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Micron Technology, Inc. Reports Results for the Fourth Quarter and Full Year of Fiscal 2023

Increasing demand and disciplined supply improving industry outlook

BOISE, Idaho, Sept. 27, 2023 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its fourth quarter and full year of fiscal 2023, which ended August 31, 2023.

Fiscal Q4 2023 highlights

  • Revenue of $4.01 billion versus $3.75 billion for the prior quarter and $6.64 billion for the same period last year
  • GAAP net loss of $1.43 billion, or $1.31 per diluted share
  • Non-GAAP net loss of $1.18 billion, or $1.07 per diluted share
  • Operating cash flow of $249 million versus $24 million for the prior quarter and $3.78 billion for the same period last year

Fiscal 2023 highlights

  • Revenue of $15.54 billion versus $30.76 billion for the prior year
  • GAAP net loss of $5.83 billion, or $5.34 per diluted share
  • Non-GAAP net loss of $4.86 billion, or $4.45 per diluted share
  • Operating cash flow of $1.56 billion versus $15.18 billion for the prior year

“During fiscal 2023, amid a challenging environment for the memory and storage industry, Micron sustained technology leadership, launched a significant number of leading-edge products, and took decisive actions on supply and cost,” said Micron Technology President and CEO Sanjay Mehrotra. “Our 2023 performance positions us well as a market recovery takes shape in 2024, driven by increasing demand and disciplined supply. We look forward to record industry TAM revenue in 2025 as AI proliferates from the data center to the edge.”

Quarterly Financial Results
(in millions, except per share amounts)

GAAP(1)   Non-GAAP(2)
FQ4-23 FQ3-23 FQ4-22   FQ4-23 FQ3-23 FQ4-22
               
Revenue $ 4,010   $ 3,752   $ 6,643     $ 4,010   $ 3,752   $ 6,643  
Gross margin   (435 )   (668 )   2,622       (366 )   (603 )   2,676  
percent of revenue   (10.8 %)   (17.8 %)   39.5 %     (9.1 %)   (16.1 %)   40.3 %
Operating expenses   1,037     1,093     1,101       842     866     1,014  
Operating income (loss)   (1,472 )   (1,761 )   1,521       (1,208 )   (1,469 )   1,662  
percent of revenue   (36.7 %)   (46.9 %)   22.9 %     (30.1 %)   (39.2 %)   25.0 %
Net income (loss)   (1,430 )   (1,896 )   1,492       (1,177 )   (1,565 )   1,621  
Diluted earnings (loss) per share   (1.31 )   (1.73 )   1.35       (1.07 )   (1.43 )   1.45  


Annual Financial Results
(in millions, except per share amounts)

GAAP(1)   Non-GAAP(2)
FY 23 FY 22   FY 23 FY 22
           
Revenue $ 15,540   $ 30,758     $ 15,540   $ 30,758  
Gross margin   (1,416 )   13,898       (1,196 )   14,113  
percent of revenue   (9.1 %)   45.2 %     (7.7 %)   45.9 %
Operating expenses   4,329     4,196       3,623     3,832  
Operating income (loss)   (5,745 )   9,702       (4,819 )   10,281  
percent of revenue   (37.0 %)   31.5 %     (31.0 %)   33.4 %
Net income (loss)   (5,833 )   8,687       (4,862 )   9,475  
Diluted earnings (loss) per share   (5.34 )   7.75       (4.45 )   8.35  
                           

Investments in capital expenditures, net(2) were $1.01 billion for the fourth quarter of 2023 and $7.01 billion for the full year of 2023, which resulted in adjusted free cash flows(2) of negative $758 million for the fourth quarter of 2023 and negative $5.45 billion for the full year of 2023. Micron ended the year with cash, marketable investments, and restricted cash of $10.52 billion. On September 27, 2023, Micron’s Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 25, 2023, to shareholders of record as of the close of business on October 10, 2023.

Business Outlook

The following table presents Micron’s guidance for the first quarter of 2024:

FQ1-24 GAAP(1) Outlook Non-GAAP(2) Outlook
     
Revenue $4.40 billion ± $200 million $4.40 billion ± $200 million
Gross margin (6.0%) ± 2.0% (4.0%) ± 2.0%
Operating expenses $1.01 billion ± $15 million $900 million ± $15 million
Diluted earnings (loss) per share ($1.24) ± $0.07 ($1.07) ± $0.07
     

Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted at investors.micron.com.

Investor Webcast

Micron will host a conference call on Wednesday, September 27, 2023 at 2:30 p.m. Mountain Time to discuss its fourth quarter financial results and provide forward-looking guidance for its first quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will be available for one year after the call. For Investor Relations and other company updates, follow @MicronTech on Twitter at twitter.com/MicronTech.

About Micron Technology, Inc.

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.

© 2023 Micron Technology, Inc. All rights reserved. Micron, the Micron logo, and all other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements regarding our industry, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents we file with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at micron.com/certainfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements to conform these statements to actual results.

(1) GAAP represents U.S. Generally Accepted Accounting Principles.
(2) Non-GAAP represents GAAP excluding the impact of certain activities, which management excludes in analyzing our operating results and understanding trends in our earnings, adjusted free cash flow, and business outlook. Further information regarding Micron’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release.

   
   


MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  August 31,
2023
June 1,
2023
September 1,
2022
August 31,
2023
September 1,
2022
           
Revenue $ 4,010   $ 3,752   $ 6,643   $ 15,540   $ 30,758  
Cost of goods sold   4,445     4,420     4,021     16,956     16,860  
Gross margin   (435 )   (668 )   2,622     (1,416 )   13,898  
           
Research and development   719     758     839     3,114     3,116  
Selling, general, and administrative   219     219     280     920     1,066  
Restructure and asset impairments   4     68     5     171     48  
Other operating (income) expense, net   95     48     (23 )   124     (34 )
Operating income (loss)   (1,472 )   (1,761 )   1,521     (5,745 )   9,702  
           
Interest income   134     127     54     468     96  
Interest expense   (129 )   (119 )   (45 )   (388 )   (189 )
Other non-operating income (expense), net   9         23     7     (38 )
    (1,458 )   (1,753 )   1,553     (5,658 )   9,571  
           
Income tax (provision) benefit   24     (139 )   (56 )   (177 )   (888 )
Equity in net income (loss) of equity method investees   4     (4 )   (5 )   2     4  
Net income (loss) $ (1,430 ) $ (1,896 ) $ 1,492   $ (5,833 ) $ 8,687  
           
Earnings (loss) per share          
Basic $ (1.31 ) $ (1.73 ) $ 1.36   $ (5.34 ) $ 7.81  
Diluted   (1.31 )   (1.73 )   1.35     (5.34 )   7.75  
           
Number of shares used in per share calculations          
Basic   1,095     1,094     1,097     1,093     1,112  
Diluted   1,095     1,094     1,106     1,093     1,122  
                               

MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

As of August 31,
2023
June 1,
2023
September 1,
2022
       
Assets      
Cash and equivalents $ 8,577   $ 9,298   $ 8,262  
Short-term investments   1,017     1,054     1,069  
Receivables   2,443     2,429     5,130  
Inventories   8,387     8,238     6,663  
Other current assets   820     715     657  
Total current assets   21,244     21,734     21,781  
Long-term marketable investments   844     973     1,647  
Property, plant, and equipment   37,928     38,727     38,549  
Operating lease right-of-use assets   666     655     678  
Intangible assets   404     410     421  
Deferred tax assets   756     708     702  
Goodwill   1,150     1,252     1,228  
Other noncurrent assets   1,262     1,221     1,277  
Total assets $ 64,254   $ 65,680   $ 66,283  
       
Liabilities and equity      
Accounts payable and accrued expenses $ 3,958   $ 4,177   $ 6,090  
Current debt   278     259     103  
Other current liabilities   529     668     1,346  
Total current liabilities   4,765     5,104     7,539  
Long-term debt   13,052     12,986     6,803  
Noncurrent operating lease liabilities   603     603     610  
Noncurrent unearned government incentives   727     632     589  
Other noncurrent liabilities   987     950     835  
Total liabilities   20,134     20,275     16,376  
       
Commitments and contingencies      
       
Shareholders’ equity      
Common stock   124     124     123  
Additional capital   11,036     10,782     10,197  
Retained earnings   40,824     42,391     47,274  
Treasury stock   (7,552 )   (7,552 )   (7,127 )
Accumulated other comprehensive income (loss)   (312 )   (340 )   (560 )
Total equity   44,120     45,405     49,907  
Total liabilities and equity $ 64,254   $ 65,680   $ 66,283  
       

MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

For the year ended August 31,
2023
September 1,
2022
     
Cash flows from operating activities    
Net income (loss) $ (5,833 ) $ 8,687  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation expense and amortization of intangible assets   7,756     7,116  
Provision to write down inventories to net realizable value   1,831      
Stock-based compensation   596     514  
Goodwill impairment   101      
Restructure and asset impairments   11     44  
Loss on debt repurchases and conversions       83  
Change in operating assets and liabilities:    
Receivables   2,763     190  
Inventories   (3,555 )   (2,179 )
Accounts payable and accrued expenses   (2,104 )   744  
Other   (7 )   (18 )
Net cash provided by operating activities   1,559     15,181  
     
Cash flows from investing activities    
Expenditures for property, plant, and equipment   (7,676 )   (12,067 )
Purchases of available-for-sale securities   (723 )   (1,770 )
Proceeds from maturities of available-for-sale securities   1,566     1,321  
Proceeds from government incentives   710     115  
Proceeds from sales of available-for-sale securities   25     294  
Proceeds from sale of Lehi, Utah fab       888  
Other   (93 )   (366 )
Net cash provided by (used for) investing activities   (6,191 )   (11,585 )
     
Cash flows from financing activities    
Proceeds from issuance of debt   6,716     2,000  
Repayments of debt   (761 )   (2,032 )
Payments of dividends to shareholders   (504 )   (461 )
Repurchases of common stock - repurchase program   (425 )   (2,432 )
Payments on equipment purchase contracts   (138 )   (141 )
Other   95     86  
Net cash provided by (used for) financing activities   4,983     (2,980 )
     
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash   (34 )   (106 )
     
Net increase (decrease) in cash, cash equivalents, and restricted cash   317     510  
Cash, cash equivalents, and restricted cash at beginning of period   8,339     7,829  
Cash, cash equivalents, and restricted cash at end of period $ 8,656   $ 8,339  
             

MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)

Inventories

In the third and second quarters of 2023, we recorded charges of $401 million and $1.43 billion, respectively, to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable values (“NRV”). The impact of inventory NRV write-downs for each period reflects (1) inventory write-downs in that period, offset by (2) lower costs in that period on the sale of inventory written down in prior periods. The impacts of inventory NRV write-downs are summarized below:

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  August 31,
2023
June 1,
2023
September 1,
2022
August 31,
2023
September 1,
2022
           
Provision to write down inventory to NRV $ $ (401 ) $ $ (1,831 ) $
Lower costs from sale of inventory written down in prior periods   563   281       844    
  $ 563 $ (120 ) $ $ (987 ) $
                         

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In millions, except per share amounts)

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  August 31,
2023
June 1,
2023
September 1,
2022
August 31,
2023
September 1,
2022
           
GAAP gross margin $ (435 ) $ (668 ) $ 2,622   $ (1,416 ) $ 13,898  
Stock-based compensation   64     60     49     201     193  
Other   5     5     5     19     22  
Non-GAAP gross margin $ (366 ) $ (603 ) $ 2,676   $ (1,196 ) $ 14,113  
           
GAAP operating expenses $ 1,037   $ 1,093   $ 1,101   $ 4,329   $ 4,196  
Stock-based compensation   (87 )   (91 )   (82 )   (363 )   (308 )
Restructure and asset impairments   (4 )   (68 )   (5 )   (171 )   (48 )
Goodwill impairment   (101 )           (101 )    
Litigation settlement       (68 )       (68 )    
Other   (3 )           (3 )   (8 )
Non-GAAP operating expenses $ 842   $ 866   $ 1,014   $ 3,623   $ 3,832  
           
GAAP operating income (loss) $ (1,472 ) $ (1,761 ) $ 1,521   $ (5,745 ) $ 9,702  
Stock-based compensation   151     151     131     564     501  
Restructure and asset impairments   4     68     5     171     48  
Goodwill impairment   101             101      
Litigation settlement       68         68      
Other   8     5     5     22     30  
Non-GAAP operating income (loss) $ (1,208 ) $ (1,469 ) $ 1,662   $ (4,819 ) $ 10,281  
           
GAAP net income (loss) $ (1,430 ) $ (1,896 ) $ 1,492   $ (5,833 ) $ 8,687  
Stock-based compensation   151     151     131     564     501  
Restructure and asset impairments   4     68     5     171     48  
Goodwill impairment   101             101      
Litigation settlement       68         68      
Loss on debt repurchases and conversions                   83  
Other   7     7     11     32     61  
Impact of Idaho income tax reform                   189  
Estimated tax effects of above and other tax adjustments   (10 )   37     (18 )   35     (94 )
Non-GAAP net income (loss) $ (1,177 ) $ (1,565 ) $ 1,621   $ (4,862 ) $ 9,475  
           
GAAP weighted-average common shares outstanding - Diluted   1,095     1,094     1,106     1,093     1,122  
Adjustment for stock-based compensation           15         13  
Non-GAAP weighted-average common shares outstanding - Diluted   1,095     1,094     1,121     1,093     1,135  
           
GAAP diluted earnings (loss) per share $ (1.31 ) $ (1.73 ) $ 1.35   $ (5.34 ) $ 7.75  
Effects of the above adjustments   0.24     0.30     0.10     0.89     0.60  
Non-GAAP diluted earnings (loss) per share $ (1.07 ) $ (1.43 ) $ 1.45   $ (4.45 ) $ 8.35  


RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

  4th Qtr. 3rd Qtr. 4th Qtr. Year Ended
  August 31,
2023
June 1,
2023
September 1,
2022
August 31,
2023
September 1,
2022
           
GAAP net cash provided by operating activities $ 249   $ 24   $ 3,777   $ 1,559   $ 15,181  
           
Expenditures for property, plant, and equipment   (1,461 )   (1,561 )   (3,613 )   (7,676 )   (12,067 )
Proceeds from sales of property, plant, and equipment   18     34     30     92     117  
Payments on equipment purchase contracts   (26 )   (36 )   (9 )   (138 )   (141 )
Amounts funded by partners   462     184     11     710     115  
Investments in capital expenditures, net   (1,007 )   (1,379 )   (3,581 )   (7,012 )   (11,976 )
Adjusted free cash flow $ (758 ) $ (1,355 ) $ 196   $ (5,453 ) $ 3,205  

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income (loss), net income (loss), diluted shares, diluted earnings (loss) per share, and adjusted free cash flow. The non-GAAP adjustments above may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. We believe this non-GAAP information is helpful in understanding trends and in analyzing our operating results and earnings. We are providing this information to investors to assist in performing analysis of our operating results. When evaluating performance and making decisions on how to allocate our resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. We believe these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of our business, enabling enhanced comparison of our operating results between periods and with peer companies. The presentation of these adjusted amounts varies from amounts presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. Our management excludes the following items in analyzing our operating results and understanding trends in our earnings:

  • Stock-based compensation;
  • Employee severance;
  • Gains and losses from settlements;
  • Restructure and asset impairments;
  • Goodwill impairment;
  • Gains and losses from debt repurchases and conversions; and
  • The estimated tax effects of above, non-cash changes in net deferred income taxes, assessments of tax exposures, certain tax matters related to prior fiscal periods, and significant changes in tax law.

Non-GAAP diluted shares are adjusted for the impact of additional shares resulting from the exclusion of stock-based compensation from non-GAAP income (loss).

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

FQ1-24   GAAP Outlook   Adjustments   Non-GAAP Outlook
               
Revenue $4.40 billion ± $200 million         $4.40 billion ± $200 million
Gross margin (6.0%) ± 2.0%   2.0 % A   (4.0%) ± 2.0%
Operating expenses $1.01 billion ± $15 million   $113 million   B   $900 million ± $15 million
Diluted earnings (loss) per share(1) ($1.24) ± $0.07   $0.17   A, B, C   ($1.07) ± $0.07


Non-GAAP Adjustments
(in millions)
           
               
A Stock-based compensation – cost of goods sold   $ 66  
A Other – cost of goods sold     4  
B Stock-based compensation – research and development     69  
B Stock-based compensation – sales, general, and administrative     44  
C Tax effects of the above items and other tax adjustments     (1 )
              $ 182  

(1) GAAP and non-GAAP earnings (loss) per share based on approximately 1.10 billion diluted shares.

The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, additional restructuring activities, balance sheet valuation adjustments, strategic investments, financing transactions, and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control.

 


Contacts:

Samir Patodia
Investor Relations
spatodia@micron.com
(408) 834-1947

Erica Rodriguez Pompen
Media Relations
epompen@micron.com
(408) 834-1873

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