Micron Technology, Inc.'s Q3 2024 Earnings Call Highlights & Earning Report

👉 Revenue Growth and Financial Performance:
📍 Revenue for Q3 reached $6.8 billion, up 17% sequentially and 82% year-over-year.
📍 DRAM revenue was approximately $4.7 billion, representing 69% of total revenue, up 13% sequentially.
📍 NAND revenue was approximately $2.1 billion, representing 30% of total revenue, up 32% sequentially.
📍 Gross margin for Q3 was 28%, an increase of over 8 percentage points sequentially.
📍 Operating income was $941 million, with an operating margin of 14%, up 10 percentage points sequentially.
📍 Non-GAAP diluted EPS for Q3 was $0.62, compared to $0.42 in the prior quarter.

👉 Strategic Developments and Innovations:
📍 Achieved over $100 million in HBM3E revenue in Q3, with margins accretive to overall company margins.
📍 1-gamma DRAM pilot production using extreme ultraviolet lithography is progressing well, on track for volume production in calendar 2025.
📍 Received a nonbinding preliminary memorandum of terms with the U.S. government for $6.1 billion in grants under the CHIPS and Science Act.
📍 Fab construction in Idaho is underway, with efforts to complete regulatory processes in New York.
📍 Launched the world's first multiport Gen4 NVMe SSD in support of next-generation centralized compute architectures.

👉 Customer Growth and Market Expansion:
📍 Revenue in the data center segment grew by over 50% sequentially, with robust AI-driven demand for products like HBM, high-capacity DIMMs, and data center SSDs.
📍 Automotive sector experienced a record quarter for revenues, with robust demand for memory and storage.
📍 In mobile, Micron's LP5X DRAM enabled recent 12-gigabyte and 16-gigabyte AI phone releases at all Android Tier 1 customers.
📍 Continued strong demand in data center SSDs, with significant market share gains and revenue reaching record levels.

👉 Financial Guidance and Outlook:
📍 For Q4, Micron expects revenue to be $7.6 billion, plus or minus $200 million.
📍 Gross margin for Q4 is expected to be 34.5%, plus or minus 100 basis points.
📍 Operating expenses for Q4 projected to be approximately $1.06 billion, plus or minus $15 million.
📍 Fiscal 2024 CapEx is projected to be around $8 billion, with a substantial increase expected in fiscal 2025.
📍 Fiscal 2025 non-GAAP tax rate estimated to be in the mid-teens percentage range.

👉 Product and Technology Roadmap:
📍 Over 80% of DRAM bit production is now on leading-edge 1-alpha and 1-beta nodes.
📍 Over 90% of NAND bit production is on two leading-edge NAND nodes, with high-volume production planned for the next-generation NAND node in calendar 2025.
📍 Micron's 1-beta 32-gigabit monolithic die-based 128-gigabyte high-capacity server DIMM products have achieved full validation and are expected to generate several hundred million dollars in revenue in the second half of fiscal 2024.
📍 The company is on track for volume production of 1-gamma DRAM using extreme ultraviolet lithography in calendar 2025.

👉 Operational Efficiency and Cost Management:
📍 Despite the recent Taiwan earthquake, Micron's operational disruptions were quickly mitigated, showcasing the agility and preparedness of the team.
📍 Fiscal 2024 DRAM front-end cost reductions, excluding HBM, are expected to be in the high single-digit percentage range.
📍 Fiscal 2024 NAND front-end cost reductions are projected to be in the low teens percentage range.
📍 Micron is committed to disciplined capital allocation, focusing on expanding free cash flow, investing in innovation, and managing supply growth in line with demand.

👉 Executive Commentary:
🗨️ Sanjay Mehrotra, CEO:
📍 "Micron delivered fiscal Q3 revenue, gross margin and EPS all above the high end of guidance ranges, driven by improved pricing and strengthening product mix."
📍 "We are in the early innings of a multiyear race to enable artificial general intelligence, which will revolutionize all aspects of life."
📍 "Our strong product position in HBM, high-capacity DIMMs, and data center SSDs positions us well for future growth."
📍 "We are focused on continuing to ramp our production and improve yields, with expectations to achieve HBM market share commensurate with our overall DRAM market share sometime in 2025.
📍 "We are well positioned to benefit from the multiyear growth opportunity driven by AI, with a strong product portfolio and strategic investments in leading-edge technology."
📍 "Our operational resilience and rapid response to the Taiwan earthquake demonstrate Micron's agility and preparedness."

🗨️ Mark Murphy, CFO:
📍 "We are pleased with our strong Q3 performance and continue to project significant improvements in profitability and ROI."
📍 "We expect record revenue and significantly better profitability in fiscal 2025, supported by disciplined investment and supply growth aligned with demand."
📍 "Our CapEx for fiscal 2024 is around $8 billion, with a meaningful increase expected in fiscal 2025 to support HBM assembly and test equipment, fab construction, and technology transition investments."
📍 "Our disciplined capital allocation strategy and focus on operational efficiency are driving significant improvements in profitability and ROI."
📍 "We remain committed to managing supply growth in line with demand, ensuring sustainable and profitable growth for the company."

👉 Looking Ahead:
📍 Micron plans to continue investments in AI and data capabilities, with a focus on product innovation and strategic customer relationships.
📍 Expectations for continued price increases throughout 2024 due to robust demand and tight supply conditions.
📍 CapEx in fiscal 2025 is expected to support HBM assembly and test equipment, as well as greenfield fab construction in Idaho and New York.
📍 Aiming to achieve HBM market share in line with overall DRAM market share by 2025, leveraging strong customer relationships and advanced technology.

👉 Key Takeaway:
Micron Technology is positioned for robust growth, driven by strong demand for AI-related products, strategic investments in leading-edge technology, and significant financial performance improvements. The company is focused on expanding its high-value product mix, maintaining supply discipline, and leveraging strategic customer relationships to support its growth objectives in the AI-driven market landscape.

👉 Micron's Q3 Earning Report: