EPS of $1.41 increased by 97.2% from previous year
Gross margin of 36.8%
Net income of 1.58B
"Micron is in the best competitive position in our history, and we are achieving share gains across high-margin product categories in our industry." - Sanjay Mehrotra
Micron Technology Inc (MU) Q2 2025 Financial Results: Record Revenues in DRAM and Strong Growth in HBM
Executive Summary
Micron Technology Inc reported robust results for Q2 2025, demonstrating resilience amidst fluctuating market dynamics. Total revenue reached approximately $8.05 billion, a substantial increase of 38% year-over-year but a decline of 8% sequentially. Key contributors were data center DRAM and HBM (High Bandwidth Memory), where revenue soared over 50% sequentially, marking a new milestone of more than $1 billion. Management emphasized a strong outlook for future demand driven by AI technologies and increased customer inventory replenishment, positioning Micron favorably in a competitive landscape.
Despite the sequential revenue drop, the company maintains a positive trajectory, with expectations of further record revenues in Q3 2025. Investors are encouraged by Micron's strategic investments in its next-gen memory technologies and its commitment to maximizing profits while managing inventory effectively. With strong gross and operating margins and a significant increase in cash flow generation, Micron is on track to capitalize on the booming memory market, especially as AI integration accelerates across devices.
Key Performance Indicators
Revenue
8.05B
QoQ: -7.53% | YoY:38.27%
Gross Profit
2.96B
36.79% margin
QoQ: -11.50% | YoY:174.61%
Operating Income
1.77B
QoQ: -18.45% | YoY:5 472.73%
Net Income
1.58B
QoQ: -15.35% | YoY:99.62%
EPS
1.42
QoQ: -15.48% | YoY:97.22%
Revenue Trend
Margin Analysis
Key Insights
**Total Revenue**: $8.05 billion, up 38% YoY, down 8% QoQ
**DRAM Revenue**: $6.1 billion, up 47% YoY (76% of total revenue)
**NAND Revenue**: $1.9 billion, up 18% YoY (23% of total revenue)
**Gross Margin**: 37.9%, down by 160 basis points QoQ
**Operating Income**: $2 billion, resulting in an operating margin of 24.9% (up 21% YoY)
Financial Highlights
Financial Performance Overview
- Total Revenue: $8.05 billion, up 38% YoY, down 8% QoQ
- DRAM Revenue: $6.1 billion, up 47% YoY (76% of total revenue)
- NAND Revenue: $1.9 billion, up 18% YoY (23% of total revenue)
- Gross Margin: 37.9%, down by 160 basis points QoQ
- Operating Income: $2 billion, resulting in an operating margin of 24.9% (up 21% YoY)
- Net Income: $1.58 billion, EPS of 1.42
Management stated, "Micron is in the best competitive position in our history... Our strong product momentum has enabled us to build deeper customer relationships." Cash Flow: Generated $3.9 billion in operating cash flow, with $857 million in free cash flow. Ending cash balance stood at $9.6 billion, supporting investments and financial flexibility. Balance Sheet Strength: Total assets of $73.05 billion with total debt of approximately $14.4 billion, reflecting low leverage with a healthy liquidity position.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
8.05B
38.27%
-7.53%
Gross Profit
2.96B
174.61%
-11.50%
Operating Income
1.77B
5 472.73%
-18.45%
Net Income
1.58B
99.62%
-15.35%
EPS
1.42
97.22%
-15.48%
Key Financial Ratios
currentRatio
3.13
grossProfitMargin
36.8%
operatingProfitMargin
22%
netProfitMargin
19.7%
returnOnAssets
2.17%
returnOnEquity
3.25%
debtEquityRatio
0.31
operatingCashFlowPerShare
$3.54
freeCashFlowPerShare
$6.41
dividendPayoutRatio
8.21%
priceToBookRatio
2.11
priceEarningsRatio
16.17
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Market Position & Strategy: Management stated, "We are achieving share gains across high-margin product categories... our strong product momentum has enabled us to build deeper customer relationships."
- Focus on AI: Sanjay Mehrotra emphasized, "Dramatic improvements in computation hardware... reduce the per-token cost of generative AI models."
- Record HBM Shipments: Revenue from HBM crossed $1 billion, reiterating Micron's leadership, "Micron remains the only company in the world to ship low-power DRAM into the data center in high volume."
- Future Outlook: Management expects fiscal Q3 revenue to be another record, driven by DRAM and NAND shipment growth. Mark Murphy commented, "We expect revenue to be $8.8 billion, plus or minus $200 million.
Micron is in the best competitive position in our history, and we are achieving share gains across high-margin product categories in our industry.
â Sanjay Mehrotra
Dramatic improvements in computation hardware have reduced the per-token cost of generative AI models.
â Sanjay Mehrotra
Forward Guidance
Looking ahead, Micron's management forecasts further growth in both DRAM and NAND sectors for the upcoming fiscal quarters. They project a fiscal Q3 revenue target between $8.8 billion and an EPS of approximately $1.57. The company is focused on strong demand driven by AI technologies, with expectations that "prior customer inventory issues will normalize during spring, fueling future purchases." Management confirmed ongoing disciplined capital investments of approximately $14 billion for FY 2025 aimed at expanding high-bandwidth and cost-effective solutions. Investors should monitor the operational ramp of the 1-gamma DRAM and availability of HBM products as the year progresses to gauge Micron's ability to meet rising demand.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
MU Focus
36.79%
22.00%
3.25%
16.17%
NVDA
75.10%
62.10%
28.50%
41.31%
INTC
35.40%
-7.96%
-1.40%
-20.52%
TSM
53.20%
42.50%
6.54%
25.32%
MRVL
46.20%
-7.57%
-1.36%
-66.34%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The analysis of Micron's Q2 2025 performance establishes a foundation for optimism among investors. Strong demand for DRAM and HBM solutions, growing utilization of AI technologies, and a disciplined approach toward capacity management and cost control will likely drive future revenue growth. Investors should consider Micron's strategic positioning against key competitors like NVIDIA and Intel, highlighting its leading-edge technology and expanding market reach in high-value sectors. However, monitoring external factors such as NAND pricing volatility and overall global economic trends will be essential in assessing long-term performance and risk. Overall, Micron presents a compelling investment opportunity considering its historical growth trajectories, robust product offerings, and pivotal role within the increasingly influential AI landscape.
Key Investment Factors
Growth Potential
Micron's strategic focus on high-margin products, especially in AI-driven DRAM and NAND markets, positions them well for accelerated growth. The increase in AI-based applications across sectors is expected to sustain higher demand for memory solutions.
Profitability Risk
Volatility in NAND pricing and potential over-reliance on consumer demand dynamics could pose challenges. Inventory management remains critical, particularly in the face of fluctuating market conditions and economic pressures.
Financial Position
Solid balance sheet with robust cash reserves and manageable debt levels provides financial flexibility and investment capacity. Maintaining a liquidity position will be pivotal for future growth opportunities.
SWOT Analysis
Strengths
Leading position in DRAM and NAND markets
Strong revenue growth from data center DRAM and HBM
Health balance sheet with significant cash reserves
Innovative product pipeline focused on AI-driven solutions
Weaknesses
Dependence on consumer-driven demand segments
Margin pressure from NAND pricing challenges
Inventory levels higher than target
Opportunities
Expansion in AI markets driving memory demand
Increased adoption of high-capacity DRAM and HBM products
Strategic investments in new technologies and facilities