Micron Technology (MU) Q3 2024 Post Call earnings summary

Executive summary

• Q3 2024 revenue reached $6.81 billion, up 82% year-over-year and 17% sequentially, driven by strong DRAM, NAND, and AI/data center demand, with record data center revenue mix and robust HBM and high-capacity DIMM margins.

• Net income for Q3 2024 was $332 million, reversing a $1.90 billion loss in Q3 2023, with gross margin improving to 27% from negative 18% year-over-year.

• HBM share is targeted to match overall DRAM market share by 2025, with volumes sold out for 2025 and margins accretive to company averages.

• Data center and AI server demand are key growth drivers, with normalized inventory levels and urgency in supply.

• Operating cash flow reached $2.48 billion in Q3, with strong product mix and margin gains from HBM and data center SSDs.

Financial highlights

• Q3 2024 revenue: $6.81 billion; nine months ended May 30, 2024: $17.36 billion, up 51% year-over-year.

• Q3 2024 net income: $332 million; nine-month net loss: $109 million, a marked improvement from a $4.40 billion loss in the prior year.

• Gross margin improved to 27% in Q3 2024 from negative 18% in Q3 2023.

• Storage Business Unit delivered operating profit in Q3, with NAND gross margins improving substantially from the prior quarter.

• Mobile business was down 1% in FQ3, reflecting planned volume and mix changes.

Outlook and guidance

• Q4 FY24 revenue guidance: $7.60 billion ± $200 million, with GAAP gross margin expected at 33.5% ± 1.0%.

• DRAM all-in costs expected to decline mid- to high-single digits long term, but HBM mix will moderate cost downs in 2025.

• OpEx expected to rise mid-single digits from Q4 to Q1, exceeding $1.1 billion, with further modest increases through 2025, mainly due to R&D.

• Bit share for both DRAM and NAND expected to be maintained in 2025, with inventory normalization supporting shipments.

• Pricing is expected to continue increasing throughout calendar 2024, with tight supply conditions anticipated into 2025.