MU Q4 2022 Earnings

Call Details

• Call Title: Micron Technology, Inc. Q4 2022 Earnings Call
• Date: September 29, 2022 at 9:30 PM UTC
• Management Team:
  • Sanjay Mehrotra (President and CEO)
  • Mark Murphy (CFO)
  • Farhan Ahmad (Vice President, Investor Relations)

Call Summary

Financial Performance

• Total fiscal Q4 revenue was $6.6B, down 23% sequentially and down 20% year over year.
• Fiscal 2022 total revenue was a record $30.8B, up 11% year over year.
• Fiscal Q4 DRAM revenue was $4.8B, representing 72% of total revenue, and declined 23% sequentially and 21% year over year.
• Fiscal Q4 NAND revenue was $1.7B, representing 25% of total revenue, and declined 26% sequentially and 14% year over year.
• Consolidated gross margin for fiscal Q4 was 40.3%, down approximately 7 percentage points sequentially, and fiscal 2022 consolidated gross margin was 45.9%, up approximately 6 percentage points year over year.
• Operating income for fiscal Q4 was $1.7B with an operating margin of 25%, down ~11 percentage points sequentially and ~12 points year over year.
• Non-GAAP EPS in fiscal Q4 was $1.45, down from $2.59 in fiscal Q3 and $2.42 in the year-ago quarter, while fiscal 2022 non-GAAP EPS was $8.35, up from $6.06 the prior year.
• Cash from operations in fiscal Q4 was $3.8B, representing 57% of revenue, and fiscal 2022 cash from operations was $15.2B, representing 49% of revenue.
• Capital expenditures were $3.6B in the quarter and $12B for the fiscal year, and fiscal Q4 free cash flow was $196M with fiscal 2022 free cash flow of $3.2B.

Guidance

• Fiscal Q1 non-GAAP revenue is expected to be $4.25B plus or minus $250M.
• Fiscal Q1 gross margin is expected to be 26% plus or minus 200 basis points.
• Fiscal Q1 operating expenses are expected to be $1.0B plus or minus $25M.
• Fiscal Q1 EPS is expected to be $0.04 per share plus or minus $0.10 based on approximately 1.12B fully diluted shares.
• Fiscal 2023 capital spending is expected to be around $8B, down more than 30% year over year, with wafer fab equipment (WFE) capex declining nearly 50% year over year.
• Company expects to be over $1.5B negative free cash flow in the November quarter and expects inventory to increase in the fiscal first half of 2023.
• Company models mid single digit percentage DRAM industry supply growth in calendar 2023 and expects industry DRAM supply growth to be well below demand growth in 2023.
• Company expects calendar 2023 industry DRAM demand to rebound toward long-term growth and customer inventories to improve starting early calendar 2023, with demand rebound starting in calendar Q2 2023.