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

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

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

  • Revenue of $6.81 billion versus $5.82 billion for the prior quarter and $3.75 billion for the same period last year
  • 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.

            
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