10-QPeriod: Q1 FY2025

MICRON TECHNOLOGY INC Quarterly Report for Q1 Ended Nov 28, 2024

Filed December 19, 2024For Securities:MU

Summary

Micron Technology Inc. reported a significant turnaround in its first fiscal quarter of 2025, achieving a substantial profit of $1.87 billion, a stark contrast to the net loss of $1.23 billion in the prior year's comparable quarter. This dramatic improvement was driven by a robust increase in revenue, which surged 84% year-over-year to $8.71 billion. The company benefited from significantly higher average selling prices and increased bit shipments for both DRAM and NAND products, with DRAM showing particular strength in the data center market. Despite strong overall performance, the company noted a slight sequential dip in NAND shipments and pricing, prompting strategic actions to align supply with demand. Micron is also making substantial investments in future growth, notably with significant direct funding secured under the CHIPS Act for new manufacturing facilities in the U.S. The company reaffirmed its financial stability, with ample cash and investments, and anticipates continued growth, particularly in AI-driven markets, while also navigating ongoing industry competition and legal challenges.

Financial Highlights

50 data points
Beta

Revenue

$8.71B

38.4% Gross Margin

Net Income

$1.87B

21.5% Net Margin

EPS (Diluted)

$1.67

Total Assets

$71.46B

Cash & Equivalents

$6.70B

Free Cash Flow

$38.00M

Financial Statements
Beta
Revenue$8.71B
Cost of Revenue$5.36B
Gross Profit$3.35B
R&D Expenses$888.00M
SG&A Expenses$288.00M
Operating Income$2.17B
Net Income$1.87B
EPS (Basic)$1.68
EPS (Diluted)$1.67
Shares Outstanding (Basic)1.11B
Shares Outstanding (Diluted)1.12B

Key Highlights

  • 1Revenue surged 84% year-over-year to $8.71 billion, driven by strong demand in DRAM and NAND markets.
  • 2Net income turned positive at $1.87 billion, a significant improvement from a net loss of $1.23 billion in the prior year's first quarter.
  • 3Gross margin improved substantially to 38% from a negative 1% in the prior year's first quarter, reflecting higher average selling prices and cost reductions.
  • 4The Compute and Networking (CNBU) segment saw a remarkable 153% revenue increase year-over-year, fueled by strong data center DRAM demand, including HBM.
  • 5Micron secured up to $6.1 billion in direct funding from the U.S. Department of Commerce under the CHIPS Act for planned U.S. manufacturing facilities.
  • 6The company repurchased $7.19 billion of its common stock under its authorized repurchase program through November 28, 2024.
  • 7Despite overall strong performance, NAND bit shipments and average selling prices saw a slight sequential decrease, prompting supply adjustments.

Frequently Asked Questions

The primary driver was a substantial increase in both average selling prices (ASPs) and bit shipments for DRAM and NAND products. DRAM, in particular, saw strong demand from the data center market, including for High Bandwidth Memory (HBM), which significantly boosted revenue and pricing.

Micron is implementing strategic actions to align NAND supply with industry demand trends, including reducing NAND wafer starts and NAND capital expenditures. This proactive approach aims to manage inventory levels and support pricing in the NAND market.

The significant direct funding secured under the CHIPS Act, totaling up to $6.1 billion, will support Micron's planned leading-edge memory manufacturing facilities in Idaho and New York. This investment is crucial for expanding U.S. production capacity to meet projected demand in the second half of the decade and beyond, reinforcing Micron's long-term growth strategy.

Micron views AI as a key growth driver, particularly for its High Bandwidth Memory (HBM) and other advanced DRAM products used in data centers. While the company is investing in AI technologies and sees strong demand, it also acknowledges the evolving nature of AI and its potential impact on competitive dynamics and future demand forecasts.