10-QPeriod: Q2 FY2024

MICRON TECHNOLOGY INC Quarterly Report for Q2 Ended Feb 29, 2024

Filed March 21, 2024For Securities:MU

Summary

Micron Technology, Inc. reported a significant rebound in its second quarter of fiscal year 2024, with revenue increasing by 23% sequentially to $5.824 billion and turning profitable with a net income of $793 million, compared to a net loss of $1.234 billion in the prior quarter. This turnaround is attributed to improving industry conditions, particularly rising average selling prices (ASPs) for both DRAM and NAND products, coupled with industry-wide supply discipline. The company also saw substantial year-over-year revenue growth of 58% for the quarter. The company's strategic investments in leading-edge manufacturing and product development are beginning to show results as market dynamics improve. While capital expenditures remain substantial, particularly for new fabs in the U.S., the company's liquidity position remains strong, with $9.63 billion in cash and marketable investments as of February 29, 2024. Investors should note the ongoing investments in future capacity and the continued focus on navigating a competitive and dynamic memory market.

Financial Highlights

52 data points
Beta

Revenue

$5.82B

18.5% Gross Margin

Net Income

$793.00M

13.6% Net Margin

EPS (Diluted)

$0.71

Total Assets

$65.72B

Cash & Equivalents

$8.10B

Free Cash Flow

-$165.00M

Financial Statements
Beta
Revenue$5.82B
Cost of Revenue$4.75B
Gross Profit$1.08B
R&D Expenses$832.00M
SG&A Expenses$280.00M
Operating Income$191.00M
Interest Expense$144.00M
Net Income$793.00M
EPS (Basic)$0.72
EPS (Diluted)$0.71
Shares Outstanding (Basic)1.10B
Shares Outstanding (Diluted)1.11B

Key Highlights

  • 1Revenue significantly increased by 23% sequentially to $5.824 billion in Q2 FY24.
  • 2The company returned to profitability with a net income of $793 million, a substantial improvement from a net loss of $1.234 billion in Q1 FY24.
  • 3Year-over-year revenue grew by 58%, indicating a strong recovery from the prior year's challenging conditions.
  • 4Both DRAM and NAND product segments showed revenue growth, driven by increasing average selling prices (ASPs) and improved bit shipments for DRAM.
  • 5Gross margin improved to 19% from -1% in the previous quarter, reflecting better pricing and cost management.
  • 6Capital expenditures remain high, with an estimated $7.5 billion to $8.0 billion for FY24, including significant investments in new U.S. fabrication facilities.
  • 7The company maintained a strong liquidity position with $9.63 billion in cash and marketable investments as of February 29, 2024.

Frequently Asked Questions

The substantial improvement was driven by a recovery in the memory market, characterized by increasing average selling prices (ASPs) for both DRAM and NAND products and improved industry supply-demand balance due to industry-wide supply discipline. This led to a 23% sequential revenue increase and a return to profitability with a net income of $793 million.

Micron continues to make significant investments in future growth, estimating capital expenditures between $7.5 billion and $8.0 billion for fiscal year 2024. This includes plans for new leading-edge memory manufacturing fabs in the United States (Idaho and New York) to support expected memory demand in the second half of the decade.

As of February 29, 2024, Micron had $13.72 billion in debt. The company reported strong liquidity with $9.63 billion in cash and marketable investments. Approximately $2.50 billion was available under its Revolving Credit Facility. The company is actively managing its debt, including issuing new notes and repaying existing ones, to fund its operations and capital expenditures.

Key risks include volatility in average selling prices, potential impacts on gross margins, geopolitical risks associated with international operations (particularly in China), intense industry competition, the need to develop new technologies, achieving returns on capacity expansions, potential government incentive risks, supply chain vulnerabilities, and ongoing legal proceedings, including patent infringement claims.