Micron Technology (MU) Q3 2024 earnings summary

Executive summary

• Fiscal Q3 2024 revenue, gross margin, and EPS exceeded the high end of guidance, driven by robust price increases, improved product mix, and strong AI-related demand across all end markets.

• Data center revenue grew over 50% sequentially, with record levels expected in fiscal 2024 and significant growth projected for fiscal 2025, fueled by AI demand and high-margin products like HBM and SSDs.

• HBM3E shipments began in Q3, generating over $100 million in revenue; HBM is sold out for 2024 and 2025, with multi-billion revenue expected in 2025.

• Automotive and storage segments achieved record quarterly revenues, with data center SSD revenue nearly doubling sequentially.

• AI-driven demand is causing tightness on leading-edge nodes, supporting continued price increases and setting up for record revenue and improved profitability in fiscal 2025.

Financial highlights

• Q3 2024 revenue was $6.8 billion, up 17% sequentially and 82% year-over-year.

• DRAM revenue: $4.7 billion (69% of total), up 13% sequentially; NAND revenue: $2.1 billion (30% of total), up 32% sequentially.

• Gross margin reached 28%, up over 8 percentage points sequentially; operating income was $941 million (14% margin).

• Adjusted EBITDA was $2.9 billion (43% margin); non-GAAP EPS was $0.62, up from $0.42 in the prior quarter and a loss of $1.43 a year ago.

• Operating cash flow was $2.5 billion (36% of revenue); free cash flow was $425 million.

Outlook and guidance

• Fiscal Q4 2024 revenue expected at $7.6 billion ±$200 million; gross margin at 34.5% ±100 bps; 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.

• Full-year fiscal 2024 CapEx projected at $8 billion; fiscal 2025 CapEx to rise to mid-30s percentage of revenue, mainly for HBM and U.S. fab construction.

• Record revenue and improved profitability expected in fiscal 2025, with continued gross margin expansion and positive free cash flow.