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Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2024
Source: Nasdaq GlobeNewswire / 26 Jun 2024 15:04:57 America/Chicago
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,
2024February 29,
2024June 1,
2023May 30,
2024June 1,
2023Revenue $ 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,
2024February 29,
2024August 31,
2023Assets 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,
2024June 1,
2023Cash 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,
2024February 29,
2024June 1,
2023May 30,
2024June 1,
2023Provision 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,
2024February 29,
2024June 1,
2023GAAP 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,
2024February 29,
2024June 1,
2023GAAP 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 OUTLOOKFQ4-24 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.
Contacts: Satya Kumar Investor Relations (408) 450-6199 Erica Rodriguez Pompen Media Relations (408) 834-1873
