Micron Technology, Inc. Q4 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue reached $6.1B, up 11% quarter-over-quarter (QoQ) and 24% year-over-year (YoY). Growth benefited from a 14-week quarter.
  • Strong DRAM shipments to cloud, PC, and gaming drove results.
  • NAND revenue declined sequentially but grew 27% YoY.
  • Micron continued operations at full capacity despite COVID-19 challenges, with ~75% of employees returned onsite.

Key Financial Results

  • Gross margin: 34.9%, rising 170 bps QoQ due to strong DRAM cost execution.
  • Operating income: $1.3B, operating margin at 21.5%, up from 18% in prior quarter.
  • EPS (non-GAAP): $1.08, up from $0.82 in FQ3 and $0.56 YoY.
  • Free cash flow: $111M; 15th consecutive quarter of positive FCF.
  • Inventory: $5.6B (135 days), up from 131 days; expected to normalize over fiscal year.
  • Fiscal 2021 CapEx planned at ~$9B, lower than pre-COVID expectations and focused on node transitions.

Business Unit Performance

  • Compute & Networking (CNBU): $3B, up 36% QoQ and 59% YoY, driven by cloud, clients, and gaming consoles.
  • Mobile (MBU): $1.5B, down 4% QoQ but up 4% YoY.
  • Storage (SBU): $913M, down 10% QoQ but up 8% YoY.
  • Embedded (EBU): $654M, down 3% QoQ and 7% YoY, with late-quarter recovery in auto and consumer end markets.

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Operator: Good afternoon. My name is Sheri, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Micron’s Fourth Quarter 2020 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 period. [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 fourth 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. 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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