Micron Technology (MU) Q4 2024 Post Call earnings summary

Executive summary

• Strong demand in data center and AI servers, along with record data center and NAND revenue in fiscal Q4 2024, is driving growth, with traditional server demand also expected to improve modestly in fiscal 2025.

• Fiscal Q4 revenue grew 93% year-over-year to $7.75 billion, with GAAP net income of $887 million and non-GAAP net income of $1.34 billion.

• Fiscal 2024 revenue reached $25.11 billion, up from $15.54 billion in the prior year, with GAAP net income of $778 million and non-GAAP net income of $1.47 billion.

• High-capacity DRAM DIMMs, especially 128GB, are primarily used in AI servers, with continued momentum expected in 2025.

• HBM (High Bandwidth Memory) business is ramping well, with multibillion-dollar opportunities anticipated in fiscal 2025.

Financial highlights

• Q4 gross margin improved to 35.3% (GAAP) and 36.5% (non-GAAP), up from 26.9% and 28.1% sequentially.

• Q4 operating income was $1.52 billion (GAAP) and $1.75 billion (non-GAAP), compared to a loss of $1.47 billion a year ago.

• Inventory rose by $300 million in fiscal Q4, with inventory days expected to improve through 2025, especially in the second half.

• DRAM bit shipments outlook for November is up sequentially, driven by better-than-expected HBM yield improvements and strong data center demand.

• Operating expenses are up 15%, with expectations for operating margin expansion through 2025 due to favorable supply-demand and product mix.

Outlook and guidance

• Q1 FY25 revenue guidance: $8.70 billion ± $200 million.

• Q1 FY25 gross margin expected at 38.5% ± 1.0% (GAAP) and 39.5% ± 1.0% (non-GAAP).

• Fiscal 2025 is expected to see increasing volumes, with the second half weighted more heavily.

• CapEx for fiscal 2025 will be up meaningfully, with $3.5 billion planned for Q1 and full-year CapEx estimated at mid-thirties percent of revenue, mainly supporting HBM and facility construction.

• HBM 12-high is expected to ramp in early 2025, with a large mix in the second half of the calendar year.