EPS of $0.79 increased by 161.1% from previous year
Gross margin of 35.3%
Net income of 887.00M
"Sanjay Mehrotra: 'We are entering fiscal 2025 with the strongest competitive positioning in Micron's history.'" - Sanjay Mehrotra
Micron Technology Inc (MU) Q4 2024 Financial Results: Record Revenues and Profitability Amidst Robust Demand
Executive Summary
Micron Technology Inc delivered a remarkable fourth quarter of fiscal 2024, achieving approximately $7.8 billion in revenue, a year-over-year increase of 93% and a sequential rise of 14%. Profitability metrics also surpassed expectations, with a gross margin of 36.5%, significantly up from prior quarters due to improved pricing and product mix. Micron’s strong momentum is underpinned by record revenues in both NAND and data center segments, reflecting a strategic alignment with growing market demands in AI and data services. Management expressed confidence in Micron's competitive positioning, particularly with its cutting-edge DRAM and NAND technologies, forecasting strong growth in fiscal 2025 driven by robust demand in cloud and AI-driven applications.
Key Performance Indicators
Revenue
7.75B
QoQ: 13.79% | YoY:93.27%
Gross Profit
2.74B
35.32% margin
QoQ: 49.40% | YoY:729.20%
Operating Income
1.52B
QoQ: 120.26% | YoY:203.40%
Net Income
887.00M
QoQ: 167.17% | YoY:162.03%
EPS
0.80
QoQ: 166.67% | YoY:161.07%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: Q4 2024 revenue reached $7.8 billion, an increase of 93% YoY. For fiscal 2024, total revenue was $25.1 billion, up 62% YoY.
**Gross Profit**: Q4 gross profit was $2.74 billion (36.5% margin), improving over 30 percentage points YoY.
**Net Income**: Micron reported net income of $887 million in Q4, translating into a diluted EPS of $0.79, a dramatic turnaround from a loss of $1.07 in Q4 2023.
**Operating Income**: Q4 operating income was $1.52 billion, reflecting a 23% operating margin, up significantly from the previous year.
**Cash Flow**: Operating cash flow generated in Q4 was approximately $3.4 billion, representing 44% of revenue for the quarter. The company ended the fiscal year with $9.2 billion in cash and investments.
Financial Highlights
Financial Performance Overview
- Revenue: Q4 2024 revenue reached $7.8 billion, an increase of 93% YoY. For fiscal 2024, total revenue was $25.1 billion, up 62% YoY.
- Gross Profit: Q4 gross profit was $2.74 billion (36.5% margin), improving over 30 percentage points YoY.
- Net Income: Micron reported net income of $887 million in Q4, translating into a diluted EPS of $0.79, a dramatic turnaround from a loss of $1.07 in Q4 2023.
- Operating Income: Q4 operating income was $1.52 billion, reflecting a 23% operating margin, up significantly from the previous year.
- Cash Flow: Operating cash flow generated in Q4 was approximately $3.4 billion, representing 44% of revenue for the quarter. The company ended the fiscal year with $9.2 billion in cash and investments.
Year-over-Year Comparisons
- Revenue Growth: Key drivers for growth included DRAM segment revenue that increased by 93% YoY to $5.3 billion, comprised 69% of total revenue. NAND revenues climbed 96% YoY to $2.4 billion, representing a new record for Micron.
- Gross Margin Improvement: Consolidated gross margins improved over eight percentage points sequentially due to rising prices and enhanced product mix, demonstrating pricing power in a favorable supply-demand environment.
The contrast with global semiconductor benchmarks indicates Micron's competitive resurgence, capitalizing on shifts pegged towards AI and increased data center needs.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
7.75B
93.27%
13.79%
Gross Profit
2.74B
729.20%
49.40%
Operating Income
1.52B
203.40%
120.26%
Net Income
887.00M
162.03%
167.17%
EPS
0.80
161.07%
166.67%
Key Financial Ratios
currentRatio
2.64
grossProfitMargin
35.3%
operatingProfitMargin
19.6%
netProfitMargin
11.4%
returnOnAssets
1.28%
returnOnEquity
1.97%
debtEquityRatio
0.31
operatingCashFlowPerShare
$3.07
freeCashFlowPerShare
$0.26
dividendPayoutRatio
14.5%
priceToBookRatio
2.35
priceEarningsRatio
29.85
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Commentary
- Sanjay Mehrotra (CEO) emphasized the robust demand in data centers and noted: "Micron delivered a strong finish to fiscal year 2024, with fiscal Q4 revenue at the high end of our guidance range and gross margins and EPS above the high end of our guidance ranges."
- Mark Murphy (CFO) highlighted: "We expect fiscal 2025 DRAM front-end cost reductions excluding HBM to be in the mid-to-high single-digit percentage range."
- Forecasts for fiscal Q1 indicate revenue expectations of $8.7 billion plus or minus $200 million, with improvements in gross margins driven by better pricing and a favorable product mix.
- Commentary around outlook for FY 2025 stated: "We look forward to delivering a substantial revenue record with significantly improved profitability... Micron is well positioned to deliver record revenue as well as significantly improved profitability and free cash flow in fiscal 2025."
Sanjay Mehrotra: 'We are entering fiscal 2025 with the strongest competitive positioning in Micron's history.'
— Sanjay Mehrotra
Mark Murphy: 'We expect fiscal 2025 CapEx to be meaningfully higher and at around the mid-30s percentage range of revenue based on our current CapEx and revenue expectations.'
— Mark Murphy
Forward Guidance
Looking forward to fiscal 2025, management maintains a positive outlook supported by strong demand within the data center, automotive, and AI verticals. Micron projects Q1 2025 revenues to land between $8.5 - $8.9 billion with a gross margin estimate of 39.5%, reflecting continued pricing discipline and a favorable product mix.
The broader industry demand for DRAM and NAND remains constructive, as indicated by the performance of Micron's direct competitors as well. Micron has announced significant CapEx plans for the upcoming year which include investments for new facilities aimed to bolster its production capabilities in response to increasing guideline production requirements. Management expects to achieve $25 billion HBM total addressable market (TAM) by 2025, with a strategy in place to align production capabilities with demand in both traditional data centers and emerging demands from AI innovations.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
MU Focus
35.32%
19.60%
1.97%
29.85%
NVDA
73.00%
61.10%
27.80%
32.82%
INTC
39.20%
2.89%
-0.13%
-173.96%
TSM
59.00%
49.00%
8.74%
18.60%
MRVL
50.50%
12.90%
1.49%
122.01%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Micron Technology Inc’s robust fiscal performance and strategic positioning in emerging technologies such as AI position it well for 2025 and beyond. Deliberate focus on maintaining a balanced and disciplined approach towards CapEx, profitable market segments, and innovation pipelines indicates potential for sustained growth. Investors are encouraged to monitor Micron’s quarterly earnings as guidance suggests strong revenue potential and key investment decisions support a proactive stance in a competitive landscape.
Key Investment Factors
Growth Potential
Micron's technology leadership positions it well to capitalize on the growing demand for AI and cloud solutions that require advanced memory products. Forecasts indicate continued revenue growth into fiscal 2025, supported by strategic investments and a favorable product portfolio.
Profitability Risk
Macro-economic conditions, potential supply chain disruptions, and overall global semiconductor demand can affect Micron's operational smoothness. Additionally, reliance on cyclical markets and competition from other memory producers may change pricing power and margins.
Financial Position
Micron's balance sheet remains robust, with $9.2 billion in cash and investments, and a disciplined capital management approach, giving leeway for expansion and strategic investments. Net leverage remains low at this stage.
SWOT Analysis
Strengths
Strong revenue growth with a significant YoY increase of 93% in Q4 2024
Improved gross margins indicating the strength of its pricing power
Leading position in NAND and DRAM markets with significant technological advancements
Strong cash flow and robust cash reserves to support growth initiatives
Weaknesses
Dependence on cyclical semiconductor markets which can create volatility
Potential supply chain risks that may arise with new investments in manufacturing
Opportunities
Growing demand segment in AI applications and data center markets
Possibility to capture market share as HBM TAM expands significantly by 2025
Strategic investments in new facilities position the company for long-term growth
Threats
Intense competition can pressure pricing and margins, especially in memory markets
Economic downturns can affect overall technology and semiconductor demand
Trade and regulatory challenges could impact the supply chain dynamics