Micron Technology, Inc. Reports Results for the First Quarter of Fiscal 2024
- Micron reported a revenue increase from the prior quarter and the same period last year.
- The company's strong execution and pricing drove better-than-anticipated financial results for the first quarter of fiscal 2024.
- Micron's industry-leading High Bandwidth Memory for data center AI applications illustrates the strength of its technology and product roadmaps.
- The company reported a GAAP net loss of $1.23 billion and a non-GAAP net loss of $1.05 billion for the first quarter of fiscal 2024.
- Operating cash flow was $1.40 billion, but adjusted free cash flows were negative $333 million for the same period.
- Micron provided a guidance for the second quarter of 2024, projecting a diluted loss per share.
The recent financial results from Micron Technology indicate a mixed performance. The reported revenue of $4.73 billion shows a positive trend when compared to the previous quarter's $4.01 billion and the same period last year. However, the company's GAAP net loss of $1.23 billion is a significant downturn, which could be indicative of operational challenges or market conditions affecting profitability.
The substantial operating cash flow of $1.40 billion suggests robust operational efficiency, despite the reported net loss. This could imply that Micron is effectively managing its working capital and cash conversion cycles. However, investors should be cautious about the negative adjusted free cash flows of $333 million, which reflect the company's capital expenditure and could impact its financial flexibility in the short term.
Micron's outlook for the next quarter, with projected revenue of $5.30 billion and an improved gross margin, signals potential recovery. Nonetheless, the anticipated diluted earnings per share of up to ($0.45) remain a concern for profitability. The company's strategic positioning in the AI solutions market and anticipated improvement in business fundamentals throughout 2024 could be long-term growth drivers.
Micron's emphasis on High Bandwidth Memory for data center AI applications highlights its strategic focus on high-growth markets. The projected record industry Total Addressable Market (TAM) for 2025 indicates that Micron is aligning its product roadmap with expected market trends. This proactive approach may enhance its competitive edge and market share in the burgeoning AI sector.
However, the semiconductor industry is cyclical and Micron's financial performance may be subject to fluctuations in demand and pricing. The reported gross margin decline to (0.7%) on a GAAP basis from the previous year's 21.9% underscores the volatility of the industry and the impact of external market pressures.
Investors should consider the broader context of the semiconductor industry, including supply chain dynamics, technological advancements and competition, when evaluating Micron's potential for rebound and growth. The company's ability to navigate these factors will be crucial for its long-term success.
From an investment perspective, Micron's current financials and forward-looking statements provide a complex picture. While the increased revenue and the optimistic business outlook for the second quarter of 2024 are positive signs, the net losses and negative free cash flows raise questions about the company's near-term profitability and financial health.
The declaration of a quarterly dividend of $0.115 per share suggests confidence in the company's liquidity and commitment to shareholder returns. However, investors should balance this with the broader financial context, including the net loss figures and the implications for earnings stability.
It is also important to monitor the semiconductor market's recovery signs, Micron's market position and its operational efficiency improvements. These factors, combined with the company's strategic initiatives in AI, will likely influence investor sentiment and the stock's performance going forward.
Industry-leading technology and products address the growing demand for AI solutions
BOISE, Idaho, Dec. 20, 2023 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its first quarter of fiscal 2024, which ended November 30, 2023.
Fiscal Q1 2024 highlights
- Revenue of
$4.73 billion versus$4.01 billion for the prior quarter and$4.09 billion for the same period last year - GAAP net loss of
$1.23 billion , or$1.12 per diluted share - Non-GAAP net loss of
$1.05 billion , or$0.95 per diluted share - Operating cash flow of
$1.40 billion versus$249 million for the prior quarter and$943 million for the same period last year
“Micron’s strong execution and pricing drove better-than-anticipated first quarter financial results,” said Micron Technology President and CEO Sanjay Mehrotra. “We expect our business fundamentals to improve throughout 2024, with record industry TAM projected for calendar 2025. Our industry-leading High Bandwidth Memory for data center AI applications illustrates the strength of our technology and product roadmaps, and we are well positioned to capitalize on the immense opportunities artificial intelligence is fueling across end markets.”
| Quarterly Financial Results | |||||||||||||||||||
| (in millions, except per share amounts) | GAAP(1) | Non-GAAP(2) | |||||||||||||||||
| FQ1-24 | FQ4-23 | FQ1-23 | FQ1-24 | FQ4-23 | FQ1-23 | ||||||||||||||
| Revenue | $ | 4,726 | $ | 4,010 | $ | 4,085 | $ | 4,726 | $ | 4,010 | $ | 4,085 | |||||||
| Gross margin | (35 | ) | (435 | ) | 893 | 37 | (366 | ) | 934 | ||||||||||
| percent of revenue | (0.7 | %) | (10.8 | %) | 21.9 | % | 0.8 | % | (9.1 | %) | 22.9 | % | |||||||
| Operating expenses | 1,093 | 1,037 | 1,102 | 992 | 842 | 999 | |||||||||||||
| Operating income (loss) | (1,128 | ) | (1,472 | ) | (209 | ) | (955 | ) | (1,208 | ) | (65 | ) | |||||||
| percent of revenue | (23.9 | %) | (36.7 | %) | (5.1 | %) | (20.2 | %) | (30.1 | %) | (1.6 | %) | |||||||
| Net income (loss) | (1,234 | ) | (1,430 | ) | (195 | ) | (1,048 | ) | (1,177 | ) | (39 | ) | |||||||
| Diluted earnings (loss) per share | (1.12 | ) | (1.31 | ) | (0.18 | ) | (0.95 | ) | (1.07 | ) | (0.04 | ) | |||||||
Investments in capital expenditures, net(2) were
Business Outlook
The following table presents Micron’s guidance for the second quarter of 2024:
| FQ2-24 | GAAP(1) Outlook | Non-GAAP(2) Outlook |
| Revenue | ||
| Gross margin | ||
| Operating expenses | ||
| Diluted earnings (loss) per share | ( | ( |
Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted at investors.micron.com.
Investor Webcast
Micron will host a conference call on Wednesday, December 20, 2023 at 2:30 p.m. Mountain Time to discuss its first quarter financial results and provide forward-looking guidance for its second quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will be available for one year after the call. For Investor Relations and other company updates, follow us on X @MicronTech.
About Micron Technology, Inc.
We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.
© 2023 Micron Technology, Inc. All rights reserved. Micron, the Micron logo, and all other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners.
Forward-Looking Statements
This press release contains forward-looking statements regarding our industry, our strategic position, technology trends and developments, our addressable market, and our financial and operating results, including our guidance for the second quarter of 2024. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents we file with the Securities and Exchange Commission, including our most recent Form 10-K and our upcoming Form 10-Q. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at investors.micron.com/risk-factor. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements to conform these statements to actual results.
| (1) | GAAP represents U.S. Generally Accepted Accounting Principles. |
| (2) | Non-GAAP represents GAAP excluding the impact of certain activities, which management excludes in analyzing our operating results and understanding trends in our earnings, adjusted free cash flow, and business outlook. Further information regarding Micron’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release. |
| MICRON TECHNOLOGY, INC. | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (In millions, except per share amounts) | |||||||||
| (Unaudited) | |||||||||
| 1st Qtr. | 4th Qtr. | 1st Qtr. | |||||||
| November 30, 2023 | August 31, 2023 | December 1, 2022 | |||||||
| Revenue | $ | 4,726 | $ | 4,010 | $ | 4,085 | |||
| Cost of goods sold | 4,761 | 4,445 | 3,192 | ||||||
| Gross margin | (35 | ) | (435 | ) | 893 | ||||
| Research and development | 845 | 719 | 849 | ||||||
| Selling, general, and administrative | 263 | 219 | 251 | ||||||
| Restructure and asset impairments | — | 4 | 13 | ||||||
| Other operating (income) expense, net | (15 | ) | 95 | (11 | ) | ||||
| Operating income (loss) | (1,128 | ) | (1,472 | ) | (209 | ) | |||
| Interest income | 132 | 134 | 88 | ||||||
| Interest expense | (132 | ) | (129 | ) | (51 | ) | |||
| Other non-operating income (expense), net | (27 | ) | 9 | (4 | ) | ||||
| (1,155 | ) | (1,458 | ) | (176 | ) | ||||
| Income tax (provision) benefit | (73 | ) | 24 | (8 | ) | ||||
| Equity in net income (loss) of equity method investees | (6 | ) | 4 | (11 | ) | ||||
| Net income (loss) | $ | (1,234 | ) | $ | (1,430 | ) | $ | (195 | ) |
| Earnings (loss) per share | |||||||||
| Basic | $ | (1.12 | ) | $ | (1.31 | ) | $ | (0.18 | ) |
| Diluted | (1.12 | ) | (1.31 | ) | (0.18 | ) | |||
| Number of shares used in per share calculations | |||||||||
| Basic | 1,100 | 1,095 | 1,090 | ||||||
| Diluted | 1,100 | 1,095 | 1,090 | ||||||
| MICRON TECHNOLOGY, INC. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (In millions) | ||||||
| (Unaudited) | ||||||
| As of | November 30, 2023 | August 31, 2023 | ||||
| Assets | ||||||
| Cash and equivalents | $ | 8,075 | $ | 8,577 | ||
| Short-term investments | 973 | 1,017 | ||||
| Receivables | 2,943 | 2,443 | ||||
| Inventories | 8,276 | 8,387 | ||||
| Other current assets | 791 | 820 | ||||
| Total current assets | 21,058 | 21,244 | ||||
| Long-term marketable investments | 720 | 844 | ||||
| Property, plant, and equipment | 37,677 | 37,928 | ||||
| Operating lease right-of-use assets | 648 | 666 | ||||
| Intangible assets | 416 | 404 | ||||
| Deferred tax assets | 781 | 756 | ||||
| Goodwill | 1,150 | 1,150 | ||||
| Other noncurrent assets | 1,326 | 1,262 | ||||
| Total assets | $ | 63,776 | $ | 64,254 | ||
| Liabilities and equity | ||||||
| Accounts payable and accrued expenses | $ | 3,946 | $ | 3,958 | ||
| Current debt | 908 | 278 | ||||
| Other current liabilities | 1,108 | 529 | ||||
| Total current liabilities | 5,962 | 4,765 | ||||
| Long-term debt | 12,597 | 13,052 | ||||
| Noncurrent operating lease liabilities | 601 | 603 | ||||
| Noncurrent unearned government incentives | 705 | 727 | ||||
| Other noncurrent liabilities | 1,026 | 987 | ||||
| Total liabilities | 20,891 | 20,134 | ||||
| Commitments and contingencies | ||||||
| Shareholders’ equity | ||||||
| Common stock | 124 | 124 | ||||
| Additional capital | 11,217 | 11,036 | ||||
| Retained earnings | 39,356 | 40,824 | ||||
| Treasury stock | (7,552 | ) | (7,552 | ) | ||
| Accumulated other comprehensive income (loss) | (260 | ) | (312 | ) | ||
| Total equity | 42,885 | 44,120 | ||||
| Total liabilities and equity | $ | 63,776 | $ | 64,254 | ||
| MICRON TECHNOLOGY, INC. | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (In millions) | ||||||
| (Unaudited) | ||||||
| Three months ended | November 30, 2023 | December 1, 2022 | ||||
| Cash flows from operating activities | ||||||
| Net income (loss) | $ | (1,234 | ) | $ | (195 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
| Depreciation expense and amortization of intangible assets | 1,915 | 1,921 | ||||
| Stock-based compensation | 188 | 146 | ||||
| Change in operating assets and liabilities: | ||||||
| Receivables | (501 | ) | 1,842 | |||
| Inventories | 111 | (1,697 | ) | |||
| Accounts payable and accrued expenses | 271 | (630 | ) | |||
| Other current liabilities | 579 | (430 | ) | |||
| Other | 72 | (14 | ) | |||
| Net cash provided by operating activities | 1,401 | 943 | ||||
| Cash flows from investing activities | ||||||
| Expenditures for property, plant, and equipment | (1,796 | ) | (2,449 | ) | ||
| Purchases of available-for-sale securities | (199 | ) | (90 | ) | ||
| Proceeds from maturities and sales of available-for-sale securities | 374 | 362 | ||||
| Proceeds from government incentives | 85 | 2 | ||||
| Other | (22 | ) | (91 | ) | ||
| Net cash provided by (used for) investing activities | (1,558 | ) | (2,266 | ) | ||
| Cash flows from financing activities | ||||||
| Payments of dividends to shareholders | (129 | ) | (126 | ) | ||
| Payments on equipment purchase contracts | (56 | ) | (47 | ) | ||
| Repayments of debt | (53 | ) | (20 | ) | ||
| Repurchases of common stock - repurchase program | — | (425 | ) | |||
| Proceeds from issuance of debt | — | 3,349 | ||||
| Other | (114 | ) | (99 | ) | ||
| Net cash provided by (used for) financing activities | (352 | ) | 2,632 | |||
| Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash | (1 | ) | (6 | ) | ||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (510 | ) | 1,303 | |||
| Cash, cash equivalents, and restricted cash at beginning of period | 8,656 | 8,339 | ||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 8,146 | $ | 9,642 | ||
MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)
Inventories
In 2023, we recorded charges of
| 1st Qtr. | 4th Qtr. | 1st Qtr. | ||||
| November 30, 2023 | August 31, 2023 | December 1, 2022 | ||||
| Provision to write down inventory to NRV | $ | — | $ | — | $ | — |
| Lower costs from sale of inventory written down in prior periods | 605 | 563 | — | |||
| $ | 605 | $ | 563 | $ | — | |
| MICRON TECHNOLOGY, INC. | |||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES | |||||||||
| (In millions, except per share amounts) | |||||||||
| 1st Qtr. | 4th Qtr. | 1st Qtr. | |||||||
| November 30, 2023 | August 31, 2023 | December 1, 2022 | |||||||
| GAAP gross margin | $ | (35 | ) | $ | (435 | ) | $ | 893 | |
| Stock-based compensation | 67 | 64 | 36 | ||||||
| Other | 5 | 5 | 5 | ||||||
| Non-GAAP gross margin | $ | 37 | $ | (366 | ) | $ | 934 | ||
| GAAP operating expenses | $ | 1,093 | $ | 1,037 | $ | 1,102 | |||
| Stock-based compensation | (115 | ) | (87 | ) | (90 | ) | |||
| Restructure and asset impairments | — | (4 | ) | (13 | ) | ||||
| Goodwill impairment | — | (101 | ) | — | |||||
| Other | 14 | (3 | ) | — | |||||
| Non-GAAP operating expenses | $ | 992 | $ | 842 | $ | 999 | |||
| GAAP operating income (loss) | $ | (1,128 | ) | $ | (1,472 | ) | $ | (209 | ) |
| Stock-based compensation | 182 | 151 | 126 | ||||||
| Restructure and asset impairments | — | 4 | 13 | ||||||
| Goodwill impairment | — | 101 | — | ||||||
| Other | (9 | ) | 8 | 5 | |||||
| Non-GAAP operating income (loss) | $ | (955 | ) | $ | (1,208 | ) | $ | (65 | ) |
| GAAP net income (loss) | $ | (1,234 | ) | $ | (1,430 | ) | $ | (195 | ) |
| Stock-based compensation | 182 | 151 | 126 | ||||||
| Restructure and asset impairments | — | 4 | 13 | ||||||
| Goodwill impairment | — | 101 | — | ||||||
| Other | (10 | ) | 7 | 10 | |||||
| Estimated tax effects of above and other tax adjustments | 14 | (10 | ) | 7 | |||||
| Non-GAAP net income (loss) | $ | (1,048 | ) | $ | (1,177 | ) | $ | (39 | ) |
| GAAP diluted earnings (loss) per share | $ | (1.12 | ) | $ | (1.31 | ) | $ | (0.18 | ) |
| Effects of the above adjustments | 0.17 | 0.24 | 0.14 | ||||||
| Non-GAAP diluted earnings (loss) per share | $ | (0.95 | ) | $ | (1.07 | ) | $ | (0.04 | ) |
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued | |||||||||
| 1st Qtr. | 4th Qtr. | 1st Qtr. | |||||||
| November 30, 2023 | August 31, 2023 | December 1, 2022 | |||||||
| GAAP net cash provided by operating activities | $ | 1,401 | $ | 249 | $ | 943 | |||
| Expenditures for property, plant, and equipment | (1,796 | ) | (1,461 | ) | (2,449 | ) | |||
| Payments on equipment purchase contracts | (56 | ) | (26 | ) | (47 | ) | |||
| Proceeds from sales of property, plant, and equipment | 33 | 18 | 23 | ||||||
| Proceeds from government incentives | 85 | 462 | 2 | ||||||
| Investments in capital expenditures, net | (1,734 | ) | (1,007 | ) | (2,471 | ) | |||
| Adjusted free cash flow | $ | (333 | ) | $ | (758 | ) | $ | (1,528 | ) |
The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income (loss), net income (loss), diluted earnings (loss) per share, and adjusted free cash flow. The non-GAAP adjustments above may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. We believe this non-GAAP information is helpful in understanding trends and in analyzing our operating results and earnings. We are providing this information to investors to assist in performing analysis of our operating results. When evaluating performance and making decisions on how to allocate our resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. We believe these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of our business, enabling enhanced comparison of our operating results between periods and with peer companies. The presentation of these adjusted amounts varies from amounts presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. Our management excludes the following items in analyzing our operating results and understanding trends in our earnings:
- Stock-based compensation;
- Gains and losses from settlements;
- Restructure and asset impairments;
- Goodwill impairment; and
- The estimated tax effects of above, non-cash changes in net deferred income taxes, assessments of tax exposures, certain tax matters related to prior fiscal periods, and significant changes in tax law.
MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
| FQ2-24 | GAAP Outlook | Adjustments | Non-GAAP Outlook | ||||
| Revenue | — | ||||||
| Gross margin | 1.0 | % | A | ||||
| Operating expenses | B | ||||||
| Diluted earnings (loss) per share(1) | ( | A, B, C | ( | ||||
| Non-GAAP Adjustments (in millions) | ||||
| A | Stock-based compensation – cost of goods sold | $ | 75 | |
| A | Other – cost of goods sold | 4 | ||
| B | Stock-based compensation – research and development | 77 | ||
| B | Stock-based compensation – sales, general, and administrative | 45 | ||
| C | Tax effects of the above items and other tax adjustments | (13 | ) | |
| $ | 188 | |||
(1) GAAP and non-GAAP earnings (loss) per share based on approximately 1.10 billion diluted shares.
The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, additional restructuring activities, balance sheet valuation adjustments, strategic investments, financing transactions, and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control.
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