Micron Technology, Inc. · NASDAQ:MU
Micron Technology — Q2 2022 Earnings Presentation
28 slides from Micron Technology's earnings presentation, Mar 29, 2022
Slide 1: Financial Results FQ2 2022
Financial Results FQ2 2022 © 2022 Micron Technology, Inc. All rights reserved. Information, products, and/or specifications are subject to change without notice. All information is provided on an “AS IS” basis without warranties of any kind. Statements regarding products, including statements regard
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement During the course of this meeting, we may make projections or other forward-looking statements regarding future events or the future financial performance of the Company and the industry. We wish to caution you that such statements are predictions and that actual events or re
Slide 3: Sanjay Mehrotra, President and CEO
3 Sanjay Mehrotra President and CEO March 29, 2022
Slide 4: Highlights
4 Highlights ▪ Delivered excellent performance in FQ2 with results above the high end of our guidance; grew revenue and margins sequentially ▪ SSD products achieved record revenue; auto market revenues also reached an all-time high ▪ Industry-leading 1-alpha DRAM and 176-layer NAND technology node r
Slide 5: Technology
5 Technology ▪ 1z and 1-alpha DRAM combined represented the majority of our DRAM bit shipments in FQ2 ▪ 176-layer NAND represented the majority of our NAND bit shipments in FQ2 ▪ Our 1-alpha DRAM and 176-layer NAND products are achieving excellent yields, providing us with solid front-end cost reduc
Slide 6: Operations
6 Operations ▪ Micron is the industry leader in quality, with the majority of our customers ranking us No. 1 ▪ Have strengthened our position as a strategic supplier to our customers, as demonstrated by our commitment to supply continuity ▪ In late December, a government mandated COVID-19 lockdown i
Slide 7: End Market Highlights
7 End Market Highlights Data Center PC & Graphics Mobile & Intelligent Edge ▪ Data center revenue in FQ2 grew ▪ PC: Saw recovery in our client revenue, ▪ Mobile: 5G transition continues in >60% year over year driven by enterprise PCs smartphones. Achieved 1st qualification ▪ Broadened the qualificat
Slide 8: Outlook
8 Outlook ▪ Expect CY-22 industry bit demand growth to be in the mid to high teens for DRAM and approximately 30% for NAND Industry ▪ ▪ Currently, we see a healthy supply-demand balance across both DRAM and NAND Non-memory component shortages are improving, and we expect that further improvements sh
Slide 9: Sumit Sadana, Chief Business Officer and Interim CFO
9 Sumit Sadana Chief Business Officer and Interim CFO March 29, 2022
Slide 10: FQ2-22 Revenue $7.8B
10 FQ2-22 Revenue $7.8B Revenue up 1% Q/Q and up 25% Y/Y March 29, 2022
Slide 11: Performance by Technology
11 Performance by Technology ▪ 73% of total revenue in FQ2-22 ▪ Revenue up 2% Q/Q and up 29% Y/Y DRAM ▪ Bit shipments increased in the high-single-digit percent range Q/Q ▪ ASPs decreased in the mid-single-digit percent range Q/Q ▪ 25% of total revenue in FQ2-22 ▪ Revenue up 4% Q/Q and up 19% Y/Y NA
Slide 12: Revenue by Business Unit
12 Revenue by Business Unit FQ2-22 FQ1-22 Q/Q % Change FQ2-21 Y/Y % Change Amounts in millions Compute and Networking (CNBU) $3,461 $3,406 2% $2,636 31% Mobile (MBU) $1,875 $1,907 (2)% $1,811 4% Storage (SBU) $1,171 $1,150 2% $850 38% Embedded (EBU) $1,277 $1,220 5% $935 37% March 29, 2022
Slide 13: Non-GAAP Operating Results
13 FQ2-22 Non-GAAP Operating Results Revenue: $7.8 billion Gross Margin: 47.8% Operating Expenses: $974 million Operating Income: $2.8 billion Net Income: $2.4 billion Diluted EPS: $2.14 Adjusted EBITDA: $4.5 billion Cash from Operations (GAAP): $3.6 billion March 29, 2022
Slide 14: Cash Flow and Capital Allocation
14 Cash Flow Cash Flow from Operations ▪ ▪ FQ2-22: $3.6B (47% of revenue) FQ2-22: CapEx of $2.6B and Capital Net CapEx1 ▪ FY-22: CapEx guidance of $11B to $12B Allocation FCF* Buybacks ▪ ▪ FQ2-22: $1.03B FQ2-22: $408M (4.8M shares) From FY-19 to FQ2-22, generated approximately $9 billion of free Div
Slide 15: FQ3-22 Guidance
15 FQ3-22 Guidance Non-GAAP Revenue $8.7 billion ± $200 million Gross margin 48.0% ± 1% Operating expenses $1.05 billion ± $25 million Diluted EPS* $2.46 ± $0.10 *Based on ~1.14 billion diluted shares March 29, 2022
Slide 16: Other key data
16 Other key data March 29, 2022
Slide 17: Financial Summary
17 Financial Summary Non-GAAP Amounts in millions, except per share FQ2-22 % of FQ1-22 % of FQ2-21 % of Revenue Revenue Revenue Revenue $7,786 100% $7,687 100% $6,236 100% Gross margin 3,724 48% 3,616 47% 2,054 33% Operating income 2,750 35% 2,725 35% 1,257 20% Income tax (provision) benefit (
Slide 18: Non-GAAP Financial Data and Guidance
18 Non-GAAP Financial Data and Guidance % of Revenue FQ2-22 FQ2-22 Non-GAAP FQ3-22 (amounts in millions, DRAM 73% Non-GAAP Guidance except per share) NAND 25% Revenue $ 7,786 $8.7 billion ± $200 million Gross margin 47.8% 48.0% ± 1% % Sales Volume Change FQ2-22 Q/Q Operating expenses $ 974 $1.05 bil
Slide 19: Revenue by Technology
19 Revenue by Technology % of % of % of Amounts in millions FQ2-22 Revenue FQ1-22 Revenue FQ2-21 Revenue DRAM $5,719 73% $5,587 73% $4,444 71% NAND 1,957 25% 1,878 24% 1,650 26% Other 110 1% 222 3% 142 2% Total $7,786 100% $7,687 100% $6,236 100% Percentages of total revenue may not total 10
Slide 20: Non-GAAP Reconciliations
20 Non-GAAP Reconciliations March 29, 2022
Slide 21: Consolidated Results
21 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ2-22 FQ1-22 FQ2-21 GAAP gross margin $ 3,676 $ 3,565 $ 1,649 Stock-based compensation 44 43 57 Inventory accounting policy change to FIFO — — 133 Change in inventory cost absorption — — 160 3D XPoint inventory write-down — — 49 O
Slide 22: Consolidated Results
22 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ2-22 FQ1-22 FQ2-21 GAAP operating income $ 2,546 $ 2,631 $ 663 Stock-based compensation 119 116 112 Inventory accounting policy change to FIFO — — 133 Change in inventory cost absorption — — 160 3D XPoint inventory write-down — —
Slide 23: Consolidated Results
23 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ2-22 FQ1-22 FQ2-21 GAAP cost of goods sold $ 4,110 $ 4,122 $ 4,587 Stock-based compensation (44) (43) (57) Inventory accounting policy change to FIFO — — (133) Change in inventory cost absorption — — (160) 3D XPoint inventory wri
Slide 24: Consolidated Results
24 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ2-22 FQ1-22 FQ2-21 GAAP net income $ 2,263 $ 2,306 $ 603 Stock-based compensation 119 116 112 Inventory accounting policy change to FIFO — — 133 Change in inventory cost absorption — — 160 3D XPoint inventory write-down — — 49 Pa
Slide 25: Consolidated Results
25 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ2-22 FQ1-22 FQ2-21 GAAP shares used in diluted EPS calculations 1,130 1,130 1,144 Adjustment for stock-based compensation 13 9 10 Non-GAAP shares used in diluted EPS calculations 1,143 1,141 1,154 GAAP diluted earnings per share
Slide 26: Consolidated Results
26 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ2-22 FQ1-22 FQ2-21 Net cash provided by operating activities $ 3,628 $ 3,938 $ 3,057 Expenditures for property, plant, and equipment (2,611) (3,265) (3,018) Proceeds from sales of property, plant, and equipment 27 21 18 Payments
Slide 27: FQ3-22 Guidance
27 FQ3-22 Guidance Non-GAAP Reconciliations GAAP Adjustments Non-GAAP Revenue $8.7 billion ± $200 million — $8.7 billion ± $200 million Gross margin 47.0% ± 1% 1% A 48.0% ± 1% Operating expenses $1.13 billion ± $25 million $80 million B $1.05 billion ± $25 million Diluted EPS* $2.33 ± $0.10 $0.13 A,
Slide 28: Micron
Micron