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

Rhea-AI Summary

Micron Technology, Inc. (MU) reported strong fiscal Q2 2024 results with revenue of $5.82 billion, GAAP net income of $793 million, and non-GAAP net income of $476 million. The company's operating cash flow was $1.22 billion, showcasing profitability and growth. Micron's CEO, Sanjay Mehrotra, highlighted the team's exceptional performance and the company's leading position in the semiconductor industry, driven by AI opportunities.

Insights

Financial Analyst

The recent financial results from Micron Technology indicate a significant rebound in the company's profitability, attributed largely to the increased demand for AI-related semiconductor products. The reported revenue of $5.82 billion marks a substantial improvement from both the previous quarter and the same period last year, suggesting a strong recovery trajectory. This uptick in revenue, coupled with a positive GAAP net income of $793 million, reflects a robust turnaround in operations.

From an investment standpoint, the positive earnings per share (EPS) figures and the company's optimistic guidance for the upcoming quarter could signal confidence to investors. The declaration of a quarterly dividend, albeit modest, further reinforces the message of financial stability and shareholder value. However, the reported negative adjusted free cash flows raise questions about the company's capital expenditure strategy and its sustainability in the long term.

Market Research Analyst

Micron's performance must be contextualized within the broader semiconductor industry, which is currently experiencing a surge in demand due to the proliferation of AI technologies. Micron's emphasis on their 'preeminent product portfolio' suggests that the company is strategically positioned to capitalize on this trend. However, it is essential to monitor market competition and the potential for supply chain constraints that could impact future profitability.

Investors should also consider the cyclical nature of the semiconductor industry, where periods of tight supply and high demand can be followed by oversupply and price declines. Micron's forward-looking statements indicate anticipation of continued growth, but market dynamics can shift rapidly, affecting future performance.

Semiconductor Industry Analyst

Understanding the nuances of Micron's financial health requires an examination of the gross margin improvement, which has risen from a negative percentage in the previous year to 18.5% this quarter. This metric is essential as it reflects the efficiency of the company's production process and its ability to control costs relative to sales. The projected increase in gross margin for the next quarter could indicate further operational improvements or pricing power in the market.

Additionally, the capital expenditures of $1.25 billion, despite resulting in negative free cash flow, highlight Micron's commitment to investing in its technological capabilities to meet the growing demand for AI applications. This strategic allocation of resources is likely to be a critical factor in maintaining competitive advantage in a rapidly evolving industry.

AI demand and tight supply accelerate return to profitability

BOISE, Idaho, March 20, 2024 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its second quarter of fiscal 2024, which ended February 29, 2024.

Fiscal Q2 2024 highlights

• Revenue of $5.82 billion versus $4.73 billion for the prior quarter and $3.69 billion for the same period last year

• GAAP net income of $793 million, or $0.71 per diluted share
• Non-GAAP net income of $476 million, or $0.42 per diluted share
• Operating cash flow of $1.22 billion versus $1.40 billion for the prior quarter and $343 million for the same period last year

“Micron delivered fiscal Q2 results with revenue, gross margin and EPS well above the high-end of our guidance range — a testament to our team’s excellent execution on pricing, products and operations,” said Sanjay Mehrotra, President and CEO of Micron Technology. “Our preeminent product portfolio positions us well to deliver a strong fiscal second half of 2024. We believe Micron is one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI.”

Quarterly Financial Results
(in millions, except per share amounts)	GAAP(1)										Non-GAAP(2)
	FQ2-24			FQ1-24			FQ2-23				FQ2-24			FQ1-24			FQ2-23
Revenue	$	5,824		$	4,726		$	3,693			$	5,824		$	4,726		$	3,693
Gross margin		1,079			(35	)		(1,206	)			1,163			37			(1,161	)
percent of revenue		18.5	%		(0.7	%)		(32.7	%)			20.0	%		0.8	%		(31.4	%)
Operating expenses		888			1,093			1,097				959			992			916
Operating income (loss)		191			(1,128	)		(2,303	)			204			(955	)		(2,077	)
percent of revenue		3.3	%		(23.9	%)		(62.4	%)			3.5	%		(20.2	%)		(56.2	%)
Net income (loss)		793			(1,234	)		(2,312	)			476			(1,048	)		(2,081	)
Diluted earnings (loss) per share		0.71			(1.12	)		(2.12	)			0.42			(0.95	)		(1.91	)

Investments in capital expenditures, net⁽²⁾ were $1.25 billion for the second quarter of 2024, which resulted in adjusted free cash flows⁽²⁾ of negative $29 million. Micron ended the second quarter of 2024 with cash, marketable investments, and restricted cash of $9.72 billion. On March 20, 2024, Micron’s Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on April 16, 2024, to shareholders of record as of the close of business on April 1, 2024.

Business Outlook

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

FQ3-24	GAAP(1) Outlook	Non-GAAP(2) Outlook
Revenue	$6.60 billion ± $200 million	$6.60 billion ± $200 million
Gross margin	25.5% ± 1.5%	26.5% ± 1.5%
Operating expenses	$1.11 billion ± $15 million	$990 million ± $15 million
Diluted earnings per share	$0.17 ± $0.07	$0.45 ± $0.07

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, March 20, 2024 at 2:30 p.m. Mountain Time to discuss its second quarter financial results and provide forward-looking guidance for its third 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 and 5G 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, market demand, and our financial and operating results, including our guidance for the third 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)
	2nd Qtr.			1st Qtr.			2nd Qtr.			Six months ended
	February 29, 2024			November 30, 2023			March 2, 2023			February 29, 2024			March 2, 2023
Revenue	$	5,824		$	4,726		$	3,693		$	10,550		$	7,778
Cost of goods sold		4,745			4,761			4,899			9,506			8,091
Gross margin		1,079			(35	)		(1,206	)		1,044			(313	)
Research and development		832			845			788			1,677			1,637
Selling, general, and administrative		280			263			231			543			482
Restructure and asset impairments		—			—			86			—			99
Other operating (income) expense, net		(224	)		(15	)		(8	)		(239	)		(19	)
Operating income (loss)		191			(1,128	)		(2,303	)		(937	)		(2,512	)
Interest income		130			132			119			262			207
Interest expense		(144	)		(132	)		(89	)		(276	)		(140	)
Other non-operating income (expense), net		(7	)		(27	)		2			(34	)		(2	)
		170			(1,155	)		(2,271	)		(985	)		(2,447	)
Income tax (provision) benefit		622			(73	)		(54	)		549			(62	)
Equity in net income (loss) of equity method investees		1			(6	)		13			(5	)		2
Net income (loss)	$	793		$	(1,234	)	$	(2,312	)	$	(441	)	$	(2,507	)
Earnings (loss) per share
Basic	$	0.72		$	(1.12	)	$	(2.12	)	$	(0.40	)	$	(2.30	)
Diluted		0.71			(1.12	)		(2.12	)		(0.40	)		(2.30	)
Number of shares used in per share calculations
Basic		1,104			1,100			1,091			1,102			1,091
Diluted		1,114			1,100			1,091			1,102			1,091

MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
As of	February 29, 2024			November 30, 2023			August 31, 2023
Assets
Cash and equivalents	$	8,016		$	8,075		$	8,577
Short-term investments		990			973			1,017
Receivables		4,296			2,943			2,443
Inventories		8,443			8,276			8,387
Other current assets		1,690			791			820
Total current assets		23,435			21,058			21,244
Long-term marketable investments		627			720			844
Property, plant, and equipment		37,587			37,677			37,928
Operating lease right-of-use assets		642			648			666
Intangible assets		414			416			404
Deferred tax assets		664			781			756
Goodwill		1,150			1,150			1,150
Other noncurrent assets		1,199			1,326			1,262
Total assets	$	65,718		$	63,776		$	64,254
Liabilities and equity
Accounts payable and accrued expenses	$	4,680		$	3,946		$	3,958
Current debt		344			908			278
Other current liabilities		1,235			1,108			529
Total current liabilities		6,259			5,962			4,765
Long-term debt		13,378			12,597			13,052
Noncurrent operating lease liabilities		593			601			603
Noncurrent unearned government incentives		662			705			727
Other noncurrent liabilities		956			1,026			987
Total liabilities		21,848			20,891			20,134
Commitments and contingencies
Shareholders’ equity
Common stock		125			124			124
Additional capital		11,564			11,217			11,036
Retained earnings		39,997			39,356			40,824
Treasury stock		(7,552	)		(7,552	)		(7,552	)
Accumulated other comprehensive income (loss)		(264	)		(260	)		(312	)
Total equity		43,870			42,885			44,120
Total liabilities and equity	$	65,718		$	63,776		$	64,254

MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Six months ended	February 29, 2024			March 2, 2023
Cash flows from operating activities
Net income (loss)	$	(441	)	$	(2,507	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense and amortization of intangible assets		3,839			3,863
Stock-based compensation		401			303
Provision to write-down inventories to net realizable value		—			1,430
Change in operating assets and liabilities:
Receivables		(1,759	)		2,910
Inventories		(57	)		(2,896	)
Other current assets		(799	)		4
Accounts payable and accrued expenses		573			(1,144	)
Other current liabilities		706			(638	)
Other		157			(39	)
Net cash provided by operating activities		2,620			1,286
Cash flows from investing activities
Expenditures for property, plant, and equipment		(3,180	)		(4,654	)
Purchases of available-for-sale securities		(465	)		(293	)
Proceeds from maturities and sales of available-for-sale securities		726			773
Proceeds from government incentives		234			64
Other		(24	)		(71	)
Net cash provided by (used for) investing activities		(2,709	)		(4,181	)
Cash flows from financing activities
Repayments of debt		(1,101	)		(53	)
Payments of dividends to shareholders		(256	)		(252	)
Payments on equipment purchase contracts		(82	)		(76	)
Repurchases of common stock - repurchase program		—			(425	)
Proceeds from issuance of debt		999			5,221
Other		(18	)		19
Net cash provided by (used for) financing activities		(458	)		4,434
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash		(8	)		9
Net increase (decrease) in cash, cash equivalents, and restricted cash		(555	)		1,548
Cash, cash equivalents, and restricted cash at beginning of period		8,656			8,339
Cash, cash equivalents, and restricted cash at end of period	$	8,101		$	9,887

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:

	2nd Qtr.			1st Qtr.			2nd Qtr.			Six months ended
	February 29, 2024			November 30, 2023			March 2, 2023			February 29, 2024			March 2, 2023
Provision to write down inventory to NRV	$	—		$	—		$	(1,430	)	$	—		$	(1,430	)
Lower costs from sale of inventory written down in prior periods		382			605			—			987			—
	$	382		$	605		$	(1,430	)	$	987		$	(1,430	)

Income Tax

For the first quarter of 2024, we recorded tax expense based on actual first quarter results, as small changes in our projected pre-tax income cause significant changes in the estimated annual effective tax rate. With our improved fiscal 2024 outlook, we can now estimate a more reliable annual effective tax rate and have reverted to a global annual effective tax rate method. The second fiscal quarter tax benefit arises from applying this estimated annual effective tax rate to our year-to-date results.

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In millions, except per share amounts)
	2nd Qtr.			1st Qtr.			2nd Qtr.
	February 29, 2024			November 30, 2023			March 2, 2023
GAAP gross margin	$	1,079		$	(35	)	$	(1,206	)
Stock-based compensation		80			67			41
Other		4			5			4
Non-GAAP gross margin	$	1,163		$	37		$	(1,161	)
GAAP operating expenses	$	888		$	1,093		$	1,097
Stock-based compensation		(129	)		(115	)		(95	)
Restructure and asset impairments		—			—			(86	)
Patent cross-license agreement gain		200			—			—
Other		—			14			—
Non-GAAP operating expenses	$	959		$	992		$	916
GAAP operating income (loss)	$	191		$	(1,128	)	$	(2,303	)
Stock-based compensation		209			182			136
Restructure and asset impairments		—			—			86
Patent cross-license agreement gain		(200	)		—			—
Other		4			(9	)		4
Non-GAAP operating income (loss)	$	204		$	(955	)	$	(2,077	)
GAAP net income (loss)	$	793		$	(1,234	)	$	(2,312	)
Stock-based compensation		209			182			136
Restructure and asset impairments		—			—			86
Patent cross-license agreement gain		(200	)		—			—
Other		2			(10	)		8
Estimated tax effects of above and other tax adjustments(1)		(328	)		14			1
Non-GAAP net income (loss)	$	476		$	(1,048	)	$	(2,081	)
GAAP weighted-average common shares outstanding - Diluted		1,114			1,100			1,091
Adjustment for stock-based compensation		20			—			—
Non-GAAP weighted-average common shares outstanding - Diluted		1,134			1,100			1,091
GAAP diluted earnings (loss) per share	$	0.71		$	(1.12	)	$	(2.12	)
Effects of the above adjustments		(0.29	)		0.17			0.21
Non-GAAP diluted earnings (loss) per share	$	0.42		$	(0.95	)	$	(1.91	)

⁽¹⁾   As described in the Income Tax note above, the second fiscal quarter tax benefit arises 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 amounts of this tax benefit 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
	2nd Qtr.			1st Qtr.			2nd Qtr.
	February 29, 2024			November 30, 2023			March 2, 2023
GAAP net cash provided by operating activities	$	1,219		$	1,401		$	343
Expenditures for property, plant, and equipment		(1,384	)		(1,796	)		(2,205	)
Payments on equipment purchase contracts		(26	)		(56	)		(29	)
Proceeds from sales of property, plant, and equipment		13			33			17
Proceeds from government incentives		149			85			62
Investments in capital expenditures, net		(1,248	)		(1,734	)		(2,155	)
Adjusted free cash flow	$	(29	)	$	(333	)	$	(1,812	)

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
FQ3-24		GAAP Outlook		Adjustments				Non-GAAP Outlook
Revenue		$6.60 billion ± $200 million		—				$6.60 billion ± $200 million
Gross margin		25.5% ± 1.5%		1.0%		A		26.5% ± 1.5%
Operating expenses		$1.11 billion ± $15 million		$123 million		B		$990 million ± $15 million
Diluted earnings per share(1)		$0.17 ± $0.07		$0.28		A, B, C		$0.45 ± $0.07

Non-GAAP Adjustments (in millions)
A	Stock-based compensation – cost of goods sold						$	78
A	Other – cost of goods sold							4
B	Stock-based compensation – research and development							76
B	Stock-based compensation – sales, general, and administrative							47
C	Tax effects of the above items and other tax adjustments							107
							$	312

⁽¹⁾   GAAP earnings per share based on approximately 1.11 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.

FAQ

What were Micron Technology, Inc.'s revenue figures for fiscal Q2 2024?

Micron Technology, Inc. reported revenue of $5.82 billion for fiscal Q2 2024.

What was the GAAP net income for Micron Technology, Inc. in fiscal Q2 2024?

Micron Technology, Inc. achieved GAAP net income of $793 million in fiscal Q2 2024.

What was the non-GAAP net income for Micron Technology, Inc. in fiscal Q2 2024?

Micron Technology, Inc. recorded non-GAAP net income of $476 million in fiscal Q2 2024.

What was the operating cash flow for Micron Technology, Inc. in fiscal Q2 2024?

Micron Technology, Inc. generated operating cash flow of $1.22 billion in fiscal Q2 2024.

Who is the President and CEO of Micron Technology, Inc.?

Sanjay Mehrotra is the President and CEO of Micron Technology, Inc.