Micron Technology(MU) - 2025 Q2 - Quarterly Report

Revenue Performance - Total revenue for Q2 2025 was $8,053 million, a decrease of 8% compared to Q1 2025, but an increase of 38% compared to Q2 2024[121][122][123]. - Total revenue for the first six months of 2025 increased by 59% compared to the same period in 2024, driven by increases in both DRAM and NAND sales[124]. DRAM and NAND Revenue - DRAM revenue decreased by 4% in Q2 2025 due to a high-single-digit percent decrease in bit shipments, partially offset by a mid-single-digit percent increase in average selling prices[125]. - NAND revenue declined by 17% in Q2 2025, primarily due to a high-teens percent decrease in average selling prices, despite modestly higher bit shipments[125]. Segment Revenue Changes - CNBU revenue increased by 4% in Q2 2025, primarily due to higher sales of HBM products, which increased more than 50%[129]. - SBU revenue decreased by 20% in Q2 2025 due to lower storage investments by data center customers and overall NAND pricing declines[129]. - MBU revenue decreased by 30% in Q2 2025, attributed to lower bit shipments as mobile customers reduced inventories[129]. - EBU revenue decreased by 3% in Q2 2025, primarily due to lower automotive sales as customers managed inventories[129]. - CNBU revenue for Q2 2025 was$ 1.919 billion, a 42% increase from Q1 2025, while SBU revenue decreased to $24 million, a 2% decline[130]. Gross Margin and Expenses - Gross margin for Q2 2025 was 37%, down from 38% in Q1 2025, but improved from 19% in Q2 2024, driven by increased average selling prices and manufacturing cost reductions[127]. - Research and development expenses for Q2 2025 were$ 898 million, representing 11% of total revenue[121]. - R&D expenses for Q2 2025 increased by 8% compared to Q2 2024, primarily due to higher employee compensation and subcontractor expenses[133]. - SG&A expenses for Q2 2025 rose by 2% compared to Q2 2024, mainly driven by increased employee compensation[134]. Cash and Investments - Cash and marketable investments totaled $9.59 billion as of February 27, 2025, up from$ 9.15 billion as of August 29, 2024[141]. - The company plans to invest approximately $14 billion in capital expenditures for 2025, focusing on property, plant, and equipment[144]. - The company received$ 1.03 billion in government incentives to offset capital expenditures in the first half of 2025[153]. Cash Flow and Financing Activities - Net cash provided by operating activities for the first six months of 2025 was $7.186 billion, significantly higher than$ 2.620 billion in the same period of 2024[151]. - For the first six months of 2025, net cash used for investing activities was $7.26 billion, primarily for property, plant, and equipment[153]. - In comparison, for the first six months of 2024, net cash used for investing activities was$ 3.18 billion, indicating a year-over-year increase of approximately 128.3%[154]. - For the first six months of 2025, net cash used for financing activities was $2.63 billion, which included$ 2.63 billion in debt repayments and $261 million in dividend payments[155]. - In the first six months of 2024, net cash used for financing activities was$ 1.10 billion, showing an increase of approximately 139.1% year-over-year[155]. Tax and Capacity Planning - The effective tax rate for Q2 2025 was 10.1%, compared to 13.2% in Q1 2025, reflecting changes in profitability[136]. - The company expects to add new DRAM wafer capacity to meet projected memory demand in the second half of the decade[144]. - The company has entered into funding agreements for up to $6.1 billion under the CHIPS Act for planned fabs in Idaho and New York[145]. Debt and Market Risk - The company reported$ 1.68 billion in proceeds from the issuance of the 2029 Term Loan A in the first half of 2025[155]. - The company had approximately $1.00 billion in proceeds from the issuance of the 2035 Notes during the same period[155]. - There have been no significant changes to critical accounting estimates since the Annual Report for the year ended August 29, 2024[156]. - The company reported no material changes to market risk during the six months ended February 27, 2025[157]. - The company continues to monitor sensitivity analysis related to changes in interest rates and currency exchange rates as part of its market risk assessment[157].