Micron Technology, Inc. Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Micron delivered record-breaking fiscal Q3 2021 results, including the largest sequential EPS increase in company history.
  • Strong demand across all key end markets (data center, PCs, mobile, automotive, industrial).
  • Supply for both DRAM and NAND remains tight and is expected to remain so into calendar 2022.
  • Technology transitions (1-alpha DRAM and 176-layer NAND) are progressing and becoming significant contributors to bit production.
  • Company announced sale of the Lehi, Utah fab to Texas Instruments for $900 million.

Financial Highlights (Compared to Fiscal Q2 2021 and Fiscal Q3 2020)

  • Total revenue: $7.4 billion (up 19% Q/Q, up 36% Y/Y).
  • DRAM revenue: $5.4 billion (up 23% Q/Q and 52% Y/Y), representing 73% of total revenue.
  • NAND revenue: $1.8 billion (up 10% Q/Q and 9% Y/Y), a company record and 24% of total revenue.
  • Gross margin: 42.9% (up 10 percentage points Q/Q).
  • Operating income: $2.4 billion (operating margin 32%, up from 20% in Q2 and 18% Y/Y).
  • EPS: $1.88 (up from $0.98 in Q2; largest sequential improvement ever).
  • Free cash flow: $1.5 billion.
  • Inventory: $4.5 billion (98 days), described as “very lean.”

Business Unit Performance (Q/Q and Y/Y)

  • Compute & Networking: $3.3 billion, up 25% Q/Q and 49% Y/Y.

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Operator: Good afternoon. My name is Josh, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Micron’s Third Quarter 2021 Financial Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. It is now my pleasure to turn the floor over to your host, Farhan Ahmad, Vice President of Investor Relations. You may begin your conference. Farhan Ahmad: Thank you, and welcome to Micron Technology’s fiscal third quarter 2021 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. 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 conferen

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