Micron Technology Reports Strong Growth Despite Margin Challenges

Micron Technology's latest earnings reveal a strong fiscal Q2 with record data center DRAM revenue and HBM achievements. However, gross margin pressures persist as NAND pricing challenges remain.

Date: 21-03-2025

AI Rating: 6

Earnings Summary: Micron Technology reported fiscal Q2 revenue of approximately $8.1 billion, down 8% sequentially but up 38% year over year. DRAM revenue reached a record at $6.1 billion, showing a significant year-over-year increase of 47%. However, sequentially, DRAM revenue saw a 4% decline. NAND revenue was $1.9 billion, which reflects an 18% year-over-year growth but down 17% sequentially.

Earnings Per Share (EPS): The company achieved a non-GAAP diluted earnings per share of $1.56, which exceeded guidance but was a decline from the previous quarter's $1.79 per share.

Profit Margins: The consolidated gross margin was reported at 37.9%, down from the prior quarter, primarily due to NAND pricing pressures. Operating margin stood at 24.9%, down approximately 260 basis points sequentially. Despite the decrease, these margins are still significantly improved compared to the year-ago period.

Cash Flow and Investments: Micron generated over $3.9 billion in operating cash flow with capital expenditures at $3.1 billion, resulting in free cash flow of $857 million. The company has an estimated total debt of $14.4 billion, but maintains a solid cash position of $9.6 billion.

Future Projections: For fiscal Q3, Micron expects continued growth in DRAM and NAND bit shipments and anticipates revenue to be around $8.8 billion. The management also plans disciplined capital spending of approximately $14 billion in 2025 to enhance manufacturing capabilities, including significant investments in HBM technologies.

Stocks: MU