding (Basic)1.10B
Shares Outstanding (Diluted)1.10B

Key Highlights

  • 1Revenue increased 18% sequentially to $4.726 billion, driven by strong DRAM and NAND sales, indicating a potential market recovery.
  • 2Net loss for the quarter was $1.234 billion, a significant improvement from the previous quarter's loss of $1.430 billion, but still a loss.
  • 3Gross margin improved to -1% from -11% in the prior quarter, reflecting better average selling prices and improved industry supply-demand balance.
  • 4Significant investments are planned for new U.S. fabrication facilities, contingent on CHIPS Act support, with capital expenditures estimated between $7.5 billion and $8.0 billion for FY2024.
  • 5The company is actively managing inventory by reducing capital expenditures and wafer starts to below peak levels.
  • 6Operating expenses, including R&D and SG&A, saw increases primarily due to higher employee compensation, but R&D expenses remained relatively flat year-over-year.
  • 7The company declared and paid a quarterly dividend of $0.115 per share, signaling continued commitment to returning capital to shareholders.

Frequently Asked Questions

Micron reported revenue of $4.726 billion for the first quarter of fiscal year 2024, an increase of 18% compared to the fourth quarter of fiscal year 2023. This growth was driven by higher sales volumes and improved average selling prices for both DRAM and NAND products, signaling a positive trend in the memory market.

No, Micron reported a net loss of $1.234 billion for the first quarter of fiscal year 2024. While this represents an improvement from the net loss of $1.430 billion in the prior quarter, the company is still operating at a loss. The gross margin, however, showed improvement, moving from negative 11% to negative 1%.

Micron estimates capital expenditures for fiscal year 2024 to be in the range of $7.5 billion to $8.0 billion. The company is making significant investments in future capacity, including plans for new leading-edge memory fabrication facilities in the United States, contingent on government support such as the CHIPS Act.

In response to challenging market conditions and elevated inventory levels, Micron has reduced capital expenditures and wafer starts for both DRAM and NAND. The company expects wafer starts to remain below peak capacity levels to manage inventory down and control supply. This strategy also led to period costs from fabrication facility underutilization, which are expected to decrease in the coming quarters.