Connect with us

Bussiness

Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2024

Published

5 months ago

on

Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2024

Micron Technology, Inc.

Micron Technology, Inc.

AI demand drives 50% sequential data center revenue growth and record high data center revenue mix

BOISE, Idaho, June 26, 2024 (GLOBE NEWSWIRE) — Micron Technology, Inc. (Nasdaq: MU) today announced results for its third quarter of fiscal 2024, which ended May 30, 2024.

Fiscal Q3 2024 highlights

  • GAAP net income of $332 million, or $0.30 per diluted share

  • Non-GAAP net income of $702 million, or $0.62 per diluted share

  • Operating cash flow of $2.48 billion versus $1.22 billion for the prior quarter and $24 million for the same period last year

“Robust AI demand and strong execution enabled Micron to drive 17% sequential revenue growth, exceeding our guidance range in fiscal Q3,” said Sanjay Mehrotra, President and CEO of Micron Technology. “We are gaining share in high-margin products like High Bandwidth Memory (HBM), and our data center SSD revenue hit a record high, demonstrating the strength of our AI product portfolio across DRAM and NAND. We are excited about the expanding AI-driven opportunities ahead, and are well positioned to deliver a substantial revenue record in fiscal 2025.”

Quarterly Financial Results

(in millions, except per share amounts)

GAAP(1)

 

Non-GAAP(2)

FQ3-24

FQ2-24

FQ3-23

 

FQ3-24

FQ2-24

FQ3-23

 

 

 

 

 

 

 

 

Revenue

$

6,811

 

$

5,824

 

$

3,752

 

 

$

6,811

 

$

5,824

 

$

3,752

 

Gross margin

 

1,832

 

 

1,079

 

 

(668

)

 

 

1,917

 

 

1,163

 

 

(603

)

percent of revenue

 

26.9

%

 

18.5

%

 

(17.8

%)

 

 

28.1

%

 

20.0

%

 

(16.1

%)

Operating expenses

 

1,113

 

 

888

 

 

1,093

 

 

 

976

 

 

959

 

 

866

 

Operating income (loss)

 

719

 

 

191

 

 

(1,761

)

 

 

941

 

 

204

 

 

(1,469

)

percent of revenue

 

10.6

%

 

3.3

%

 

(46.9

%)

 

 

13.8

%

 

3.5

%

 

(39.2

%)

Net income (loss)

 

332

 

 

793

 

 

(1,896

)

 

 

702

 

 

476

 

 

(1,565

)

Diluted earnings (loss) per share

 

0.30

 

 

0.71

 

 

(1.73

)

 

 

0.62

 

 

0.42

 

 

(1.43

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in capital expenditures, net(2) were $2.06 billion for the third quarter of 2024, which resulted in adjusted free cash flows(2) of $425 million. Micron ended the third quarter of 2024 with cash, marketable investments, and restricted cash of $9.22 billion. On June 26, 2024, Micron’s Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on July 23, 2024, to shareholders of record as of the close of business on July 8, 2024.

Business Outlook

The following table presents Micron’s guidance for the fourth quarter of 2024:

FQ4-24

GAAP(1) Outlook

Non-GAAP(2) Outlook

 

 

 

Revenue

$7.60 billion ± $200 million

$7.60 billion ± $200 million

Gross margin

33.5% ± 1.0%

34.5% ± 1.0%

Operating expenses

$1.19 billion ± $15 million

$1.06 billion ± $15 million

Diluted earnings per share

$0.61 ± $0.08

$1.08 ± $0.08

 

 

 

Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted at investors.micron.com.

Investor Webcast

Micron will host a conference call on Wednesday, June 26, 2024 at 2:30 p.m. Mountain Time to discuss its third quarter financial results and provide forward-looking guidance for its fourth quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will be available for one year after the call. For Investor Relations and other company updates, follow us on X @MicronTech.

About Micron Technology, Inc.

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.

© 2024 Micron Technology, Inc. All rights reserved. Micron, the Micron logo, and all other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements regarding our industry, our strategic position, technology trends and developments including artificial intelligence, market demand, and our financial and operating results, including our guidance for the fourth quarter of 2024. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents we file with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at investors.micron.com/risk-factor. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements to conform these statements to actual results.

(1)

GAAP represents U.S. Generally Accepted Accounting Principles.

(2)

Non-GAAP represents GAAP excluding the impact of certain activities, which management excludes in analyzing our operating results and understanding trends in our earnings, adjusted free cash flow, and business outlook. Further information regarding Micron’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release.

MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)

 

 

 

 

 

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

Nine months ended

 

May 30,
2024

February 29,
2024

June 1,
2023

May 30,
2024

June 1,
2023

 

 

 

 

 

 

Revenue

$

6,811

 

$

5,824

 

$

3,752

 

$

17,361

 

$

11,530

 

Cost of goods sold

 

4,979

 

 

4,745

 

 

4,420

 

 

14,485

 

 

12,511

 

Gross margin

 

1,832

 

 

1,079

 

 

(668

)

 

2,876

 

 

(981

)

 

 

 

 

 

 

Research and development

 

850

 

 

832

 

 

758

 

 

2,527

 

 

2,395

 

Selling, general, and administrative

 

291

 

 

280

 

 

219

 

 

834

 

 

701

 

Restructure and asset impairments

 

—

 

 

—

 

 

68

 

 

—

 

 

167

 

Other operating (income) expense, net

 

(28

)

 

(224

)

 

48

 

 

(267

)

 

29

 

Operating income (loss)

 

719

 

 

191

 

 

(1,761

)

 

(218

)

 

(4,273

)

 

 

 

 

 

 

Interest income

 

136

 

 

130

 

 

127

 

 

398

 

 

334

 

Interest expense

 

(150

)

 

(144

)

 

(119

)

 

(426

)

 

(259

)

Other non-operating income (expense), net

 

10

 

 

(7

)

 

—

 

 

(24

)

 

(2

)

 

 

715

 

 

170

 

 

(1,753

)

 

(270

)

 

(4,200

)

 

 

 

 

 

 

Income tax (provision) benefit

 

(377

)

 

622

 

 

(139

)

 

172

 

 

(201

)

Equity in net income (loss) of equity method investees

 

(6

)

 

1

 

 

(4

)

 

(11

)

 

(2

)

Net income (loss)

$

332

 

$

793

 

$

(1,896

)

$

(109

)

$

(4,403

)

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

Basic

$

0.30

 

$

0.72

 

$

(1.73

)

$

(0.10

)

$

(4.03

)

Diluted

 

0.30

 

 

0.71

 

 

(1.73

)

 

(0.10

)

 

(4.03

)

 

 

 

 

 

 

Number of shares used in per share calculations

 

 

 

 

 

Basic

 

1,107

 

 

1,104

 

 

1,094

 

 

1,104

 

 

1,092

 

Diluted

 

1,123

 

 

1,114

 

 

1,094

 

 

1,104

 

 

1,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

As of

May 30,
2024

February 29,
2024

August 31,
2023

 

 

 

 

Assets

 

 

 

Cash and equivalents

$

7,594

 

$

8,016

 

$

8,577

 

Short-term investments

 

785

 

 

990

 

 

1,017

 

Receivables

 

5,131

 

 

4,296

 

 

2,443

 

Inventories

 

8,512

 

 

8,443

 

 

8,387

 

Other current assets

 

1,297

 

 

1,690

 

 

820

 

Total current assets

 

23,319

 

 

23,435

 

 

21,244

 

Long-term marketable investments

 

775

 

 

627

 

 

844

 

Property, plant, and equipment

 

37,926

 

 

37,587

 

 

37,928

 

Operating lease right-of-use assets

 

660

 

 

642

 

 

666

 

Intangible assets

 

413

 

 

414

 

 

404

 

Deferred tax assets

 

597

 

 

664

 

 

756

 

Goodwill

 

1,150

 

 

1,150

 

 

1,150

 

Other noncurrent assets

 

1,415

 

 

1,199

 

 

1,262

 

Total assets

$

66,255

 

$

65,718

 

$

64,254

 

 

 

 

 

Liabilities and equity

 

 

 

Accounts payable and accrued expenses

$

5,145

 

$

4,680

 

$

3,958

 

Current debt

 

398

 

 

344

 

 

278

 

Other current liabilities

 

1,297

 

 

1,235

 

 

529

 

Total current liabilities

 

6,840

 

 

6,259

 

 

4,765

 

Long-term debt

 

12,860

 

 

13,378

 

 

13,052

 

Noncurrent operating lease liabilities

 

609

 

 

593

 

 

603

 

Noncurrent unearned government incentives

 

672

 

 

662

 

 

727

 

Other noncurrent liabilities

 

1,049

 

 

956

 

 

987

 

Total liabilities

 

22,030

 

 

21,848

 

 

20,134

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

Common stock

 

125

 

 

125

 

 

124

 

Additional capital

 

11,794

 

 

11,564

 

 

11,036

 

Retained earnings

 

40,169

 

 

39,997

 

 

40,824

 

Treasury stock

 

(7,552

)

 

(7,552

)

 

(7,552

)

Accumulated other comprehensive income (loss)

 

(311

)

 

(264

)

 

(312

)

Total equity

 

44,225

 

 

43,870

 

 

44,120

 

Total liabilities and equity

$

66,255

 

$

65,718

 

$

64,254

 

 

 

 

 

 

 

 

 

 

 

MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

Nine months ended

May 30,
2024

June 1,
2023

 

 

 

Cash flows from operating activities

 

 

Net income (loss)

$

(109

)

$

(4,403

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

Depreciation expense and amortization of intangible assets

 

5,794

 

 

5,819

 

Stock-based compensation

 

620

 

 

448

 

Provision to write-down inventories to net realizable value

 

—

 

 

1,831

 

Change in operating assets and liabilities:

 

 

Receivables

 

(2,562

)

 

2,728

 

Inventories

 

(125

)

 

(3,406

)

Other current assets

 

(435

)

 

(35

)

Accounts payable and accrued expenses

 

846

 

 

(1,113

)

Other current liabilities

 

769

 

 

(677

)

Other

 

304

 

 

118

 

Net cash provided by operating activities

 

5,102

 

 

1,310

 

 

 

 

Cash flows from investing activities

 

 

Expenditures for property, plant, and equipment

 

(5,266

)

 

(6,215

)

Purchases of available-for-sale securities

 

(1,110

)

 

(496

)

Proceeds from maturities and sales of available-for-sale securities

 

1,433

 

 

1,192

 

Proceeds from government incentives

 

267

 

 

248

 

Other

 

(35

)

 

(90

)

Net cash provided by (used for) investing activities

 

(4,711

)

 

(5,361

)

 

 

 

Cash flows from financing activities

 

 

Repayments of debt

 

(1,816

)

 

(706

)

Payments of dividends to shareholders

 

(384

)

 

(378

)

Payments on equipment purchase contracts

 

(127

)

 

(112

)

Repurchases of common stock – repurchase program

 

—

 

 

(425

)

Proceeds from issuance of debt

 

999

 

 

6,716

 

Other

 

(40

)

 

—

 

Net cash provided by (used for) financing activities

 

(1,368

)

 

5,095

 

 

 

 

Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash

 

(15

)

 

(13

)

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(992

)

 

1,031

 

Cash, cash equivalents, and restricted cash at beginning of period

 

8,656

 

 

8,339

 

Cash, cash equivalents, and restricted cash at end of period

$

7,664

 

$

9,370

 

 

 

 

 

 

 

 

MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)
(All tabular amounts in millions)

Inventories

In 2023, we recorded charges of $1.83 billion to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable value (“NRV”). The impact of inventory NRV write-downs for each period reflects (1) inventory write-downs in that period, offset by (2) lower costs in that period on the sale of inventory written down in prior periods. The impacts of inventory NRV write-downs are summarized below:

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

Nine months ended

 

May 30,
2024

February 29,
2024

June 1,
2023

May 30,
2024

June 1,
2023

 

 

 

 

 

 

Provision to write down inventory to NRV

$

—

$

—

$

(401

)

$

—

$

(1,831

)

Lower costs from sale of inventory written down in prior periods

 

—

 

382

 

281

 

 

987

 

281

 

 

$

—

$

382

$

(120

)

$

987

$

(1,550

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax

In the first quarter of 2024, our tax expense was based on actual results for jurisdictions where small changes in our projected pre-tax income would have caused significant changes in the estimated annual effective tax rate. With our improved fiscal 2024 outlook, we were able to estimate a more reliable annual effective tax rate and have reverted to a global annual effective tax rate method for all jurisdictions beginning in the second quarter of 2024.

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In millions, except per share amounts)

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

 

May 30,
2024

February 29,
2024

June 1,
2023

 

 

 

 

GAAP gross margin

$

1,832

 

$

1,079

 

$

(668

)

Stock-based compensation

 

80

 

 

80

 

 

60

 

Other

 

5

 

 

4

 

 

5

 

Non-GAAP gross margin

$

1,917

 

$

1,163

 

$

(603

)

 

 

 

 

GAAP operating expenses

$

1,113

 

$

888

 

$

1,093

 

Stock-based compensation

 

(137

)

 

(129

)

 

(91

)

Restructure and asset impairments

 

—

 

 

—

 

 

(68

)

Patent cross-license agreement gain

 

—

 

 

200

 

 

—

 

Litigation settlement

 

—

 

 

—

 

 

(68

)

Non-GAAP operating expenses

$

976

 

$

959

 

$

866

 

 

 

 

 

GAAP operating income (loss)

$

719

 

$

191

 

$

(1,761

)

Stock-based compensation

 

217

 

 

209

 

 

151

 

Restructure and asset impairments

 

—

 

 

—

 

 

68

 

Patent cross-license agreement gain

 

—

 

 

(200

)

 

—

 

Litigation settlement

 

—

 

 

—

 

 

68

 

Other

 

5

 

 

4

 

 

5

 

Non-GAAP operating income (loss)

$

941

 

$

204

 

$

(1,469

)

 

 

 

 

GAAP net income (loss)

$

332

 

$

793

 

$

(1,896

)

Stock-based compensation

 

217

 

 

209

 

 

151

 

Restructure and asset impairments

 

—

 

 

—

 

 

68

 

Patent cross-license agreement gain

 

—

 

 

(200

)

 

—

 

Litigation settlement

 

—

 

 

—

 

 

68

 

Other

 

3

 

 

2

 

 

7

 

Estimated tax effects of above and other tax adjustments(1)

 

150

 

 

(328

)

 

37

 

Non-GAAP net income (loss)

$

702

 

$

476

 

$

(1,565

)

 

 

 

 

GAAP weighted-average common shares outstanding – Diluted

 

1,123

 

 

1,114

 

 

1,094

 

Adjustment for stock-based compensation

 

13

 

 

20

 

 

—

 

Non-GAAP weighted-average common shares outstanding – Diluted

 

1,136

 

 

1,134

 

 

1,094

 

 

 

 

 

GAAP diluted earnings (loss) per share

$

0.30

 

$

0.71

 

$

(1.73

)

Effects of the above adjustments

 

0.32

 

 

(0.29

)

 

0.30

 

Non-GAAP diluted earnings (loss) per share

$

0.62

 

$

0.42

 

$

(1.43

)

 

 

 

 

 

 

 

 

 

 

(1)

The second fiscal quarter tax benefit arose from applying our estimated annual effective tax rate to our year-to-date results. A portion of this benefit is included in our non-GAAP net income, with a larger benefit in our GAAP net income. The divergence between the GAAP and non-GAAP tax relates to the difference in our GAAP and non-GAAP estimated annual effective tax rates, which are computed separately.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

 

3rd Qtr.

2nd Qtr.

3rd Qtr.

 

May 30,
2024

February 29,
2024

June 1,
2023

 

 

 

 

GAAP net cash provided by operating activities

$

2,482

 

$

1,219

 

$

24

 

 

 

 

 

Expenditures for property, plant, and equipment

 

(2,086

)

 

(1,384

)

 

(1,561

)

Payments on equipment purchase contracts

 

(45

)

 

(26

)

 

(36

)

Proceeds from sales of property, plant, and equipment

 

41

 

 

13

 

 

34

 

Proceeds from government incentives

 

33

 

 

149

 

 

184

 

Investments in capital expenditures, net

 

(2,057

)

 

(1,248

)

 

(1,379

)

Adjusted free cash flow

$

425

 

$

(29

)

$

(1,355

)

 

 

 

 

 

 

 

 

 

 

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income (loss), net income (loss), diluted shares, diluted earnings (loss) per share, and adjusted free cash flow. The non-GAAP adjustments above may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. We believe this non-GAAP information is helpful in understanding trends and in analyzing our operating results and earnings. We are providing this information to investors to assist in performing analysis of our operating results. When evaluating performance and making decisions on how to allocate our resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. We believe these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of our business, enabling enhanced comparison of our operating results between periods and with peer companies. The presentation of these adjusted amounts varies from amounts presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. Our management excludes the following items in analyzing our operating results and understanding trends in our earnings:

  • Stock-based compensation;

  • Gains and losses from settlements;

  • Restructure and asset impairments; and

  • The estimated tax effects of above, non-cash changes in net deferred income taxes, assessments of tax exposures, certain tax matters related to prior fiscal periods, and significant changes in tax law.

Non-GAAP diluted shares are adjusted for the impact of additional shares resulting from the exclusion of stock-based compensation from non-GAAP income (loss).

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

FQ4-24

 

GAAP Outlook

 

Adjustments

 

Non-GAAP Outlook

 

 

 

 

 

 

 

 

 

Revenue

$7.60 billion ± $200 million

 

—

 

 

 

$7.60 billion ± $200 million

Gross margin

33.5% ± 1.0%

 

1.0%

 

A

 

34.5% ± 1.0%

Operating expenses

$1.19 billion ± $15 million

 

$125 million

 

B

 

$1.06 billion ± $15 million

Diluted earnings per share(1)

$0.61 ± $0.08

 

$0.47

 

A, B, C

 

$1.08 ± $0.08

Non-GAAP Adjustments
(in millions)

 

 

 

 

 

A

Stock-based compensation – cost of goods sold

 

$

84

A

Other – cost of goods sold

 

 

4

B

Stock-based compensation – research and development

 

 

77

B

Stock-based compensation – sales, general, and administrative

 

 

48

C

Tax effects of the above items and other tax adjustments

 

 

315

 

 

 

$

528

 

 

 

 

 

(1)

GAAP earnings per share based on approximately 1.12 billion diluted shares and non-GAAP earnings per share based on approximately 1.14 billion diluted shares.

The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, additional restructuring activities, balance sheet valuation adjustments, strategic investments, financing transactions, and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control.

CONTACT: Contacts: Satya Kumar Investor Relations (408) 450-6199 Erica Rodriguez Pompen Media Relations (408) 834-1873
Related Topics:
Continue Reading