Micron Technology, Inc. · NASDAQ:MU
Micron Technology — Q4 2021 Earnings Presentation
41 slides from Micron Technology's earnings presentation, Sep 28, 2021
Slide 1: Financial Results FQ4 2021
Financial Results FQ4 2021 © 2021 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 September 28, 2021
Slide 4: Highlights
4 Highlights FQ4-21 ▪ Achieved robust profitability and the second-highest quarterly revenue in Micron's history ▪ Record quarterly revenue in NAND as well as in our embedded business. FY-21 ▪ Achieved our highest-ever mobile revenue, driven by all-time-high managed NAND revenue and MCP mix; embedde
Slide 5: Technology and Operations
5 Technology and Operations ▪ Memory is at the leading edge of semiconductor manufacturing, and Micron has leadership in both DRAM and NAND technology ▪ Reached mature yields in our ramp of 1-alpha DRAM and 176-layer NAND 20% to 30% faster than prior nodes ▪ 1-alpha and 1z DRAM nodes combined now re
Slide 6: DRAM and NAND Revenue
6 DRAM + NAND Revenue as % of Semiconductor TAM 4-year moving average 30% DRAM and NAND Revenue 20% Growing faster than the broader semiconductor industry 10% 2005 2010 2015 2020 Source: WSTS September 28, 2021
Slide 7: End Market Highlights
7 End Market Highlights Data Center PC & Graphics Mobile & Intelligent Edge ▪ Data center revenue grew Q/Q and ▪ PC: Work- and learn-from-anywhere ▪ Mobile: FQ4 mobile revenue increased Y/Y fueled by secular drivers in cloud trends are expected to drive a more than 25% Y/Y, driven by continued deman
Slide 8: Industry Outlook
8 Industry Outlook ▪ Expect CY-21 DRAM bit demand growth to be in the low 20% range DRAM ▪ Expect CY-22 demand growth consistent with long-term bit growth CAGR of mid-to-high teens percent ▪ Expect CY-21 NAND bit demand growth to be in the high 30% range NAND ▪ Expect CY-22 demand growth consistent
Slide 9: Micron Outlook
9 Micron Outlook Planning to deliver record revenue with solid profitability in FY-22 ▪ Long-term Micron bit supply growth CAGR in line with industry demand ▪ CY-22 bit shipment growth expected to be in-line with industry demand DRAM ▪ FY-22 bit shipment to lag long term demand CAGR ▪ Annual cost pe
Slide 10: Dave Zinsner, Chief Financial Officer
10 Dave Zinsner Chief Financial Officer September 28, 2021
Slide 11: Revenue
11 Revenue FQ4-21 FY-21 $8.3B $27.7B Up 11% Q/Q and up 37% Y/Y Up 29% Y/Y September 28, 2021
Slide 12: DRAM
12 DRAM ▪ 74% of total revenue in FQ4-21 ▪ Revenue up 12% Q/Q and up 39% Y/Y FQ4-21 ▪ Bit shipments up lower-single-digit percent Q/Q ▪ ASPs up high-single-digit percent range Q/Q ▪ 72% of total revenue in FY-21 FY-21 ▪ Revenue up 38% Y/Y September 28, 2021
Slide 13: NAND
13 NAND ▪ 24% of total revenue in FQ4-21 ▪ Revenue up 9% Q/Q and up 29% Y/Y FQ4-21 ▪ Bit shipments up low-single-digit percent Q/Q ▪ ASPs up mid-single-digit percent Q/Q ▪ 25% of total revenue in FY-21 FY-21 ▪ Revenue up 14% Y/Y September 28, 2021
Slide 14: Revenue by Business Unit
14 Revenue by Business Unit Q/Q % Y/Y % Y/Y % FQ4-21 FQ3-21 FQ4-20 FY-21 FY-20 Change Change Change Compute and Networking (CNBU) $3,794M $3,304M 15% $3,020M 26% $12,280M $9,184M 34% Mobile (MBU) $1,892M $1,999M (5)% $1,462M 29% $7,203M $5,702M 26% Storage (SBU) $1,203M $1,009M 19% $913M 32% $3,973M
Slide 15: Non-GAAP Operating Results
15 Non-GAAP Operating Results FQ4-21 FY-21 Revenue $8.3B $27.7B Gross Margin 47.9% 39.7% Operating Expenses $891M $3.3B Operating Income $3.1B $7.7B Net Income $2.8B $7.0B Diluted EPS $2.42 $6.06 Adjusted EBITDA $4.7B $14.0B Cash from Operations (GAAP) $3.9B $12.5B September 28, 2021
Slide 16: Cash Flow and Capital Allocation
16 Cash Flow Cash Flow from Operations ▪ FQ4-21: $3.9B (47% of revenue) ▪ FY-21: $12.5B and Capital Net CapEx1 ▪ FY-21: CapEx of $9.7B ▪ FY-22: CapEx guidance of $11B to $12B Allocation FCF* ▪ FQ4-21: $1.9B ▪ FY-21: over $2.8B From FY-17 to FY-21, generated Buybacks ▪ FQ4-21: $1.1B (13.9M shares) ov
Slide 17: FQ1-22 Guidance
17 FQ1-22 Guidance Non-GAAP Revenue $7.65 billion ± $200 million Gross margin 47% ± 1% Operating expenses $915 million ± $25 million Diluted EPS* $2.10 ± $0.10 *Based on ~1.14 billion diluted shares September 28, 2021
Slide 18: The New Micron Delivers Strong Revenue Growth and Profitability Cross Cycle
18 The New Micron Delivers Strong Revenue Growth and Profitability Cross Cycle *4-year average metrics reveal sustained cross cycle performance Strong revenue growth Cash Meaningful FCF Growing Asset Base outpacing broader semis generation power over time >2x >4x ~5x ~4x $25.7B $12.8B $42.4B $23.9B
Slide 19: Other Key Data
19 Other Key Data September 28, 2021
Slide 20: Financial Summary
20 Financial Summary Non-GAAP Amounts in millions, except per share FQ4-21 % of FQ3-21 % of FQ4-20 % of Revenue Revenue Revenue Revenue $8,274 100% $7,422 100% $6,056 100% Gross margin 3,964 48% 3,185 43% 2,111 35% Operating income 3,073 37% 2,364 32% 1,302 21% Income tax (provision) benefit (298) (
Slide 21: Financial Summary
21 Financial Summary Non-GAAP Amounts in millions, except per share FY-21 % of Revenue FY-20 % of Revenue Revenue $27,705 100% $21,435 100% Gross margin 10,987 40% 6,718 31% Operating income 7,667 28% 3,419 16% Income tax (provision) benefit (694) (134) Net income attributable to Micron 6,976 25% 3,
Slide 22: Non-GAAP Financial Data and Guidance
22 Non-GAAP Financial Data and Guidance % of Revenue FQ4-21 FQ4-21 Non-GAAP FQ1-22 (amounts in millions, DRAM 74% Non-GAAP Guidance except per share) NAND 24% Revenue $ 8,274 $7.65 billion ± $200 million Gross margin 47.9% 47% ± 1% % Sales Volume Change FQ4-21 Q/Q Operating expenses $ 891 $915 milli
Slide 23: Revenue by Technology
23 Revenue by Technology % of % of % of Amounts in millions FQ4-21 Revenue FQ3-21 Revenue FQ4-20 Revenue DRAM $6,091 74% $5,448 73% $4,371 72% NAND 1,971 24% 1,812 24% 1,530 25% Other 212 3% 162 2% 155 3% Total $8,274 100% $7,422 100% $6,056 100% Percentages of total revenue may not total 100% due t
Slide 24: Revenue by Technology
24 Revenue by Technology % of % of Amounts in millions FY-21 FY-20 Revenue Revenue DRAM $20,039 72% $14,510 68% NAND 7,007 25% 6,131 29% Other 659 2% 794 4% Total $27,705 100% $21,435 100% Percentages of total revenue may not total 100% due to rounding. September 28, 2021
Slide 25: Non-GAAP Reconciliations
25 Non-GAAP Reconciliations September 28, 2021
Slide 26: Consolidated Results
26 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ4-21 FQ3-21 FQ4-20 GAAP gross margin $ 3,912 $ 3,126 $ 2,068 Stock-based compensation 43 45 37 Other 9 14 6 Non-GAAP gross margin $ 3,964 $ 3,185 $ 2,111 GAAP operating expenses $ 957 $ 1,327 $ 911 Stock-based compensation (50) (
Slide 27: Consolidated Results
27 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ4-21 FQ3-21 FQ4-20 GAAP cost of goods sold $ 4,362 $ 4,296 $ 3,988 Stock-based compensation (43) (45) (37) Other (9) (14) (6) Non-GAAP cost of goods sold $ 4,310 $ 4,237 $ 3,945 GAAP research and development $ 705 $ 670 $ 630 Sto
Slide 28: Consolidated Results
28 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ4-21 FQ3-21 FQ4-20 GAAP net income attributable to Micron $ 2,720 $ 1,735 $ 988 Stock-based compensation 93 98 89 Restructure and asset impairments 22 453 50 Amortization of debt discount and other costs 8 7 6 (Gain) loss on debt
Slide 29: Consolidated Results
29 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ4-21 FQ3-21 FQ4-20 GAAP shares used in diluted EPS calculations 1,138 1,145 1,131 Adjustment for stock-based compensation and capped calls 9 9 11 Non-GAAP shares used in diluted EPS calculations 1,147 1,154 1,142 GAAP diluted ear
Slide 30: Consolidated Results
30 Consolidated Results Non-GAAP Reconciliations Amounts in millions FQ4-21 FQ3-21 FQ4-20 Net cash provided by operating activities $ 3,884 $ 3,560 $ 2,271 Investments in capital expenditures, net Expenditures for property, plant, and equipment, net* (2,011) (2,185) (2,268) Payments on equipment pur
Slide 31: Consolidated Results
31 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-21 FY-20 GAAP gross margin $ 10,423 $ 6,552 Stock-based compensation 186 139 Inventory accounting policy change to FIFO 133 — Change in inventory cost absorption 160 — 3D XPoint inventory write-down 49 — Other 36 27 Non-GAAP gro
Slide 32: Consolidated Results
32 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-21 FY-20 GAAP operating income $ 6,283 $ 3,003 Stock-based compensation 395 328 Inventory accounting policy change to FIFO 133 — Change in inventory cost absorption 160 — 3D XPoint inventory write-down 49 — Restructure and asset
Slide 33: Consolidated Results
33 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-21 FY-20 GAAP cost of goods sold $ 17,282 $ 14,883 Stock-based compensation (186) (139) Inventory accounting policy change to FIFO (133) — Change in inventory cost absorption (160) — 3D XPoint inventory write-down (49) — Other (
Slide 34: Consolidated Results
34 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-21 FY-20 GAAP net income attributable to Micron $ 5,861 $ 2,687 Stock-based compensation 395 328 Inventory accounting policy change to FIFO 133 — Change in inventory cost absorption 160 — 3D XPoint inventory write-down 49 — Rest
Slide 35: Consolidated Results
35 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-21 FY-20 GAAP shares used in diluted EPS calculations 1,141 1,131 Adjustment for stock-based compensation and capped calls 10 10 Non-GAAP shares used in diluted EPS calculations 1,151 1,141 GAAP diluted earnings per share $ 5.14
Slide 36: Consolidated Results
36 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-21 FY-20 Net cash provided by operating activities $ 12,468 $ 8,306 Investments in capital expenditures, net Expenditures for property, plant, and equipment, net* (9,922) (8,154) Payments on equipment purchase contracts (295) (6
Slide 37: FQ1-22 Guidance
37 FQ1-22 Guidance Non-GAAP Reconciliations GAAP Adjustments Non-GAAP Revenue $7.65 billion ± $200 million — $7.65 billion ± $200 million Gross margin 46.0% ± 1% 1% A 47.0% ± 1% Operating expenses $986 million ± $25 million $71 million B $915 million ± $25 million Diluted EPS* $2.00 ± $0.10 $0.10 A,
Slide 38: Consolidated Results
38 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-11 FY-12 FY-13 Net cash provided by operating activities $ 2,482 $ 2,115 $ 1,811 Investments in capital expenditures, net Expenditures for property, plant, and equipment, net (2,423) (1,804) (1,414) Payments on equipment purchas
Slide 39: Consolidated Results
39 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-17 FY-18 FY-19 Net cash provided by operating activities $ 8,153 $ 17,400 $ 13,189 Investments in capital expenditures, net Expenditures for property, plant, and equipment, net (4,641) (8,671) (9,634) Payments on equipment purch
Slide 40: Consolidated Results
40 Consolidated Results Non-GAAP Reconciliations Amounts in millions FY-14 FY-15 FY-16 Equity $ 11,562 $ 13,239 $ 12,928 Less: Intangible assets 468 449 464 Goodwill 4 23 104 Tangible book value $ 11,090 $ 12,767 $ 12,360 Amounts in millions FY-17 FY-18 FY-19 Equity $ 19,470 $ 33,164 $ 36,770 Less:
Slide 41: Micron
Micron