Micron Technology, Inc. Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $5.1 billion, up 6% sequentially but down 35% year-over-year from $7.9 billion in FQ1 2019.
  • EPS (non-GAAP): $0.48, down from $0.56 in FQ4 2019 and $2.97 in FQ1 2019.
  • Gross Margin: 27.3%, slightly above guidance midpoint but down sharply from prior-year levels (approx. 58% in FQ1 2019).
  • Positive free cash flow of $80 million, though significantly lower vs $2.3 billion in the year-ago quarter.
  • Inventory reduced to $4.9 billion (121 days), down from 131 days in FQ4 but still above targeted long‑term levels (110 days).

Business Conditions & Industry Outlook

  • Management expects fiscal Q2 to be the bottom of the cycle, with recovery starting in Q3 and improving throughout calendar 2020.
  • DRAM:
    • Industry bit demand growth for 2019 raised to ~20% (previously lower expectations).
    • 2020 bit demand expected mid‑teens %, lower due to strong 2019 comps.
    • Supply expected to grow somewhat below demand industrywide.
  • NAND:
    • Industry demand growth ~mid‑40% in 2019; high‑20s to low‑30s in 2020.
    • 2020 industry supply expected to be meaningfully below demand due to CapEx reductions.

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Operator: Thank you, ladies and gentlemen, and thank you for standing by. Welcome to Micron Technology's First Quarter 2020 Financial Conference Call. [Operator Instructions] I would now like to hand the conference over to your host, Head of Investor Relations, Farhan Ahmad. Sir, please go ahead. Farhan Ahmad: Thank you and welcome to Micron Technology's first fiscal quarter 2020 financial conference call. On the call with me today are Sanjay Mehrotra, President and CEO; and Dave Zinsner, Chief Financial Officer. Today's call will be approximately 60 minutes in length. This call including the audio and slides, is also being webcast from our Investor Relations website at investors.micron.com. In addition, our website contains the earnings press release and the prepared remarks filed a short while ago. Today's discussion of financial results will be presented on a non-GAAP financial basis unless otherwise specified. A reconciliation of GAAP to non-GAAP financial measures may be found on our website, along with a convertible debt and capped call dilution table. As a reminder, a webcast replay will be available on our website later today. We encourage you to monitor our website at micron.com throughout the quarter for the most current information on the company, including information on the various financial conferences that we will be attending. You can follow us on Twitter at MicronTech. As a reminder, the matters we will be discussing today include forward-looking statements.

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