Micron Beats on Q4 Earnings: Will Strong Guidance Lift the Stock?

Core Insights - Micron Technology reported fourth-quarter fiscal 2025 earnings of $3.03 per share, exceeding the Zacks Consensus Estimate by 5.9% and showing a year-over-year increase of 156.8% from $1.18 per share [1][8] - Revenues for the fourth quarter rose 46% year over year to $11.32 billion, also surpassing the Zacks Consensus Estimate by 1.2%, driven by strong demand for high bandwidth memory (HBM) products [1][8] Financial Performance - DRAM revenues reached $8.98 billion, accounting for 79.4% of total revenues, marking a 68.7% increase year over year and a 27% increase sequentially [3] - NAND revenues were $2.3 billion, representing 19.9% of total revenues, down 4.8% year over year but up 5% quarter over quarter [4] - Other revenues increased to $79 million from $59 million year over year and from $75 million in the previous quarter [4] Business Segments - The Cloud Memory Business Unit generated $4.54 billion in revenues, soaring 214% year over year and 34% sequentially, driven by record HBM revenues [5] - The Core Data Business Unit's revenues were $1.57 billion, down 23% year over year but up 3% quarter over quarter [6] - The Mobile and Client Business Unit reported revenues of $3.76 billion, up 25% year over year and 16% sequentially [6] - The Auto and Embedded Business Unit's revenues totaled $1.43 billion, increasing 17% year over year and 27% sequentially [6] Profitability Metrics - Non-GAAP gross profit for the fourth quarter was $5.17 billion, up from $2.83 billion year over year, with a non-GAAP gross margin of 45.7%, improving from 36.5% in the year-ago quarter [7][10] - Non-GAAP operating income was $3.955 billion, significantly higher than $1.745 billion in the year-ago quarter [9] Cash Flow and Balance Sheet - Micron ended the quarter with cash and investments of $19.95 billion, up from $10.81 billion in the prior quarter, while total debt decreased to $14.017 billion from $15 billion [11] - The company generated an operating cash flow of $5.73 billion and spent $4.93 billion on capital expenditures, resulting in an adjusted free cash flow of $803 million [12] Future Outlook - For the first quarter of fiscal 2026, Micron anticipates revenues of $12.5 billion (+/-$300 million), exceeding the Zacks Consensus Estimate of $12.05 billion [13] - The company projects a non-GAAP gross margin of 51.5% and operating expenses of $1.34 billion for the same quarter [13][14]