Micron Technology(MU) - 2025 Q3 - Quarterly Results

Executive Summary & Business Highlights Fiscal Q3 2025 Performance Highlights Micron reported record Q3 2025 revenue, fueled by strong DRAM, HBM, and data center growth, projecting record full-year profitability and free cash flow - Micron achieved record revenue in fiscal Q3 2025[3] - DRAM revenue reached an all-time high, with HBM revenue growing nearly 50% sequentially[3] - Data center revenue more than doubled year-over-year and hit a quarterly record[3] - Consumer-oriented end markets experienced strong sequential growth[3] - The company is on track for record revenue, solid profitability, and free cash flow in fiscal 2025, driven by AI-driven memory demand[3] Quarterly Financial Results (GAAP & Non-GAAP) Micron reported significant Q3 2025 financial improvements across revenue, gross margin, and net income, alongside strong operating and adjusted free cash flow Fiscal Q3 2025 Key Financial Results | Metric (in millions, except per share) | FQ3-25 (GAAP) | FQ2-25 (GAAP) | FQ3-24 (GAAP) | FQ3-25 (Non-GAAP) | FQ2-25 (Non-GAAP) | FQ3-24 (Non-GAAP) | | :------------------------------------ | :------------ | :------------ | :------------ | :---------------- | :---------------- | :---------------- | | Revenue | $9,301 | $8,053 | $6,811 | $9,301 | $8,053 | $6,811 | | Gross margin | $3,508 | $2,963 | $1,832 | $3,623 | $3,053 | $1,917 | | Gross margin percent of revenue | 37.7 % | 36.8 % | 26.9 % | 39.0 % | 37.9 % | 28.1 % | | Operating expenses | $1,339 | $1,190 | $1,113 | $1,133 | $1,046 | $976 | | Operating income | $2,169 | $1,773 | $719 | $2,490 | $2,007 | $941 | | Operating income percent of revenue | 23.3 % | 22.0 % | 10.6 % | 26.8 % | 24.9 % | 13.8 % | | Net income | $1,885 | $1,583 | $332 | $2,181 | $1,783 | $702 | | Diluted earnings per share | $1.68 | $1.41 | $0.30 | $1.91 | $1.56 | $0.62 | Fiscal Q3 2025 Cash Flow and Balance Sheet Highlights | Metric (in millions) | FQ3-25 | FQ2-25 | FQ3-24 | | :----------------------------- | :---------- | :---------- | :---------- | | Operating cash flow | $4,610 | $3,940 | $2,480 | | Capital expenditures, net | $2,660 | N/A | N/A | | Adjusted free cash flow | $1,950 | N/A | N/A | | Cash, marketable investments, and restricted cash (end of quarter) | $12,220 | N/A | N/A | - Micron's Board of Directors declared a quarterly dividend of $0.115 per share, payable on July 22, 2025[4] Business Outlook (FQ4 2025 Guidance) Micron projects continued sequential revenue growth and improved profitability for fiscal Q4 2025, with strong increases across both GAAP and Non-GAAP metrics Fiscal Q4 2025 Guidance | Metric (in millions, except per share) | GAAP Outlook | Non-GAAP Outlook | | :------------------------------------ | :-------------------- | :-------------------- | | Revenue | $10.7 billion ± $300 million | $10.7 billion ± $300 million | | Gross margin | 41.0% ± 1.0% | 42.0% ± 1.0% | | Operating expenses | $1.35 billion ± $20 million | $1.20 billion ± $20 million | | Diluted earnings per share | $2.29 ± $0.15 | $2.50 ± $0.15 | - Fiscal Q4 revenue is projected to grow another 15% sequentially[1] Company Information & Disclosures About Micron Technology, Inc. Micron Technology is a leading provider of innovative memory and storage solutions, offering high-performance DRAM, NAND, and NOR products essential for AI and data economy advancements - Micron is an industry leader in innovative memory and storage solutions[8] - The company delivers high-performance DRAM, NAND, and NOR memory and storage products through its Micron® and Crucial® brands[8] - Micron's innovations fuel the data economy, enabling advances in AI and compute-intensive applications[8] Forward-Looking Statements This section notes the press release contains forward-looking statements subject to risks and uncertainties, with no obligation for the company to update them - The press release contains forward-looking statements about technologies, product demand, investments, industry, and financial/operating results[10] - These statements are subject to risks and uncertainties that could cause actual results to differ materially[10] - Micron is under no duty to update any forward-looking statements[10] GAAP and Non-GAAP Definitions This section defines GAAP as U.S. accounting principles and Non-GAAP as adjusted measures used by management to analyze operating results and enhance investor transparency - GAAP represents U.S. Generally Accepted Accounting Principles[11] - Non-GAAP excludes the impact of certain activities that management uses to analyze operating results and understand trends[11] - Non-GAAP information is provided to investors for enhanced comparison and transparency of operating results[11] Consolidated Financial Statements Consolidated Statements of Operations The Consolidated Statements of Operations reflect a strong financial turnaround in Q3 2025, with significant increases in revenue, gross margin, and net income, moving from a prior-year net loss to substantial net income Consolidated Statements of Operations (Selected Data) | Metric (in millions, except per share) | 3rd Qtr. May 29, 2025 | 2nd Qtr. Feb 27, 2025 | 3rd Qtr. May 30, 2024 | Nine Months Ended May 29, 2025 | Nine Months Ended May 30, 2024 | | :------------------------------------ | :-------------------- | :-------------------- | :-------------------- | :----------------------------- | :----------------------------- | | Revenue | $9,301 | $8,053 | $6,811 | $26,063 | $17,361 | | Gross margin | $3,508 | $2,963 | $1,832 | $9,819 | $2,876 | | Operating income (loss) | $2,169 | $1,773 | $719 | $6,116 | $(218) | | Net income (loss) | $1,885 | $1,583 | $332 | $5,338 | $(109) | | Diluted earnings (loss) per share | $1.68 | $1.41 | $0.30 | $4.75 | $(0.10) | Consolidated Balance Sheets The Consolidated Balance Sheets show a healthy financial position with growth in total assets and equity, significant increases in cash, and a slight decrease in inventories Consolidated Balance Sheets (Selected Data) | Metric (in millions) | May 29, 2025 | February 27, 2025 | August 29, 2024 | | :-------------------------------- | :----------- | :---------------- | :-------------- | | Cash and cash equivalents | $10,163 | $7,552 | $7,041 | | Total current assets | $27,919 | $24,689 | $24,372 | | Inventories | $8,727 | $9,007 | $8,875 | | Property, plant, and equipment | $44,773 | $42,528 | $39,749 | | Total assets | $78,397 | $73,053 | $69,416 | | Total current liabilities | $10,135 | $7,877 | $9,248 | | Total liabilities | $27,649 | $24,420 | $24,285 | | Total equity | $50,748 | $48,633 | $45,131 | - Cash and cash equivalents increased by $2,611 million from the prior quarter and $3,122 million from August 2024[15] - Total assets grew by $5,344 million sequentially and $8,981 million year-over-year[15] Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows show robust operating cash generation, significant capital expenditure outflows, and a net financing inflow primarily from debt issuance for the nine months ended May 29, 2025 Consolidated Statements of Cash Flows (Selected Data) | Metric (in millions) | Nine Months Ended May 29, 2025 | Nine Months Ended May 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $5,338 | $(109) | | Net cash provided by operating activities | $11,795 | $5,102 | | Net cash used for investing activities | $(8,889) | $(4,711) |\ | Net cash provided by (used for) financing activities | $214 | $(1,368) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $3,117 | $(992) | | Cash, cash equivalents, and restricted cash at end of period | $10,169 | $7,664 | - Net cash provided by operating activities more than doubled year-over-year for the nine-month period[17] - Expenditures for property, plant, and equipment increased significantly to $10,199 million for the nine months ended May 29, 2025[17] - Proceeds from issuance of debt contributed $4,430 million to financing activities[17] Reconciliation of GAAP to Non-GAAP Measures GAAP to Non-GAAP Financial Results Reconciliation This section reconciles GAAP to Non-GAAP financial measures, detailing adjustments for stock-based compensation, patent license charges, and tax effects, used by management to assess underlying business performance GAAP to Non-GAAP Reconciliation (Selected Items) | Metric (in millions, except per share) | GAAP FQ3-25 | Non-GAAP FQ3-25 | Adjustments (FQ3-25) | | :------------------------------------ | :---------- | :-------------- | :------------------- | | Gross margin | $3,508 | $3,623 | $115 (Stock-based comp) | | Operating expenses | $1,339 | $1,133 | $(148) (Stock-based comp), $(57) (Patent license) | | Operating income | $2,169 | $2,490 | $263 (Stock-based comp), $57 (Patent license) | | Net income | $1,885 | $2,181 | $263 (Stock-based comp), $57 (Patent license), $46 (Debt prepayments), $(71) (Tax effects) | | Diluted earnings per share | $1.68 | $1.91 | $0.23 (Effects of adjustments) | | Adjusted free cash flow | N/A | $1,949 | $4,609 (GAAP operating cash flow) - $2,660 (Investments in capital expenditures, net) | - Non-GAAP adjustments include stock-based compensation, gains/losses from settlements, gains/losses from debt prepayments, restructure and asset impairments, and estimated tax effects[23] - Management uses non-GAAP information to analyze operating results and understand trends, believing it provides useful supplemental information for investors[21] GAAP to Non-GAAP Outlook Reconciliation This section reconciles the FQ4 2025 GAAP and Non-GAAP outlook, detailing adjustments primarily for stock-based compensation across various expense categories and their associated tax effects FQ4 2025 GAAP to Non-GAAP Outlook Reconciliation | Metric (in millions, except per share) | GAAP Outlook | Adjustments (Non-GAAP) | Non-GAAP Outlook | | :------------------------------------ | :-------------------- | :--------------------- | :-------------------- | | Revenue | $10.7 billion ± $300 million | — | $10.7 billion ± $300 million | | Gross margin | 41.0% ± 1.0% | 1.0% (A) | 42.0% ± 1.0% | | Operating expenses | $1.35 billion ± $20 million | $147 million (B) | $1.20 billion ± $20 million | | Diluted earnings per share | $2.29 ± $0.15 | $0.21 (A, B, C) | $2.50 ± $0.15 | | Non-GAAP Adjustments (in millions): | | | | | A Stock-based compensation – cost of goods sold | | $119 | | | B Stock-based compensation – research and development | | $93 | | | B Stock-based compensation – sales, general, and administrative | | $54 | | | C Tax effects of the above items and other tax adjustments | | $(27) | | | Total Adjustments | | $239 | | - Non-GAAP earnings per share for FQ4 2025 are based on approximately 1.15 billion diluted shares, compared to 1.13 billion for GAAP[25] - The guidance does not incorporate the impact of potential business combinations, divestitures, additional restructuring, balance sheet valuation adjustments, strategic investments, financing transactions, or other significant future events[25]