Micron: Fiscal 3Q23 Financial Results

(in $ million)	3Q22	3Q23	9 mo. 22	9 mo. 23
Revenue	8,642	3,752	24,115	11,530
*Growth*		-57%		*-52%*
Net income (loss)	2,626	(1,896)	7,195	(4,403)

Micron Technology, Inc. announced results for its third quarter of fiscal 2023, which ended June 1, 2023.

3FQ23 highlights

Revenue of $3.75 billion vs. $3.69 billion for 2FQ23 and $8.64 billion for the 3FQ22
GAAP net loss of $1.90 billion, or $1.73 per diluted share
Non-GAAP net loss of $1.57 billion, or $1.43 per diluted share
Operating cash flow of $24 million versus $343 million for 2FQ23 and $3.84 billion for 3FQ22

“Micron delivered fiscal third quarter revenue, gross margin, and EPS all above the midpoint of the guidance range,” said president and CEO Sanjay Mehrotra. “We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored. The recent Cyberspace Administration of China decision is a significant headwind that is impacting our outlook and slowing our recovery. Longer-term, Micron’s technology leadership, product portfolio, and operational excellence continues to strengthen our competitive positioning across diverse growth markets, including AI and memory-centric computing.”

Investments in capital expenditures, net were $1.38 billion for 3FQ23, which resulted in adjusted free cash flows of negative $1.36 billion. The company ended 3FQ23 with cash, marketable investments, and restricted cash of $11.40 billion.

Board of directors has declared a quarterly dividend of $0.115 per share, payable in cash on July 25, 2023, to shareholders of record as of the close of business on July 10, 2023.

Comments

≠2 biggest WW storage company since 3 years behind SK hynix, according to our figures, recorded revenue up 2% Q/Q and down 57% Y/Y at $3,752 million in 3FQ23, above the midpoint of guidance range, after an horrible 2FQ23 with revenue down 53% Y/Y and huge loss.

DRAM
• revenue of $2,673 million
• 71% of total revenue
• sales down 2% Q/Q
• bit shipments increased in the 10-percentange range Q/Q
• ASPs declined approximately 10% Q/Q

NAND
• revenue of $1,013 million
• 27% of total revenue
• sales up 14% Q/Q
• bit shipments increased in the upper 30 percentage range Q/Q
• ASPs declined in the mid-teens percentage range Q/Q

Revenue for the Storage Business Unit was $627 million, up 24% Q/Q and driven by increased shipments across most of the portfolio.

Update on business in China
• The impact of the May 21 decision by the Cyberspace Administration of China on the business of Micron remains uncertain and fluid.
• Several customers, including mobile OEMs, have been contacted by certain Critical Information Infrastructure operators or representatives of the government in China concerning the future use of Micron products.
• Firm's revenue with companies headquartered in mainland China and Hong Kong, including direct sales as well as indirect sales through distributors, accounts for approximately a quarter of WW revenue and remains the principal exposure.
• The manufacturer currently estimates that approximately half of that China-headquartered customer revenue, which equates to a low-double-digit percentage of WW revenue, is at risk of being impacted.
• It is working to mitigate this impact over time and expects increased quarter-to-quarter revenue variability. Its long-term goal is to retain its WW DRAM and NAND share.

Outlook and actions
• Expects for calendar 2023 industry bit demand growth have reduced to low-to-mid single digits in DRAM and to high-single digits in NAND, which are well below the expected long-term CAGR of mid-teens percentage range in DRAM and low 20s percentage range in NAND.
• Expects stronger industry bit shipments for DRAM and NAND in the second half of the calendar year, driven by secular content growth and continued improvement in customer inventory.
• Sees DRAM and NAND supply growth in calendar 2023 to be negative for the industry as utilization and Capex cuts are impacting supply growth.
• While supply demand balance is improving, due to the excess inventory, profitability and cash flow will remain extremely challenged for some time.
• Expects year-on-year bit supply growth to be meaningfully negative for DRAM, and to produce fewer NAND bits in calendar 2023 than in calendar 2022.

Outlook for 4FQ23 for revenue is $3.90 billion ± $200 million or between -21% and +4%, meaning FY23 sales at around $15,340 million probably losing its ≠2 ranking WW storage company behind WD and Dell.

NAND revenue only

Period

Revenue
in $ million

Q/Q or Y/Y change
for FY

% of
global revenue

FY19

5,335

23%

FY20

6,131

14%

29%

1FQ21

1,574

27%

2FQ21

1,650

26%

3FQ21

1,812

10%

24%

4FQ21

1,971

21%

FY21

7,007

14%

25%

1FQ22

1,878

-5%

24%

2FQ22

1,957

25%

3FQ22

2,300

18%

26%

4FQ22

1,688

-26%

25%

FY22

7,811

11%

25%

1FQ23

1,103

-35%

27%

2FQ23

885

-20%

24%

3FQ23

1,013

14%

27%