Micron Technology (MU) Q1 2025 Post Call earnings summary

Executive summary

• Achieved record Q1 FY25 revenue of $8.71B, up 84% year-over-year, driven by strong AI and data center demand, with data center revenue growing over 40% sequentially and over 400% year-over-year, now exceeding 50% of total revenue.

• Net income reached $1.87B ($1.67/share GAAP), reversing a $1.23B loss in Q1 2024, with EPS of $1.68 (diluted).

• Consumer-oriented segments faced headwinds from delayed PC refresh cycles and elevated inventories, leading to reduced shipment forecasts for calendar 2024.

• HBM and leading-edge DRAM products are ramping rapidly, with the company targeting natural market share in HBM by the second half of calendar 2025.

• Entered CHIPS Act funding agreements for up to $6.1B for new U.S. fabs, supporting long-term capacity expansion.

Financial highlights

• Gross margin improved to 38.4% (GAAP) and 39.5% (non-GAAP), up from -1% a year ago, reflecting higher selling prices and cost reductions.

• DRAM revenue rose 87% year-over-year, NAND revenue up 82%, both on higher ASPs and bit shipments.

• Operating income was $2.17B (GAAP), compared to a $1.13B loss in Q1 2024.

• Cash, marketable investments, and restricted cash totaled $8.75B at quarter end.

• Declared a quarterly dividend of $0.115 per share, payable January 15, 2025.

Outlook and guidance

• Q2 FY25 revenue guidance: $7.90B ± $200M, with gross margin expected at 37.5% ±1.0% (GAAP) and 38.5% ±1.0% (non-GAAP).

• Sequential increases in DRAM and NAND volumes are expected to resume in FQ3 as customer inventories normalize by spring.

• DRAM and NAND bit shipments are projected to align with industry growth rates (mid-teens for DRAM, low double digits for NAND) for calendar 2024 and 2025.

• HBM revenue ramp will continue through fiscal and calendar 2025, with robust demand and capacity expansion underway.

• Management anticipates growth in the second half of FY25 as consumer markets recover.