Micron Technology (MU) Q3 2024 earnings summary

Executive summary

• Q3 FY24 revenue reached $6.81B, up 17% sequentially and 82% year-over-year, driven by robust AI demand, price increases, and improved product mix across all end markets.

• Data center revenue grew over 50% sequentially, with record levels expected in FY24 and significant growth projected for FY25, fueled by AI and HBM demand; HBM3E shipments began in Q3, generating over $100M in revenue.

• Net income for Q3 2024 was $332M (GAAP), a turnaround from a net loss of $1.90B in Q3 2023; non-GAAP net income was $702M.

• All business segments reported improved operating income, with especially strong growth in Compute and Networking and Storage units; automotive and data center SSDs achieved record revenues.

• HBM is sold out for 2024 and 2025, with multi-billion revenue expected in FY25; HBM3E recognized for 30% lower power consumption than competitors.

Financial highlights

• Q3 2024 revenue: $6.81B (+82% YoY, +17% QoQ); DRAM revenue: $4.7B (69% of total), NAND: $2.1B (30% of total), both up sequentially.

• Gross margin improved to 28% (non-GAAP) and 27% (GAAP), up from negative levels a year ago; operating income was $941M (14% margin).

• Adjusted EBITDA was $2.9B (43% margin); non-GAAP EPS was $0.62, GAAP EPS $0.30.

• Operating cash flow was $2.5B (36% of revenue); free cash flow was $425M; cash and investments ended at $9.2B.

• Quarterly dividend of $0.115/share declared for July 2024.

Outlook and guidance

• Q4 FY24 revenue guidance: $7.6B ±$200M; gross margin at 34.5% ±1%; non-GAAP EPS at $1.08 ±$0.08.

• DRAM bit shipments to be flattish, NAND shipments up slightly in Q4; shipment growth to strengthen in the November quarter.

• FY24 CapEx projected at ~$8B; FY25 CapEx to rise to mid-30s% of revenue, mainly for HBM and U.S. fab construction.

• Record revenue and improved profitability expected in FY25, with continued gross margin expansion and positive free cash flow.

• Construction of new DRAM fabs in Idaho and New York underway, with production ramping in 2026 and beyond.