01—Abstract
Summary
Summary of the 10-Q filed March 21, 2024. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported a significant rebound in its second quarter of fiscal year 2024, with revenue increasing by 23% sequentially to $5.824 billiona 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%b 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 billionc 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.
02—Key points
Key Highlights
- Revenue significantly increased by 23% sequentially to $5.824 billion in Q2 FY24.
- The 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.
- Year-over-year revenue grew by 58%, indicating a strong recovery from the prior year's challenging conditions.
- Both DRAM and NAND product segments showed revenue growth, driven by increasing average selling prices (ASPs) and improved bit shipments for DRAM.
- Gross margin improved to 19% from -1% in the previous quarter, reflecting better pricing and cost management.
- Capital expenditures remain high, with an estimated $7.5 billion to $8.0 billion for FY24, including significant investments in new U.S. fabrication facilities.
- The company maintained a strong liquidity position with $9.63 billion in cash and marketable investments as of February 29, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Micron Technology Inc kept $0.14.
- Revenue$5.82B100.0%
- Cost of revenue−$4.75B81.5%
- Gross profit$1.08B18.5%
- Operating costs−$888.0M15.2%
- Operating income$191.0M3.3%
- Interest, other & tax$602.0M10.3%
- Net income$793.0M13.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed March 21, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $5.82B$3.69B | +57.7% |
| Cost of Revenue | $4.75B$4.90B | −3.1% |
| Gross Profit | $1.08B-$1.21B | +189.5% |
| R&D Expenses | $832.00M$788.00M | +5.6% |
| SG&A Expenses | $280.00M$231.00M | +21.2% |
| Operating Income | $191.00M-$2.30B | +108.3% |
| Interest Expense | $144.00M$89.00M | +61.8% |
| Net Income | $793.00M-$2.31B | +134.3% |
| EPS (Basic) | $0.72$-2.12 | +134.0% |
| EPS (Diluted) | $0.71$-2.12 | +133.5% |
| Shares Outstanding (Basic) | 1.10B1.09B | +1.2% |
| Shares Outstanding (Diluted) | 1.11B1.09B | +2.1% |
05—Questions
Frequently Asked Questions
What drove the significant improvement in revenue and profitability in Q2 FY24?
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.
What is Micron's outlook on capital expenditures and future capacity?
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.
How is the company managing its debt and liquidity?
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.
What are the key risks highlighted in the filing?
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.
06—Continue